<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 22, 1999
REGISTRATION NO. 333-86003
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CD RADIO INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE
(STATE OR OTHER JURISDICTION OF 52-1700207
INCORPORATION OR ORGANIZATION) (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>
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1221 AVENUE OF THE AMERICAS, 36TH FLOOR
NEW YORK, NEW YORK 10020
212-584-5100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
PATRICK L. DONNELLY
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CD RADIO INC.
1221 AVENUE OF THE AMERICAS, 36TH FLOOR
NEW YORK, NEW YORK 10020
212-584-5100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
MITCHELL S. FISHMAN
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
212-373-3000
------------------------
APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: From time to time, after this
Registration Statement becomes effective.
If the securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form is to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
________________________________________________________________________________
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 22, 1999
PROSPECTUS
$500,000,000
[CD RADIO LOGO]
DEBT SECURITIES, PREFERRED STOCK,
COMMON STOCK AND WARRANTS
We from time to time may offer:
unsecured or secured debt securities in one or more series;
shares of preferred stock in one or more series;
shares of common stock;
warrants or other rights to purchase debt securities, preferred stock or
common stock or any combination of securities; and
any combination of debt securities, preferred stock, common stock or warrants,
at an aggregate initial public offering price not to exceed $500,000,000.
The number, amount, prices, net proceeds to CD Radio Inc. and specific terms of
the securities will be determined at or before the time of sale and will be set
forth in an accompanying prospectus supplement.
The net proceeds to us from the sale of the securities will be the initial
public offering price or the purchase price of those securities less any
applicable commission or discount, and less any other expenses of CD Radio
associated with the issuance and distribution of those securities.
If any agents or any underwriters are involved in the sale of the foregoing
securities, their names and any applicable commission or discount will be set
forth in the accompanying prospectus supplement.
This prospectus may not be used for the sale of any securities unless it is
accompanied by a prospectus supplement. The accompanying prospectus supplement
may modify or supersede any statement in this prospectus.
Nasdaq National Market trading symbol: 'CDRD.'
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE 'RISK FACTORS' BEGINNING ON
PAGE 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-----------------------------------
The date of this prospectus is September , 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE AMENDED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
TABLE OF CONTENTS
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PAGE
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Special Note Regarding Forward Looking Statements........... 2
About This Prospectus....................................... 3
About CD Radio.............................................. 3
Risk Factors................................................ 4
Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends........................................... 16
Use of Proceeds............................................. 16
Description of Debt Securities.............................. 16
Description of Capital Stock................................ 28
Description of Warrants..................................... 43
Plan of Distribution........................................ 46
Legal Matters............................................... 47
Experts..................................................... 47
Incorporation by Reference.................................. 47
Where You May Find Additional Available Information About
Us........................................................ 47
</TABLE>
------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS
LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS PROSPECTUS MAY ONLY BE
ACCURATE ON THE DATE OF THIS PROSPECTUS.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
The following cautionary statements identify important factors that could
cause our actual results to differ materially from those projected in the
forward looking statements made in this prospectus. Any statements about our
expectations, beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and may be forward looking. These
statements are often, but not always, made through the use of words or phrases
such as 'will likely result,' 'are expected to,' 'will continue,' 'is
anticipated,' 'estimated,' 'intends,' 'plans,' 'projection' and 'outlook.'
Accordingly, these statements involve estimates, assumptions and uncertainties
which could cause actual results to differ materially from those expressed in
them. Any forward looking statements are qualified in their entirety by
reference to the factors discussed throughout this prospectus, and particularly
the risk factors described under 'Risk Factors' in this prospectus. Among the
significant factors that have a direct bearing on our results of operations are:
the potential risk of delay in implementing our business plan;
increased costs of construction and launch of necessary satellites;
risk of launch failure;
unproven market and unproven applications of technology;
our dependence on Space Systems/Loral, Inc. ('Loral') and Lucent
Technologies, Inc. ('Lucent');
unavailability of receivers and antennas; and
our need for additional financing.
These and other factors are discussed in 'Risk Factors' and elsewhere in
this prospectus.
Because the risk factors referred to above could cause actual results or
outcomes to differ materially from those expressed in any forward looking
statements made by us or on our behalf, you should not place undue reliance on
any of these forward looking statements. Further, any forward looking statement
speaks only as of the date on which it is made, and we undertake no obligation
to update any forward looking statement or statements to reflect events or
circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not possible for us to predict which will arise. In addition, we cannot
assess with any precision the impact of each factor on our business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward looking statements.
2
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a 'shelf' registration process. Under
this shelf process, we may sell, over the next two years, any combination of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $500,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the additional
information described under the heading 'Where You May Find Additional Available
Information About Us.'
ABOUT CD RADIO
We are building a digital quality radio service that will broadcast up to
100 channels directly from satellites to vehicles. CD Radio will be broadcast
throughout the continental United States over a frequency band, the 'S-band,'
that will augment traditional AM and FM radio bands. We hold one of only two
licenses issued by the FCC to build, launch and operate a national satellite
radio broadcast system. Under our FCC license, we have the exclusive use of a
12.5 MHz portion of the S-band for this purpose. Our service, which will be
primarily for motorists, will offer 50 channels of commercial-free, digital
quality music programming and up to 50 channels of news, sports, talk and
programming. We currently expect to commence CD Radio broadcasts at the end of
the fourth quarter of 2000, at an anticipated subscription price of $9.95 per
month.
CD Radio was incorporated in the State of Delaware as Satellite CD Radio,
Inc. on May 17, 1990. On December 7, 1992, we changed our name to CD Radio Inc.,
and we formed a wholly owned subsidiary, Satellite CD Radio, Inc., that is the
holder of our FCC license. Our executive offices are located at 1221 Avenue of
the Americas, New York, New York 10020, our telephone number is (212) 584-5100
and our internet address is cdradio.com. The information on our website is not
part of this prospectus.
3
<PAGE>
RISK FACTORS
In addition to the other information in this prospectus, the following risk
factors should be considered carefully in evaluating us and our business and in
deciding whether to invest in our securities.
OUR BUSINESS IS STILL IN THE DEVELOPMENT STAGE
Historically, we have generated only losses. We are a development stage
company. The service we propose to offer, CD Radio, is in a relatively early
stage of development and we have never recognized any operating revenues or
conducted any operations. Since our inception, we have concentrated on raising
capital, obtaining required licenses, developing technology, strategic planning,
market research and building our infrastructure. Our financial results from our
inception on May 17, 1990 through June 30, 1999, are as follows:
no revenues;
net losses of approximately $95 million (including net losses of
approximately $5 million during the year ended December 31, 1997 and $48
million during the year ended December 31, 1998); and
net losses applicable to common stock of approximately $206 million, which
includes a deemed dividend on our former 5% Delayed Convertible Preferred
Stock (the '5% Preferred Stock') of $52 million. In November 1997, we
exchanged 1,846,799 shares of our 10 1/2% Series C Convertible Preferred
Stock for all of the issued and outstanding shares of 5% Preferred Stock.
We do not expect any revenues before 2001, and still have a variety of
hurdles to surmount before commencing operations. We have not started to
broadcast CD Radio and do not expect to generate any revenues from operations
until the first quarter of 2001 or to generate positive cash flow from
operations until the third quarter of 2001, at the earliest. Our ability to
generate revenues, generate positive cash flow and achieve profitability will
depend upon a number of factors, including:
raising additional financing;
the timely receipt of all necessary regulatory authorizations;
the successful and timely construction and deployment of our satellite
system;
the development and manufacture by one or more consumer electronics
manufacturers of devices capable of receiving CD Radio; and
the successful marketing and consumer acceptance of CD Radio.
We cannot assure you that we will accomplish any of the above, that CD Radio
will ever commence operations, that we will attain any particular level of
revenues, that we will generate positive cash flow or that we will achieve
profitability.
WE NEED ADDITIONAL FINANCING TO BUILD AND LAUNCH OUR SERVICE
We need more money to continue implementing our business plan. We require
near-term funding to continue building our system. We believe we can fund our
planned operations and the construction of our satellite and terrestrial system
into the first quarter of 2000 from our working capital at July 31, 1999, which
includes:
the proceeds from our sale of 5,000,000 shares of common stock to Prime 66
Partners, L.P. for $100 million on November 2, 1998;
our sale of 9.2% Series A Junior Cumulative Convertible Preferred Stock to
Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P.,
which we refer to as the 'Apollo Investors,' for $135 million on
December 23, 1998; and
4
<PAGE>
the proceeds from our sale of 200,000 units, each unit consisting of
$1,000 principal amount of 14 1/2% senior secured notes due 2009 and three
warrants, each to purchase 3.65 shares of our common stock, for $200
million on May 18, 1999.
We have exercised an option granted us by the Apollo Investors to sell them
650,000 shares of our 9.2% Series B Junior Cumulative Convertible Preferred
Stock, par value $.001 per share, for $65 million. Subject to customary
conditions and there not having occurred a material adverse change, we expect to
sell these shares to the Apollo Investors shortly after the date of this
prospectus. We refer to our 9.2% Series A Junior Cumulative Convertible
Preferred Stock and our 9.2% Series B Junior Cumulative Convertible Preferred
Stock together as the 'Junior Preferred Stock.'
We currently do not have sufficient financing commitments to completely
fund our pre-operational capital requirements. We expect to satisfy the
remainder of our funding requirements through the issuance of debt or equity
securities or a combination of debt and equity securities. We cannot assure you
that we will obtain additional financing on favorable terms or that we will do
so on a timely basis.
We estimate that we will need the following amounts for the following
purposes:
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<S> <C>
to develop and commence operation of CD Radio by the end of $1,170 million
the fourth quarter of 2000
to fund operations through the first full year of operations $ 150 million
ending with the fourth quarter of 2001
Total through the first year of operations $1,320 million
</TABLE>
We have or expect that we may have use of the following funds to develop
and operate CD Radio:
<TABLE>
<S> <C>
net funds raised through June 30, 1999 (including those $ 832 million
borrowed under a term loan facility which must be
refinanced or repaid in an aggregate principal amount of
$115 million by the earlier of February 29, 2000 and ten
days prior to the launch of our second satellite)
funds from the sale of 9.2% Series B Junior Cumulative $ 63 million
Convertible Preferred Stock to the Apollo Investors, net
of fees and expenses (which are expected to be received in
October 1999)
funds which Bank of America may, but is not required to, $ 106 million
arrange for us ($225 million less $115 million to repay
our existing bank credit facility, net of estimated fees and
expenses)
Total funds we may, or expect to be able to, access $1,001 million
</TABLE>
After we give effect to the funds we have and the funds we expect to raise,
we estimate that we will need an additional $169 million to develop and commence
operation of CD Radio by the end of the fourth quarter of 2000 and an additional
$150 million to fund our business through the first full year of operations. If
Bank of America is unable to arrange a new credit facility, we will need to
raise $115 million to refinance the credit facility in the first quarter of 2000
and an additional $106 million to fund our operations through the end of the
fourth quarter of 2000. The availability of this new credit facility, which we
expect to draw on to repay amounts outstanding at maturity under our existing
bank credit facility, will be influenced by a variety of factors, some of which,
including the market for syndicated bank loans generally, are outside of our
control. We will require more money than estimated if there are delays, cost
overruns, launch failures or other adverse developments.
WE FACE MANY FINANCING CHALLENGES AND CONSTRAINTS
We face many challenges and constraints in financing our development and
operations, including those listed below.
5
<PAGE>
Our debt instruments limit our ability to incur indebtedness. The
indentures governing our 15% senior secured discount notes due 2007 and our
14 1/2% senior secured notes due 2009 limit our ability to incur additional
indebtedness. In addition, we expect any future senior indebtedness will contain
similar limits on our ability to incur additional indebtedness.
We will have to satisfy a variety of conditions before we can obtain any
syndicated bank borrowings. We entered into a credit agreement with Bank of
America and other lenders in July 1998 under which Bank of America and the other
lenders agreed to provide us a term loan facility of up to $115 million maturing
on the earlier of February 29, 2000 and ten days prior to the launch of our
second satellite. Bank of America has also agreed to attempt to arrange a
syndicate of lenders to provide us with a term loan facility of $225 million. To
borrow the funds under this term loan facility, we must first satisfy specified
conditions and negotiate, execute and deliver definitive loan documents. The
availability of this new credit facility, which we expect to draw on to repay
amounts outstanding at maturity under our existing bank credit facility, will be
influenced by a variety of factors, some of which, including the market for
syndicated bank loans generally, are outside of our control. We intend to use a
portion of the proceeds from this term loan facility to repay the existing term
loan facility and for other general corporate purposes. The term loan facility
would provide us with approximately $106 million of net additional funds after
repayment of the existing term loan facility and the payment of fees and
expenses.
We have substantial near-term requirements for additional funds. We require
substantial funds to construct and launch the satellites that will be part of
our broadcast system. We are committed to make aggregate payments of
approximately $736 million under our Amended and Restated Contract with Loral
(the 'Loral Satellite Contract'), which includes $15 million of long-lead time
elements for a fifth satellite and $3 million for integration analysis of the
viability of using the Sea Launch platform as an alternative launch vehicle for
our satellites. We started paying for the construction of the satellites in
April 1997 and we must pay further installments through December 2003. Loral has
agreed to defer a total of $50 million of the payments under the Loral Satellite
Contract originally scheduled for payment in 1999. Interest on the deferred
amounts accrues at 10% per annum until December 2001, at which time interest
becomes payable quarterly in cash. We must pay the amounts deferred in
installments beginning in June 2002.
If we fail to secure the financing required to pay Loral on a timely basis,
we risk:
delays in launching our satellites and starting broadcasting operations;
increases in the cost of building or launching our satellites or other
activities necessary to put CD Radio into operation;
a default on our commitments to Loral, our creditors or others;
our inability to commence CD Radio service; and
the forced discontinuance of our operations or the sale of our business.
A delay in introducing our service could hinder our ability to raise
additional financing. Any delay in implementing our business plan would hurt our
ability to obtain the financing we need by adversely affecting our expected
results of operations and increasing our cost of capital. Our ability to begin
offering our CD Radio service at the end of the fourth quarter of 2000 depends
on Loral delivering completed satellites before the launch dates and providing
or obtaining launch services on a timely basis. A significant delay in the
development, construction, launch or commencement of operation of our satellites
would adversely affect our results of operations in a material way.
Other delays in implementing our business plan could also materially
adversely affect our results of operations. Several factors could delay us,
including the following:
obtaining additional authorizations from the FCC;
coordinating the use of S-band radio frequency spectrum with Mexico;
delays in or modifications to the design, development, technical
specifications, construction or testing of our satellites, receivers or
other aspects of our system;
delay in commercial availability of devices capable of receiving
CD Radio;
6
<PAGE>
failure of our vendors to perform as anticipated; and
a delayed or unsuccessful satellite launch or deployment.
We have previously incurred some delays in implementing our business plan.
During any period of delay, we would continue to need significant amounts of
cash to fund capital expenditures, administrative and overhead costs,
contractual obligations and debt service. Accordingly, any delay could
materially increase the aggregate amount of funds we need to commence
operations. Additional financing may not be available on favorable terms or at
all during periods of delay.
WE ARE DEPENDENT UPON LORAL TO BUILD AND LAUNCH OUR SATELLITES
Our business depends upon Loral successfully constructing and launching the
satellites to transmit CD Radio. We are relying upon Loral to construct and to
deliver these satellites in orbit on a timely basis. We cannot assure you that
Loral will deliver the satellites or provide these launch services on a timely
basis, if at all. If Loral fails to deliver functioning satellites in a timely
manner, our business could be materially adversely affected. Although our
agreement with Loral requires Loral to pay us penalties for late delivery, based
on the length of the delay, these remedies may not adequately mitigate the
damage any launch delays cause to our business. In addition, if Loral fails to
deliver the designated launch services due to causes beyond its control, Loral
will not be liable for the delay or the damages caused by the delay. While the
satellites are under construction, Loral is at risk should anything happen to
the satellites. In addition, Loral is responsible for making sure the satellites
meet specific performance specifications at the time of launch (in the case of
our first three satellites) or at the time of delivery to our ground storage
location (in the case of our fourth satellite). However, if any satellite is
destroyed during or after launch or if the fourth satellite is damaged or
destroyed while in storage, Loral will not be responsible to us for the cost of
replacing it.
We depend on Loral to obtain access to available slots on launch vehicles
and to contract with third-party launch service providers for the launch of our
satellites. A launch service provider may postpone one or more of our launches
for a variety of reasons, including:
technical problems;
a launch of a scientific satellite whose mission may be degraded by delay;
the need to conduct a replacement launch for another customer; or
a launch of another customer's satellite whose launch was postponed.
Generally, Loral is not liable to us for a satellite or launch failure. However,
if the first Proton launch vehicle used to launch our satellites fails, Loral
will provide us with a free replacement launch. The timing of this replacement
launch cannot be predicted, but in any event would not be before delivery of the
fourth satellite.
We also depend on Loral to ensure that the software to test the satellites
before launch, to run the satellites and to track and control the satellites,
will be capable of handling the potential problems that may arise beginning on
January 1, 2000. These potential problems are known as 'The Year 2000 Issue.'
The Year 2000 Issue is the result of computer programs being written using two
digits (rather than four) to define a year, which could result in
miscalculations or system failures resulting from recognition of a date
occurring after December 31, 1999 as falling in the year 1900 (or another year
in the 1900s) rather than the year 2000 or thereafter. While currently the above
mentioned systems are not fully prepared to handle The Year 2000 Issue, Loral is
aware of this condition and has assured us that all Loral systems will be year
2000 compliant before the critical date of January 1, 2000.
WE ARE DEPENDENT ON LUCENT TO DESIGN AND DEVELOP CHIP SETS
Our business depends upon Lucent successfully designing, developing and
manufacturing commercial quantities of integrated circuits (or chip sets), which
will be used in consumer electronic devices capable of receiving CD Radio's
broadcasts. If Lucent fails to deliver commercial quantities of the chip sets in
a timely manner, the costs of the chip set development work
7
<PAGE>
increases significantly or the price of the chip set is not low enough to
support the introduction of consumer devices capable of receiving CD Radio, our
business will be materially adversely affected. We have agreed to pay Lucent the
cost of the development work related to the chip sets, currently estimated to be
approximately $27 million.
We cannot assure you that:
Lucent will be able to deliver significant quantities of chip sets in
order for us to commence operations at the end of the fourth quarter of
2000;
the cost to us of the chip set development work will not exceed $27
million; or
Lucent will be able to establish a price for the chip sets which will be
low enough to encourage and support the widespread introduction of
consumer devices capable of receiving CD Radio.
WE ARE NOT SURE THERE WILL BE A MARKET FOR CD RADIO
Currently no one offers a commercial satellite radio service such as
CD Radio in the United States. As a result, our proposed market is new and
untested and we cannot reliably estimate the potential demand for this service
or the degree to which our proposed service will meet that demand. We cannot
assure you that there will be sufficient demand for CD Radio to enable us to
achieve significant revenues or cash flow or profitable operations. CD Radio
will achieve or fail to gain market acceptance depending upon factors beyond our
control, including:
the willingness of consumers to pay subscription fees to obtain satellite
radio broadcasts;
the cost, availability and consumer acceptance of devices capable of
receiving CD Radio;
our marketing and pricing strategies and those of our competitor;
the development of alternative technologies or services; and
general economic conditions.
OUR PLANNED SYSTEM RELIES ON UNPROVEN APPLICATIONS OF TECHNOLOGY
Our satellite system applies technology in new and unproven ways. CD Radio
is designed to be broadcast from three satellites orbiting the Earth. Two of the
three satellites will transmit the same signal at any given time to receivers
that will receive signals through antennas. This design applies technology in
new and unproven ways. Accordingly, we cannot assure you that the CD Radio
system will work as planned.
Some obstructions will adversely affect CD Radio reception. High
concentrations of tall buildings, other obstructions, such as those found in
large urban areas, and tunnels will block the signals from both transmitting
satellites. We plan to install terrestrial repeating transmitters to rebroadcast
CD Radio in some urban areas to mitigate this problem. However, some areas with
impediments to satellite line-of-sight may still experience 'dead zones.' We
cannot assure you that the CD Radio system will operate as planned with the
technology we have developed.
Our system has never been tested with orbiting satellites. We cannot assure
you that the CD Radio system will function as intended until we test it with
orbiting satellites and antennas and receivers suitable for commercial
production. We have never done this kind of test because there are no commercial
satellites in orbit capable of transmitting radio signals on S-band frequencies
to the United States. In support of our application for our FCC license, we
conducted a terrestrial simulation of our proposed radio service from November
1993 through November 1994. For the demonstration, we transmitted S-band signals
to a prototype receiver and satellite dish antenna installed in a car to
simulate specific transmission characteristics of our planned system. As part of
the demonstration, the prototype receiver received 30 channels of compact disc
quality music while the car was driven throughout the range. We have also
successfully tested our system in San Francisco, where our terrestrial repeater
network has been completed.
8
<PAGE>
SATELLITE LAUNCHES HAVE SIGNIFICANT RISKS
We cannot assure you that the launches of our satellites will be
successful. Satellite launches have significant risks, including launch failure,
damage or destruction of the satellite during launch and failure to achieve a
proper orbit or operate as planned. The Loral Satellite Contract does not
protect us against the risks inherent in satellite launches or in-orbit
operations. Our three satellites are scheduled to be launched on Proton launch
vehicles, which are built by Russian entities. The Proton family of launch
vehicles has a launch success rate of 92% based on its last 50 launches. Past
experience, however, is not necessarily indicative of future performance.
On July 5, 1999, the second stage of a Proton rocket launched from the
Baikonur Cosmodrome in Kazakhstan malfunctioned during flight. As a result of
this failure, Proton rocket launches were suspended and the Russian government
appointed an official investigatory commission. In late July 1999, the
commission announced that the failure was caused by a fire which started in one
of the launch vehicle's engines. Proton launches were resumed in
September 1999. We cannot assure you that these developments will not delay one
or more of our anticipated satellite launches.
As part of our risk management program, we contracted with Loral for the
construction of a fourth satellite that we will use as a ground spare and for
some of the long-lead time parts for a fifth satellite. We also plan to obtain
insurance covering a replacement launch to the extent required to cover risks
Loral does not assume.
SATELLITES HAVE A LIMITED LIFE AND MAY FAIL IN ORBIT
We expect that our satellites will last approximately 15 years, and that
after this period their performance in delivering CD Radio will deteriorate. We
cannot assure you, however, of the useful life of any particular satellite. Our
operating results would be adversely affected if the useful life of our initial
satellites is significantly shorter than 15 years.
The useful lives of our satellites will vary and will depend on a number of
factors, including:
quality of construction;
amount of fuel on board;
durability of component parts;
expected gradual environmental degradation of solar panels;
random failure of satellite components, which could result in damage to or
loss of a satellite; and
in rare cases, damage or destruction by electrostatic storms or collisions
with other objects in space.
If one of our satellites fails on launch or in orbit and if we are required to
launch our spare satellite, our operational timetable will be delayed for up to
six months. If two or more of our satellites fail on launch or in orbit, our
operational timetable could be delayed by at least 16 months.
INSURANCE MAY NOT COVER ALL RISKS OF LAUNCHING AND OPERATING SATELLITES
There are many potential risks to insure. Our agreement with Loral does not
protect us against launch vehicle failure, failure of a satellite to deploy
correctly or failure of a satellite to operate as planned. Accordingly, we must
purchase insurance to protect adequately against these risks. We cannot assure
you that we will be able to purchase launch insurance or in-orbit insurance. In
addition, the insurance premiums we pay may increase substantially upon any
adverse change in insurance market conditions.
Many risks we face may not be covered by insurance. Our insurance may not
cover all of our losses, and may not fully reimburse us for the following:
expenditures for a satellite which fails to perform to specifications
after launch;
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damages from business interruption, loss of business and any expenditures
arising from satellite failures or launch delays; and
losses for which there are deductibles, exclusions and conditions.
OUR TECHNOLOGY MAY BECOME OBSOLETE
We will depend on technologies being developed by third parties to
implement key aspects of our system. These technologies may become obsolete. We
may be unable to obtain more advanced technologies on a timely basis or on
reasonable terms, or our competitors may obtain more advanced technologies and
we may not have access to these technologies.
RECEIVERS AND ANTENNAS ARE NOT YET AVAILABLE
To receive the CD Radio service, a subscriber will need to purchase a
device capable of receiving our broadcasts as well as an appropriate antenna.
Although we have entered into an agreement with Lucent to develop and
manufacture chip sets that represent the essential element of CD Radio
receivers, we cannot assure you that Lucent will succeed in this development
effort. We have also entered into agreements with Delco, Recoton, Alpine and
Matsushita to design and develop devices capable of receiving CD Radio
broadcasts and antennas for use with these devices. We cannot assure you that
Delco, Recoton, Alpine or Matsushita will succeed in their development efforts.
No one currently manufactures devices capable of receiving CD Radio
broadcasts and suitable antennas, and none of Delco, Recoton, Alpine and
Matsushita has agreed to manufacture commercial quantities of these devices. We
do not intend to manufacture or distribute CD Radio receivers and antennas
ourselves. We have discussed the manufacture of CD Radio receivers and antennas
for retail sale in the United States with several manufacturers, including
Delco, Visteon, Recoton, Alpine and Matsushita. These discussions may not result
in a binding commitment on the part of any manufacturer to produce, market and
sell devices capable of receiving CD Radio broadcasts and suitable antennas in a
timely manner and at a price that would permit the widespread introduction of
CD Radio in accordance with our business plan. In addition, any manufacturers of
devices capable of receiving CD Radio broadcasts and antennas may not produce
them in sufficient quantities to meet anticipated consumer demand. Our business
would be materially adversely affected if we cannot arrange for the timely
development of these products for commercial sale at an affordable price and
with sufficient retail distribution.
Our FCC license requires that we design a receiver that is interoperable
with the national satellite radio system being developed by the other existing
licensee, XM Satellite Radio Inc. Although we have made progress towards
designing a receiver that is interoperable with the system XM is constructing,
we cannot predict whether we will be able to satisfy this interoperability
requirement because of the various technological challenges involved. Complying
with this interoperability requirement also could make the devices capable of
receiving CD Radio broadcasts and the related antenna more difficult and costly
to manufacture. Accordingly, this interoperability requirement could delay the
commercial introduction of these products or require that they be sold at higher
prices.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST CONVENTIONAL RADIO STATIONS,
THE OTHER HOLDER OF AN FCC LICENSE TO PROVIDE THIS SERVICE OR OTHER POTENTIAL
PROVIDERS OF THIS SERVICE
We will be competing with established conventional (over the air) radio
stations, which, unlike CD Radio:
do not charge subscription fees;
do not require users to purchase a separate receiver and antenna;
often offer local information programming such as local news and traffic
reports; and
in the case of some FM stations, may begin to broadcast digital, compact
disc quality signals before we start operations.
In addition to direct competition from XM, we face the possibility of
additional satellite broadcast radio competition:
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if the FCC grants additional licenses for satellite-delivered radio
services;
if holders of licenses for other portions of the electromagnetic spectrum
(currently licensed for other uses) obtain changes to their licenses; or
if holders of licenses without FCC restrictions for other portions of the
spectrum devise a method of broadcasting satellite radio.
Finally, one or more competitors may design a satellite radio broadcast
system that is superior to our system. The competitive factors listed above
could materially adversely affect our results of operations. In addition, any
delays in introducing our service also could place us at a competitive
disadvantage relative to any competitor that begins operations before us.
WE MAY NOT BE ABLE TO SUCCESSFULLY MANAGE RAPID GROWTH
We expect to experience significant and rapid growth in the scope and
complexity of our business as we proceed with the development of our satellite
radio system. As of the date of this prospectus, we do not currently employ
sufficient staff to program our broadcast service, manage operations, control
the operation of our satellites or handle sales and marketing efforts. Although
we have hired experienced executives in these areas, we must hire many
additional employees before we begin commercial operations of our service. This
growth is likely to place a substantial strain on our management and operational
resources. Our results of operations could be materially adversely affected if
we fail to do any of the following:
develop and implement effective management systems;
hire and train sufficient personnel to perform all of the functions
necessary to effectively provide our service;
manage our subscriber base and business; or
manage our growth effectively.
WE ARE SUBJECT TO CONTINUING AND DETAILED REGULATION BY THE FCC
Our FCC license is being challenged. On October 10, 1997, the FCC's
International Bureau granted us an FCC license after we submitted a winning bid
in an FCC auction. One of the low-bidders in the FCC auction applied to have the
full FCC review the grant of our FCC license. The application requests that the
FCC adopt restrictions on foreign ownership and overrule the granting of our FCC
license on the basis of our ownership. If the FCC denies this application, the
complaining party may appeal to the U.S. Court of Appeals. Because less than 25%
of our voting stock is owned by non-U.S. persons, we believe the FCC will uphold
the grant of our FCC license. We cannot predict the ultimate outcome of any
proceedings relating to this application or any other proceedings that
interested parties may file. Since December 29, 1997, there have been no
developments in this matter.
We need a modification to our FCC license before we can begin operation. In
May 1998, we decided to increase the number of satellites in our system from two
to three and to change the orbit of those satellites. To implement these
changes, the FCC must approve changes to our FCC license. If the FCC were to
deny our application to modify our license, we would be required to redesign our
proposed system and modify our satellites, at a significant cost, and our
commercial operations would be delayed. On December 11, 1998, we filed an
application with the FCC for these changes. Although we believe that the FCC
will approve our application for this necessary change, we cannot assure you
that this will occur. XM and WCS Radio, Inc. have filed comments objecting to
this modification of our FCC license. The FCC staff has requested additional
materials from us, and we are in the process of complying with the staff's
request. We cannot predict the time it will take the FCC to act on our
application or any of these objections, or whether additional submissions or
waiver requests will be necessary, and we cannot be sure that the modification
we have requested will be granted.
We will need to renew our FCC license after eight years. The term of our
FCC license with respect to each satellite is eight years, beginning on the date
it is declared operational after it is inserted into orbit. When the term of our
FCC license for each satellite expires, we must apply for
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a renewal of the relevant license. If the FCC does not renew our FCC license, we
would be forced to cease broadcasting CD Radio. We cannot assure you that we
will obtain these renewals.
We need FCC approval to operate our terrestrial repeating transmitters.
Although we plan to install terrestrial repeating transmitters to rebroadcast
CD Radio in some urban areas, the FCC has not yet established rules governing
the application procedure for obtaining authorizations to construct and operate
terrestrial repeating transmitters on a commercial basis. The FCC initiated a
rulemaking on the subject in March 1997 and received several comments urging the
FCC to consider placing restrictions on the ability to deploy terrestrial
repeating transmitters. We cannot predict the outcome of this process.
The United States needs to complete frequency coordination with Mexico. To
use our assigned spectrum, the United States government must complete a process
of frequency coordination with Mexico. We cannot assure you that the United
States government will be able to coordinate use of this spectrum with Mexico or
do so in a timely manner. The United States and Canadian governments were
required to complete a similar process and have done so.
New devices may interfere with CD Radio broadcasts. The FCC has proposed
regulations to allow a new type of lighting device that may generate radio
energy in the part of the spectrum we intend to use. We believe the current
proposed regulations for these devices do not contain adequate safeguards to
prevent interference with services such as CD Radio. If the FCC fails to adopt
adequate technical standards specifically applicable to these devices and if the
use of these devices becomes commonplace, we could experience difficulties
enforcing our rights. If the FCC fails to adopt adequate standards, the new
devices could materially adversely affect reception of our broadcasts. Although
we believe that the FCC will set adequate standards to prevent harmful
interference, we cannot assure you that it will do so.
We may be adversely affected by changing regulations. To provide CD Radio,
we must retain our FCC license and obtain or retain other requisite approvals.
Our ability to do so could be affected by changes in laws, FCC regulations,
international agreements governing communications policy generally or
international agreements relating specifically to CD Radio. In addition, the
manner in which CD Radio would be offered or regulated could be affected by
these changes.
We may be adversely affected by foreign ownership restrictions. The
Communications Act of 1934 restricts ownership in some broadcasters by
foreigners. If these foreign ownership restrictions were applied to us, we would
need further authorization from the FCC if our foreign ownership were to exceed
25%. The order granting our FCC license determined that, as a private carrier,
those restrictions do not apply to us. However, the order granting our FCC
license stated that our foreign ownership status under the Communications Act
could be raised in a future proceeding. The pending appeal of the grant of our
FCC license may bring the question of foreign ownership restrictions before the
full FCC.
We could be required to comply with public service regulations. The FCC has
indicated that it may impose public service obligations on satellite radio
broadcasters in the future, which could add to our costs or reduce our revenues.
For example, the FCC could require broadcasters to set aside channels for
educational programming. We cannot predict whether the FCC will impose public
service obligations or the impact that any of these obligations would have on
our results of operations.
CONSUMERS MAY STEAL OUR SERVICE
Consumers may steal the CD Radio signal. Although we plan to use encryption
technology to mitigate signal piracy, we do not believe that this technology is
infallible. Accordingly, we cannot assure you that we can eliminate theft of the
CD Radio signal. Widespread signal theft could reduce the number of motorists
willing to pay us subscription fees and materially adversely affect our results
of operations.
OUR PATENTS MAY NOT BE SUFFICIENT TO PREVENT OTHERS FROM COPYING ELEMENTS OF OUR
SYSTEM
Although our U.S. patents cover various features of satellite radio
technology, our patents may not cover all aspects of our system. Others may
duplicate aspects of our system which are not
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covered by our patents without liability to us. In addition, competitors may
challenge, invalidate or circumvent our patents. We may be forced to enforce our
patents or determine the scope and validity of other parties' proprietary rights
through litigation. In this event, we may incur substantial costs and we cannot
assure you of success in this litigation. In addition, others may block us from
operating our system if our system infringes their patents, their pending patent
applications which mature into patents or their inventions developed earlier
which mature into patents. Should we desire to license our technology, we cannot
assure you that we can do so. Assuming we pay all necessary fees on time, the
earliest expiration date on any of our patents is April 10, 2012.
WE MAY NOT BE ABLE TO SATISFY A CHANGE OF CONTROL OFFER
The indentures governing our senior secured notes and our senior secured
discount notes and the certificates of designations for our Series C Preferred
Stock, 9.2% Series A Junior Cumulative Convertible Preferred Stock and 9.2%
Series B Junior Cumulative Convertible Preferred Stock contain provisions that
apply to a change of control of our company. Additionally, future securities
sold under this registration statement may contain similar provisions. If
someone triggers a change of control as defined in those instruments, or in
future instruments sold under this registration statement, we must offer to
purchase those securities. If we have to make such an offer, we cannot be sure
that we will have enough funds to pay for all the securities that holders could
tender. If we fail to pay for our senior secured notes and our senior secured
discount notes in a change of control offer, we will be in default under the
indentures for the affected notes and the holders of these notes and their
trustees may demand that we prepay all amounts outstanding under these notes. If
we fail to pay for the Series C Preferred Stock in a change of control offer,
the holders of a majority of this class of stock will be able to elect directors
constituting at least 25% of our board of directors, up to a maximum of two
directors. If we fail to pay for the 9.2% Series A Junior Cumulative Convertible
Preferred Stock and the 9.2% Series B Junior Cumulative Convertible Preferred
Stock in a change of control offer because of our obligations to other holders
of our debt securities or preferred stock, we must use our best efforts to
satisfy these obligations or to obtain permission to repurchase these classes of
preferred stock. Any securities sold under this registration statement in the
future may have similar provisions.
EXISTING STOCKHOLDERS MAY CONTROL US AND THEIR INTERESTS MAY CONFLICT WITH YOURS
As of August 31, 1999, our executive officers and directors beneficially
owned or could vote approximately 25.4% of our outstanding common stock. In
addition, as of that date, our executive officers and directors together with
Prime 66 and the Apollo Investors beneficially owned or could vote approximately
47% of our outstanding common stock (assuming conversion of the Junior Preferred
Stock). As a result of this concentration of ownership, these stockholders, if
they choose to act in concert, may exert considerable influence over our
management and policies. Similarly, some or all of these stockholders could
delay, defer or prevent a change of control.
WE DO NOT INTEND TO PAY ANY DIVIDENDS ON OUR COMMON STOCK
We have never paid any dividends on our common stock, and we do not
currently anticipate paying any dividends on this stock. In addition, many of
our agreements limit our ability to pay dividends.
OUR STOCK PRICE HAS BEEN VOLATILE
The trading price of our common stock has been volatile, and it may
continue to be so. This trading price could fluctuate widely in response to
announcements of business and technical developments by us or our competitors,
our success in accomplishing our business plan and other events or factors,
including expectations by investors and securities analysts and our prospects.
In addition, stock markets have experienced extreme price volatility in recent
years. This volatility has had a substantial effect on the market prices of
development stage companies, at times for reasons unrelated to their operating
performance. These broad market fluctuations may adversely affect the price of
our common stock.
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OUR RIGHTS PLAN AND ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS COULD
PREVENT AN ACQUISITION OF OUR COMPANY
Our stockholders rights plan, the anti-takeover provisions in our charter
documents and any issuance of our preferred stock could be deemed to have
anti-takeover effects and may delay, deter or prevent an acquisition of our
company that a stockholder might consider to be in his or her best interest. Our
board of directors has the authority to issue shares of preferred stock in one
or more series and to determine the price, rights, preferences and privileges of
those shares without any further vote or action by stockholders. We have adopted
a stockholders rights plan and in connection with the stockholders rights plan,
our board of directors designated 300,000 shares of preferred stock as Series B
Preferred Stock. Any issuance of our preferred stock, including preferred stock
with voting and conversion rights, as well as our Series C Preferred Stock, our
9.2% Series A Junior Cumulative Convertible Preferred Stock and our 9.2%
Series B Junior Cumulative Convertible Preferred Stock, which are convertible
into shares of common stock, may adversely affect the voting power of the
holders of common stock.
We also may become subject to the anti-takeover provisions of Section 203
of the Delaware General Corporation Law. These provisions could delay or prevent
a change of our control or adversely affect the market price of our common
stock. Furthermore, the severance provisions of employment agreements with some
members of our management provide for payments that could discourage an
attempted change in our control.
THERE IS NO PUBLIC MARKET FOR THE DEBT SECURITIES, PREFERRED STOCK OR WARRANTS
Before the offering of any debt securities, preferred stock or warrants,
there will have been no public market for those securities and we do not intend
to apply for the listing of any debt securities or preferred stock that may be
offered by this prospectus on any securities exchange or for quotation of any
debt securities or preferred stock on any public market. We cannot assure you
that an active public market for any debt securities, preferred stock or
warrants will develop or as to the liquidity, if any, that may develop in such
market. If an active public market in any new class of securities does not
develop, the market price and liquidity of those securities may be adversely
affected. Please refer to the section in this prospectus entitled 'Plan of
Distribution.'
Historically, the market for non-investment grade debt securities and
preferred stock has been affected by disruptions that have caused substantial
volatility in the prices of securities similar to the debt securities, preferred
stock and warrants that may be offered by this prospectus. We cannot assure you
that any market for those securities will not be affected by similar
disruptions.
HOLDERS OF DEBT SECURITIES WITH ORIGINAL ISSUE DISCOUNT MAY BE LIMITED IN
BANKRUPTCY CLAIMS
Debt securities that are issued or treated as issued at a discount from
their principal amount will generally be treated as having original issue
discount. If a bankruptcy case is commenced by or against us under the United
States Bankruptcy Code after the issuance of the debt securities, the claim of a
holder of the debt securities may be limited to an amount equal to the sum of
(1) the initial public offering price for the debt securities and (2) that
portion of the original issue discount that is not deemed to constitute
'unmatured interest' for purposes of the United States Bankruptcy Code. Any
original issue discount that was not amortized as of the date of the
commencement of a bankruptcy filing would constitute 'unmatured interest.'
DILUTION UPON CONVERSION OF PREFERRED STOCK AND CONVERTIBLE DEBT
Our common equity holders and warrant holders may be diluted by the
following actions:
if the holders of our Series C Preferred Stock convert their shares into
common stock, which may be done at any time;
if we issue convertible debt securities (which we may do at any time
unless prior approval of our stockholders is required under Delaware law,
the rules of the Nasdaq National Market or the rules of any other stock
exchange on which our securities may be listed or the issuance is limited
by the instruments governing our debt securities) and the holders thereof
convert their shares into common stock;
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if the Apollo Investors convert their Junior Preferred Stock into common
stock, which may be done at any time;
if we issue additional equity securities, which we may do at any time
unless prior approval of our stockholders is required under Delaware law,
the rules of the Nasdaq National Market or the rules of any other stock
exchange on which our equity securities may be listed; or
if Ford exercises its warrants to purchase up to four million shares of
our common stock, which Ford may do only if it satisfies requirements
relating to the manufacture of vehicles capable of receiving CD Radio.
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio of earnings to combined fixed
charges and preferred stock dividends for the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------- SIX MONTHS ENDED
1994 1995 1996 1997 1998 JUNE 30, 1999
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(1)................... -- -- -- -- -- --
Ratio of earnings to combined
fixed charges and preferred
stock dividends(1)........... -- -- -- -- -- --
</TABLE>
- ------------
(1) No figure is provided for any period during which the applicable ratio was
less than 1.00.
The ratio of earnings to fixed charges is computed by dividing our
earnings, which include income before taxes (excluding the cumulative and
transition effects of accounting changes) and fixed charges, by fixed charges.
The ratio of earnings to combined fixed charges and preferred stock dividends is
computed by dividing earnings by the sum of fixed charges and dividends on
preferred stock. 'Fixed charges' consist of interest on debt and a portion of
rentals determined to be representative of interest. For the years ended
December 31, 1994, 1995, 1996, 1997 and 1998 and for the six months ended
June 30, 1999, our earnings were insufficient to cover our fixed charges by
approximately $4.1 million, $2.1 million, $2.8 million, $4.8 million, $62.3
million and $46.4 million. Earnings were also inadequate to cover our combined
fixed charges and preferred stock dividends over the same time periods by
approximately $4.1 million, $2.1 million, $2.8 million, $59.1 million, $99.9
million and $66.0 million.
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, we will
use the net proceeds from the sale of the offered securities for general
corporate purposes, including capital expenditures, the reduction of
indebtedness and other purposes. We may invest funds not required immediately
for such purposes in short-term obligations or we may use them to reduce the
future level of our indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debt securities sets forth
certain general terms that may apply to the debt securities. The particular
terms of any debt securities will be described in the prospectus supplement
relating to those debt securities. For purposes of this 'Description of Debt
Securities,' the term 'CD Radio' refers to our company but not to any of its
subsidiaries.
Any senior debt securities will be issued in one or more series under an
indenture, as supplemented or amended from time to time, between us and an
institution that we will name in the related prospectus supplement, as trustee.
Any subordinate debt securities will be issued in one or more series under an
indenture, as supplemented or amended from time to time, between us and an
institution that we will name in the related prospectus supplement, as trustee.
For ease of reference, we will refer to the indenture relating to any senior
debt securities as the senior indenture and to the indenture relating to any
subordinate debt securities as the subordinate indenture.
This summary of the terms and provisions of the debt securities and the
indentures is not necessarily complete, and we refer you to the copy of the
forms of the indentures which are filed as exhibits to the registration
statement of which this prospectus forms a part. Whenever we refer to particular
defined terms of the indentures in this section or in a prospectus supplement,
we are incorporating these definitions into this prospectus or the prospectus
supplement.
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GENERAL
The debt securities will be issuable in one or more series in accordance
with an indenture supplemental to the applicable indenture or a resolution of
our board of directors or a committee of the board. Unless otherwise specified
in a prospectus supplement, each series of senior debt securities will rank
equally in right of payment with all of our other senior obligations. Each
series of subordinate debt securities will be subordinated and junior in right
of payment to the extent and in the manner described in the subordinate
indenture and any supplemental indenture relating to the subordinate debt
securities. Except as otherwise provided in a prospectus supplement, the
indentures do not limit our ability to incur other secured or unsecured debt,
whether under the indentures, any other indenture that we may enter into in the
future or otherwise. For more information, you should read the prospectus
supplement relating to a particular offering of securities.
The applicable prospectus supplement will describe the following terms of
the series of debt securities with respect to which this prospectus is being
delivered:
the title of the debt securities of the series and whether such series
constitutes senior debt securities or subordinated debt securities;
any limit on the aggregate principal amount of the debt securities;
the person to whom any interest on a debt security shall be payable, if
other than the person in whose name that debt security is registered on
the regular record date;
the date or dates on which the principal and premium, if any, of the debt
securities of the series are payable or the method of that determination
or the right to defer any interest payments;
the rate or rates (which may be fixed or variable) at which the debt
securities will bear interest, if any, or the method of determining the
rate or rates, the date or dates from which such interest will accrue, the
interest payment dates on which any such interest will be payable or the
method by which the dates will be determined, the regular record date for
any interest payable on any interest payment date and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve
30-day months;
the place or places where the principal of and any premium and any
interest on the debt securities of the series will be payable, if other
than the Borough of Manhattan, The City of New York;
the period or periods within which, the date or dates on which, the price
or prices at which and the terms and conditions upon which the debt
securities of the series may be redeemed, in whole or in part, at our
option or otherwise;
our obligation, if any, to redeem, purchase or repay the debt securities
of the series pursuant to any sinking fund or analogous provisions or at
the option of the holders and the period or periods within which, the
price or prices at which, the currency or currencies including currency
unit or units in which and the terms and conditions upon which, the debt
securities shall be redeemed, purchased or repaid, in whole or in part;
the terms, if any, upon which the debt securities of the series may be
convertible into or exchanged for other debt securities, preferred stock
or common stock of CD Radio and the terms and conditions upon which the
conversion or exchange shall be effected, including the initial conversion
or exchange price or rate, the conversion or exchange period and any other
additional provisions;
the denominations in which any debt securities will be issuable, if other
than denominations of $1,000 and any integral multiple thereof;
the currency, currencies or currency units in which payment of principal
of and any premium and interest on debt securities of the series shall be
payable, if other than United States dollars;
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any index, formula or other method used to determine the amount of
payments of principal of and any premium and interest on the debt
securities;
if the principal amount payable at the stated maturity of debt securities
of the series will not be determinable as of any one or more dates before
the stated maturity, the amount that will be deemed to be the principal
amount as of any date for any purpose, including the principal amount
thereof which will be due and payable upon any maturity other than the
stated maturity or which will be deemed to be outstanding as of any date
(or, in any such case, the manner in which the deemed principal amount is
to be determined), and if necessary, the manner of determining the
equivalent thereof in United States currency;
if the principal of or any premium or interest on any debt securities is
to be payable, at our election or the election of the holders, in one or
more currencies or currency units other than that or those in which such
debt securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and
interest on such debt securities shall be payable, and the periods within
which and the terms and conditions upon which such election is to be made;
if other than the principal amount thereof, the portion of the principal
amount of the debt securities which will be payable upon declaration of
the acceleration of the maturity thereof or provable in bankruptcy;
the applicability of, and any addition to or change in, the covenants and
definitions then set forth in the applicable indenture or in the terms
then set forth in such indenture relating to permitted consolidations,
mergers or sales of assets;
any changes or additions to the provisions of the applicable indenture
dealing with defeasance, including the addition of additional covenants
that may be subject to our covenant defeasance option;
whether any of the debt securities are to be issuable in permanent global
form and, if so, the depositary or depositaries for such global security
and the terms and conditions, if any, upon which interests in such debt
securities in global form may be exchanged, in whole or in part, for the
individual debt securities represented thereby in definitive registered
form, and the form of any legend or legends to be borne by the global
security in addition to or in lieu of the legend referred to in the
applicable indenture;
the appointment of any trustee, any authenticating or paying agents,
transfer agent or registrars;
the terms, if any, of any guarantee of the payment of principal, premium
and interest with respect to debt securities of the series and any
corresponding changes to the provisions of the applicable indenture as
then in effect;
the terms, if any, of the transfer, mortgage, pledge or assignment as
security for the debt securities of the series of any properties, assets,
moneys, proceeds, securities or other collateral, including whether
certain provisions of the Trust Indenture Act are applicable and any
corresponding changes to provisions of the applicable indenture as then in
effect;
any addition to or change in the events of default with respect to the
debt securities of the series and any change in the right of the trustee
or the holders to declare the principal, premium and interest with respect
to the debt securities due and payable;
any applicable subordination provisions in addition to those set forth
herein with respect to subordinated debt securities;
if the securities of the series are to be secured, the property covered by
the security interest, the priority of the security interest, the method
of perfecting the security interest and any escrow arrangements related to
the security interest; and
any other terms of the debt securities not inconsistent with the
provisions of the applicable indenture.
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We may sell debt securities at a substantial discount below their stated
principal amount or debt securities that bear no interest or bear interest at a
rate which at the time of issuance is below market rates. We will describe the
material U.S. federal income tax consequences, accounting and other special
considerations applicable to the debt securities in the applicable prospectus
supplement.
If the purchase price of any of the debt securities is payable in one or
more foreign currencies or currency units or if any debt securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any debt securities is
payable in one or more foreign currencies or currency units, we will set forth
the restrictions, elections, specific terms and other information with respect
to such issue of debt securities and such foreign currency or currency units in
the applicable prospectus supplement.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable prospectus supplement,
principal, premium, if any, and interest, if any, on the debt securities will be
payable, without coupons, and the exchange of and the transfer of debt
securities will be registrable, at our office or agency maintained for such
purpose in the Borough of Manhattan, The City of New York and at any other
office or agency maintained for such purpose. Unless otherwise indicated in the
applicable prospectus supplement, the debt securities will be issued in
denominations of $1,000 and any integral multiples thereof.
Holders may present each series of debt securities for exchange as provided
above, and for registration of transfer, with the form of transfer endorsed
thereon, or with a satisfactory written instrument of transfer, duly executed,
at the office of the appropriate securities registrar or at the office of any
transfer agent designated by us for such purpose and referred to in the
applicable prospectus supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the indenture. We will
appoint the trustee of each series of debt securities as securities registrar
for such series under the indenture. If the applicable prospectus supplement
refers to any transfer agents, in addition to the securities registrar initially
designated by us with respect to any series, we may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that we maintain a transfer
agent in each place of payment for the series. We may at any time designate
additional transfer agents with respect to any series of debt securities.
All moneys paid by us to a paying agent for the payment of principal,
premium, if any, or interest, if any, on any debt security which remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to us, and after such time, the holder of such debt
security may look only to us for payment.
In the event of any redemption, we shall not be required to (a) issue,
register the transfer of or exchange debt securities of any series during a
period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of debt securities of that series to be
redeemed and ending at the close of business on the day of such mailing or (b)
register the transfer of or exchange any debt security called for redemption,
except, in the case of any debt securities being redeemed in part, any portion
not being redeemed.
BOOK-ENTRY SYSTEM
The provisions set forth below in this section headed 'Book-Entry System'
will apply to the debt securities of any series if the prospectus supplement
relating to such series so indicates.
Unless otherwise indicated in the applicable prospectus supplement, the
debt securities of such series will be represented by one or more global
securities registered with a depositary named in the prospectus supplement
relating to such series. Except as set forth below, a global security may be
transferred, in whole but not in part, only to the depositary or another nominee
of the depositary.
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The specific terms of the depositary arrangement with respect to a series
of debt securities will be described in the prospectus supplement relating to
the series. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by such global security to the accounts of
institutions or persons, commonly known as participants, that have accounts with
the depositary or its nominee. The accounts to be credited will be designated by
the underwriters, dealers or agents. Ownership of beneficial interests in a
global security will be limited to participants or persons that may hold
interests through participants. Ownership of interests in such global security
will be shown on, and the transfer of those ownership interests will be effected
only through, records maintained by the depositary (with respect to
participants' interests) and such participants (with respect to the owners of
beneficial interests in such global security). The laws of some jurisdictions
may require that certain purchasers of securities take physical delivery of the
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a global security.
So long as the depositary, or its nominee, is the registered holder and
owner of such global security, the depositary or such nominee, as the case may
be, will be considered the sole owner and holder for all purposes of the debt
securities and for all purposes under the applicable indenture. Except as set
forth below or as otherwise provided in the applicable prospectus supplement,
owners of beneficial interests in a global security will not be entitled to have
the debt securities represented by such global security registered in their
names, will not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered to be the owners or
holders of any debt securities under the applicable indenture or such global
security. Accordingly, each person owning a beneficial interest in a global
security must rely on the procedures of the depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder of debt securities
under the applicable indenture of such global security. We understand that under
existing industry practice, in the event we request any action of holders of
debt securities or if an owner of a beneficial interest in a global security
desires to take any action that the depositary, as the holder of such global
security is entitled to take, the depositary would authorize the participants to
take such action, and that the participants would authorize beneficial owners
owning through such participants to take such actions or would otherwise act
upon the instructions of beneficial owners owning through them.
Payments of principal of and premium, if any, and interest, if any, on debt
securities represented by a global security will be made to the depositary or
its nominee, as the case may be, as the registered owner and holder of such
global security, against surrender of the debt securities at the principal
corporate trust office of the trustee. Interest payments will be made at the
principal corporate trust office of the trustee or by a check mailed to the
holder at its registered address. Payment in any other manner will be specified
in the prospectus supplement.
We expect that the depositary, upon receipt of any payment of principal,
premium, if any, of interest, if any, in respect of a global security, will
credit immediately participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such global
security as shown on the records of the depositary. We expect that payments by
participants to owners of beneficial interests in a global security held through
such participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in 'street name,' and will be the responsibility of
such participant. Neither CD Radio nor the trustee nor any agent of CD Radio or
the trustee will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in a global security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests or for any other aspect
of the relationship between the depositary and its participants or the
relationship between such participants and the owners of beneficial interests in
such global security owning through such participants.
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Unless and until it is exchanged in whole or in part for debt securities in
definitive form, a global security may not be transferred except as a whole by
the depositary to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such depositary.
Unless otherwise provided in the applicable prospectus supplement, debt
securities represented by a global security will be exchangeable for debt
securities in definitive form of like tenor as such global security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if:
the depositary notifies us and the trustee that it is unwilling or unable
to continue as depositary for such global security or if at any time the
depositary ceases to be a clearing agency registered under the Exchange
Act and a successor depositary is not appointed by us within 90 days;
we, in our sole discretion, determine not to have all of the debt
securities represented by a global security and notify the trustee
thereof; or
there shall have occurred and be continuing an event of default or an
event which, with the giving of notice or lapse of time, or both, would
constitute an event of default with respect to the debt securities.
Any debt security that is exchangeable pursuant to the preceding sentence is
exchangeable for debt securities registered in such names as the depositary
shall instruct the trustee. It is expected that such instructions may be based
upon directions received by the depositary from its participants with respect to
ownership of beneficial interests in such global security. Subject to the
foregoing, a global security is not exchangeable except for a global security or
global securities of the same aggregate denominations to be registered in the
name of the depositary or its nominee.
OPTION TO DEFER INTEREST PAYMENTS OR TO PAY-IN-KIND
If so described in the applicable prospectus supplement, we will have the
right, at any time and from time to time during the term of any series of debt
securities, to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions and covenants, if any, specified in
such prospectus supplement, provided that an extension period may not extend
beyond the stated maturity of the final installment of principal of the series
of debt securities. If provided in the applicable prospectus supplement, we will
have the right, at any time and from time to time during the term of any series
of debt securities, to make payments of interest by delivering additional debt
securities of the same series.
COVENANTS OF CD RADIO
The covenants, if any, that will apply to a particular series of debt
securities will be set forth in the indenture relating to such series of debt
securities. Except as otherwise specified in the applicable prospectus
supplement with respect to any series of debt securities, we may remove or add
covenants without the consent of holders of the securities.
DEFEASANCE AND COVENANT DEFEASANCE
We may be discharged from our obligations on the debt securities of any
series that have matured or will mature or be redeemed within one year if we
deposit with the trustee enough cash to pay all the principal, interest and any
premium due to the stated maturity date or redemption date of the debt
securities and comply with certain other conditions set forth in the applicable
indenture.
Each indenture contains a provision that permits us to elect either:
to be discharged after 90 days from all of our obligations (subject to
limited exceptions) with respect to any series of debt securities then
outstanding ('defeasance'); and/or
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to be released from our obligations under certain covenants and from the
consequences of an event of default resulting from a breach of those
covenants or cross-default ('covenant defeasance').
To make either of the above elections, we must deposit in trust with the trustee
money and/or U.S. Government Obligations, if the debt securities are denominated
in U.S. dollars, and/or Foreign Government Securities if the debt securities are
denominated in a foreign currency, which through the payment of principal and
interest under their terms will provide sufficient money, without reinvestment,
to repay in full those senior or subordinate debt securities. As a condition to
defeasance or covenant defeasance, we must deliver to the trustee an opinion of
counsel that the holders of the debt securities will not recognize income, gain
or loss for federal income tax purposes as a result of the defeasance.
If either of the above events occur, the holders of the debt securities of
the series will not be entitled to the benefits of the indenture, except for
registration of transfer and exchange of debt securities and replacement of
lost, stolen or mutilated debt securities.
EVENTS OF DEFAULT
The following events are defined in the indentures as 'Events of Default'
with respect to a series of debt securities (unless such event is specifically
inapplicable to a particular series as described in the applicable prospectus
supplement):
failure to pay any interest on any debt security of that series when due,
which failure continues for 30 days;
failure to pay principal of or any premium on any debt security of that
series when due;
failure to deposit any sinking fund payment, within 30 days of when due,
in respect of any debt security of that series;
with respect to each series of debt securities, failure to perform any
other of our covenants applicable to that series, which failure continues
for 90 days after written notice to us by the trustee or to us and the
trustee by the holders of at least 25% in principal amount of the
outstanding debt securities of that series specifying such failure,
requiring it to be remedied and stating that such notice is a 'Notice of
Default';
certain events of bankruptcy, insolvency or reorganization involving us;
and
any other Event of Default provided with respect to debt securities of
that series.
If an Event of Default for any series of debt securities occurs and
continues, the trustee or holders of at least 25% in principal amount of the
debt securities of that series may declare the entire principal amount of all
the debt securities of that series to be due and payable immediately. Subject to
certain conditions, the declaration may be annulled and past defaults (except
uncured payment defaults and certain other specified defaults) may be waived by
the holders of a majority of the principal amount of the outstanding debt
securities of that series.
An Event of Default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture.
Each indenture will require the trustee, within 90 days after the
occurrence of a default known to it with respect to any outstanding series of
debt securities, to give the holders of that series notice of the default if
uncured or not waived. However, the trustee may withhold this notice if it
determines in good faith that the withholding of this notice is in the interest
of those holders, except that the trustee may not withhold this notice in the
case of a payment default. The term 'default' for the purpose of this provision
means any event that is, or after notice or lapse of time or both would become,
an Event of Default with respect to debt securities of that series.
Other than the duty to act with the required standard of care during an
Event of Default, a trustee is not obligated to exercise any of its rights or
powers under the applicable indenture at the request or direction of any of the
holders of debt securities, unless the holders have offered to the trustee
reasonable indemnification. Each indenture provides that the holders of a
majority in
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principal amount of outstanding debt securities of any series may in certain
circumstances direct the time, method and place of conducting any proceeding for
any remedy available to the trustee, or exercising any trust or other power
conferred on the trustee.
The senior indenture will include a covenant that we will file annually
with the trustee a certificate of no default, or specifying any default that
exists.
MODIFICATION, WAIVER AND MEETINGS
We and the trustee may enter into supplemental indentures without the
consent of the holders of debt securities for one or more of the following
purposes:
to evidence the succession of another person to us pursuant to the
provisions of the applicable indenture relating to consolidations, mergers
and sales of assets and the assumption by the successor of our covenants,
agreements and obligations in the applicable indenture and in the debt
securities;
to surrender any right or power conferred upon us by the applicable
indenture, to add to our covenants such further covenants, restrictions,
conditions or provisions for the protection of the holders of all or any
series of debt securities as our board of directors shall consider to be
for the protection of the holders of the debt securities, and to make the
occurrence, or the occurrence and continuance, of a default in any of the
additional covenants, restrictions, conditions or provisions a default or
an Event of Default under the applicable indenture (provided, however,
that with respect to any such additional covenant, restriction, condition
or provision, the supplemental indenture may provide for a period of grace
after default, which may be shorter or longer than that allowed in the
case of other defaults, may provide for an immediate enforcement upon the
default, may limit the remedies available to the trustee upon the default,
or may limit the right of holders of a majority in aggregate principal
amount of any or all series of debt securities to waive the default);
to cure any ambiguity or omission or to correct or supplement any
provision contained in the applicable indenture, in any supplemental
indenture or in any debt securities that may be defective or inconsistent
with any other provision contained therein, to convey, transfer, assign,
mortgage or pledge any property to or with the trustee, or to make such
other provisions in regard to matters or questions arising under the
applicable indenture, in each case as shall not adversely affect the
interests of any holders of debt securities of any series in any material
respect;
to modify or amend the applicable indenture to permit the qualification of
such indenture or any supplemental indenture under the Trust Indenture Act
as then in effect;
to add guarantees with respect to any or all of the debt securities or to
secure any or all of the debt securities;
to add to, change or eliminate any of the provisions of the applicable
indenture with respect to one or more series of debt securities; so long
as any such addition, change or elimination not otherwise permitted under
the applicable indenture shall (1) neither apply to any debt security of
any series created before the execution of the supplemental indenture and
entitled to the benefit of the provision nor modify the rights of the
holders of any debt security with respect to the provision, or (2) become
effective only when there is no such debt security outstanding;
to evidence and provide for the acceptance of appointment by a successor
or separate trustee with respect to the debt securities of one or more
series and to add to or change any of the provisions of the applicable
indenture as shall be necessary to provide for or facilitate the
administration of such indenture by more than one trustee;
to establish the form or terms of debt securities of any series;
to provide for uncertificated debt securities in addition to or in place
of certificated debt securities (provided that the uncertificated debt
securities are issued in registered form for
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purposes of Section 163(f) of the Internal Revenue Code or in a manner
such that the uncertificated debt securities are described in Section
163(f)(2)(B) of such Code); and
to make any change that does not adversely affect the rights of any
holder.
Modifications and amendments of the applicable indenture may be made by
CD Radio and the trustee with the consent of the holders of a majority in
principal amount of the outstanding debt securities of each series affected by
such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each outstanding debt
security affected thereby:
change the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security;
reduce the principal amount of, rate of interest on or any premium payable
upon the redemption of any debt security;
reduce the amount of principal of an original issue discount security
payable upon acceleration of the maturity thereof;
change the place of payment where, or the coin or currency in which, any
debt security or any premium or interest thereon is payable;
impair the right to institute suit for the enforcement of any payment on
or with respect to any debt security after the stated maturity, redemption
date or repayment date;
reduce the percentage in principal amount of outstanding debt securities
of any series, the consent of whose holders is required for modification
or amendment of the applicable indenture or for waiver of compliance with
certain provisions of such indenture or for waiver of certain defaults;
change the optional redemption or repurchase provisions in a manner
adverse to any holder; or
modify any of the provisions set forth in this paragraph, except to
increase the percentage of holders whose consent is required for
modifications and amendments of the applicable indenture or to provide
that certain other provisions of the applicable indenture may not be
modified or waived without the consent of the holder of each outstanding
debt security affected thereby.
The holders of a majority in principal amount of the outstanding debt
securities of each series may, on behalf of the holders of all the debt
securities of that series, waive, insofar as that series is concerned,
compliance by us with certain restrictive provisions of the applicable
indenture. The holders of a majority in principal amount of the outstanding debt
securities of each series may, on behalf of all holders of debt securities of
that series and any coupons relating to such series, waive any past default
under the applicable indenture with respect to debt securities of the series,
except a default (a) in the payment of principal of or any premium or interest
on any debt security of such series or (b) in respect of a covenant or provision
of the applicable indenture which cannot be modified or amended without the
consent of each holder of outstanding debt securities of the affected series.
The indentures provide that in determining whether the holders of the
requisite principal amount of the outstanding debt securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of holders of debt securities
the principal amount of an original issue discount security that shall be
deemed to be outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon
acceleration of the maturity thereof;
the principal amount of a debt security denominated in other than U.S.
dollars shall be the U.S. dollar equivalent, determined on the date of
original issuance of such debt security, of the principal amount of such
debt security (or, in the case of an original issue discount
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security, the U.S. dollar equivalent on the date of original issuance of
such debt security of the amount determined (as provided in (a) above of
such debt security)); and
debt securities owned by us or any subsidiary of ours shall be disregarded
and deemed not to be outstanding.
In addition, we and the trustees may execute, without the consent of any
holder of the debt securities, any supplemental indenture for the purpose of
creating any new series of debt securities.
SUBORDINATION
Except as set forth in the applicable prospectus supplement, the
subordinate indenture provides that the subordinate debt securities are
subordinate and junior in right of payment to all of our senior indebtedness.
If an Event of Default occurs with respect to any senior indebtedness
permitting the holders thereof to accelerate the maturity thereof and the
default is the subject of judicial proceedings or written notice of such Event
of Default, requesting that payments on subordinate debt securities cease, is
given to us by the holders of senior indebtedness, then unless and until
(1) the default in payment or Event of Default shall have been cured or waived
or (2) 120 days shall have passed after written notice is given and the default
is not the subject of judicial proceedings, no direct or indirect payment, in
cash, property or securities, by set-off or otherwise, will be made or agreed to
be made on account of the subordinate debt securities or interest thereon or in
respect of any repayment, redemption, retirement, purchase or other acquisition
of subordinate debt securities.
Except as set forth in the applicable prospectus supplement, the
subordinate indenture provides that in the event of:
any insolvency, bankruptcy, receivership, reorganization or other similar
proceeding relating to us, our creditors or our property; or
any proceeding for the liquidation or dissolution of CD Radio,
all present and future senior indebtedness, including, without limitation,
interest accruing after the commencement of the proceeding, will first be paid
in full before any payment or distribution, whether in cash, securities or other
property, will be made by us on account of subordinate debt securities. In that
event, any payment or distribution, whether in cash, securities or other
property, other than securities of CD Radio or any other corporation provided
for by a plan of reorganization or a readjustment, the payment of which is
subordinate, at least to the extent provided in the subordination provisions of
the indenture, to the payment of all senior indebtedness at the time outstanding
and to any securities issued in respect thereof under any such plan of
reorganization or readjustment and other than payments made from any trust
described in the 'Defeasance and Covenant Defeasance' above, which would
otherwise but for the subordination provisions be payable or deliverable in
respect of subordinate debt securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of ours being subordinate to the payment of subordinated debt
securities, will be paid or delivered directly to the holders of senior
indebtedness or to their representative or trustee, in accordance with the
priorities then existing among such holders, until all senior indebtedness shall
have been paid in full. No present or future holder of any senior indebtedness
will be prejudiced in the right to enforce subordination of the indebtedness
evidenced by subordinate debt securities by any act or failure to act on our
part.
The term 'Senior Indebtedness' means:
(1) the principal, premium, if any, interest and all other amounts
owed in respect of all our (A) indebtedness for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds or other similar
instruments,
(2) all our capital lease obligations,
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(3) all our obligations issued or assumed as the deferred purchase
price of property, all our conditional sale obligations and all our
obligations under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business),
(4) all our obligations for the reimbursement of any letter of credit,
banker's acceptance, security purchase facility or similar credit
transaction,
(5) all obligations of the type referred to in clauses (1) through (4)
above of other persons for the payment of which we are responsible or
liable as obligor, guarantor or otherwise, and
(6) all obligations of the type referred to in clauses (1) through (5)
above of other persons secured by any lien on any property or asset of ours
(whether or not such obligation is assumed by us), except for (x) any such
indebtedness that is by its terms subordinated to or pari passu with the
subordinate debt securities and (y) any indebtedness between or among us or
our affiliates, including all other debt securities and guarantees in
respect of those debt securities issued to any trust, or trustee of such
trust, partnership or other entity affiliated with us that is, directly or
indirectly, a financing vehicle of ours (a 'Financing Entity') in
connection with the issuance by such Financing Entity of preferred
securities or other securities that rank pari passu with, or junior to, the
subordinate debt securities.
Except as provided in the applicable prospectus supplement, the subordinate
indenture for a series of subordinated debt does not limit the aggregate amount
of senior indebtedness that may be issued by us. The subordinate debt securities
are effectively subordinated to all existing and future liabilities of our
subsidiaries.
By reason of such subordination, in the event of a distribution of assets
upon insolvency, some of our general creditors may recover more, ratably, than
holders of the subordinated debt securities.
A subordinate indenture may provide that the subordination provisions
thereof will not apply to money and securities held in trust pursuant to the
satisfaction and discharge and the legal defeasance provisions of the
subordinate indenture.
If this prospectus is being delivered in connection with the offering of a
series of subordinated debt securities, the accompanying prospectus supplement
or the information incorporated by reference therein will set forth the
approximate amount of senior indebtedness outstanding as of a recent date.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Except as may otherwise be provided in the prospectus supplement, each
indenture provides that we may not consolidate with or merge with or into any
person, or convey, transfer or lease all or substantially all of its assets, or
permit any person to consolidate with or merge into us, unless the following
conditions have been satisfied:
(a) either (1) we shall be the continuing person in the case of a merger or
(2) the resulting, surviving or transferee person, if other than us
(the 'Successor Company'), shall be a corporation organized and
existing under the laws of the United States, any State or the District
of Columbia and shall expressly assume all our obligations under the
debt securities and the applicable indenture;
(b) immediately after giving effect to the transaction (and treating any
indebtedness that becomes an obligation of the Successor Company or any
subsidiary of ours as a result of the transaction as having been
incurred by the Successor Company or the subsidiary at the time of the
transaction), no default, Event of Default or event that, after notice
or lapse of time, would become an Event of Default under the applicable
indenture shall have occurred and be continuing; and
(c) we shall have delivered to the trustee under each indenture an
officers' certificate and an opinion of counsel, each stating that the
consolidation, merger, transfer or lease complies with the provisions
of the applicable indenture.
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Upon completion of any such transaction, the Successor Company resulting
from such consolidation or into which we are merged or the transferee or lessee
to which such conveyance, transfer or lease is made, will succeed to, and be
substituted for, and may exercise every right and power of, us under each
indenture, and thereafter, except in the case of a lease, the predecessor (if
still in existence) will be released from its obligations and covenants under
each indenture and all outstanding debt securities.
NOTICES
Except as otherwise provided in the indentures, notices to holders of debt
securities will be given by mail to the addresses of such holders as they appear
in the Security Register.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable prospectus supplement, the
debt securities of any series may be convertible or exchangeable into other
securities. The specific terms on which debt securities of any series may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at our option, in which case
the number of shares of other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the
applicable prospectus supplement.
TITLE
Before due presentment of a debt security for registration of transfer, we,
the trustee and any agent of ours or the trustee may treat the person in whose
name such debt security is registered as the owner of such debt security for the
purpose of receiving payment of principal of and any premium and any interest
(other than defaulted interest or as otherwise provided in the applicable
prospectus supplement) on such debt security and for all other purposes
whatsoever, whether or not such debt security be overdue, and neither CD Radio,
the trustee nor any agent of ours or the trustee shall be affected by notice to
the contrary.
REPLACEMENT OF DEBT SECURITIES
Any mutilated debt security will be replaced by us at the expense of the
holder upon surrender of such debt security to the trustee. Debt securities that
become destroyed, stolen or lost will be replaced by us at the expense of the
holder upon delivery to the trustee of the debt security or evidence of the
destruction, loss or theft thereof satisfactory to us and the trustee. In the
case of a destroyed, lost or stolen debt security, an indemnity satisfactory to
the trustee and us may be required at the expense of the holder of such debt
security before a replacement debt security will be issued.
GOVERNING LAW
The indentures and the debt securities will be governed by, and construed
in accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
We may appoint a separate trustee for any series of debt securities. As
used herein in the description of a series of debt securities, the term
'trustee' refers to the trustee appointed with respect to the series of debt
securities.
The indentures contain certain limitations on the right of the trustee,
should it become a creditor of ours, to obtain payment of claims in certain
cases or to realize for its own account on certain property received in respect
of any such claim as security or otherwise. The trustee will be permitted to
engage in certain other transactions; however, if it acquires any conflicting
interest and there is a default under the debt securities of any series for
which the trustee serves as trustee, the trustee must eliminate such conflict or
resign.
The trustee or its affiliate may provide certain banking and financial
services to us in the ordinary course of business.
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DESCRIPTION OF CAPITAL STOCK
Our amended and restated certificate of incorporation provides for
authorized capital of 250,000,000 shares, consisting of 200,000,000 shares of
common stock, par value $0.001 per share, and 50,000,000 shares of preferred
stock, par value $0.001 per share.
The following description sets forth the terms and provisions of our common
stock, preferred stock and of certain classes of preferred stock which have been
authorized by the board of directors. The terms of any shares of our capital
stock offered by any prospectus supplement, but not set forth below, will be
described in the prospectus supplement relating to such shares of capital stock.
COMMON STOCK
As of August 9, 1999, we had 23,341,731 shares of common stock outstanding
held of record by 232 persons, and had reserved for issuance 41,556,719 shares
of common stock with respect to incentive stock plans, outstanding common stock
purchase warrants and conversion of the Series C Preferred Stock and Junior
Preferred Stock.
Holders of the common stock are entitled to cast one vote for each share
held of record on all matters acted upon at any stockholder's meeting and to
receive dividends if, as and when declared by the Board of Directors out of
funds legally available therefor. There are no cumulative voting rights. If
there is any liquidation, dissolution or winding-up of our company, each holder
of our common stock will be entitled to participate, taking into account the
rights of any outstanding Preferred Stock, ratably in all of our assets
remaining after payment of liabilities. Holders of our common stock have no
preemptive or conversion rights. All outstanding shares of common stock,
including shares of common stock issued upon the exercise of the common stock
warrants, will be fully paid and non-assessable.
Our common stock is quoted on the Nasdaq National Market under the symbol
'CDRD.'
PREFERRED STOCK
The board of directors is authorized, subject to any limitations prescribed
by law, without further stockholder approval, to issue from time to time up to
an aggregate of 50,000,000 shares of our preferred stock, in one or more series.
Each such series of preferred stock shall have such number of shares,
designations, preferences, powers, qualifications and special or relative rights
or privileges as shall be determined by the board of directors, which may
include, among others, dividend rights, voting rights, redemption and sinking
fund provisions, liquidation preferences, conversion rights and preemptive
rights. The rights of the holders of common stock will be subject to the rights
of holders of any preferred stock issued in the future. The issuance of
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of our outstanding voting stock.
The specific terms of any preferred stock being offered will be described
in the prospectus supplement relating to that preferred stock. The following
summaries of the provisions of the preferred stock are subject to, and are
qualified in their entirety by reference to, the certificate of designation
relating to the particular class or series of preferred stock. Reference is made
to the prospectus supplement relating to the preferred stock offered with that
prospectus for specific terms, including:
the designation of the preferred stock;
the number of shares of the preferred stock offered, the liquidation
preference per share and the initial offering price of the preferred
stock;
the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation these items applicable to the preferred stock;
the date from which dividends on the preferred stock shall accumulate, if
applicable;
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the procedures for any auction and remarketing of the preferred stock;
the provision of a sinking fund, if any, for the preferred stock;
the provision for redemption, if applicable, of the preferred stock;
any listing of the preferred stock on any securities exchange;
the terms and conditions, if applicable, upon which the preferred stock
will be convertible into or exchangeable for common stock, and whether at
our option or the option of the holder;
whether the preferred stock will rank senior or junior to or on a parity
with any other class or series of preferred stock;
the voting rights, if any, of the preferred stock;
any other specific terms, preference, rights, limitations or restrictions
of the preferred stock; and
a discussion of United States federal income tax considerations applicable
to the preferred stock.
PREFERRED STOCK PURCHASE RIGHTS
On October 22, 1997, the board of directors adopted a stockholders rights
plan and, in connection with the adoption of this plan, declared a dividend
distribution of one 'Right' for each outstanding share of common stock to
stockholders of record at the close of business on November 3, 1997 (the 'Rights
Record Date'). Except as described below, each Right entitles the registered
holder of the Right to purchase from us one-hundredth of a share of Series B
Preferred Stock, par value $0.001 per share (the 'Series B Shares'), at a
purchase price of $115.00 (the 'Purchase Price'), which may be adjusted. The
Purchase Price shall be paid in cash. The description and terms of the Rights
are set forth in a Rights Agreement, dated October 22, 1997 (the 'Rights
Agreement'), by and between us and Continental Stock Transfer & Trust Company,
as Rights Agent, and in amendments to the Rights Agreement dated October 13,
1998, November 13, 1998, December 22, 1998 and June 11, 1999.
On October 13, 1998, we amended the Rights Agreement to make it
inapplicable to the purchase of 5,000,000 shares of common stock by Prime 66 and
to allow Prime 66 to purchase and own up to an additional 1% of the outstanding
shares of common stock without Prime 66 becoming an 'Acquiring Person' within
the meaning of the Rights Agreement. On November 13, 1998 and December 22, 1998,
we amended the Rights Agreement to render it inapplicable to the purchase of the
Junior Preferred Stock by the Apollo Investors and to permit the Apollo
Investors to (1) acquire additional shares of Junior Preferred Stock issued as
dividends declared on the Junior Preferred Stock, (2) acquire additional shares
of common stock upon the conversion of shares of Junior Preferred Stock into
shares of common stock, or (3) acquire up to an additional 1% of the outstanding
shares of common stock, without the Apollo Investors becoming 'Acquiring
Persons' within the meaning of the Rights Agreement. On June 11, 1999, we also
amended the Rights Agreement to make it inapplicable to the issuance of warrants
entitling Ford Motor Company ('Ford') to acquire from us 4,000,000 shares of our
common stock.
Initially, no separate Right certificates will be distributed and the
Rights will be evidenced, with respect to any shares of common stock outstanding
on the Rights Record Date, by the certificates representing the shares of common
stock. Until the Rights Separation Date (as defined below), the Rights will be
transferred with, and only with, certificates for shares of common stock. Until
the earlier of the Rights Separation Date and the redemption or expiration of
the Rights, new certificates for shares of common stock issued after the Rights
Record Date will contain a notation incorporating the Rights Agreement by
reference. The Rights are not exercisable until the earlier to occur of (1) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an 'Acquiring Person') has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of common stock (except by reason of (a) exercise by this
person of stock options granted to this person by us under any
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of our stock option or similar plans (b) the exercise of conversion rights
contained in specified classes of Preferred Stock, or (c) the exercise of
warrants owned on the date of the Rights Agreement, which include warrants to
acquire 1,740,000 shares of common stock issued to an affiliate of Everest
Capital Fund, Ltd. or (2) 15 business days following the commencement of a
tender offer or exchange offer by any person (other than CD Radio, any
subsidiary of CD Radio or any employee benefit plan of CD Radio) if, upon the
completion of this tender offer or exchange offer, this person or group would be
the beneficial owner of 15% or more of the outstanding shares of common stock
(the earlier of these dates being called the 'Rights Separation Date'), and will
expire on October 22, 2002, unless earlier redeemed by us as described below. As
soon as practicable following the Rights Separation Date, separate certificates
evidencing the Rights will be mailed to holders of record of the shares of
common stock as of the close of business on the Rights Separation Date and,
thereafter, the separate Rights certificates alone will evidence the Rights. A
holder of 15% or more of the common stock as of the date of the Rights Agreement
will be excluded from the definition of 'Acquiring Person' unless the holder
increases the aggregate percentage of its and its affiliates' beneficial
ownership interest in us by an additional 1%.
If, at any time following the Rights Separation Date, (1) we are the
surviving corporation in a merger with an Acquiring Person and our shares of
common stock are not changed or exchanged, (2) a person (other than CD Radio,
any subsidiary of CD Radio or any employee benefit plan of CD Radio), together
with its Affiliates and Associates (as defined in the Rights Agreement), becomes
an Acquiring Person (in any manner, except by (a) the exercise of stock options
granted under our existing and future stock option plans, (b) the exercise of
conversion rights contained in specified Preferred Stock issues, (c) the
exercise of warrants specified in the Rights Agreement or (d) a tender offer for
any and all outstanding shares of common stock made as provided by applicable
laws, which remains open for at least 40 Business Days (as defined in the Rights
Agreement) and into which holders of 80% or more of our outstanding shares of
common stock tender their shares), (3) an Acquiring Person engages in one or
more 'self-dealing' transactions as described in the Rights Agreement or
(4) during the time when there is an Acquiring Person, an event occurs (e.g., a
reverse stock split), that results in the Acquiring Person's ownership interest
being increased by more than one percent, the Rights Agreement provides that
proper provision shall be made so that each holder of a Right will thereafter be
entitled to receive, upon the exercise of the Right at the then current exercise
price of the Right, shares of common stock (or, in some circumstances, cash,
property or other securities of ours) having a value equal to two times the
exercise price of the Right.
If, at any time following the first date of public announcement by us or an
Acquiring Person indicating that this Acquiring Person has become an Acquiring
Person (the 'Shares Acquisition Date'), (1) we consolidate or merge with another
person and we are not the surviving corporation, (2) we consolidate or merge
with another person and are the surviving corporation, but in the transaction
our shares of common stock are changed or exchanged or (3) 50% or more of our
assets or earning power is sold or transferred, the Rights Agreement provides
that proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise of the Right at the then
current exercise price of the Right, shares of common stock of the acquiring
company having a value equal to two times the exercise price of the Right.
The board of directors may, at its option, at any time after the right of
the board to redeem the Rights has expired or terminated (with some exceptions),
exchange all or part of the then outstanding and exercisable Rights (other than
those held by the Acquiring Person and Affiliates and Associates of the
Acquiring Person) for shares of common stock at a ratio of one share of common
stock per Right, as adjusted; provided, however, that the Right cannot be
exercised once a person, together with the person's Affiliates and Associates,
becomes the beneficial owner of 50% or more of the shares of common stock then
outstanding. If the board authorizes this exchange, the Rights will immediately
cease to be exercisable.
Notwithstanding any of the foregoing, following the occurrence of any of
the events described in the fourth and fifth paragraphs of this section, any
Rights that are, or (under some
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circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person or Affiliate or Associate of an Acquiring Person shall
immediately become null and void. The Rights Agreement contains provisions
intended to prevent the utilization of voting trusts or similar arrangements
(except for the voting arrangement between Darlene Friedland, David Margolese
and us) that could have the effect of rendering ineffective or circumventing the
beneficial ownership rules described in the Rights Agreement.
The Purchase Price payable, and the number of Series B Shares or other
securities or property issuable, upon exercise of the Rights may be adjusted
from time to time to prevent dilution (1) in the event of a dividend of
Series B Shares on, or a subdivision, combination or reclassification of, the
Series B Shares, (2) upon the grant to holders of the Series B Shares of
specific rights or warrants to subscribe for Series B Shares or securities
convertible into Series B Shares at less than the current market price of the
Series B Shares or (3) upon the distribution to holders of the Series B Shares
of debt securities or assets (excluding regular quarterly cash dividends and
dividends payable in Series B Shares) or of subscription rights or warrants
(other than those referred to above).
At any time after the date of the Rights Agreement until ten Business Days
(a period that can be extended) following the Shares Acquisition Date, the board
of directors, with the concurrence of a majority of the independent directors
(those members of the Board who are not officers or employees of ours or of any
subsidiary of ours and who are not Acquiring Persons or their Affiliates,
Associates, nominees or representatives, and who either (1) were members of the
board before the adoption of the Rights Plan or (2) were subsequently elected to
the board and were recommended for election or approved by a majority of the
independent directors then on the board), may redeem the Rights, in whole but
not in part, at a price of $0.01 per Right, which may be adjusted. Thereafter,
the board may redeem the Rights only in specified circumstances including in
connection with specific events not involving an Acquiring Person or an
Affiliate or Associate of an Acquiring Person. In addition, our right of
redemption may be reinstated if (1) an Acquiring Person reduces its beneficial
ownership to 10% or less of the outstanding shares of common stock in a
transaction or series of transactions not involving us and (2) there is at the
time no other Acquiring Person. The Rights Agreement may also be amended, as
described below, to extend the period of redemption.
Until a Right is exercised, the holder of the Right, as such, will have no
rights as a stockholder, including the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to stockholders or to
us, stockholders may, depending upon the circumstances, recognize taxable income
if the Rights become exercisable for shares of our common stock (or other
consideration) or for shares of common stock of the Acquiring Person.
Other than those provisions relating to the principal economic terms of the
Rights or imposing limitations on the right to amend the Rights Agreement, any
of the provisions of the Rights Agreement may be amended by the board with the
concurrence of a majority of the independent directors or by special approval of
our stockholders before the Rights Separation Date. Thereafter, the period
during which the Rights may be redeemed may be extended (by action of the board,
with the concurrence of a majority of the independent directors or by special
approval of our stockholders), and other provisions of the Rights Agreement may
be amended by action of the Board with the concurrence of a majority of the
independent directors or by special approval of our stockholders; provided,
however, that (a) this amendment will not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person) and (b) no
amendment shall be made at a time when the Rights are no longer redeemable
(except for the possibility of the right of redemption being reinstated as
described above).
DELAWARE ANTI-TAKEOVER LAW AND PROVISIONS IN OUR CHARTER
Section 203 of the Delaware General Corporation Law ('Section 203')
generally provides that a stockholder acquiring more than 15% of the outstanding
voting stock of a corporation subject to the statute (an 'Interested
Stockholder') but less than 85% of this stock may not engage in some types of
Business Combinations (as defined in Section 203) with the corporation for a
period of
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three years after the time the stockholder became an Interested Stockholder. The
prohibition of Section 203 does not apply under the following circumstances:
(1) before the time of the acquisition, the corporation's board of
directors approved either the Business Combination or the transaction in
which the stockholder became an Interested Stockholder; or
(2) the Business Combination is approved by the corporation's board of
directors and authorized at a stockholders' meeting by a vote of at least
two-thirds of the corporation's outstanding voting stock not owned by the
Interested Stockholder.
Under Section 203, these restrictions will not apply to specific Business
Combinations proposed by an Interested Stockholder following the earlier of the
announcement or notification of specific extraordinary transactions involving
the corporation and a person who was not an Interested Stockholder during the
previous three years, who became an Interested Stockholder with the approval of
the corporation's board of directors or who became an Interested Stockholder at
a time when the restrictions contained in Section 203 did not apply for reasons
specified in Section 203. The above exception applies if the extraordinary
transaction is approved or not opposed by a majority of the directors who were
directors prior to the person becoming an Interested Stockholder during the
previous three years or were recommended for election or elected to succeed
those directors by a majority of those directors.
Section 203 defines the term 'Business Combination' to encompass a wide
variety of transactions with or caused by an Interested Stockholder. These
include transactions in which the Interested Stockholder receives or could
receive a benefit on other than a pro rata basis with other stockholders,
transactions with the corporation which increase the proportionate interest in
the corporation directly or indirectly owned by the Interested Stockholder or
transactions in which the Interested Stockholder receives other benefits.
The provisions of Section 203, coupled with our board of director's
authority to issue preferred stock without further stockholder action, could
delay or frustrate the removal of incumbent directors or a change in our
control. The provisions could also discourage, impede or prevent a merger,
tender offer or proxy contest, even if the event would be favorable to the
interests of stockholders. Our stockholders, by adopting an amendment to our
amended and restated certificate of incorporation, may elect not to be governed
by Section 203 effective 12 months after the adoption. Neither our certificate
of incorporation nor our by-laws exclude us from the restrictions imposed by
Section 203.
10 1/2% SERIES C CONVERTIBLE PREFERRED STOCK
The board of directors has authorized the issuance of up to 2,025,000
shares of the Series C Preferred Stock.
General. The following description of our Series C Preferred Stock does not
purport to be complete and is qualified in its entirety by the provisions of our
amended and restated certificate of incorporation, and the certificate of
designations relating to the Series C Preferred Stock, each of which is
available on request.
Rank. The Series C Preferred Stock, with respect to dividend rights and
rights upon liquidation, winding-up or dissolution, ranks (1) senior and before
the common stock and to any other stock issued by us designated as junior to the
Series C Preferred Stock and (2) equally with any class or series of our stock,
the terms of which do not designate the class or series as either junior or
senior to the Series C Preferred Stock.
Dividends. The annual dividend rate per share of the Series C Preferred
Stock is an amount equal to 10.5% of the sum of (x) the liquidation preference
of the Series C Preferred Stock and (y) all accrued and unpaid dividends, if
any, whether or not declared, from the date of issuance of the shares of
Series C Preferred Stock to the applicable dividend payment date. Dividends on
the shares of Series C Preferred Stock are cumulative, accruing quarterly and,
when and as declared by our board of directors, are payable quarterly initially
on November 15, 2002 (the 'First
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Scheduled Dividend Payment Date') and on February 15, May 15, August 15 and
November 15 of each year (each, a 'Dividend Payment Date') thereafter. In
addition, accrued dividends on the shares of Series C Preferred Stock will be
paid on the redemption date of any share of Series C Preferred Stock redeemed by
us, on the purchase date of any share of Series C Preferred Stock purchased by
us in an Offer to Purchase (defined below) or on the conversion date of any
share of Series C Preferred Stock converted into shares of common stock on or
after the First Scheduled Dividend Payment Date. No accrued dividends will be
paid on any shares of Series C Preferred Stock that are converted by the holders
of the Series C Preferred Stock before the First Scheduled Dividend Payment
Date, unless these shares of Series C Preferred Stock are converted on or before
a redemption date by holders of the Series C Preferred Stock electing to convert
these shares after having received a notice of redemption for these shares.
Dividends may be paid in cash, shares of common stock or any combination of cash
and common stock, at our option. Common stock issued to pay dividends will be
valued at the average closing price of the common stock as reported in The Wall
Street Journal for the 20 consecutive trading days immediately preceding the
date of the payment. Dividends with respect to any share of Series C Preferred
Stock accumulate from November 15, 1997.
If and so long as any full cumulative dividends payable on the shares of
Series C Preferred Stock in respect of all prior dividend periods will not have
been paid or set apart for payment, we will not pay any dividends or make any
distributions of assets on or redeem, purchase or otherwise acquire for
consideration shares of our capital stock ranking junior to or on a par with the
Series C Preferred Stock in payment of dividends.
Dividends on the shares of Series C Preferred Stock are payable to the
holders of record of Series C Preferred Stock as they appear on our stock
register on a record date, not more than 40 days nor fewer than 10 days
preceding the payment date of the dividends, as will be fixed by the board of
directors. Dividends on account of arrears for any past dividend periods may be
declared and paid at any time, without reference to any Dividend Payment Date,
to the holders of record on a date, not exceeding 40 days nor less than 10 days
preceding the payment date of the dividends, as may be fixed by the board of
directors. Dividends paid in cash will be paid to each holder of record in
United States dollars by check mailed to the holder at its address appearing on
our books. Any shares of common stock issued, at our option, to pay any
dividends on shares of Series C Preferred Stock will thereupon be duly
authorized, validly issued, fully paid and non-assessable. No fractional shares
of common stock will be issued as dividends.
Redemption. Except as described below, the shares of Series C Preferred
Stock may not be redeemed by us at our option before November 15, 2002. From and
after November 15, 1999 and before November 15, 2002, we may redeem shares of
Series C Preferred Stock, in whole or in part, at any time at a redemption price
of 100% of the liquidation preference of the shares of Series C Preferred Stock
redeemed, plus accrued and unpaid dividends, if any, whether or not declared, to
the redemption date, if the average closing price of the common stock as
reported in The Wall Street Journal for the 20 consecutive trading days before
the notice of redemption of the Series C Preferred Stock equals or exceeds
$31.50 per share, as adjusted. From and after November 15, 2002, we may redeem
shares of Series C Preferred Stock, in whole or in part, at the following
redemption prices per share, expressed as percentages of the liquidation
preference of Series C Preferred Stock, if redeemed during the 12-month period
beginning November 15 in the year indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2002............................................. 105.25%
2003............................................. 102.63%
2004............................................. 101.81%
2005 and thereafter.............................. 100.00%
</TABLE>
plus, in each case, accrued and unpaid dividends, if any, to the redemption
date.
On November 15, 2012 (the 'Mandatory Redemption Date'), the Company is
required to redeem all outstanding shares of Series C Preferred Stock at a
redemption price of 100% of the
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liquidation preference of the shares of Series C Preferred Stock, plus accrued
and unpaid dividends, if any, whether or not declared, to the Mandatory
Redemption Date.
The amount paid to the holders of shares of Series C Preferred Stock upon
redemption which is allocable to the liquidation preference of the shares of
Series C Preferred Stock shall be paid in cash and the amount of any accrued and
unpaid dividends to be paid on the shares of Series C Preferred Stock redeemed
shall be paid in cash, shares of common stock or any combination of cash and
common stock at our option.
We are required to give notice of any proposed redemption of shares of
Series C Preferred Stock on a date that is not less than 15 days nor more than
40 days (as determined by us, the 'Redemption Record Date') before the date of
redemption, to the holders of record on the Redemption Record Date of the shares
to be redeemed at their addresses appearing on our books. Each notice will
specify the shares of Series C Preferred Stock called for redemption, the
redemption price and the time, place and date of redemption. Neither failure to
mail the notice, nor any defect in the notice or in the mailing of the notice,
to any particular holder shall affect the sufficiency of the notice or the
validity of the proceedings for redemption with respect to the other holders. On
or after the redemption date, each holder of shares of Series C Preferred Stock
being redeemed will present and surrender the holder's certificate or
certificates evidencing the shares to us at the place described in the
redemption notice, whereupon we will cancel the shares and will pay to the
holders the redemption price for the surrendered shares, plus accrued and unpaid
dividends, if any, to the redemption date. If fewer than all the shares of
Series C Preferred Stock represented by any holder's certificate are redeemed,
we will issue a new certificate representing the unredeemed shares of Series C
Preferred Stock.
If fewer than all of the outstanding shares of Series C Preferred Stock are
being redeemed, the shares to be redeemed will be selected proportionately or by
lot or in another manner as our board of directors may determine, provided that
only whole shares shall be selected for redemption.
Any shares of Series C Preferred Stock which have been called for
redemption may be converted into shares of common stock before being redeemed
provided that the holder of the Series C Preferred Stock gives written notice to
us, before the close of business on the business day immediately preceding the
date of redemption, of the holder's election to convert shares of Series C
Preferred Stock into shares of common stock, together with the certificate or
certificates evidencing the shares, duly endorsed or assigned to us, and any
necessary transfer tax payment as described below. See ' -- Conversion.'
Change in Control. Upon the occurrence of a Change in Control, we must make
an offer to purchase (an 'Offer to Purchase') all then outstanding shares of
Series C Preferred Stock at a purchase price (the 'Change in Control Purchase
Price') in cash equal to 101% of their liquidation preference, plus all accrued
and unpaid dividends (paid in cash), if any, whether or not declared, to the
date the shares are purchased (the 'Change in Control Purchase Date'). A 'Change
in Control' is defined as the occurrence of any of the following events:
any 'person' or 'group' (as these terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than Loral, Arianespace or David
Margolese, is or becomes the 'beneficial owner' (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall
be deemed to have 'beneficial ownership' of all securities that the person
has the right to acquire, whether this right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 40%
of our total outstanding voting stock;
we consolidate with, or merge with or into another person or convey,
transfer, lease or otherwise dispose of all or substantially all of our
assets to any person, or any person consolidates with or merges with or
into us, in a transaction in which our outstanding voting stock is
converted into or exchanged for cash, securities or other property, other
than, at all times when our senior discount notes are outstanding, those
transactions that are not deemed a 'Change of Control' under the terms of
the indenture relating to our senior discount notes;
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during any consecutive two-year period, individuals who at the beginning
of the period constituted our board of directors (together with any new
directors whose election to the board of directors, or whose nomination
for election by our stockholders, was approved by a vote of 66 2/3% of the
directors then still in office who were either directors at the beginning
of the period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of our board of
directors then in office; or
we are liquidated or dissolved or a special resolution is passed by our
stockholders approving the plan of liquidation or dissolution,
other than, at all times when our senior discount notes are outstanding, those
transactions that are not deemed a 'Change of Control' under the terms of the
indenture relating to our senior discount notes.
Within 30 days following any Change in Control, we must give written notice
of the Change in Control to each holder of shares of Series C Preferred Stock by
first-class mail, postage prepaid, at his address appearing in our stock
register, stating the purchase price and that the purchase date shall be a
business day no earlier than 30 days nor later than 60 days from the date the
notice is mailed, or a later date if necessary to comply with requirements under
the Exchange Act; that any shares of Series C Preferred Stock not tendered will
continue to accumulate dividends; that, unless we default in the payment of the
purchase price, any shares of Series C Preferred Stock accepted for payment
under the Offer to Purchase shall cease to accumulate dividends after the Change
in Control Purchase Date; and other specific procedures that a holder of shares
of Series C Preferred Stock must follow to accept an Offer to Purchase or to
withdraw acceptance of an Offer to Purchase.
If an Offer to Purchase is made, we cannot assure you that we will have
available funds sufficient to pay the Change in Control Purchase Price for any
or all of the shares of Series C Preferred Stock that might be delivered by
holders of Series C Preferred Stock seeking to accept the Offer to Purchase and,
accordingly, if there is a Change of Control, none of the holders of the shares
of Series C Preferred Stock may receive the Change in Control Purchase Price for
their Series C Preferred Stock.
The existence of a holder's right to require us to repurchase the holder's
Series C Preferred Stock upon a Change in Control may deter a third party from
acquiring us in a transaction which constitutes a Change in Control.
Furthermore, the possibility that a third party would be deterred from acquiring
us may have an adverse effect on the market price of our Series C Preferred
Stock.
We will comply with the applicable tender offer rules, including
Rule 14e-1 under the Exchange Act, and any other applicable securities laws or
regulations in connection with an Offer to Purchase.
Conversion. Each share of Series C Preferred Stock may be converted at any
time, at the option of the holder, unless previously redeemed, into a number of
shares of common stock calculated by dividing the liquidation preference of the
Series C Preferred Stock (without accrued and unpaid dividends) by a conversion
price equal to $18 (the 'Conversion Price'). The Conversion Price will not be
adjusted at any time for accrued and unpaid dividends on the shares of Series C
Preferred Stock, but will be adjusted for the occurrence of specified corporate
events affecting the common stock. Upon conversion, at any time after the First
Scheduled Dividend Payment Date, holders of the Series C Preferred Stock will be
entitled to receive all accrued and unpaid dividends upon the shares of
Series C Preferred Stock converted payable in cash or shares of common stock, or
a combination of cash and common stock, at our option. No accrued dividends will
be paid on any shares of Series C Preferred Stock that are converted by their
holders before the First Scheduled Dividend Payment Date, unless these shares of
Series C Preferred Stock are converted before a redemption date by their holders
electing to convert these shares after having received a notice of redemption
for these shares. Common stock issued to pay
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dividends will be valued at the average closing price of the common stock as
reported in The Wall Street Journal for the 20 consecutive trading days
immediately preceding the date of payment.
To convert shares of Series C Preferred Stock into common stock, the
registered holder of the shares of Series C Preferred Stock must give written
notice to us that it elects to convert these shares and surrender at the office
of the transfer agent, or at another office or offices, if any, as the board of
directors may designate, the certificate or certificates therefor, duly endorsed
or assigned to us or in blank, together with any payment for stamp or similar
taxes that may be required to be paid by the holder, as described below.
Shares of Series C Preferred Stock will be deemed to have been converted
immediately before the close of business on the day of the surrender of the
shares for conversion, and the person or persons entitled to receive the common
stock issuable upon the conversion will be treated for all purposes as the
record holder or holders of the common stock at that time. As promptly as
practicable on or after the conversion date, we will issue and deliver a
certificate or certificates for the number of full shares of common stock
issuable upon the conversion, together with any payment instead of issuing any
fractional shares of common stock, to the person or persons entitled to receive
the same. In case shares of Series C Preferred Stock are called for redemption,
the right to convert the shares will terminate at the close of business on the
business day immediately preceding the redemption date, unless default shall be
made in payment of the redemption price.
The Conversion Price for shares of Series C Preferred Stock will be
adjusted in some events, including (1) dividends and other distributions payable
in common stock on any class of our capital stock, (2) the issuance to all
holders of common stock of rights or warrants entitling them to subscribe for or
purchase common stock at less than fair market value, (3) subdivisions,
combinations and reclassifications of the common stock, (4) distributions to all
holders of common stock of evidences of our indebtedness or assets and (5) a
consolidation or merger to which we are a party or the sale or transfer of all
or substantially all of our assets.
We will pay any and all stamp or other similar taxes that may be payable in
respect of the issue or delivery of shares of common stock upon conversion of
shares of Series C Preferred Stock. We will not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares of common stock in a name other than that in which the shares
of Series C Preferred Stock so converted or exchanged were registered, and this
issue or delivery will not be made unless and until the person requesting this
issue has paid to us the amount of this tax, if any, or has established to our
satisfaction that this tax has been paid. All shares of common stock issued upon
conversion of shares of Series C Preferred Stock shall be validly issued, fully
paid and nonassessable.
Voting Rights. Other than the consent rights described below with respect
to some corporate actions, and except as otherwise provided by applicable law,
holders of shares of Series C Preferred Stock have no voting rights. Consent of
the holders of a majority of the outstanding shares of Series C Preferred Stock
will be required before we may take some corporate actions, including (1) any
amendment, alteration or repeal of any of the provisions of our certificate of
incorporation or by-laws which affects adversely the voting powers, rights or
preferences of the holders of the shares of Series C Preferred Stock, (2) the
authorization or creation of, or the increase in authorized amount of, any
shares of any class or series of equity securities that ranks senior to or on a
parity with the Series C Preferred Stock with respect to dividend rights and
rights upon liquidation, winding-up or dissolution and (3) merging or
consolidating with or into any other entity, unless the resulting corporation
will thereafter have no class or series of shares and no other securities either
authorized or outstanding ranking before, or on a parity with, the Series C
Preferred Stock in the payment of dividends or the distribution of its assets on
liquidation, dissolution or winding-up. In addition, if (1) after the First
Scheduled Dividend Payment Date, dividends payable on the shares of Series C
Preferred Stock shall be in arrears in an aggregate amount equal to at least six
quarterly dividend payments, (2) we fail to redeem all of the outstanding shares
of Series C Preferred Stock on the Mandatory Redemption Date, or (3) we fail to
make an Offer to Purchase upon a Change in Control, the holders of a majority of
the
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outstanding shares of Series C Preferred Stock, voting as a class, will be
entitled to elect (a) one director if there are seven or less directors on the
board of directors at the time or (b) two directors if there are eight or more
directors on the board of directors at the time.
In exercising these voting rights or when otherwise granted voting rights
by operation of law, each share of Series C Preferred Stock will be entitled to
one vote per share.
No consent of the holders of the Series C Preferred Stock is required for
(1) the creation by us of any indebtedness of any kind or (2) the authorization
or issuance of any class of our capital stock ranking junior to the Series C
Preferred Stock in payment of dividends or upon our liquidation, dissolution or
winding-up.
Liquidation. If there is any voluntary or involuntary liquidation,
dissolution or winding-up of us, before any distribution of our assets to the
holders of shares of common stock or any other capital stock of ours ranking
junior to the Series C Preferred Stock upon our liquidation, dissolution or
winding-up, the holders of shares of Series C Preferred Stock will be entitled
to receive out of our assets available for distribution to our stockholders,
whether from capital, surplus or earnings, an amount per share of Series C
Preferred Stock equal to $100, plus accrued and unpaid dividends on the share of
Series C Preferred Stock, if any, to the date of final distribution.
If there is any voluntary or involuntary liquidation, dissolution or
winding-up of us, before any distribution of our assets to the holders of shares
of Series C Preferred Stock or any capital stock of ours ranking equally with
the shares of Series C Preferred Stock, the holders of any shares of capital
stock ranking senior to the Series C Preferred Stock shall be entitled to
receive out of our assets available for distribution to our stockholders,
whether from capital, surplus or earnings, an amount per share of the senior
stock equal to the liquidation preference of the senior stock, plus accrued and
unpaid dividends thereon, if any, to the date of final distribution.
If, upon any liquidation, dissolution or winding-up of us, the amounts
payable with respect to the shares of Series C Preferred Stock or any capital
stock ranking on a par with the shares of Series C Preferred Stock are not paid
in full, then the holders will share ratably in the distribution of assets, or
proceeds from the liquidation, dissolution or winding-up, in proportion to the
full respective preferential amounts to which they are entitled. Neither a
consolidation nor a merger of us with one or more other corporations, nor a sale
or a transfer of all or substantially all of our assets, will be deemed to be a
voluntary or involuntary liquidation, dissolution or winding-up of us.
Sinking Fund; Other Matters. We are not required to redeem the Series C
Preferred Stock under any sinking fund provisions. Holders of shares of
Series C Preferred Stock have no preemptive rights.
Transfer Agent. The transfer agent for the Series C Preferred Stock is
Continental Stock Transfer & Trust Company, New York, New York.
9.2% SERIES A JUNIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK AND
9.2% SERIES B JUNIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK
The board of directors has authorized the issuance of up to 4,300,000
shares of 9.2% Series A Junior Cumulative Convertible Preferred Stock and up to
2,100,000 shares of the 9.2% Series B Junior Cumulative Convertible Preferred
Stock. As of July 31, 1999, we had 1,350,000 shares of 9.2% Series A Junior
Cumulative Convertible Preferred Stock outstanding held of record by the Apollo
Investors.
Dividends. The annual dividend rate per share of the Junior Preferred Stock
will be an amount equal to 9.2% of the sum of (1) the liquidation preference of
the Junior Preferred Stock and (2) all unpaid dividends, if any, whether or not
declared, from the date of issuance of the shares of Junior Preferred Stock (for
shares of 9.2% Series A Junior Cumulative Convertible Preferred Stock, the
'Closing Date' and, for shares of 9.2% Series B Junior Cumulative Convertible
Preferred Stock, the 'Option Closing Date') to the applicable dividend payment
date. Dividends on the shares of Junior Preferred Stock will be cumulative,
accruing annually and, when
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and as declared by our Board of Directors, will be payable annually initially on
November 15, 1999 and on each November 15 thereafter (each, a 'Junior Preferred
Dividend Payment Date'). If any dividend payable on any Junior Preferred
Dividend Payment Date is not declared or paid on the Junior Preferred Dividend
Payment Date in full, in cash or in additional shares of Junior Preferred Stock
of the same series, then the amount of the unpaid dividend ('Default Dividends')
will be accumulated and will accrue dividends, until paid, compounded annually
at a rate equal to 15% per annum. Dividends may be paid in cash, shares of
Junior Preferred Stock of the same series or any combination of cash and Junior
Preferred Stock, at our option. Default Dividends may only be paid in shares of
Junior Preferred Stock of the same series.
With respect to the payment of dividends, the 9.2% Series A Junior
Cumulative Convertible Preferred Stock ranks on a parity with the 9.2% Series B
Junior Cumulative Convertible Preferred Stock. If and so long as full cumulative
dividends payable on the shares of Junior Preferred Stock in respect of all
prior dividend periods have not been paid or set apart for payment and proper
provision has not been made so that holders of Junior Preferred Stock are
offered the opportunity to make a Payout Election instead of a Conversion Price
adjustment (as described below), we will not pay any dividends, except for
dividends payable in common stock or our capital stock ranking junior to the
Junior Preferred Stock in payment of dividends ('Junior Dividend Stock') or make
any distributions of assets on or redeem, purchase or otherwise acquire for
consideration shares of common stock or Junior Dividend Stock.
If and so long as any accrued and unpaid dividends payable on any shares of
our capital stock ranking senior to the Junior Preferred Stock in payment of
dividends have not been paid or set apart for payment, we will not pay any
dividends in cash on shares of Junior Preferred Stock. No dividends paid in cash
will be paid or declared and set apart for payment on any shares of Junior
Preferred Stock or of our capital stock ranking equally with the Junior
Preferred Stock in the payment of dividends ('Parity Dividend Stock') for any
period unless we have paid or declared and set apart for payment, or
contemporaneously pay or declare and set apart for payment, all accrued and
unpaid dividends on the Junior Preferred Stock for all dividend payment periods
terminating on or before the date of payment of these dividends; provided,
however, that all dividends accrued by us on shares of Junior Preferred Stock or
Parity Dividend Stock will be declared proportionately with respect to all
shares of Junior Preferred Stock and Parity Dividend Stock then outstanding,
based on the ratio of unpaid dividends on the Junior Preferred Stock to unpaid
dividends on the Parity Dividend Stock. No dividends paid in cash will be paid
or declared and set apart for payment on Junior Preferred Stock for any period
unless we have paid or declared and set apart for payment, or contemporaneously
pay or declare and set apart for payment, all accrued and unpaid dividends on
any shares of Parity Dividend Stock for all dividend payment periods terminating
on or before the date of payment of these dividends.
Redemption. Except as described below, shares of Junior Preferred Stock may
not be redeemed by us at our option before November 15, 2003. From and after
November 15, 2001 and before November 15, 2003, we may redeem shares of Junior
Preferred Stock, in whole or in part, at any time at a redemption price of 100%
of the liquidation preference of the shares of Junior Preferred Stock redeemed,
plus unpaid dividends, if any, whether or not declared, to the redemption date,
if the average closing price of the common stock as reported in The Wall Street
Journal or, at our election, other reputable financial news source, for the 20
consecutive trading days before the notice of redemption of the Junior Preferred
Stock (the 'Current Market Price') equals or exceeds $60 per share, as adjusted.
From and after November 15, 2003, we may redeem shares of Junior Preferred
Stock, in whole or in part, at any time at a redemption price of 100% of the
liquidation preference of the Junior Preferred Stock redeemed, plus unpaid
dividends, if any, whether or not declared, to the redemption date.
On November 15, 2011, we will be required to redeem all outstanding shares
of Junior Preferred Stock at a redemption price of 100% of the liquidation
preference of the Junior Preferred Stock redeemed, plus unpaid dividends, if
any, whether or not declared, to the redemption date.
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The amount paid to the holders of shares of Junior Preferred Stock upon
redemption that is allocable to the liquidation preference of the shares of
Junior Preferred Stock will be paid in cash and the amount of any unpaid
dividends to be paid on the shares of Junior Preferred Stock redeemed will be
paid in cash, shares of Junior Preferred Stock of the same series or any
combination of cash and Junior Preferred Stock at our option.
Change of Control. Upon the occurrence of a Change of Control, we must make
an offer (a 'Change of Control Offer') to purchase all then outstanding shares
of Junior Preferred Stock at a purchase price in cash equal to 101% of their
liquidation preference, plus unpaid dividends (paid in cash), if any, whether or
not declared, to the date the shares are purchased; provided that if the
purchase of the Junior Preferred Stock would violate or constitute a default
under (1) our senior discount notes or the indenture relating to our senior
discount notes or (2) the indenture or indentures or other agreement or
agreements under which there may be issued or outstanding from time to time
other indebtedness of CD Radio ('Other Agreements') in an aggregate principal
amount not exceeding $450 million (less the amount, if any, of indebtedness
issued to replace, refinance or refund our senior discount notes) because we
have not satisfied all of our obligations under the indenture relating to our
senior discount notes and the Other Agreements arising from the Change of
Control (collectively, the 'Senior Obligations'), then we will be required to
use our best efforts to satisfy the Senior Obligations as promptly as possible
or to obtain the requisite consents necessary to permit the repurchase of the
Junior Preferred Stock, and until the Senior Obligations are satisfied or
consents are obtained, we will not be obligated to make a Change of Control
Offer.
With respect to the Junior Preferred Stock, a 'Change of Control' is
defined as the occurrence of any of the following events: (1) any 'person' or
'group' (as these terms are used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the 'beneficial owner' (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person shall be deemed to have 'beneficial
ownership' of all securities that the person has the right to acquire, whether
the right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of our total outstanding voting stock;
(2) we consolidate with or merge with or into another person or convey,
transfer, lease or otherwise dispose of all or substantially all of our assets
to any person, or any person consolidates with or merges with or into us, in a
transaction in which our outstanding voting stock is converted into or exchanged
for cash, securities or other property, other than, at all times when the senior
discount notes are outstanding, those transactions that are not deemed a 'Change
of Control' under the terms of the indenture relating to our senior discount
notes; (3) during any consecutive two-year period, individuals who at the
beginning of the period constituted our board of directors (together with any
new directors whose election to the board of directors, or whose nomination for
election by our stockholders, was approved by a vote of 66 2/3% of the directors
then still in office who were either directors at the beginning of the period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of our board of directors then in office; or
(4) we are liquidated or dissolved or a special resolution is passed by our
stockholders approving the plan of liquidation or dissolution, other than, at
all times when our senior discount notes are outstanding, those transactions
that are not deemed a 'Change of Control' under the terms of the indenture
relating to our senior discount notes.
Notwithstanding the foregoing, no transaction or event will be deemed a
'Change of Control' if (1) all of the outstanding shares of common stock are to
be converted pursuant thereto solely into the right to receive, for each share
of common stock so converted, cash and/or shares of Qualifying Acquiror common
stock (valued at its Current Market Price) together having a value in excess of
$30.30, (2) we have declared and paid all dividends on the Junior Preferred
Stock, whether or not theretofore declared or undeclared, to the date of the
Change of Control and the holders of Junior Preferred Stock have been given
reasonable opportunity to convert, before the Change of Control, any shares of
Junior Preferred Stock so issued as a dividend, and (3) immediately following
the event the number of shares of Qualifying Acquiror common stock into which
shares of Junior Preferred Stock have been converted (together with, if shares
of Junior Preferred Stock are to remain outstanding, any shares of Qualifying
Acquiror common stock into
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which all outstanding shares of Junior Preferred Stock would be convertible)
represent both (a) less than 5% of the total number of shares of Qualifying
Acquiror common stock outstanding immediately after the Change of Control and
(b) less than one third of the number of shares of Qualifying Acquiror common
stock that would be Publicly Traded immediately after the event. The term
'Qualifying Acquiror common stock' means the common stock of any corporation if
listed on or admitted to trading on the New York Stock Exchange, American Stock
Exchange or Nasdaq, and the term 'Publicly Traded' means shares of Qualifying
Acquiror common stock that are both (a) held by persons who are neither
officers, directors or Affiliates of the corporation nor the 'beneficial owner'
(as the term is defined in Rule 13d-3 under the Exchange Act) of 5% or more of
the total number of shares then issued and outstanding, and (b) not 'restricted
securities' (as the term is defined in Rule 144 of the Securities Act).
Conversion. Each share of Junior Preferred Stock may be converted at any
time, at the option of the holder, unless previously redeemed, into a number of
shares of common stock calculated by dividing the liquidation preference of the
Junior Preferred Stock (without unpaid dividends) by $30 (as adjusted from time
to time, the 'Conversion Price'). The Conversion Price will not be adjusted at
any time for unpaid dividends on the shares of Junior Preferred Stock, but will
be adjusted for the occurrence of some corporate events affecting the common
stock. Upon conversion, holders of the Junior Preferred Stock will be entitled
to receive any unpaid dividends upon the shares of Junior Preferred Stock
converted payable in cash, shares of common stock or a combination of cash and
common stock, at our option.
The Conversion Price for shares of Junior Preferred Stock will be adjusted
in some events, including (1) dividends and other distributions payable in
common stock on any class of our capital stock, (2) subdivisions, combinations
and reclassifications of the common stock, (3) the issuance to all holders of
common stock of rights or warrants entitling them to subscribe for or purchase
common stock at less than fair market value, (4) distributions to all holders of
common stock of evidence of our indebtedness or assets, (5) repurchases,
redemptions or other acquisitions of the common stock by us at a price per share
greater than the Current Market Price per share of common stock on the date of
the event, (6) issuance or sale of common stock by us at a price per share more
than 15% below (or, in the case of any issuance or sale to an affiliate of ours,
any amount below) the Current Market Price per share of common stock on the date
of the event (except for issuances to or through a nationally recognized
investment banking firm in which our affiliates purchase less than 25% of the
shares in the offering) and (7) a consolidation or merger to which we are a
party or the sale or transfer of all or substantially all of our assets.
The Conversion Price for shares of Junior Preferred Stock will not be
adjusted if (1) the adjustment would not require an increase or decrease of at
least 1% in the Conversion Price then in effect or (2) with respect to each
series of Junior Preferred Stock and in connection with an adjustment that would
be made in respect of a dividend, purchase, redemption or other acquisition,
holders of a majority of the outstanding shares of the series of Junior
Preferred Stock elect to participate in the dividend, purchase, redemption or
other acquisition (a 'Payout Election') proportionately with the holders of
common stock or capital stock ranking junior to the Junior Preferred Stock
('Junior Stock').
Voting Rights. So long as any shares of Junior Preferred Stock are
outstanding, each share of Junior Preferred Stock will entitle its holder to
vote, in person or by proxy, at any special or annual meeting of stockholders,
on all matters entitled to be voted on by holders of common stock voting
together as a single class with all other shares entitled to vote those matters.
With respect to these matters, each share of Junior Preferred Stock will entitle
its holder to cast that number of votes per share as is equal to the number of
votes that the holder would be entitled to cast had the holder converted its
shares of Junior Preferred Stock into shares of common stock on the record date
for determining our stockholders eligible to vote on these matters.
In addition to any vote or consent of stockholders required by law or by
our amended and restated certificate of incorporation, the consent of the
holders of at least a majority of the shares of a particular series of Junior
Preferred Stock at any time issued and outstanding will be necessary for
effecting or validating any reclassification of that series of Junior Preferred
Stock or
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amendment, alteration or repeal of any of the provisions of our amended and
restated certificate of incorporation or amended and restated by-laws which
adversely affects the voting powers, rights or preferences of the holders of the
shares of that series of Junior Preferred Stock. The consent of the holders of
at least a majority of the shares of Junior Preferred Stock at the time issued
and outstanding, acting as a single class, will be necessary for effecting or
validating any amendment, alteration or repeal of any of the provisions of our
amended and restated certificate of incorporation or amended and restated
by-laws which affects adversely the voting powers, rights or preferences of the
holders of the shares of both series of Junior Preferred Stock. Any amendment of
the provisions of our amended and restated certificate of incorporation so as to
authorize or create, or to increase the authorized amount of, any Junior Stock
will not be deemed to affect adversely the voting powers, rights or preferences
of the holders of shares of Junior Preferred Stock. The consent of at least a
majority of the shares of each series of Junior Preferred Stock will also be
necessary for:
(1) the authorization or creation of, or the increase in the
authorized amount of, or the issuance of any shares of any class or series
of, capital stock ranking senior to the Junior Preferred Stock ('Senior
Stock') or any security convertible into shares of any class or series of
Senior Stock;
(2) the authorization or creation of, or the increase in the
authorized amount of, or the issuance of any shares of any class or series
of capital stock ranking equally with the Junior Preferred Stock ('Parity
Stock') or any security convertible into shares of any class or series of
Parity Stock so that the aggregate liquidation preference of all
outstanding shares of Parity Stock (other than (x) shares of Junior
Preferred Stock issued under the stock purchase agreement, dated November
13, 1998, between us and Apollo Investment Fund IV, L.P. and Apollo
Overseas Partners, L.P. and (y) shares of Junior Preferred Stock issued as
a dividend in respect of shares issued in respect of (x) or (y)) would
exceed the sum of (A) $135,000,000 and (B) the aggregate liquidation
preference of the shares of 9.2% Series B Junior Cumulative Convertible
Preferred Stock issued at the Option Closing, if any;
(3) our merger or consolidation with or into any other entity, unless,
after the merger or consolidation, the resulting corporation will have no
class or series of shares and no other securities either authorized or
outstanding ranking before, or equally with, shares of Junior Preferred
Stock; provided, however, that no vote or consent of the holders of Junior
Preferred Stock will be required if before the time when the merger or
consolidation is to take effect, and regardless of whether the merger or
consolidation would constitute a Change of Control, a Change of Control
Offer is made for all shares of Junior Preferred Stock at the time
outstanding; and
(4) the application of any of our funds, property or assets to the
purchase, redemption, sinking fund or other retirement of any shares of any
class of Junior Stock, or the declaration, payment or making of any
dividend or distribution on any shares of any class of Junior Stock, other
than a dividend or dividends payable solely in shares of common stock or
Junior Stock of the same series, unless the holders of Junior Preferred
Stock have been offered the opportunity to make a Payout Election with
respect to this event.
In connection with the foregoing class rights to vote, each holder of
shares of Junior Preferred Stock shall have one vote for each share of Junior
Preferred Stock held. No consent of holders of Junior Preferred Stock is
required for the creation of any indebtedness of any kind of CD Radio.
Liquidation. If we are voluntarily or involuntarily liquidated, dissolved
or wound up, the 9.2% Series A Junior Cumulative Convertible Preferred Stock
will rank on a parity with the 9.2% Series B Junior Cumulative Convertible
Preferred Stock, and before any distribution of our assets to the holders of
shares of common stock or any other class or series of Junior Stock, but after
payment of the liquidation preference payable on the Series C Preferred Stock or
any other class or series of Senior Stock, the holders of shares of Junior
Preferred Stock will be entitled to receive out of our assets available for
distribution to our stockholders, whether from capital, surplus or earnings, an
amount per share of Junior Preferred Stock equal to $100, plus accrued
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and unpaid dividends on each share of Junior Preferred Stock, if any, to the
date of final distribution.
If we are voluntarily or involuntarily liquidated, dissolved or wound up,
before any distribution of our assets to the holders of shares of Junior
Preferred Stock or Parity Stock, the holders of any shares of Senior Stock will
be entitled to receive out of our assets available for distribution to our
stockholders, whether from capital, surplus or earnings, an amount per share of
Senior Stock equal to the liquidation preference of the Senior Stock, plus
accrued and unpaid dividends on the Senior Stock, if any, to the date of final
distribution.
If, upon any liquidation, dissolution or winding-up of us, the amounts
payable with respect to the shares of Junior Preferred Stock or any Parity Stock
are not paid in full, then holders of Junior Preferred Stock and Parity Stock
will share ratably in the distribution of assets, or proceeds of the
liquidation, dissolution or winding-up, in proportion to the full respective
preferential amounts to which they are entitled. Neither a consolidation nor a
merger of us with one or more other corporations, nor a sale or a transfer of
all or substantially all of our assets, will be deemed to be a voluntary or
involuntary liquidation, dissolution or winding-up of us.
Exchange. Shares of Junior Preferred Stock may be exchanged at any time and
from time to time, at our option, for our 9.2% Convertible Debentures (the
'Convertible Debt'). The Convertible Debt will be issued under an indenture
acceptable, in form and substance, to a majority of the holders of the Junior
Preferred Stock immediately before the effectiveness of the indenture.
The Convertible Debt will have a maturity date 13 years following the
Closing Date, a principal amount equal to the aggregate liquidation preference
of the shares of Junior Preferred Stock exchanged and will provide for the
payment of interest at a rate of 9.2% per annum, payable annually in cash or
additional Convertible Debt, at our option. The Convertible Debt will be
convertible and redeemable on terms substantially similar to those of the Junior
Preferred Stock.
Registration Rights. At any time after December 23, 2000, holders of shares
of 9.2% Series A Junior Cumulative Convertible Preferred Stock, or shares of
common stock into which shares of 9.2% Series A Junior Cumulative Convertible
Preferred Stock have been converted, representing, in the aggregate, at least
50% of the shares of common stock into which shares of 9.2% Series A Junior
Cumulative Convertible Preferred Stock have been or may be converted (assuming
conversion of the 9.2% Series A Junior Cumulative Convertible Preferred Stock)
('Series A Registrable Securities') will be entitled, on two occasions, to
require us to register the Series A Registrable Securities for sale in an
underwritten public offering by a nationally recognized investment banking firm
or firms reasonably acceptable to us. At any time after December 23, 2000,
holders of shares of 9.2% Series B Junior Cumulative Convertible Preferred Stock
or shares of common stock into which shares of 9.2% Series B Junior Cumulative
Convertible Preferred Stock have been converted representing, in the aggregate,
at least 50% of the shares of common stock into which shares of 9.2% Series B
Junior Cumulative Convertible Preferred Stock have been or may be converted
(assuming conversion of the 9.2% Series B Junior Cumulative Convertible
Preferred Stock) ('Series B Registrable Securities') will be entitled, on one
occasion, to require us to register the Series B Registrable Securities for sale
in an underwritten public offering by a nationally recognized investment banking
firm or firms reasonably acceptable to us.
If a demand registration would be seriously detrimental to us and our
stockholders, the demand registration may be deferred, at our request, twice in
any 12-month period, for an aggregate period of time of up to 90 days. In
addition, holders of Junior Preferred Stock will be bound by customary 'lockup'
agreements at the request of the managing underwriter of any public offering on
our behalf. If we plan to file a registration statement on behalf of one or more
security holders, holders of Junior Preferred Stock also have the right, taking
into account customary limitations and the rights of the other security holders,
to request that the registration include their Registrable Securities. Holders
of Junior Preferred Stock or Registrable Securities are entitled to an unlimited
number of these 'piggy-back' registrations.
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Tag-Along Agreement. David Margolese, our Chairman and Chief Executive, and
we also entered into a tag-along agreement with the Apollo Investors. Under the
tag-along agreement, if Mr. Margolese sells more than 800,000 shares of our
common stock before the earlier of the date that the Apollo Investors
beneficially own less than 2,000,000 shares of the common stock or the date that
is six months after the nationwide commercial introduction of our service, then
the Apollo Investors have rights to sell, proportionately with Mr. Margolese, a
portion of the common stock owned by them in any subsequent transaction in which
Mr. Margolese disposes of 80,000 or more shares of our common stock.
REGISTRATION RIGHTS
In connection with the sale of 5,000,000 shares of common stock to Prime
66, we granted registration rights to Prime 66. Prime 66 has the right to make
two demands, at any time after October 1, 2000, which will require us to use our
best efforts to effect the registration of Prime 66's shares of common stock.
In addition, if we determine to register any shares of common stock for one
or more security holders, Prime 66 has the right, taking into account customary
limitations and the rights of the other security holders, to request that the
registration include Prime 66's common stock. Prime 66 is entitled to an
unlimited number of these 'piggy-back' registrations.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, preferred stock,
common stock or any combination thereof. Warrants may be issued independently or
together with any other securities offered in an applicable prospectus
supplement and may be attached to or separate from such securities. Warrants may
be issued under warrant agreements (each, a 'warrant agreement') to be entered
into between us and a warrant agent specified in the applicable prospectus
supplement. The warrant agent will act solely as our agent in connection with
the warrants of a particular series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
warrants. The following sets forth certain general terms and provisions of
warrants which may be offered. Further terms of the warrants and the applicable
warrant agreement will be set forth in an applicable prospectus supplement.
DEBT WARRANTS
The prospectus supplement relating to a particular issue of warrants to
issue debt securities ('debt warrants') will describe the terms of the debt
warrants, including the following:
the title of the debt warrants;
the offering price for the debt warrants, if any;
the aggregate number of the debt warrants;
the designation and terms of the debt securities purchasable upon exercise
of the debt warrants;
if applicable, the designation and terms of the debt securities that the
debt warrants are issued with and the number of debt warrants issued with
each debt security;
if applicable, the date from and after which the debt warrants and any
debt securities issued with them will be separately transferable;
the principal amount of debt securities that may be purchased upon
exercise of a debt warrant and the price at which the debt securities may
be purchased upon exercise (which may be payable in cash, securities or
other property);
the dates on which the right to exercise the debt warrants will commence
and expire;
if applicable, the minimum or maximum amount of the debt warrants that may
be exercised at any one time;
43
<PAGE>
information with respect to book-entry procedures, if any;
the currency or currency units in which the offering price, if any, and
the exercise price are payable;
if applicable, a discussion of material United States federal income tax
considerations;
the antidilution provisions of the debt warrants, if any;
the redemption or call provisions, if any, applicable to the debt
warrants; and
any additional terms of the debt warrants, including terms, procedures,
and limitations relating to the exchange and exercise of the debt
warrants.
STOCK WARRANTS
The prospectus supplement relating to a particular issue of warrants to
issue common stock or preferred stock will describe the terms of the warrants,
including the following:
the title of the warrants;
the offering price for the warrants, if any;
the aggregate number of the warrants;
the designation and terms of the common stock or preferred stock that may
be purchased upon exercise of the warrants;
if applicable, the designation and terms of the securities that the
warrants are issued with and the number of warrants issued with each
security;
if applicable, the date from and after which the warrants and any
securities issued with the warrants will be separately transferable;
the number of shares of common stock or preferred stock that may be
purchased upon exercise of a warrant and the price at which such shares
may be purchased upon exercise;
the dates on which the right to exercise the warrants will commence and
expire;
if applicable, the minimum or maximum amount of the warrants that may be
exercised at any one time;
the currency or currency units in which the offering price, if any, and
the exercise price are payable;
if applicable, a discussion of material United States federal income tax
considerations;
the antidilution provisions of the warrants, if any;
the redemption or call provisions, if any, applicable to the warrants; and
any additional terms of the warrants, including terms, procedures, and
limitations relating to the exchange and exercise of the warrants.
EXERCISE OF WARRANTS
Each warrant will entitle the holder of warrants to purchase for cash the
amount of shares of preferred stock, shares of common stock or debt securities
at the exercise price as shall in each case be set forth in, or be determinable
as set forth in, the prospectus supplement relating to the warrants offered
thereby. Warrants may be exercised at any time up to the close of business on
the expiration date set forth in the prospectus supplement relating to the
warrants offered thereby. After the close of business on the expiration date,
unexercised warrants will become void.
Warrants may be exercised as set forth in the prospectus supplement
relating to the warrants offered thereby. Upon receipt of payment and the
warrant certificate properly completed and duly executed at the corporate trust
office of the warrant agent or any other office indicated in the prospectus
supplement, we will, as soon as practicable, forward the shares of preferred
stock, shares of common stock or debt securities purchasable upon such exercise.
If less than all of the
44
<PAGE>
warrants represented by the warrant certificate are exercised, a new warrant
certificate will be issued for the remaining warrants.
WARRANTS TO PURCHASE SERIES C PREFERRED STOCK
In connection with the issuance of a class of preferred stock which is no
longer outstanding, we issued warrants as of April 9, 1997, to Libra
Investments, Inc. ('Libra') and some individuals and entities designated by
Libra. These warrants may be exercised for an aggregate of 177,178 shares of
Series C Preferred Stock. Holders of these warrants may exercise their warrants
until April 9, 2002, at an exercise price which declines every month. During
July 1999, the exercise price for each of these warrants was $66.05 per share of
Series C Preferred Stock.
THE UNIT OFFERING WARRANTS
On May 18, 1999, we issued units composed of our 14 1/2% senior secured
notes due 2009 and warrants to purchase an aggregate of 2,190,000 shares of
common stock at a price of $28.60 per share. These warrants were issued under a
warrant agreement, dated as of May 15, 1999, between us, as issuer, and United
States Trust Company of New York, as warrant agent. The number of shares of
common stock to be issued under these warrants will be adjusted in some cases if
we issue additional shares of common stock, options, warrants or convertible
securities and in some other events. These warrants will expire on May 15, 2009.
Under the warrant agreement for these warrants, holders can not exercise their
warrants before the earlier to occur of: (1) the effective date of a change in
our control and (2) May 18, 2000.
We have agreed to file and have declared effective a shelf registration
statement covering the resale of the unit offering warrants within 150 days
after the issuance of the warrants, and, to cause the shelf registration
statement to remain effective until the earliest of (1) two years after the
issuance of the unit offering warrants, (2) the time when all unit offering
warrants have been sold under the shelf registration statement and (3) the time
when the unit offering warrants can be sold by persons who are not our
affiliates without restriction under the Securities Act.
We have also agreed to file and have declared effective a shelf
registration statement covering the issuance of the shares of common stock
issuable upon the exercise of the unit offering warrants and to cause this shelf
registration statement to remain effective until the earlier of (1) the time
when all unit offering warrants have been exercised and (2) May 15, 2009.
Holders of these warrants and shares of common stock received upon exercise
of these warrants will also have the right to include these warrants and shares
of common stock received upon exercise of these warrants in any registration
statement we file under the Securities Act for our account or for any holders of
our common equity securities, with some exceptions.
THE FORD WARRANT
On June 15, 1999, we issued a warrant to Ford which entitles Ford to
purchase up to 4,000,000 shares of our common stock at a purchase price of
$30 per share.
Under this warrant agreement, Ford's right to exercise this warrant vests
as follows:
with respect to 1,000,000 shares of common stock, on the date that Ford
has manufactured 500,000 new vehicles containing CD Radio receivers ('Ford
Enabled Vehicles');
with respect to an additional 500,000 shares of common stock, on the date
that Ford has manufactured an aggregate of 1,000,000 Ford Enabled
Vehicles;
with respect to an additional 500,000 shares of common stock, on the date
that Ford has manufactured an aggregate of 2,000,000 Ford Enabled
Vehicles;
with respect to an additional 1,000,000 shares of common stock, on the
date that Ford has manufactured an aggregate of 3,000,000 Ford Enabled
Vehicles; and
with respect to an additional 1,000,000 shares of common stock, on the
date that Ford has manufactured an aggregate of 4,000,000 Ford Enabled
Vehicles.
45
<PAGE>
The number of shares of common stock to be issued under this warrant will
be adjusted in some cases if we issue stock dividends, combine stock, reorganize
or reclassify capital stock, merge, sell all of our assets and in some other
events. This warrant will expire on the earlier of June 11, 2009 and the date of
termination or expiration of the agreement, dated June 11, 1999, between us and
Ford.
We are required to give Ford notice of adjustments in the number of shares
issuable under this warrant and of extraordinary corporate events. If we issue
shares of common stock in an underwritten public offering, we also must notify
Ford and offer to issue Ford, for cash at an equal price, the number of shares
of common stock required so that Ford will have the same percentage of the total
number of shares of common stock issued and outstanding immediately prior to the
offering as after giving effect to the offering. Ford, however, must exercise
this preemptive purchase right within five days after receiving notice from us
and must purchase its common shares simultaneous with the closing of the
offering.
PLAN OF DISTRIBUTION
We may sell the securities:
(1) to one or more underwriters or dealers for public offering and sale by
them and
(2) to investors directly or through agents.
The distribution of securities may be effected from time to time in one or
more transactions at a fixed price or prices (which may be changed from time to
time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each prospectus
supplement will describe:
(1) the method of distribution of the securities offered thereby;
(2) the purchase price and the proceeds we will receive from the sale; and
(3) any securities exchanges on which the securities of such series may be
listed.
In connection with the sale of the securities, underwriters, dealers or
agents may receive compensation from us or from purchasers of the securities for
whom they may act as agents, in the form of discounts, concessions or
commissions. The underwriters, dealers or agents that participate in the
distribution of the securities may be deemed to be underwriters under the
Securities Act and any discounts or commissions received by them and any profit
on the resale of the securities received by them may be deemed to be
underwriting discounts and commissions thereunder. Any such underwriter, dealer
or agent will be identified and any such compensation received from us will be
described in the applicable prospectus supplement. Any initial public offering
price and any discounts or concessions allowed or paid to dealers may be changed
from time to time.
Under the agreements that may be entered into with us, underwriters,
dealers and agents may be entitled to indemnification by us against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the underwriters, dealers or agents
may be required to make in respect thereof.
Each underwriter, dealer and agent participating in the distribution of any
securities that are issuable in bearer form will agree that it will not offer,
sell, resell or deliver, directly or indirectly, securities in bearer form to
persons located in the United States or to United States persons (other than
qualifying financial institutions), in connection with the original issuance of
the securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for us in the ordinary
course of business.
Certain persons participating in an offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the securities,
including over-allotment, stabilizing and short-covering transactions in such
securities, the imposition of a penalty bid, and bidding for and purchasing
shares of the common stock in the open market during and after an offering.
46
<PAGE>
LEGAL MATTERS
Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York, will pass
upon specific legal matters with respect to the securities. Certain regulatory
matters arising under the Communications Act will be passed upon by Wiley, Rein
& Fielding, Washington, D.C.
EXPERTS
Our consolidated financial statements as of December 31, 1997 and 1998, and
for each of the three years in the period ended December 31, 1998, and for the
period from May 17, 1990 (date of inception) to December 31, 1998, included in
this prospectus have been so included in reliance on the report (which contains
an explanatory paragraph relating to our ability to continue as a going concern,
as described in Note 2 to the financial statements) of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
accounting and auditing.
INCORPORATION BY REFERENCE
The SEC allows us to 'incorporate by reference' in this prospectus other
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act until we sell all of the securities covered by this
prospectus.
1. Our Annual Report on Form 10-K for the year ended December 31, 1998.
2. Our Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1999 and June 30, 1999.
3. Our Current Reports on Form 8-K dated February 4, 1999, April 9, 1999,
April 16, 1999, May 3, 1999, May 25, 1999 and June 15, 1999.
4. The description of our common stock contained in our Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the Exchange
Act and declared effective on September 13, 1994 (including any
amendment or report filed for the purpose of updating such description).
We have filed each of these documents with the SEC and they are available
from the SEC's Internet site and public reference rooms described under 'Where
You May Find Additional Available Information About Us' below. You may also
request a copy of these filings, at no cost, by writing or calling us at the
following address or telephone number:
Patrick L. Donnelly
Senior Vice President, General Counsel and Secretary
CD Radio Inc.
1221 Avenue of the Americas, 36th Floor
New York, New York 10020
(212) 584-5100
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information.
WHERE YOU MAY FIND ADDITIONAL AVAILABLE INFORMATION ABOUT US
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any of these reports, statements
or other information at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at its regional offices in New York City, New
York, and Chicago, Illinois. You can request copies of those documents, upon
payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public at the SEC's Internet site at
http://www.sec.gov.
47
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The cash expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... 139,000
Trustee's fees.............................................. 100,000
Accounting fees and expenses................................ 300,000
Legal fees and expenses..................................... 600,000
Printing, engraving and delivery expenses................... 450,000
Rating agency fees.......................................... 20,000
Blue sky fees and expenses.................................. 10,000
Listing fee................................................. 50,000
Financial advisory fees..................................... 2,550,000
NASD filing fees............................................ 50,000
Miscellaneous expenses...................................... 31,000
----------
Total.................................................. $4,300,000
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a
corporation to indemnify its directors, officers, employees and agents against
certain liabilities they may incur in such capacities, including liabilities
under the Securities Act, provided they act in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation. Our amended and restated certificate of incorporation and amended
and restated by-laws require us to indemnify our officers and directors to the
full extent permitted by Delaware law.
Section 102 of the Delaware General Corporation Law authorizes a
corporation to limit or eliminate its directors' liability to the corporation or
its stockholders for monetary damages for breaches of fiduciary duties, other
than for (i) breaches of the duty of loyalty, (ii) acts or omissions involving
bad faith, intentional misconduct or knowing violations of the law,
(iii) unlawful payments of dividends, stock purchases or redemptions, or
(iv) transactions from which a director derives an improper personal benefit.
Our amended and restated certificate of incorporation contains provisions
limiting the liability of the directors to us and to our stockholders to the
full extent permitted by Delaware law.
Section 145 of the Delaware General Corporation Law authorizes a
corporation to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the corporation against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such. Our amended and restated
certificate of incorporation and amended and restated by-laws provide that we
may, to the full extent permitted by law, purchase and maintain insurance on
behalf of any director, officer, employee or agent of ours against any liability
that may be asserted against him or her, and we currently maintain such
insurance. We have acquired $10 million of liability insurance covering our
directors and officers for claims asserted against them or incurred by them in
such capacity, including claims brought under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The Exhibit Index beginning on page E-1 is incorporated by reference.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(c) (1) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of a prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) That any securities being registered hereunder which remain unsold at
the termination of the offering shall be removed from registration by means of a
post-effective amendment.
(d) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(1) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(2) to reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment thereof), which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high of the estimated maximum offering range may
be reflected in the form of prospectus filed by the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20% change in the maximum aggregate offering price set forth
in the 'Calculation of Registration Fee' table in this registration
statement;
(3) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
Provided, however, that the undertakings set forth in paragraphs (d)(1) and
(d)(2) above do not apply if this registration statement is on Form S-3,
Form S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this registration statement.
II-2
<PAGE>
(e) Insofar as the securities to be registered are to be offered to
existing security holders pursuant to warrants or rights and any securities not
taken by security holders are to be reoffered to the public:
(1) to supplement the prospectus, after the expiration of the
subscription period,
(2) to set forth the results of the subscription offer, the
transactions by the underwriters during the subscription period, the amount
of unsubscribed securities to be purchased by the underwriters, and the
terms of any subsequent reoffering thereof.
If any public offering by the underwriters is to be made on terms differing
from those set forth on the cover page of the prospectus, a post-effective
amendment will be filed to set forth the terms of such offering.
(f) To file an application for the purpose of determining the eligibility
of the trustee to act under subsection (a) of section 310 of the Trust Indenture
Act ('Act') in accordance with the rules and regulations prescribed by the
Commission under section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
September 22, 1999.
CD RADIO INC.
By: /s/ PATRICK L. DONNELLY
.................................
PATRICK L. DONNELLY
SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman and Chief Executive Officer September 22, 1999
......................................... and Director (Principal Executive
DAVID MARGOLESE and Financial Officer)
* Vice President and Controller September 22, 1999
......................................... (Principal Accounting Officer)
JOHN T. MCCLAIN
* Director September 22, 1999
.........................................
ROBERT D. BRISKMAN
* Director September 22, 1999
.........................................
LAWRENCE F. GILBERTI
* Director September 22, 1999
.........................................
JOSEPH V. VITTORIA
* Director September 22, 1999
.........................................
RALPH V. WHITWORTH
</TABLE>
- ------------
* Signed in accordance with power of attorney
/s/ PATRICK L. DONNELLY
.....................................
PATRICK L. DONNELLY
ATTORNEY-IN-FACT
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<S> <C> <C>
1.1 -- Form of Underwriting Agreement*.
4.1.1 -- Form of Certificate for Shares of Common Stock
(incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-1 (File No. 33-74782))...
4.1.2 -- Rights Agreement, dated as of October 22, 1997, between
the Company and Continental Stock Transfer & Trust
Company, as rights agent (incorporated by reference to
Exhibit 1 to the Company's Registration Statement on Form
8-A, filed with the Commission on October 30, 1997 (the
'Form 8-A'))..............................................
4.1.3 -- Form of Certificate of Designations of Series B Preferred
Stock (incorporated by reference to Exhibit A to Exhibit 1
to the Form 8-A)..........................................
4.1.4 -- Form of Right Certificate (incorporated by reference to
Exhibit B to Exhibit 1 to the Form 8-A)...................
4.1.5 -- Amendment to the Rights Agreement, dated as of
October 22, 1997, between the Company and Continental
Stock Transfer & Trust Company, as rights agent, dated as
of October 13, 1998 (incorporated by reference to
Exhibit 99.2 to the Company's Current Report on Form 8-K
filed on October 13, 1998)................................
4.1.6 -- Amendment to the Rights Agreement, dated as of
October 22, 1997, between the Company and Continental
Stock Transfer & Trust Company, as rights agent, dated as
of November 13, 1998 (incorporated by reference to
Exhibit 99.7 to the Company's Current Report on Form 8-K
filed on November 17, 1998)...............................
4.1.7 -- Amended and Restated Amendment to Rights Agreement, dated
as of December 22, 1997, between the Company and
Continental Stock Transfer & Trust Company, as rights
agent, dated as of December 22, 1998 (incorporated by
reference to Exhibit 6 to the Amendment No. 1 to the
Form 8-A, filed with the Commission on January 6, 1999)...
4.1.8 -- Amendment to the Rights Agreement, dated as of
October 22, 1997, between the Company and Continental
Stock Transfer & Trust Company, as rights agent, dated as
of June 11, 1999 (incorporated by reference to
Exhibit 4.1.8 to the Company's Registration Statement on
Form S-4 (File No. 333-82303) filed on July 2, 1999 (the
'1999 Units Registration Statement')).....................
4.1.9 -- Form of Certificate of Designations, Preferences and
Relative, Participating, Optional and Other Special Rights
of 10 1/2% Series C Convertible Preferred Stock (the
'Series C Certificate of Designations') (incorporated by
reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-4 (File No. 333-34761))...............
4.1.10 -- Certificate of Correction to Series C Certificate of
Designations (incorporated by reference to Exhibit 3.5.2
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 (the '1997 Form 10-K'))...........
4.1.11 -- Certificate of Increase of 10 1/2% Series C Convertible
Preferred Stock (incorporated by reference to Exhibit
3.5.3 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1998)..................
4.1.12 -- Exhibit A to the Stock Purchase Agreement, dated as of
November 13, 1998, by and among the Company, Apollo
Investment Fund IV, L.P. and Apollo Overseas Partners IV,
L.P. (the 'Apollo Stock Purchase Agreement') (Form of
Certificate of Designation of the Series A Junior
Preferred Stock) (incorporated by reference to
Exhibit 99.2 to the Company's Current Report on Form 8-K
filed on November 17, 1998)...............................
4.1.13 -- Exhibit B to the Apollo Stock Purchase Agreement (Form of
Certificate of Designation of the Series B Junior
Preferred Stock) (incorporated by reference to
Exhibit 99.3 to the Company's Current Report on Form 8-K
filed on November 17, 1998)...............................
4.1.14 -- Form of Certificate for shares of 9.2% Series A Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.10.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1998 (the
'1998 Form 10-K)).........................................
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<S> <C> <C>
4.1.15 -- Form of Certificate for shares of 9.2% Series B Junior
Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4.10.2 to the 1998 Form 10-K)........
4.2.1 -- Indenture, dated as of November 26, 1997, between the
Company and IBJ Schroder Bank & Trust Company, as Trustee
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3 (File No. 333-34769)
(the '1997 Units Registration Statement'))................
4.2.2 -- Form of Note (incorporated by reference to Exhibit 4.2 to
the 1997 Units Registration Statement)....................
4.2.3 -- Warrant Agreement, dated as of November 26, 1997, between
the Company and IBJ Schroder Bank & Trust Company, as
warrant agent (incorporated by reference to Exhibit 4.3 to
the 1997 Units Registration Statement)....................
4.2.4 -- Form of Warrant (incorporated by reference to Exhibit 4.4
to the 1997 Units Registration Statement).................
4.3.1 -- Form of Preferred Stock Warrant Agreement, dated as of
April 9, 1997, between the Company and each warrantholder
thereof (incorporated by reference to Exhibit 4.12 to the
1997 Form 10-K............................................
4.3.2 -- Form of Common Stock Purchase Warrant granted by the
Company to Everest Capital Master Fund, L.P. and to The
Ravich Revocable Trust of 1989 (incorporated by reference
to Exhibit 4.11 to the 1997 Form 10-K)....................
4.4.1 -- Notes Registration Rights Agreement among CD Radio Inc.
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Lehman Brothers Inc., Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, U.S.
Bancorp Libra, dated as of May 13, 1999 (incorporated by
reference to Exhibit 4.4.1 to the 1999 Units Registration
Statement)................................................
4.4.2 -- Indenture between the Company and United States Trust
Company of New York, as trustee, dated as of May 15, 1999,
regarding the Company's 14 1/2% Senior Secured Notes due
2009 (incorporated by reference to Exhibit 4.4.2 to the
1999 Units Registration Statement)........................
4.4.3 -- Form of the Company's 14 1/2% Senior Secured Notes due
2009 (incorporated by reference to Exhibit 4.4.2 to the
1999 Units Registration Statement)........................
4.4.4 -- Warrant Agreement between the Company and United States
Trust Company of New York, as warrant agent, dated as of
May 15, 1999 (incorporated by reference to Exhibit 4.4.4
to the 1999 Units Registration Statement).................
4.4.5 -- Amended and Restated Pledge Agreement among the Company,
as pledgor, IBJ Whitehall Bank & Trust Company, as
trustee, United States Trust Company of New York, as
trustee, and IBJ Whitehall Bank & Trust Company, as
collateral agent, dated as of May 15, 1999 (incorporated
by reference to Exhibit 4.4.5 to the 1999 Units
Registration Statement)...................................
4.4.6 -- Collateral Pledge and Security Agreement between the
Company, as pledgor, and United States Trust Company of
New York, as trustee, dated as of May 15, 1999
(incorporated by reference to Exhibit 4.4.6 to the 1999
Units Registration Statement).............................
4.4.7 -- Intercreditor Agreement, dated May 15, 1999, by and
between IBJ Whitehall Bank & Trust Company, as trustee,
and United States Trust Company of New York, as trustee
(incorporated by reference to Exhibit 4.4.7 to the 1999
Units Registration Statement).............................
4.5.1 -- Common Stock Purchase Warrant granted by the Company to
Ford Motor Company, dated June 11, 1999 (incorporated by
reference to Exhibit 4.4.2 to the 1999 Units Registration
Statement)................................................
4.6.1 -- Form of Senior Indenture*................................
4.6.2 -- Form of Subordinate Indenture*...........................
</TABLE>
E-2
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<TABLE>
<CAPTION>
EXHIBIT PAGE
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<S> <C> <C>
5.1 -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
regarding legality*.......................................
12.1 -- Statement re: Computation of Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed Charges and
Preferred Stock Dividends***..............................
23.1 -- Consent of Independent Accountants***....................
23.2 -- Consent of Paul, Weiss, Rifkind, Wharton & Garrison***...
23.3 -- Consent of Wiley, Rein & Fielding***.....................
24.1 -- Powers of Attorney (included on signature page)***.......
25.1 -- Statement of Eligibility and Qualification on Form T-1 of
the Trustee to act as Trustee under the Indenture**.......
</TABLE>
- ------------
* Filed electronically with this registration statement.
** To be filed by amendment or by a Current Report on Form 8-K in accordance
with Regulation S-K, Item 601(b).
*** Filed on September 15, 1999 as an exhibit to the Form S-3 as initially filed
on the same date.
E-3
<PAGE>
CD RADIO INC.
(a Delaware corporation)
$500,000,000
Debt Securities, Preferred Stock, Common Stock and Warrants
FORM OF UNDERWRITING AGREEMENT
Dated as of September 23, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C> <C>
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company...........................4
(1) Compliance with Registration Requirements......................4
(2) Incorporated Documents.........................................5
(3) Independent Accountants........................................5
(4) Financial Statements...........................................5
(5) No Material Adverse Change in Business.........................5
(6) Good Standing of the Company...................................6
(7) Good Standing of Subsidiaries..................................6
(8) Capitalization.................................................6
(9) Authorization of this Underwriting Agreement and Terms
Agreement..................................................7
(10) Authorization of Common Stock..................................7
(11) Authorization of Preferred Stock ..............................7
(12) Authorization of Senior Debt Securities and/or Subordinated
Debt Securities................................................7
(13) Authorization of the Indentures................................8
(14) Authorization of Warrants......................................8
(15) Authorization of Warrant Agreement.............................8
(16) Authorization of Underlying Securities.........................8
(17) Descriptions of the Underwritten Securities, Underlying
Securities, Indentures and Warrant Agreement...............9
(18) Absence of Defaults and Conflicts..............................9
(19) Absence of Labor Dispute......................................10
(20) Absence of Proceedings........................................10
(21) Accuracy of Exhibits..........................................11
(22) Absence of Further Requirements...............................11
(23) Possession of Intellectual Property...........................11
(24) Possession of Licenses and Permits............................11
(25) Title to Property.............................................12
(26) Commodity Exchange Act........................................12
(27) Investment Company Act........................................12
(28) Environmental Laws............................................12
(b) Officers' Certificates.................................................13
SECTION 2. Sale and Delivery to Underwriters; Closing.............................13
(a) Underwritten Securities................................................13
(b) Option Underwritten Securities.........................................13
(c) Payment................................................................14
(d) Denominations; Registration............................................14
</TABLE>
ii
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<TABLE>
<S> <C> <C>
SECTION 3. Covenants of the Company...............................................14
(a) Compliance with Securities Regulations and Commission Requests.........14
(b) Filing of Amendments...................................................15
(c) Delivery of Registration Statements....................................15
(d) Delivery of Prospectuses...............................................15
(e) Continued Compliance with Securities Laws..............................15
(f) Blue Sky Qualifications................................................16
(g) Earnings Statement.....................................................16
(h) Reservation of Securities..............................................16
(i) Use of Proceeds........................................................17
(j) Listing................................................................17
(k) Restriction on Sale of Securities......................................17
(l) Reporting Requirements.................................................17
SECTION 4. Payment of Expenses....................................................17
(a) Expenses...............................................................17
(b) Termination of Agreement...............................................18
SECTION 5. Conditions of Underwriters' Obligations................................18
(a) Effectiveness of Registration Statement................................18
(b) Opinion of General Counsel for Company.................................18
(c) Opinion of Counsel for Company.........................................18
(d) Opinion of Regulatory Counsel for Company..............................19
(e) Officers' Certificate..................................................19
(f) Accountant's Comfort Letter............................................19
(g) Bring-down Comfort Letter..............................................19
(h) Ratings................................................................20
(i) Approval of Listing....................................................20
(j) No Objection...........................................................20
(k) Lock-up Agreements.....................................................20
(l) Over-Allotment Option..................................................20
(m) Additional Documents...................................................20
(n) Additional Documents...................................................21
(o) Termination of Terms Agreement.........................................21
SECTION 6. Indemnification........................................................21
(a) Indemnification of Underwriters........................................21
(b) Indemnification of Company, Directors and Officers.....................22
(c) Actions against Parties; Notification..................................23
(d) Settlement without Consent if Failure to Reimburse.....................23
SECTION 7. Contribution...........................................................24
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.........25
</TABLE>
iii
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<TABLE>
<S> <C> <C>
SECTION 9. Termination............................................................25
(a) Underwriting Agreement.................................................25
(b) Terms Agreement........................................................25
(c) Liabilities............................................................26
SECTION 10. Default by One or More of the Underwriters.............................26
SECTION 11. Notices................................................................27
SECTION 12. Parties................................................................27
SECTION 13. GOVERNING LAW AND TIME.................................................27
SECTION 14. Effect of Headings.....................................................27
Exhibit A Form of Terms Agreement...............................................A-1
Exhibit B Form of Opinion of Patrick L. Donnelly, Esq.
Senior Vice President, General Counsel and
Secretary of the Company............................................B-1
Exhibit C Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison...........C-1
Exhibit D Form of Opinion of Wiley, Rein & Fielding.............................D-1
</TABLE>
iv
<PAGE>
CD RADIO INC.
(a Delaware corporation)
Common Stock, Warrants to Purchase Common Stock,
Preferred Stock, Warrants to Purchase Preferred Stock,
Debt Securities and Warrants to Purchase Debt Securities
FORM OF UNDERWRITING AGREEMENT
As of September 23, 1999
[Names of Underwriters]
c/o [Managing Underwriter]
[Address]
Ladies and Gentlemen:
CD Radio Inc., a Delaware corporation (the "Company"), proposes to issue
and sell up to $500,000,000 aggregate initial public offering price of its (i)
shares of common stock, par value $.001 per share (the "Common Stock"), (ii)
warrants to purchase shares of Common Stock (the "Common Stock Warrants"), (iii)
shares of preferred stock, par value $.001 per share (the "Preferred Stock"),
(iv) warrants to purchase shares of Preferred Stock (the "Preferred Stock
Warrants"), (v) senior or subordinated debt securities (the "Debt Securities"),
or (vi) warrants to purchase Debt Securities (the "Debt Security Warrants"), or
any combination thereof, from time to time, in or pursuant to one or more
offerings on terms to be determined at the time of sale.
The Preferred Stock will be issued in one or more series and each series of
Preferred Stock may vary, as applicable, as to the title, specific number of
shares, rank, stated value, liquidation preference, dividend rate or rates (or
method of calculation), dividend payment dates, redemption provisions, sinking
fund requirements, conversion provisions (and terms of the related Underlying
Securities (as defined below)) and any other variable terms as set forth in the
applicable certificate of designations (each, the "Certificate of Designations")
relating to such series of Preferred Stock.
The Debt Securities will be issued in one or more series as senior
indebtedness (the "Senior Debt Securities") under an indenture, dated as of
September 15, 1999 (the "Senior Indenture"), between the Company and the trustee
or, as the case may be, trustees named therein (the "Senior Trustees" and each,
a "Senior Trustee"), or as subordinated indebtedness (the "Subordinated Debt
Securities") under an indenture, dated as of September 15, 1999 (the
"Subordinated Indenture" and, collectively with the Senior Indenture, the
"Indentures", and each, an "Indenture"), between the Company and the trustee or,
as the case may be, trustees named therein (the "Subordinated Trustees" and each
a "Subordinated Trustee" and, collectively with the Senior Trustee or Senior
Trustees, the "Trustees", and each, a "Trustee"). Each series of Debt Securities
may vary, as applicable, as to title, aggregate principal amount, rank, interest
rate or formula and timing of payments thereof, stated maturity date, redemption
and/or repayment provisions, security, sinking fund requirements, conversion
provisions (and terms of the
<PAGE>
related Underlying Securities) and any other variable terms established by or
pursuant to the applicable Indenture.
Each issue of Common Stock Warrants, Preferred Stock Warrants and Debt
Security Warrants (collectively, the "Warrants") will be issued pursuant to a
separate warrant agreement (each, a "Warrant Agreement") between the Company and
the warrant agent identified therein (each, a "Warrant Agent"). The Warrants may
vary, as applicable, as to, among other terms, title, type, specific number,
exercise dates or periods, exercise price(s), expiration date(s) and terms of
the related Underlying Securities.
As used herein, "Securities" shall mean the Common Stock, Common Stock
Warrants, Preferred Stock, Preferred Stock Warrants, Senior Debt Securities,
Subordinated Debt Securities, Debt Security Warrants, or any combination
thereof, initially issuable by the Company and "Underlying Securities"
shall mean the Common Stock, Preferred Stock, Senior Debt Securities or
Subordinated Debt Securities issuable upon exercise of the Warrants, as
applicable, or upon conversion of the Preferred Stock, Senior Debt Securities
or Subordinated Debt Securities, as applicable.
Whenever the Company determines to make an offering of Securities through
an underwriter or an underwriting syndicate, the Company will enter into an
agreement (each, a "Terms Agreement") providing for the sale of such Securities
to, and the purchase and offering thereof by, such underwriter or underwriters
(the "Underwriters", which term shall include any Underwriter substituted
pursuant to Section 10 hereof). The Terms Agreement relating to the offering of
Securities shall (i) contain deletions from, modifications of, and additions to,
the provisions of this Form of Underwriting Agreement agreed to by the Company
and the Underwriters and (ii) specify the number or aggregate principal amount,
as the case may be, of Securities to be initially issued (the "Initial
Underwritten Securities"), the name of each Underwriter participating in such
offering (subject to substitution as provided in Section 10 hereof) and the name
of any Underwriter acting as manager or co-manager in connection with such
offering, the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis and, if on
a fixed price basis, the initial offering price, the price at which the Initial
Underwritten Securities are to be purchased by the Underwriters, the form, time,
date and place of delivery and payment of the Initial Underwritten Securities
and any other material variable terms of the Initial Underwritten Securities, as
well as the material variable terms of any related Underlying Securities. In
addition, if applicable, such Terms Agreement shall specify whether the Company
has agreed to grant to the Underwriters an option to purchase additional
Securities to cover over-allotments, if any, and the number or aggregate
principal amount, as the case may be, of Securities subject to such option (the
"Option Underwritten Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and all or any
portion of any Option Underwritten Securities, as applicable. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between the Company and the Underwriters or, if applicable, the
representative(s) of the Underwriters. Each offering of Underwritten Securities
through a sole Underwriter or through an underwriting syndicate will be governed
by this Underwriting Agreement, as supplemented by the applicable Terms
Agreement.
2
<PAGE>
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-86003), as amended
by pre-effective amendment no. 1 and pre-effective amendment no. 2. thereto, for
the registration of the Securities and the Underlying Securities under the
Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof
from time to time in accordance with Rule 415 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement has been declared effective by the Commission and each
Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act"), and the Company has filed such post-effective
amendments thereto as may be required prior to the execution of the applicable
Terms Agreement and each such post-effective amendment has been declared
effective by the Commission. Such registration statement (as so amended, if
applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the final prospectus supplement relating to the offering of
the Underwritten Securities, in the forms first furnished to the Underwriters by
the Company for use in connection with the offering of the Underwritten
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall also be deemed to include all documents incorporated therein
by reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the execution of the applicable Terms Agreement; provided,
further, that if the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b)
Registration Statement"), then all references to "Registration Statement" shall
also be deemed to include the Rule 462(b) Registration Statement; and provided,
further, that if the Company elects to rely upon Rule 434 of the 1933 Act
Regulations, then all references to "Prospectus" shall also be deemed to include
the final or preliminary prospectus and the applicable term sheet or abbreviated
term sheet (the "Term Sheet"), as the case may be, in the forms first furnished
to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references to the date of the Prospectus shall mean the
date of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to
(i) any prospectus used before the Registration Statement became effective and
(ii) any prospectus that omitted, as applicable, the Rule 430A Information, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations and was used after such effectiveness and prior to the initial
delivery of the Prospectus to the Underwriters by the Company. For purposes of
this Underwriting Agreement, all references to the Registration Statement,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Underwriting Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be, prior to the execution of the applicable Terms Agreement;
and all references in this Underwriting Agreement to amendments or supplements
to the Registration Statement, Prospectus or
3
<PAGE>
preliminary prospectus shall be deemed to include the filing of any document
under the 1934 Act which is incorporated by reference in the Registration
Statement, Prospectus or preliminary prospectus, as the case may be, after the
execution of the applicable Terms Agreement.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter named in the applicable Terms Agreement, as of
the date thereof, as of the Closing Time (as defined below) and, if applicable,
as of each Date of Delivery (as defined below) (in each case, a "Representation
Date"), as follows:
(1) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with. In addition, each Indenture has been
duly qualified under the 1939 Act.
At the respective times the Registration Statement and any
post-effective amendments thereto (including the filing of the Company's
most recent Annual Report on Form 10-K with the Commission (the "Annual
Report on Form 10-K")) became effective and at each Representation Date,
the Registration Statement and any amendments thereto complied and will
comply in all material respects with the requirements of the 1933 Act, the
1933 Act Regulations, the 1939 Act, the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations") and did not and
will 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 not misleading. At the date of the Prospectus, at the
Closing Time and at each Date of Delivery, if any, neither the Prospectus
nor any amendments and supplements thereto included or will include an
untrue statement of a material fact or omitted or will omit 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. If
the Company elects to rely upon Rule 434 of the 1933 Act Regulations, the
Company will comply with the requirements of Rule 434. Notwithstanding the
foregoing, the representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter expressly for use in
the Registration Statement or the Prospectus.
Each preliminary prospectus and 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 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of Underwritten Securities will, at the
time of such delivery, be identical
4
<PAGE>
to any electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus,
when they became effective or at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read together
with the other information in (including other information incorporated by
reference therein) the Prospectus, at the date of the Prospectus, at the
Closing Time and at each Date of Delivery, if any, did not and will not
include an untrue statement of a material fact or omit 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.
(3) Independent Accountants. The accountants who certified the
financial statements and any supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included therein, present fairly
the financial position of the Company and its consolidated subsidiaries, or
such other entity, as the case may be, at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries, or such other entity, as the case may
be, for the periods specified. Such financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement and
the Prospectus present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement and the Prospectus. In addition, any pro forma financial
statements of the Company and its subsidiaries, or such other entity, as
the case may be, and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein.
(5) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one
5
<PAGE>
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those arising in
the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise and (C) except
for regular dividends on the Company's common stock or preferred stock, in
amounts per share that are consistent with past practice or the applicable
charter document or supplement thereto, respectively, there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(6) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Underwriting Agreement and the applicable Terms
Agreement. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not result in a Material Adverse
Effect.
(7) Good Standing of Subsidiaries. Each of Satellite CD Radio, Inc.
and each "significant subsidiary" of the Company (as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the 1933 Act) (each, a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized
and is validly existing as a corporation in good standing under the laws of
the jurisdicition of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not result in a Material Adverse
Effect. Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and is validly issued, fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. None of the outstanding shares of
capital stock of any Subsidiary was issued in violation of preemptive or
other similar rights of any securityholder of such Subsidiary.
(8) Capitalization. If the Prospectus contains a "Capitalization"
section, the authorized, issued and outstanding shares of capital stock of
the Company is as set forth in the column entitled "Actual" under such
section (except for subsequent issuances thereof, if any, contemplated
under this Underwriting Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). Such shares of capital stock have been duly authorized and
validly issued by the Company and are fully paid and non-assessable, and
none of such shares of capital stock was issued in violation of preemptive
or other similar rights of any securityholder of the Company.
6
<PAGE>
(9) Authorization of this Underwriting Agreement and Terms Agreement.
This Underwriting Agreement has been, and the applicable Terms Agreement as
of the date thereof will have been, duly authorized, executed and delivered
by the Company.
(10) Authorization of Common Stock. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Common Stock,
such Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and delivered by the Company pursuant
to this Underwriting Agreement and such Terms Agreement against payment of
the consideration therefor specified in such Terms Agreement, will be
validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company. No
holder of such Underwritten Securities is or will be subject to personal
liability by reason of being such a holder.
(11) Authorization of Preferred Stock. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Preferred
Stock, such Underwritten Securities have been, or as of the date of such
Terms Agreement will have been, duly authorized by the Company for issuance
and sale pursuant to this Underwriting Agreement and such Terms Agreement.
The applicable Preferred Stock, when issued and delivered by the Company
pursuant to this Underwriting Agreement and such Terms Agreement against
payment of the consideration therefor, will be validly issued, fully paid
and non-assessable and will not be subject to preemptive or other similar
rights of any securityholder of the Company. No holder of such Preferred
Stock is or will be subject to personal liability by reason of being such a
holder. The applicable Certificate of Designations will be in full force
and effect prior to the Closing Time.
(12) Authorization of Senior Debt Securities and/or Subordinated Debt
Securities. If the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Senior Debt Securities and/or
Subordinated Debt Securities, such Underwritten Securities have been, or as
of the date of such Terms Agreement will have been, duly authorized by the
Company for issuance and sale pursuant to this Underwriting Agreement and
such Terms Agreement. Such Underwritten Securities, when issued and
authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the consideration therefor specified in such
Terms Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and except further as enforcement thereof may be limited by
requirements that a claim with respect to any Debt Securities payable in a
foreign or composite currency (or a foreign or composite currency judgment
in respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or by
governmental authority to limit,
7
<PAGE>
delay or prohibit the making of payments outside the United States. Such
Underwritten Securities will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the applicable
Indenture.
(13) Authorization of the Indentures. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Senior Debt
Securities and/or Subordinated Debt Securities or if Preferred Stock is
convertible into Debt Securities, each applicable Indenture has been, or
prior to the issuance of the Debt Securities thereunder will have been,
duly authorized, executed and delivered by the Company and, upon such
authorization, execution and delivery, will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(14) Authorization of Warrants. If the Underwritten Securities being
sold pursuant to the applicable Terms Agreement include Warrants, such
Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and authenticated in the manner
provided for the applicable Warrant Agreement and delivered against payment
of the consideration therefor specified in such Terms Agreement, (A) will
constitute valid and binding obligations of the Company, entitled to the
benefits provided by such Warrant Agreement and enforceable against the
Company in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and (B) will be in the
form contemplated by, and entitled to the benefits of, the Warrant
Agreement.
(15) Authorization of Warrant Agreement. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include
Warrants, each applicable Warrant Agreement has been, or prior to the
issuance of such Underwritten Securities will have been, duly authorized,
executed and delivered by the Company and, upon such authorization,
execution and delivery, will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
(16) Authorization of Underlying Securities. If the Underlying
Securities related to the Underwritten Securities being sold pursuant to
the applicable Terms
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Agreement include Common Stock or Preferred Stock, such Underlying
Securities have been, or as of the date of such Terms Agreement will have
been, duly authorized and reserved for issuance by the Company upon
exercise of the Common Stock Warrants or Preferred Stock Warrants, as
applicable, or upon conversion of the related Preferred Stock, Senior Debt
Securities or Subordinated Debt Securities, as applicable. If the
Underlying Securities include Common Stock or Preferred Stock, such
Underlying Securities, when issued upon such exercise or conversion, as
applicable, will be validly issued, fully paid and non-assessable and will
not be subject to preemptive or other similar rights of any securityholder
of the Company. No holder of such Common Stock or Preferred Stock is or
will be subject to personal liability by reason of being such a holder. If
the Underlying Securities related to the Underwritten Securities being sold
pursuant to the applicable Terms Agreement include Senior Debt Securities
and/or Subordinated Debt Securities, such Underlying Securities have been,
or as of the date of such Terms Agreement will have been, duly authorized
for issuance by the Company upon the exercise of the Debt Security Warrants
or upon conversion of the related Preferred Stock. Such Underlying
Securities, when issued and authenticated in the manner provided for in the
applicable Indenture and delivered in accordance with the terms of the Debt
Security Warrants or the related Preferred Stock, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with
respect to any Debt Securities payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
(17) Descriptions of the Underwritten Securities, Underlying
Securities, Indentures and Warrant Agreement. The Underwritten Securities
being sold pursuant to the applicable Terms Agreement and each applicable
Indenture and Warrant Agreement, as of each Representation Date, and any
Underlying Securities, when issued and delivered in accordance with the
terms of the related Underwritten Securities, will conform in all material
respects to the statements relating thereto contained in the Prospectus and
will be in substantially the form filed or incorporated by reference, as
the case may be, as an exhibit to the Registration Statement.
(18) Absence of Defaults and Conflicts. Neither the Company nor any of
its Subsidiaries is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the assets, properties or
operations of the Company or any of its Subsidiaries is subject
(collectively, "Agreements and Instruments"), except for
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such defaults that would not result in a Material Adverse Effect. The
execution, delivery and performance of this Underwriting Agreement, the
applicable Terms Agreement and each applicable Indenture and Warrant
Agreement and any other agreement or instrument entered into or issued or
to be entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Registration
Statement and the Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Underwritten Securities and the use
of the proceeds from the sale of the Underwritten Securities as described
under the caption "Use of Proceeds" as well as the issuance of any
Underlying Securities) and compliance by the Company with its obligations
hereunder and thereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any assets, properties or operations of the Company or any of its
Subsidiaries pursuant to, any Agreements and Instruments, nor will such
action result in any violation of the provisions of the charter or by-laws
of the Company or any of its Subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of their
assets, properties or operations. As used herein, a "Repayment Event" means
any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its
Subsidiaries.
(19) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any of its Subsidiaries exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(20) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or to the knowledge of
the Company threatened, against or affecting the Company or any of its
Subsidiaries which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the assets,
properties or operations thereof or the consummation of the transactions
contemplated under the Prospectus, this Underwriting Agreement, the
applicable Terms Agreement or any applicable Indenture or Warrant Agreement
or the performance by the Company of its obligations hereunder and
thereunder. The aggregate of all pending legal or governmental proceedings
to which the Company or any of its subsidiaries is a party or of which any
of their respective assets, properties or operations is the subject which
are not described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
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(21) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(22) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the due authorization,
execution and delivery by the Company of this Underwriting Agreement or the
applicable Terms Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus, this Underwriting
Agreement, such Terms Agreement or any applicable Indenture or Warrant
Agreement, except such as have been already made, obtained or rendered, as
applicable.
(23) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(24) Possession of Licenses and Permits. Except as disclosed in the
Registration Statement, the Prospectus or the documents incorporated by
reference therein, the Company and its Subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (including, without
limitation, all permits required for the operation of the business of the
Company and its Subsidiaries by the FCC and each state and local authority
that regulates the activities of the Company) (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies, other governmental authorities or self
regulatory organizations necessary to conduct the business now operated by
them except as would not result in a Material Adverse Effect; the Company
and its Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect; all
of the Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect; and except as disclosed in the Registration
Statement, Prospectus or the documents incorporated by reference therein,
neither the Company nor any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would
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result in a Material Adverse Effect. To the knowledge of the Company,
except as described in the Registration Statement, Prospectus or the
documents incorporated by reference therein, there exists no reason or
cause that could justify the variation, suspension, cancelation or
termination of any such Governmental Licenses held by the Company or any of
its Subsidiaries with respect to the construction or operation of their
respective businesses, which variation, suspension, cancelation or
termination could reasonably be expected to have a Material Adverse Effect.
(25) Title to Property. The Company and its Subsidiaries have good and
marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind, except (A) as otherwise
stated in the Registration Statement and the Prospectus or (B) those which
do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries. All of the leases
and subleases material to the business of the Company and its Subsidiaries
considered as one enterprise, and under which the Company or any of its
Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any of its Subsidiaries has
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its
Subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiaries of
the continued possession of the leased or subleased premises under any such
lease or sublease, except (A) as otherwise stated in the Registration
Statement and the Prospectus or (B) those which do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries.
(26) Commodity Exchange Act. If the Underwritten Securities being sold
pursuant to the applicable Terms Agreement include Debt Securities or if
any related Underlying Securities include Debt Securities, as the case may
be, such Debt Securities, upon issuance, will be excluded or exempted
under, or beyond the purview of, the Commodity Exchange Act, as amended
(the "Commodity Exchange Act"), and the rules and regulations of the
Commodity Futures Trading Commission under the Commodity Exchange Act (the
"Commodity Exchange Act Regulations").
(27) Investment Company Act. The Company is not, and upon the issuance
and sale of the Underwritten Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
(28) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or
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administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) neither the Company nor any of its Subsidiaries fails to
possess any permit, authorization or approval required under any applicable
Environmental Laws or to be in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its Subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its Subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any of its Subsidiaries and delivered to any Underwriter or to
counsel for the Underwriters in connection with the offering of the Underwritten
Securities shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby on the date of such certificate
and, unless subsequently amended or supplemented, at each Representation Date
subsequent thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Underwritten Securities. The several commitments of the Underwriters to
purchase the Underwritten Securities pursuant to the applicable Terms Agreement
shall be deemed to have been made on the basis of the representations,
warranties and agreements herein contained and shall be subject to the terms and
conditions herein set forth.
(b) Option Underwritten Securities. Subject to the terms and conditions
herein set forth, the Company may grant, if so provided in the applicable Terms
Agreement, an option to the Underwriters, severally and not jointly, to purchase
up to the number or aggregate principal amount, as the case may be, of the
Option Underwritten Securities set forth therein at a price per Option
Underwritten Security equal to the price per Initial Underwritten Security (plus
accrued interest as applicable), less an amount equal to any dividends or
distributions declared by the Company and paid or payable on the Initial
Underwritten Securities but not payable on the Option Underwritten Securities.
Such option, if granted, will expire 30 days after the date of such Terms
Agreement, and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Underwritten Securities upon notice by
the Underwriters to the Company setting forth the number or aggregate principal
amount, as the case may be, of Option Underwritten Securities as to which the
several Underwriters are then exercising the option and the time, date and place
of payment and delivery for such Option
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Underwritten Securities. Any such time and date of payment and delivery (each, a
"Date of Delivery") shall be determined by the Underwriters but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, unless otherwise agreed upon by the
Underwriters and the Company. If the option is exercised as to all or any
portion of the Option Underwritten Securities, each of the Underwriters,
severally and not jointly, will purchase that proportion of the total number or
aggregate principal amount, as the case may be, of Option Underwritten
Securities then being purchased which the number or aggregate principal amount,
as the case may be, of Initial Underwritten Securities each such Underwriter has
severally agreed to purchase as set forth in such Terms Agreement bears to the
total number or aggregate principal amount, as the case may be, of Initial
Underwritten Securities, subject to such adjustments as the Underwriters in
their discretion shall make to eliminate any sales or purchases of a fractional
number or aggregate principal amount, as the case may be, of Option Underwritten
Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the offices of Cravath, Swaine
& Moore, 825 Eighth Avenue, New York, NY 10019, or at such other place as shall
be agreed upon by the Underwriters and the Company, at 9:00 A.M. (Eastern time)
on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on
any given day) business day after the date of the applicable Terms Agreement
(unless postponed in accordance with the provisions of Section 10 hereof), or
such other time not later than ten business days after such date as shall be
agreed upon by the Underwriters and the Company (such time and date of payment
and delivery being herein called "Closing Time"). In addition, in the event that
the Underwriters have exercised their option, if any, to purchase any or all of
the Option Underwritten Securities, payment of the purchase price for, and
delivery of such Option Underwritten Securities, shall be made at the
above-mentioned offices of Cravath, Swaine & Moore, or at such other place as
shall be agreed upon by the Underwriters and the Company, on the relevant Date
of Delivery as specified in the notice from the Underwriters to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriters for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them.
(d) Denominations; Registration. The Underwritten Securities or
certificates for the Underwritten Securities shall be in such denominations and
registered in such names as the Underwriters may request in writing at least one
full business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be. The Underwritten Securities or certificates for the
Underwritten Securities will be made available for examination and packaging by
the Underwriters in The City of New York at a reasonable time prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if and
as applicable, and will notify the Underwriters immediately, and confirm the
notice in writing, of (i) the
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effectiveness of any post-effective amendment to the Registration Statement or
the filing of any supplement or amendment to the Prospectus, (ii) the receipt of
any comments from the Commission, (iii) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Underwritten
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424 and will take such
steps as it deems necessary to ascertain promptly whether the Prospectus
transmitted for filing under Rule 424 was received for filing by the Commission
and, in the event that it was not, it will promptly file the Prospectus. The
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriters notice of
its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations), any Term
Sheet or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Underwriters with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not
file or use any such document to which the Underwriters or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to counsel for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
signed or reproduced copies of all consents and certificates of experts, and
will also deliver to each of the Underwriters, without charge, a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto (without exhibits). The Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company will deliver to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will furnish
to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations so as
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to permit the completion of the distribution of the Underwritten Securities as
contemplated in this Underwriting Agreement and the applicable Terms Agreement
and in the Registration Statement and the Prospectus. If at any time when the
Prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the reasonable opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement in order that the Registration Statement will 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 not misleading or to
amend or supplement the Prospectus in order that the Prospectus will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters, without
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Underwritten Securities and
any related Underlying Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
the Underwriters may designate and to maintain such qualifications in effect for
a period of not less than one year from the date of the applicable Terms
Agreement; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Underwritten Securities or any related Underlying Securities have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the date of such Terms
Agreement.
(g) Earnings Statement. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Reservation of Securities. If the applicable Terms Agreement specifies
that any related Underlying Securities include Common Stock or Preferred Stock,
the Company will reserve and keep available at all times, free of preemptive or
other similar rights, a sufficient number of shares of Common Stock and/or
Preferred Stock, as applicable, for the purpose of enabling the Company to
satisfy any obligations to issue such Underlying Securities upon exercise of the
related Warrants, as applicable, or upon conversion of the Preferred Stock,
Senior Debt Securities or Subordinated Debt Securities, as applicable.
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(i) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Underwritten Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(j) Listing. The Company will use its best efforts to effect the listing of
the Underwritten Securities and any related Underlying Securities, prior to the
Closing Time, on any national securities exchange or quotation system if and as
specified in the applicable Terms Agreement.
(k) Restriction on Sale of Securities. Between the date of the applicable
Terms Agreement and the Closing Time or such other date specified in such Terms
Agreement, the Company will not, without the prior written consent of the
Underwriters, directly or indirectly, issue, sell, offer or contract to sell,
grant any option for the sale of, or otherwise dispose of, the securities
specified in such Terms Agreement.
(l) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Underwriting Agreement or the applicable Terms
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Underwriting Agreement, any Terms
Agreement, the Indentures, any Warrant Agreement and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Underwritten Securities or any related Underlying Securities,
(iii) the preparation, issuance and delivery of the Underwritten Securities and
any related Underlying Securities and any certificates for the Underwritten
Securities or such Underlying Securities to the Underwriters, including any
transfer taxes and any stamp or other duties payable upon the sale, issuance or
delivery of the Underwritten Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors or agents
(including transfer agents and registrars), as well as the fees and
disbursements of the Trustees and any Warrant Agent, and their respective
counsel, (v) the qualification of the Underwritten Securities and any related
Underlying Securities under state securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation, printing and delivery of a Blue Sky survey, and
any amendment thereto, (vi) the preparation, printing, filing and delivery to
the Underwriters of copies of each preliminary prospectus, any Term Sheet, and
the Prospectus and any amendments or supplements thereto, (vii) the fees charged
by nationally recognized rating organizations for the rating of the Underwritten
Securities and any related Underlying Securities, if applicable, (viii) the fees
and expenses incurred with respect to the listing of the Underwritten Securities
and any related Underlying Securities, if applicable, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review, if any, by the National Association
of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Underwritten Securities and any related Underlying Securities,
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and (x) the fees and expenses of any Underwriter acting in the capacity of a
"qualified independent underwriter" (as defined in Section 2(l) of Schedule E of
the bylaws of the NASD), if applicable.
(b) Termination of Agreement. If the applicable Terms Agreement is
terminated by the Underwriters in accordance with the provisions of Section 5 or
Section 9(b)(i) hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Underwritten Securities pursuant to the
applicable Terms Agreement are subject to the accuracy of the representations
and warranties of the Company contained in Section 1 hereof or in certificates
of any officer of the Company or any of its Subsidiaries delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or be pending or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus containing information relating to the
description of the Underwritten Securities and any related Underlying
Securities, the specific method of distribution and similar matters shall have
been filed with the Commission in accordance with Rule 424(b)(1), (2), (3), (4)
or (5), as applicable (or any required post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A), or, if the Company has elected to rely upon Rule 434
of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule 424(b)(7).
(b) Opinion of General Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Patrick L. Donnelly, General Counsel for the Company, or other counsel
satisfactory to the Underwriters, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters, to the effect set forth in Exhibit B hereto
and to such further effect as counsel to the Underwriters may reasonably
request.
(c) Opinion of Counsel for Company. At Closing Time, the Underwriters shall
have received the favorable opinion, dated as of Closing Time, of Paul, Weiss,
Rifkind, Wharton & Garrison, counsel for the Company, or other counsel
satisfactory to the Underwriters, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters, to the effect set forth in Exhibit C hereto
and to such further effect as counsel to the Underwriters may reasonably
request. In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State
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of Delaware, upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its Subsidiaries and certificates of public officials.
(d) Opinion of Regulatory Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Wiley, Rein & Fielding, regulatory counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, to the
effect set forth in Exhibit D hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(e) Opinion of Counsel for Underwriters. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Cravath,
Swaine & Moore, counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters, with respect to the
matters set forth in the following parts of Exhibit C: Sections (1), (4) to (12)
(as applicable) (solely as to the extent that execution and delivery are matters
of the Delaware General Corporation Law or New York law), (13) (solely as to the
information in the Prospectus under "Description of the Underwritten Securities"
and "Description of the Underlying Securities", if any, or any caption
purporting to describe any such Securities), (19), (23) and the penultimate
paragraph of Exhibit C hereto. In giving such opinion, such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(f) Officers' Certificate. At Closing Time, there shall not have been,
since the date of the applicable Terms Agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Underwriters shall have received a certificate of the President or a Vice
President of the Company and of the chief financial officer or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) are true and correct with the same force and effect
as though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted, are pending or, to the
best of such officer's knowledge, are threatened by the Commission.
(g) Accountant's Comfort Letter. At the time of the execution of the
applicable Terms Agreement, the Underwriters shall have received from Arthur
Andersen LLP a letter dated such date, in form and substance satisfactory to the
Underwriters, together with signed or reproduced copies of such letter for each
of the Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial
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<PAGE>
information contained in the Registration Statement and the Prospectus and the
documents incorporated by reference therein.
(h) Bring-down Comfort Letter. At Closing Time, the Underwriters shall have
received from Arthur Andersen LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (g) of this Section 5, except that the specified date referred to
shall be a date not more than three business days prior to the Closing Time.
(i) Ratings. At Closing Time and at any relevant Date of Delivery, unless
the Underwritten Securities being sold pursuant to the applicable Terms
Agreement relate solely to Common Stock or Common Stock Warrants, the
Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization", as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in
the applicable Terms Agreement, and the Company shall have delivered to the
Underwriters a letter, dated as of such date, from each such rating
organization, or other evidence satisfactory to the Underwriters, confirming
that the Underwritten Securities have such ratings. Since the time of execution
of such Terms Agreement, there shall not have occurred a downgrading in, or
withdrawal of, the rating assigned to the Underwritten Securities or any of the
Company's other securities by any such rating organization, and no such rating
organization shall have publicly announced that it has under surveillance or
review its rating of the Underwritten Securities or any of the Company's other
securities.
(j) Approval of Listing. At Closing Time, the Underwritten Securities shall
have been approved for listing, subject only to official notice of issuance, if
and as specified in the applicable Terms Agreement.
(k) No Objection. If the Registration Statement or an offering of
Underwritten Securities has been filed with the NASD for review, the NASD shall
not have raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(l) Lock-up Agreements. On the date of the applicable Terms Agreement, the
Underwriters shall have received, in form and substance satisfactory to it, each
lock-up agreement, if any, specified in such Terms Agreement as being required
to be delivered by the persons listed therein.
(m) Over-Allotment Option. In the event that the Underwriters are granted
an over-allotment option by the Company in the applicable Terms Agreement and
the Underwriters exercise their option to purchase all or any portion of the
Option Underwritten Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the
Company or any of its Subsidiaries hereunder shall be true and correct as of
each Date of Delivery, and, at the relevant Date of Delivery, the Underwriters
shall have received:
(1) A certificate, dated such Date of Delivery, of the President or a
Vice President of the Company and the chief financial officer or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(f) hereof remains true
and correct as of such Date of Delivery.
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(2) The favorable opinions relating to the Option Underwritten
Securities and otherwise to the same effect as the opinions required by
Sections 5(b)-(d) hereof each in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery.
(3) The favorable opinion of Cravath, Swaine & Moore, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(e) hereof.
(4) A letter from Arthur Andersen LLP, in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to the
Underwriters pursuant to Section 5(h) hereof, except that the "specified
date" on the letter furnished pursuant to this paragraph shall be a date
not more than three business days prior to such Date of Delivery.
(5) Since the time of execution of such Terms Agreement, there shall
not have occurred a downgrading in, or withdrawal of, the rating assigned
to the Underwritten Securities or any of the Company's other securities by
any such rating organization, and no such rating organization shall have
publicly announced that it has under surveillance or review its rating of
the Underwritten Securities or any of the Company's other securities.
(n) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Underwritten Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Underwritten Securities as herein contemplated shall be satisfactory
in form and substance to the Underwriters and to counsel for the Underwriters.
(o) Termination of Terms Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
the applicable Terms Agreement (or, with respect to the Underwriters' exercise
of any applicable over-allotment option for the purchase of Option Underwritten
Securities on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase the Option Underwritten Securities on such Date of
Delivery) may be terminated by the Underwriters by notice to the Company at any
time at or prior to the Closing Time (or such Date of Delivery, as applicable),
and such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall
survive any such termination and remain in full force and effect.
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SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(3) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by the Underwriters), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information
deemed to be a part thereof, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
the Company will not be liable to an Underwriter with respect to any preliminary
prospectus to the extent that the Company shall sustain the burden of proving
that any such loss, liability, claim, damage or expense resulted from the fact
that such Underwriter, in contravention of a requirement of the Underwriting
Agreement or applicable law, sold Securities to a person to whom such
Underwriter failed to send or give, at or prior to the Closing Time, a copy of
the Prospectus, as then amended or supplemented if (i) the Company has
previously furnished copies thereof (sufficiently in advance of the Closing Time
to allow for distribution by the Closing Time) to the Underwriters and the loss,
liability, claim, damage or expense of such Underwriter
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<PAGE>
resulted from an untrue statement or omission or alleged untrue statement or
omission of a material fact contained in or omitted from the preliminary
prospectus which was corrected in the Prospectus as, if applicable, amended or
supplemented prior to the Closing Time and (ii) such failure to give or send
such Prospectus by the Closing Time to the party or parties asserting such loss,
liability, claim, damage or expense would have constituted the sole defense to
the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Underwriters and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
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<PAGE>
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (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
Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if
the allocation provided by clause (i) 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 hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, 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 hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of such Underwritten Securities as set
forth on such cover.
The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
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 which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation
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<PAGE>
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities set forth opposite their respective names in the
applicable Terms Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Underwriting
Agreement or the applicable Terms Agreement or in certificates of officers of
the Company or any of its subsidiaries submitted pursuant hereto or thereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of and payment for
the Underwritten Securities.
SECTION 9. Termination.
(a) Underwriting Agreement. This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by the Underwriters upon the giving of 30 days' prior written notice
of such termination to the other party hereto.
(b) Terms Agreement. The Underwriters may terminate the applicable Terms
Agreement, by notice to the Company, at any time at or prior to the Closing Time
or any relevant Date of Delivery, if (i) there has been, since the time of
execution of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or, if the Underwritten Securities or any related Underlying
Securities include Debt Securities denominated or payable in, or indexed to, one
or more foreign or composite
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<PAGE>
currencies, in the international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriters, impracticable to market
the Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities, or (iii) trading in any securities of the Company has
been suspended or materially limited by the Commission or the Nasdaq National
Market or if trading generally on the New York Stock Exchange or the American
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by either of said exchanges or by such
system or by order of the Commission, the NASD or any other governmental
authority, or (iv) a banking moratorium has been declared by either Federal or
New York authorities or, if the Underwritten Securities or any related
Underlying Securities include Debt Securities denominated or payable in, or
indexed to, one or more foreign or composite currencies, by the relevant
authorities in the related foreign country or countries.
(c) Liabilities. If this Underwriting Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Underwritten Securities which it
or they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), then the non-defaulting Underwriters shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the non-defaulting
Underwriters shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities does not exceed 10% of the number or aggregate
principal amount, as the case may be, of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations under such Terms Agreement bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities exceeds 10% of the number or aggregate principal
amount, as the case may be, of Underwritten Securities to be purchased on
such date pursuant to such Terms Agreement, such Terms Agreement (or, with
respect to the Underwriters' exercise of any applicable over-allotment
option for the purchase of Option Underwritten Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters to
purchase, and the Company
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<PAGE>
to sell, such Option Underwritten Securities on such Date of Delivery)
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a termination
of the applicable Terms Agreement or (ii) in the case of a Date of Delivery
after the Closing Time, a termination of the obligations of the Underwriters and
the Company with respect to the related Option Underwritten Securities, as the
case may be, either the Underwriters or the Company shall have the right to
postpone the Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or the Prospectus or in any other documents or
arrangements.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to [ ], attention of [ ]; and notices
to the Company shall be directed to it at CD Radio Inc., 1221 Avenue of the
Americas, 36th Floor, New York, NY 10020, attention of Patrick L. Donnelly.
SECTION 12. Parties. This Underwriting Agreement and the applicable Terms
Agreement shall each inure to the benefit of and be binding upon the Company
and, upon execution of such Terms Agreement, any Underwriters and their
respective successors. Nothing expressed or mentioned in this Underwriting
Agreement or such Terms Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or such Terms Agreement or any provision
herein or therein contained. This Underwriting Agreement and such Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY
APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Underwriting Agreement, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
CD RADIO INC.
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[Names of Underwriters]
By: [Managing Underwriter]
By:
--------------------------------------
Authorized Signatory
28
<PAGE>
Exhibit A
CD RADIO INC.
(a Delaware corporation)
[13]
TERMS AGREEMENT
[ ]
To: CD Radio Inc.
1221 Avenue of the Americas, 36th Fl.
New York, NY 10020
Ladies and Gentlemen:
We understand that CD Radio Inc., a Delaware corporation (the
"Company"), proposes to issue and sell [ shares of its common stock, par
value $.001 per share (the "Common Stock")] [ shares of its preferred
stock, par value $.001 per share (the "Preferred Stock")] [$ aggregate
principal amount of its [senior] [subordinated] debt securities (the "Debt
Securities")] [ warrants (the "Common Stock Warrants") to purchase common
stock, par value $.001 per share] [ warrants (the "Preferred Stock
Warrants") to purchase preferred stock, par value $.001 per share]
[ warrants (the "Debt Security Warrants") to purchase $ aggregate
principal amount of [senior] [subordinated] debt securities] ([such securities
also being hereinafter referred to as] the "[Initial] Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, we [the underwriters named below (the "Underwriters")] offer to purchase
[, severally and not jointly,] the [[number] [principal] [amount] of]
Underwritten Securities [opposite their names set forth below] at the purchase
price set forth below [, and a proportionate share of Option Underwritten
Securities set forth below, to the extent any are purchased].
A-1
<PAGE>
<TABLE>
<CAPTION>
[Number]
[Principal Amount]
Underwriter of [Initial] Underwritten Securities
- ----------- ------------------------------------
<S> <C>
----------------
Total [$]
----------
----------
</TABLE>
The Underwritten Securities shall have the following terms:
[Common Stock]
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions:
Closing date and location:
[Preferred Stock]
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
A-2
<PAGE>
Listing requirements:
Black-out provisions:
Lock-up provisions:
Initial public offering price per share: $___ plus accumulated dividends, if
any, from _____
Purchase price per share: $___ plus accumulated dividends, if any, from _____
Other terms and conditions:
Closing date and location:
A-3
<PAGE>
[Debt Securities]
Title:
Rank:
Ratings:
Aggregate principal amount:
Denominations:
Currency of payment:
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
If Fixed Price Offering, initial public offering price per share: % of the
principal amount, plus accrued interest [amortized original issue discount], if
any, from _______________.
Purchase price per share: ___% of principal amount, plus accrued interest
[amortized original issue discount], if any, from _________________.
Form:
Other terms and conditions:
Closing date and location:
A-4
<PAGE>
[Common Stock] [Preferred Stock] [Debt Security] Warrants
Title:
Type:
Number:
Warrant Agent:
Issuable jointly with [Common Stock] [Preferred Stock] [Debt Securities]:
[Yes] [No]
Number of [Common Stock] [Preferred Stock] [Debt Security] Warrants
issued with each [share of Common Stock] [share of Preferred Stock]
[$__________ principal amount of Debt Securities]:
Date(s) from which or period(s) during which [Common Stock] [Preferred Stock]
[Debt Security] Warrants are exercisable:
Date(s) on which [Common Stock] [Preferred Stock] [Debt Security] Warrants
expire:
Exercise price(s):
Initial public offering price: $
Purchase price: $
Title of Underlying Securities:
[Number of shares] [Principal amount] purchasable upon exercise of one [Common
Stock] [Preferred Stock] [Debt Security] Warrant:
Terms of Underlying Securities:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I
hereto entitled "CD RADIO INC.-- Common Stock, Warrants to Purchase Common
Stock, Preferred Stock, Warrants to Purchase Preferred Stock, Debt Securities
and Warrants to Purchase Debt Securities--Form of Underwriting Agreement as of
September 23, 1999" are hereby incorporated by reference in their entirety
herein and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
A-5
<PAGE>
Please accept this offer no later than ____ o'clock P.M. (New York City
time) on ______________ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
By
--------------------------------
Authorized Signatory
[Acting on behalf of itself and the
other named Underwriters.]
Accepted:
CD RADIO INC.
By
-----------------------------------
Name:
Title:
A-6
<PAGE>
Exhibit B
FORM OF OPINION OF
PATRICK L. DONNELLY, ESQ. TO
BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The District of Columbia, the State of New York and the State of
Michigan [others] are the only jurisdictions in which the Company is required to
be qualified as a foreign corporation to transact business, whether by reason of
the ownership or leasing of property or the conduct of business as of the date
hereof, except where the failure so to qualify or to be in good standing would
not result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidaries considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Effect").
(2) Satellite CD Radio, Inc. (the "Subsidiary") has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of Delaware, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in the District of Columbia and in the State of New York, which are the
only jurisdictions in which the Subsidiary is required to be qualified, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; all of the issued and outstanding capital
stock of the Subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable and, to my knowledge, is owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity other than liens in favor of the Collateral Agent (as defined in the
Amended and Restated Pledge Agreement dated as of May 15, 1999 (the "Pledge
Agreement")) pursuant to the Pledge Agreement for its benefit, the benefit of
the trustee of the Company's 15% Senior Secured Discount Notes due 2007 (the
"Discount Notes"), the benefit of the trustee of the Company's 14-1/2% Senior
Secured Notes due 2009 (the "Notes") and the ratable benefit of the holders of
Discount Notes and Notes; none of the outstanding shares of capital stock of the
Subsidiary was issued in violation of the preemptive rights provisions in (a)
the Subsidiary's certificate of incorporation or by-laws or (b) the Delaware
General Corporation Law.
[include equivalent opinion for other Subsidiaries, if any]
(3) The execution, delivery and performance of the Company's Amended and
Restated Contract with Space Systems/Loral Inc. (the "Loral Satellite Contract")
by the Company and compliance by the Company with its obligations under the
Loral Satellite Contract do not and will not, whether with or without the giving
of notice or lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in the Underwriting Agreement) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its Subsidiaries pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument,
B-1
<PAGE>
described in the Prospectus, to which the Company or its Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the property or
assets of the Company or its Subsidiaries is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or its Subsidiaries, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to me, of any government, government instrumentality or court of the State
of Delaware, the State of New York or the United States, having jurisdiction
over the Company or its Subsidiaries or any of their respective properties,
assets or operations.
In addition, although I have not undertaken to investigate or verify
independently, and am not passing upon and do not assume any responsibility for,
the accuracy, completeness or fairness of the contents of the Prospectus, in
connection with the preparation of the Prospectus, I have participated in
conferences with representatives of and counsel to the Underwriters and with
certain officers and employees of, and independent certified public accountants
for, the Company, at which conferences the contents of the Prospectus and
related matters were discussed, and based upon this participation (and relying
as to factual matters to the extent I deemed reasonable on officers and
employees of the Company), advise you that no facts have come to my attention
that would lead me to believe that the Prospectus or any amendment or supplement
thereto (except for financial statements and schedules and other financial data
included or incorporated by reference in or omitted from those documents, as to
which I make no statement), at the time the Prospectus was issued, at the time
any amended or supplemented Prospectus was issued or at the Closing Time (as
defined in the Underwriting Agreement), included or includes an untrue statement
of a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering his opinion, such counsel may rely, as to matters of facts
(but not as to legal conclusions), to the extent he deems proper, on
certificates of public officials. The opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
The opinion shall contain assumptions, limitations, qualifications and
exceptions normally included by counsel in transactions of this kind.
B-2
<PAGE>
Exhibit C
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(2) The Company has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under, or as contemplated under, the
Underwriting Agreement and the applicable Terms Agreement.
(3) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in the District of Columbia, the State of New
York and the State of Michigan [others].
(4) The Underwriting Agreement and the applicable Terms Agreement have been
duly authorized, executed and delivered by the Company.
(5) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Common Stock --] The Underwritten Securities
have been duly authorized by the Company for issuance and sale pursuant to the
Underwriting Agreement and the applicable Terms Agreement. The Underwritten
Securities, when issued and delivered by the Company pursuant to the
Underwriting Agreement and such Terms Agreement against payment of the
consideration therefor specified in such Terms Agreement, will be validly
issued, fully paid and non-assessable and will not be subject to preemptive or
other similar rights of any securityholder of the Company. No holder of the
Underwritten Securities is or will be subject to personal liability by reason of
being such a holder. The form of certificate used to evidence the Underwritten
Securities is in due and proper form and complies with the applicable statutory
requirements, with any applicable requirements of the charter or by-laws of the
Company and with the requirements of the Nasdaq National Market.
(6) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Preferred Stock] The Underwritten Securities
have been duly authorized by the Company for issuance and sale pursuant to the
Underwriting Agreement and the applicable Terms Agreement. The applicable
Preferred Stock, when issued and delivered by the Company pursuant to the
Underwriting Agreement and such Terms Agreement against payment of the
consideration therefor specified in such Terms Agreement, will be validly
issued, fully paid and non-assessable and will not be subject to preemptive or
other similar rights of any securityholder of the Company. No holder of such
Preferred Stock is or will be subject to personal liability by reason of being
such a holder. The form of certificate used to evidence the Preferred Stock is
in due and proper form and complies with the applicable statutory requirements,
with any applicable requirements of the charter or by-laws of the Company and
with the requirements of the Nasdaq National Market.
C-1
<PAGE>
(7) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Senior Debt Securities and/or Subordinated
Debt Securities -] The Underwritten Securities have been duly authorized by the
Company for issuance and sale pursuant to the Underwriting Agreement and the
applicable Terms Agreement. The Underwritten Securities, when issued and
authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the consideration therefor specified in such Terms
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with respect to
any Debt Securities payable in a foreign or corporate currency (or a foreign or
composite currency judgment in respect of such claim) be converted into U.S.
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law or by governmental authority to limit, delay or prohibit the
making of payments outside the United States. The Underwritten Securities are in
the form contemplated by, and each registered holder thereof is entitled to the
benefits of, the applicable Indenture.
(8) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Senior Debt Securities and/or Subordinated
Debt Securities or if Preferred Stock is convertible into Debt Securities --]
The [Each] applicable Indenture has been duly authorized, executed and delivered
by the Company and (assuming due authorization, execution and delivery thereof
by the applicable Trustee) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(9) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Warrants --] The Underwritten Securities have
been duly authorized by the Company for issuance and sale pursuant to the
Underwriting Agreement and the applicable Terms Agreement. The Underwritten
Securities, when issued and authenticated in the manner provided for in the
applicable Warrant Agreement and delivered against payment of the consideration
therefor specified in such Terms Agreement, will constitute valid and binding
obligations of the Company, entitled to the benefits provided by such Warrant
Agreement and enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(10) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Warrants --] The [Each] applicable Warrant
Agreement has been duly authorized, executed and delivered by the Company and
(assuming due authorization, execution and delivery thereof by the applicable
Warrant Agent)
C-2
<PAGE>
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(11) [Include if the Underlying Securities related to the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include Common
Stock or Preferred Stock] The Underlying Securities have been duly authorized
and reserved for issuance by the Company [upon exercise of the [Common Stock]
[Preferred Stock] Warrants] [upon conversion of the related [Preferred Stock]
[Senior Debt Securities] [Subordinated Debt Securities]]. The Underlying
Securities, when issued upon such [exercise] [conversion], will be validly
issued, fully paid and non-assessable and will not be subject to preemptive or
other similar rights of any securityholder of the Company. No holder of the
Underlying Securities is or will be subject to personal liability by reason of
being such a holder. [Include if the Underlying Securities related to the
Underwritten Securities being sold pursuant to the applicable Terms Agreement
include Senior Debt Securities and/or Subordinated Debt Securities --] The
Underlying Securities have been duly authorized for issuance by the Company
[upon exercise of the Debt Security Warrants] [upon conversion of the related
Preferred Stock]. The Underlying Securities, when issued and authenticated in
the manner provided for in the applicable Indenture and delivered in accordance
with the terms of the [Debt Security Warrants] [related [Preferred Stock]], will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law), and except further as enforcement thereof may
be limited by requirements that a claim with respect to any Debt Securities
payable in a foreign or composite currency (or a foreign or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or by
governmental authority to limit, delay or prohibit the making of payments
outside the United States.
(12) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the [each] applicable [Indenture] [Warrant Agreement]
conform, and any Underlying Securities, when issued and delivered in accordance
with the terms of the related Underwritten Securities, will conform, in all
material respects to the statements relating thereto contained in the Prospectus
and are in substantially the form filed or incorporated by reference, as the
case may be, as an exhibit to the Registration Statement.
(13) The information in the Prospectus under "Description of Underwritten
Securities" and "Description of Underlying Securities", if any, or any caption
purporting to describe any such Securities, "Certain Federal Income Tax
Considerations" and " ", in the Annual Report on Form 10-K under
" " and in the Registration Statement under Item 15, to the extent
that it constitutes matters of law, summaries of legal matters or the Company's
charter, bylaws or legal proceedings, or legal conclusions, has been reviewed
by us and is correct in all material respects.
C-3
<PAGE>
(14) To the best of our knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws and no default by the
Company or any of its subsidiaries exists in the due performance or observance
of any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(15) The execution, delivery and performance of the Underwriting Agreement,
the applicable Terms Agreement and the [each] applicable [Indenture] [Warrant
Agreement] and any other agreement or instrument listed on Schedule A hereto and
the consummation of the transactions contemplated in the Underwriting Agreement
and such Terms Agreement and in the Registration Statement and the Prospectus
(including the issuance and sale of the Underwritten Securities and the use of
the proceeds from the sale of the Underwritten Securities as described under the
caption "Use of Proceeds" and the issuance of any Underlying Securities) and
compliance by the Company with its obligations thereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
assets, properties or operations of the Company or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the assets, properties or operations of
the Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations.
(16) To the best of our knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation to which the Company or any
of its subsidiaries is a party or to which the assets, properties or operations
of the Company or any of its subsidiaries is subject, before or by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect") or
which might reasonably be expected to materially and adversely affect the
assets, properties or operations thereof or the consummation of the transactions
contemplated under the Underwriting Agreement, the applicable Terms Agreement or
the [any] applicable [Indenture] [Warrant Agreement] or the performance by the
Company of its obligations thereunder.
(17) All descriptions in the Prospectus of contracts and other documents to
which the Company or its subsidiaries are a party are accurate in all material
respects. To the best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or referred to
therein or filed or incorporated by reference as exhibits
C-4
<PAGE>
thereto, and the descriptions thereof or references thereto are correct in all
material respects.
(18) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(19) The Registration Statement (including any Rule 462(b) Registration
Statement) has been declared effective under the 1933 Act. Any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b). To the best of our knowledge, no stop
order suspending the effectiveness of the Registration Statement (or such Rule
462(b) Registration Statement) has been issued under the 1933 Act and no
proceedings for that purpose have been initiated or are pending or threatened by
the Commission.
(20) The Registration Statement (including any Rule 462(b) Registration
Statement) and the Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement
(including any Rule 462(b) Registration Statement) and Prospectus, excluding the
documents incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or omitted therefrom and each Trustee's Statement of
Eligibility on Form T-1 (the "Form T-1s"), as to which we express no opinion),
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(21) The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules therein or omitted therefrom,
as to which we express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all material
respects with the requirements of the 1933 Act or the 1934 Act, as applicable,
and the rules and regulations of the Commission thereunder.
(22) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the due authorization,
execution or delivery by the Company of the Underwriting Agreement or the
applicable Terms Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus, the Underwriting Agreement, such
Terms Agreement or the [any] applicable [Indenture] [Warrant Agreement], other
than (x) under the 1933 Act, the 1933 Act Regulations, the 1939 Act and the 1939
Act Regulations, which have already been made, obtained or rendered, as
applicable and (y) as required by any state securities or Blue Sky laws of the
various states, as to which state laws we express no opinion. For the purposes
of this opinion, the term "governmental authority" means the government of, or
any executive, legislative, judicial, administrative or regulatory body of, the
State of Delaware, the State of New York or the United States of America
[others, as applicable]
(23) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Debt Securities or if any related Underlying
Securities include Debt Securities --] The [Each] applicable Indenture has been
duly qualified under the 1939 Act.
C-5
<PAGE>
(24) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Debt Securities or if any related Underlying
Securities include Debt Securities --] The [Underwritten] [Underlying]
Securities, upon issuance, will be excluded or exempted under, or beyond the
purview of, the Commodity Exchange Act, as amended (the "Commodity Exchange
Act"), and the rules and regulations of the Commodity Futures Trading Commission
under the Commodity Exchange Act (the "Commodity Exchange Act Regulations").
(25) The Company is not, and upon the issuance and sale of the Underwritten
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be required to register as an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act") and the rules and regulations of the Commission
under the statute.
Nothing has come to our attention that would lead us to believe that the
Registration Statement (including any Rule 462(b) Registration Statement) or any
post-effective amendment thereto (except for financial statements and supporting
schedules and other financial data included therein or omitted therefrom and for
the Form T-1s, as to which we make no statement), at the time the Registration
Statement (including any Rule 462(b) Registration Statement) or any
post-effective amendment thereto (including the filing of the Company's Annual
Report on Form 10-K with the Commission) became effective or at the date of the
applicable Terms Agreement, contained an 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 or that the Prospectus or any
amendment or supplement thereto (except for financial statements and supporting
schedules and other financial data included therein or omitted therefrom, as to
which we make no statement), at the time the Prospectus was issued, at the time
any such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991). The opinion shall contain assumptions, limitations,
qualifications and exceptions normally included by counsel in transactions of
this kind.
C-6
<PAGE>
Exhibit D
FORM OF OPINION OF WILEY, REIN & FIELDING,
REGULATORY COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
(1) (a) The execution, delivery and performance of the Underwriting
Agreement, the consummation of the transactions contemplated therein and in the
Prospectus and compliance by the Company with its obligations thereunder do not
violate (i) the Federal Communications Act of 1934, as amended (the
"Communications Act"), (ii) any rules or regulations of the Federal
Communications Commission ("FCC") applicable to the Company or its Subsidiary,
(iii) to the best of such counsel's knowledge, any decree from any court, and
(b) no consent, approval, authorization or order of or filing with the FCC, is
necessary for the execution, delivery and performance of the Underwriting
Agreement except for consents, approvals, authorizations or orders of or
qualifications as have already been obtained and except to the extent that the
failure to obtain such consents, approvals, authorizations or orders or to
qualify with the FCC would not, individually or in the aggregate, have a
material adverse effect on the prospects, condition (financial or otherwise) or
in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole.
(2) Except as described in the Prospectus, (a) each of the Company and its
Subsidiary has made all reports and filings, and paid all fees, required by the
FCC and the State Authorities, and have all certificates, orders, permits,
licenses, authorizations, consents and approvals of and from, and have made all
filings and registrations, with the FCC and the State Authorities necessary to
own, lease, license and use its properties and assets and to conduct the
business now operated by them or intended to be operated by them in the manner
described in the Prospectus; and (b) to the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the violation, revocation or modification of any such
certificates, orders, permits, licenses, authorizations, consents or approvals,
or the qualification or rejection of any such filing or registration, the effect
of which, singly or in the aggregate, would have a material adverse effect on
the prospects, condition, financial or otherwise, earnings, operations or
business of the Company and its subsidiaries now operated by them or intended to
be operated by them in the manner described in the Prospectus taken as a whole.
(3) To the best of such counsel's knowledge after due inquiry (A) no
adverse judgment, decree or order of the FCC or of any State Authority has been
issued against the Company or its subsidiary and (B) no litigation, proceeding,
inquiry or investigation has been commenced or threatened against the Company or
its subsidiary before or by the FCC or any State Authority which, if decided
adversely to the Company's interest, would have a material adverse effect on the
Company and its subsidiary, taken as a whole.
(4) The statements in the Prospectus under the captions [ ], insofar
as such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly summarize the matters referred to
therein.
D-1
<PAGE>
In rendering their opinion, counsel may rely, as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. The opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991). The opinion shall contain assumptions, limitations,
qualifications and exceptions normally included by counsel in transactions of
this kind.
D-2
<PAGE>
Exhibit 4.6.1
CD RADIO INC.
AND
Trustee
Indenture
Dated as of September 15, 1999
Senior Indebtedness Securities
<PAGE>
TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION...........................................1
Section 1.1 Definitions......................................................1
Section 1.2 Compliance Certificates and Opinions............................11
Section 1.3 Form of Documents Delivered to Trustee..........................11
Section 1.4 Acts of Holders.................................................12
Section 1.5 Notices, etc., to Trustee and Company...........................14
Section 1.6 Notice to Holders; Waiver.......................................15
Section 1.7 Effect of Headings and Table of Contents........................16
Section 1.8 Successors and Assigns..........................................16
Section 1.9 Separability Clause.............................................16
Section 1.10 Benefits of Indenture...........................................16
Section 1.11 Governing Law...................................................16
Section 1.12 Legal Holidays..................................................17
Section 1.13 Personal Immunity from Liability for Incorporators,
Stockholders, Etc...............................................17
Section 1.14 Conflict with Trust Indenture Act...............................17
ARTICLE 2 SECURITIES FORMS................................................17
Section 2.1 Forms of Securities.............................................17
Section 2.2 Form of Trustee's Certificate of Authentication.................18
Section 2.3 Securities Issuable in Global Form..............................18
ARTICLE 3 THE SECURITIES..................................................19
Section 3.1 Amount Unlimited; Issuable in Series............................19
Section 3.2 Denominations...................................................24
Section 3.3 Execution, Authentication, Delivery and Dating..................24
Section 3.4 Temporary Securities............................................27
Section 3.5 Registration, Registration of Transfer and Exchange.............30
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities................33
Section 3.7 Payment of Interest; Interest Rights Preserved..................34
Section 3.8 Persons Deemed Owners...........................................37
Section 3.9 Cancellation....................................................37
Section 3.10 Computation of Interest.........................................38
ARTICLE 4 SATISFACTION AND DISCHARGE......................................38
Section 4.1 Satisfaction and Discharge of Indenture.........................38
Section 4.2 Application of Trust Funds......................................40
ARTICLE 5 REMEDIES........................................................40
Section 5.1 Events of Default...............................................40
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Section 5.2 Acceleration of Maturity; Rescission and Annulment..............42
Section 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee......................................................43
Section 5.4 Trustee May File Proofs of Claim................................44
Section 5.5 Trustee May Enforce Claims Without Possession of Securities or
Coupons.........................................................45
Section 5.6 Application of Money Collected..................................45
Section 5.7 Limitation on Suits.............................................45
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts................46
Section 5.9 Restoration of Rights and Remedies..............................46
Section 5.10 Rights and Remedies Cumulative..................................47
Section 5.11 Delay or Omission Not Waiver....................................47
Section 5.12 Control by Holders of Securities................................47
Section 5.13 Waiver of Past Defaults.........................................47
Section 5.14 Waiver of Usury, Stay or Extension Laws.........................48
Section 5.15 Undertaking for Costs...........................................48
ARTICLE 6 THE TRUSTEE.....................................................48
Section 6.1 Certain Duties and Responsibilities.............................48
Section 6.2 Notice of Defaults..............................................50
Section 6.3 Certain Rights of Trustee.......................................50
Section 6.4 Not Responsible for Recitals or Issuance of Securities..........51
Section 6.5 May Hold Securities.............................................52
Section 6.6 Money Held in Trust.............................................52
Section 6.7 Compensation and Reimbursement..................................52
Section 6.8 Corporate Trustee Required; Eligibility; Conflicting
Interests.......................................................53
Section 6.9 Resignation and Removal; Appointment of Successor...............53
Section 6.10 Acceptance of Appointment by Successor..........................55
Section 6.11 Merger, Conversion, Consolidation or Succession to
Business........................................................56
Section 6.12 Appointment of Authenticating Agent.............................56
ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY.........................................................58
Section 7.1 Disclosure of Names and Addresses of Holders....................58
Section 7.2 Reports by Trustee..............................................58
Section 7.3 Reports by Company..............................................58
Section 7.4 Company to Furnish Trustee Names and Addresses of Holders.......59
</TABLE>
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ARTICLE 8 CONSOLIDATION, MERGER, SALE, LEASE OR
CONVEYANCE......................................................60
Section 8.1 Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain
Conditions......................................................60
Section 8.2 Rights and Duties of Successor Corporation......................60
Section 8.3 Officers' Certificate and Opinion of Counsel....................61
ARTICLE 9 SUPPLEMENTAL INDENTURES.........................................61
Section 9.1 Supplemental Indentures without Consent of Holders..............61
Section 9.2 Supplemental Indentures with Consent of Holders.................63
Section 9.3 Execution of Supplemental Indentures............................65
Section 9.4 Effect of Supplemental Indentures...............................65
Section 9.5 Conformity with Trust Indenture Act.............................65
Section 9.6 Reference in Securities to Supplemental Indentures..............65
ARTICLE 10 COVENANTS.......................................................66
Section 10.1 Payment of Principal, Premium, if any, Interest
and Additional Amounts..........................................66
Section 10.2 Maintenance of Office or Agency.................................66
Section 10.3 Money for Securities Payments to Be Held in Trust...............68
Section 10.4 Existence.......................................................69
Section 10.5 Maintenance of Properties.......................................70
Section 10.6 Payment of Taxes and Other Claims...............................70
Section 10.7 Statement as to Compliance......................................70
Section 10.8 Additional Amounts..............................................70
Section 10.9 Waiver of Certain Covenants.....................................71
ARTICLE 11 REDEMPTION OF SECURITIES........................................72
Section 11.1 Applicability of Article........................................72
Section 11.2 Election to Redeem; Notice to Trustee...........................72
Section 11.3 Selection by Trustee of Securities to Be Redeemed...............72
Section 11.4 Notice of Redemption............................................73
Section 11.5 Deposit of Redemption Price.....................................74
Section 11.6 Securities Payable on Redemption Date...........................75
Section 11.7 Securities Redeemed in Part.....................................76
ARTICLE 12 SINKING FUNDS...................................................76
Section 12.1 Applicability of Article........................................76
Section 12.2 Satisfaction of Sinking Fund Payments with Securities...........76
Section 12.3 Redemption of Securities for Sinking Fund.......................77
ARTICLE 13 REPURCHASE AT THE OPTION OF HOLDERS.............................77
Section 13.1 Applicability of Article........................................77
Section 13.2 Repurchase of Securities........................................77
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Section 13.3 Notice; Exercise of Repurchase Right............................78
Section 13.4 When Securities Presented for Repurchase Become Due and
Payable.........................................................79
Section 13.5 Securities Not Repurchased on Repurchase Date...................80
Section 13.6 Securities Repaid in Part.......................................80
ARTICLE 14 DEFEASANCE AND COVENANT DEFEASANCE..............................80
Section 14.1 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance...............................80
Section 14.2 Defeasance and Discharge........................................80
Section 14.3 Covenant Defeasance.............................................81
Section 14.4 Conditions to Defeasance or Covenant Defeasance.................81
Section 14.5 Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions...........................83
Section 14.6 Reinstatement...................................................84
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
iv
<PAGE>
CD RADIO INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the "TIA") and
Indenture, dated as of September 15, 1999.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
310(a)(1)................................................. 6.7
(b)(2)................................................. 6.7
(b).................................................... 6.7, 6.8
312(a).................................................... 7.4
312(c).................................................... 7.1
313(a).................................................... 7.2
(c).................................................... 7.2
314(a).................................................... 7.3
(a)(4)................................................. 10.9
(c)(1)................................................. 1.2
(c)(2)................................................. 1.2
(e).................................................... 1.2
315(b).................................................... 6.1
316(a) (last sentence).................................... 1.1 ("Outstanding")
(a)(1)(A).............................................. 5.12
(a)(1)(B).............................................. 5.13
(b).................................................... 5.8
317(a)(1)................................................. 5.3
(a)(2)................................................. 5.4
318(a).................................................... 1.11
(c).................................................... 1.11
</TABLE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the TIA, which
provides that the provisions of Sections 310 through 317 of the TIA are a part
of and govern every qualified indenture, whether or not physically contained in
the Indenture.
<PAGE>
INDENTURE, dated as of September 15, 1999, between CD RADIO INC., a
Delaware corporation (hereinafter called the "Company"), having its principal
office at 1221 Avenue of the Americas, 36th Floor, New York, New York 10020 and
, a corporation organized under the laws of , as
Trustee hereunder (hereinafter called the "Trustee"), having its Corporate Trust
Office at .
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes senior debt securities (hereinafter called the "Securities") evidencing
its senior indebtedness, and has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of the Securities,
unlimited as to principal amount, to bear interest at the rates or formulas, to
mature at such times and to have such other provisions as shall be fixed as
hereinafter provided.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939 that are deemed to be incorporated into this Indenture and shall, to the
extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all the holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
<PAGE>
2
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper," as
used in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(4) the word "including" means "including without limitation," and
(5) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Additional Amounts" means any additional amounts which are required by a
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 6.11.
"Authorized Newspaper" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 5.1.
<PAGE>
3
"Bearer Security" means any Security established pursuant to Section 2.1
which is payable to bearer.
"Board of Directors" means the board of directors of the Company, the
executive committee of that board or any committee of that board duly authorized
to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
3.1, any day, other than a Saturday or Sunday, that is neither a legal holiday
nor a day on which banking institutions in that Place of Payment or particular
location are authorized or required by law, regulation or executive order to
close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Common Depositary" has the meaning specified in Section 3.4.
"Common Stock" means, with respect to any Person, capital stock issued by
such Person other than Preferred Stock.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by the Chief Executive Officer, Chief
Financial Officer, the President or a Vice President of the Company and
delivered to the Trustee.
<PAGE>
4
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at .
"corporation" means a corporation, association, partnership, companies
(including limited liability companies) joint-stock company or business trust.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Currency Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) any currency
unit (or composite currency) other than the ECU for the purposes for which it
was established.
"Custodian" has the meaning specified in Section 5.1.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"DTC" has the meaning specified in Section 3.4.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article 5.
"Foreign Currency" means any currency, currency unit or composite currency,
including the ECU, issued by the government of one or more countries
<PAGE>
5
other than the United States of America or by any recognized confederation or
association of such governments.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States, applied on a consistent basis.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or such government which issued the foreign
currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder" means, in the case of a Registered Security, the Person in whose
name a Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 3.1; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of the
particular series of Securities for which such Person is Trustee established as
contemplated by Section 3.1, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or
<PAGE>
6
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity, and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 10.8, includes such
Additional Amounts.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Material Adverse Effect" has the meaning specified in Section 10.4.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, the President or a Vice President and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company
and who shall be reasonably satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
<PAGE>
7
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 14.2 and
14.3, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article 14;
(iv) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(v) Securities converted into Common Stock or Preferred Stock pursuant
to or in accordance with this Indenture if the terms of such Securities
provide for convertibility pursuant to Section 3.1;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.2, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 3.1 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the
<PAGE>
8
principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 3.1, and
(iv) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of or within
any series, means the place or places where the principal of (and premium, if
any) and interest on such Securities are payable as specified as contemplated by
Sections 3.1 and 10.2.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Stock" means, with respect to any Person, capital shares issued
by such Person that are entitled to a preference or priority over any other
capital shares issued by such Person upon any distribution of such Person's
assets, whether by dividend or upon liquidation, dissolution or winding up.
"Redemption Date," when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture as set forth in such Security.
<PAGE>
9
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" shall mean any Security which is registered in the
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 3.1, whether or not a Business Day.
"Repurchase Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Repurchase Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer," when used with respect to the Trustee, means the
chairman or vice-chairman of the Board of Directors, the chairman or
vice-chairman of the executive committee of the Board of Directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president,") the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any corporate trust
officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Security" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Company.
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10
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation a majority of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
that ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as in
force at the date hereof; provided, however, that in the event the Trust
Indenture Act of 1939 or such rules and regulations are amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 and such rules and regulations as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; provided, however, that if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 3.1, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect to
any Securities pursuant to Section 3.1, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
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11
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
Section 1.2 Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates delivered
pursuant to Section 10.8) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable
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12
care should know, that the opinion, certificate or representations with respect
to the matters upon which his certificate or opinion is based are erroneous. Any
such Opinion of Counsel or certificate or representations may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information as to such factual matters is in the possession of the Company,
unless such counsel knows that the certificate or opinion or representations as
to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4 Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of the supplemental indenture with respect to
such series, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section 1.4.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person
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13
executing the same, may also be proved in any other reasonable manner which the
Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited, the Bearer Securities therein described; or such facts may be proved
by the certificate or affidavit of the Person holding such Bearer Securities, if
such certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, or (2) such Bearer Security
is produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The ownership of Bearer Securities may also be proved
in any other manner which the Trustee deems sufficient.
(e) (i) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a
Board Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no
obligation to do so; provided that the Company may not set a record date
for, and the provisions of this paragraph shall not apply with respect to,
the giving or making of any notice, declaration, request or direction
referred to in clause (e)(iii) below. Notwithstanding TIA Section 316(c),
such record date shall be the record date specified in or pursuant to such
Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If
such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective
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14
pursuant to the provisions of this Indenture not later than eleven months
after the record date.
(ii) Subject to clause (e)(iii) below, in the absence of any such
record date fixed by the Company, regardless as to whether a solicitation
of the Holders is occurring on behalf of the Company or any Holder, the
Trustee may, at its option, fix in advance a record date for the
determination of such Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Trustee shall have no obligation to do so. Any such record date shall be a
date not more than 30 days prior to the first solicitation of Holders
generally in connection therewith and no later than the date of such
solicitation.
(iii) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred
to in Section 5.12. If any record date is set pursuant to this paragraph,
the Holders of Outstanding Securities on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless
taken on or prior to any applicable expiration date by Holders of the
requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from
setting a new record date for any action (whereupon the record date
previously set shall automatically and without any action by any Person be
cancelled and of no effect), nor shall anything in this paragraph be
construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Trustee, at the Company's expense, shall cause notice of
such record date, the proposed action by Holders and the applicable
expiration date to be given to the Company in writing and to each Holder of
Securities in the manner set forth in Section 1.6.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
Section 1.5 Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other
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15
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration; provided that notices to the Trustee shall only be
deemed given when actually received by the Trustee,
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.6 Notice to Holders; Waiver. Where this Indenture provides
for notice of any event to Holders of Registered Securities by the Company or
the Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders of Registered Securities is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
of Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein. Any notice mailed to a Holder in the manner
herein prescribed shall be conclusively deemed to have been received by such
Holder, whether or not such Holder actually receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 3.1, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in New York
City and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. Any
such notice shall be deemed to have been given on the date of such publication
or, if published more than once, on the date of the first such publication.
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16
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 1.7 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.8 Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 1.9 Separability Clause. In case any provision in this
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.10 Benefits of Indenture. Nothing in this Indenture or in
the Securities or coupons, express or implied, shall give to any Person, other
than the parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 1.11 Governing Law. This Indenture and the Securities and
coupons shall be governed by and construed in accordance with the law of the
State of New York without regard to conflicts of laws principles. This Indenture
is subject to
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17
the provisions of the TIA that are required to be part of this Indenture and
shall, to the extent applicable, be governed by such provisions.
Section 1.12 Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repurchase Date, sinking fund payment date, Stated
Maturity or Maturity of any Security or the last date on which a Holder has the
right to convert his Securities shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium, if any) need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repurchase Date or
sinking fund payment date, or at the Stated Maturity or Maturity or on such last
day for conversion; provided that no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date, Repurchase Date, sinking fund payment date, Stated Maturity or Maturity or
on such last day for conversion, as the case may be.
Section 1.13 Personal Immunity from Liability for Incorporators,
Stockholders, Etc. No recourse shall be had for the payment of the principal of
or premium, if any, or interest, if any, on any Security, or for any claim based
thereon, or otherwise in respect of any Security, or based on or in respect of
this Indenture or any indenture supplemental hereto, against any incorporator,
or against any past, present or future stockholder, director or officer, as
such, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released as
a condition of, and as consideration for, the execution of this Indenture and
the issue of Securities.
Section 1.14 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with a provision of the TIA which is
required under such Act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the TIA which may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be. To the extent a Security conflicts with a
provision in the Indenture, the Indenture governs.
ARTICLE 2
SECURITIES FORMS
Section 2.1 Forms of Securities. The Registered Securities, if any, of
each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms as shall be established in one or
more indentures
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18
supplemental hereto or approved from time to time by or pursuant to a Board
Resolution in accordance with Section 3.1, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which the Securities may be listed or
any depositary therefor, or to conform to usage or as may, consistently
herewith, be determined by the officers executing such Securities, as evidenced
by their execution of the Securities.
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
Section 2.2 Form of Trustee's Certificate of Authentication. Subject
to Section 6.12, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
as Trustee
By
Authorized Signatory
Section 2.3 Securities Issuable in Global Form. If Securities of or
within a series are issuable in global form, as specified as contemplated by
Section 3.1, then, notwithstanding clause (8) of Section 3.1 and the provisions
of Section 3.2, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such
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19
Person or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 3.3 or 3.4. Subject to the
provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 1.2 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.
Notwithstanding the provisions of Section 3.7, unless otherwise
specified as contemplated by Section 3.1, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE 3
THE SECURITIES
Section 3.1 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 3.3, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the
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20
following, as applicable (each of which (except for the matters set forth in
clauses (1), (2) and (22) below) if so provided, may be determined from time to
time by the Company with respect to unissued Securities of the series when
issued from time to time):
(1) the title of the Securities of the series (which shall distinguish
the Securities of such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6, 11.7 or 13.6);
(3) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if other
than in the manner provided in Section 3.4;
(4) the date or dates, or the method by which such date or dates will
be determined, on which the principal and premium, if any, of the
Securities of the series shall be payable or the method of that
determination or the right to defer any interest payments;
(5) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by
which such rate or rates shall be determined, the date or dates from which
such interest shall accrue or the method by which such date or dates shall
be determined, the Interest Payment Dates on which such interest will be
payable and the Regular Record Date, if any, for the interest payable on
any Registered Security on any Interest Payment Date, or the method by
which such date shall be determined, and the basis upon which interest
shall be calculated if other than that of a 360-day year of twelve 30-day
months;
(6) the place or places, if any, other than or in addition to the
Borough of Manhattan, New York City, where the principal of (and premium,
if any), interest, if any, on, and Additional Amounts, if any, payable in
respect of, Securities of the series shall be payable, any Registered
Securities of the series may be surrendered for registration of transfer,
exchange or
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21
conversion and notices or demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served;
(7) the period or periods within which, the date or dates on which,
the price or prices at which, the currency or currencies, currency unit or
units or composite currency or currencies in which, and other terms and
conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have the
option;
(8) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods
within which or the date or dates on which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other terms and conditions upon which Securities
of the series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(9) the terms, if any, upon which the Securities of the series may be
convertible into or exchanged for Securities of another series, Common
Stock or Preferred Stock, as the case may be, and the terms and conditions
upon which such conversion shall be effected (including the initial
conversion or exchange price or rate, the conversion or exchange period,
any adjustment of the applicable conversion price and any requirements
relative to the reservation of such shares for purposes of conversion or
exchange);
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series
shall be issuable;
(11) if other than Dollars, the Foreign Currency or Currencies in
which payment of the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series shall be
payable or in which the Securities of the series shall be denominated;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be determined
with reference to an index, formula or other method (which index, formula
or method may be based, without limitation, on one or more currencies,
currency units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
<PAGE>
22
(13) if the principal amount payable at the stated maturity of the
Securities of the series will not be determinable as of any one or more
dates before the Stated Maturity, the amount that will be deemed to be the
principal amount as of any date for any purpose, including the principal
amount thereof which will be due and payable upon any Maturity other than
the Stated Maturity or which will be deemed to be outstanding as of any
date (or, in any such case, the manner in which the deemed principal amount
is to be determined), and if necessary, the manner of determining the
equivalent thereof in United States currency;
(14) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies, currency unit or units or composite currency or currencies
other than that in which such Securities are denominated or stated to be
payable, the period or periods within which, and the terms and conditions
upon which, such election may be made, and the time and manner of, and
identity of the exchange rate agent with responsibility for, determining
the exchange rate between the currency or currencies, currency unit or
units or composite currency or currencies in which such Securities are
denominated or stated to be payable and the currency or currencies,
currency unit or units or composite currency or currencies in which such
Securities are to be so payable;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2
or, if applicable, the portion of the principal amount of Securities of the
series that is convertible in accordance with the provisions of this
Indenture, or the method by which such portion shall be determined;
(16) the applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms
then set forth in such Indenture relating to permitted consolidations,
mergers or sales of assets;
(17) the applicability, if any, of Section 14.2 and/or Section 14.3 to
the Securities of the series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Article 14;
(18)(a) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both,
any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may be
exchanged for Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any Securities of
the series are to be issuable
<PAGE>
23
initially in temporary global form and whether any Securities of the series
are to be issuable in permanent global form with or without coupons and, if
so, whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and of
like tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 3.5, and, if Registered Securities of the series are to
be issuable as a global Security, the identity of the depositary for such
series;
(18)(b) the date as of which any Bearer Securities of the series and
any temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of the
first Security of the series to be issued;
(18)(c) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and/or terms of such certificates, documents or conditions;
(19) the appointment of any trustee, any authenticating or paying
agents, transfer agent or registrars;
(20) the terms, if any, of any guarantee of the payment of principal,
premium and interest with respect to the Securities of the series and any
corresponding changes to the provisions of the applicable indenture as then
in effect;
(21) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Securities of the series of any properties,
assets, moneys, proceeds, securities or other collateral, including whether
certain provisions of the TIA are applicable and any corresponding changes
to provisions of the applicable indenture as then in effect and including
provisions addressing priority, perfection and escrow arrangements related
to the security interest;
(22) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are consistent
with the Events of Default or covenants set forth herein, and any change in
the right of the Trustee or the Holders of the Securities to declare the
principal premium and interest with respect to debt securities due and
payable;
<PAGE>
24
(23) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(24) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(25) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 10.8 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have
the option to redeem such Securities rather than pay such Additional
Amounts (and the terms of any such option); and
(26) any other terms of the series.
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 3.3) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.
Section 3.2 Denominations. The Securities of each series shall be
issuable in such denominations as shall be specified as contemplated by Section
3.1. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
Section 3.3 Execution, Authentication, Delivery and Dating. The
Securities and any coupons appertaining thereto shall be executed on behalf of
the
<PAGE>
25
Company by the Chief Executive Officer, Chief Financial Officer, the President
or a Vice President of the Company and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these individuals on the
Securities and coupons may be manual or facsimile signatures of the present or
any future such authorized officer and may be imprinted or otherwise reproduced
on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 3.1, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 3.1, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 3.4, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 3.6, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and cancelled.
If all the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the
<PAGE>
26
Trustee shall be entitled to receive, and (subject to TIA Section 315(a) through
315(d)) shall be fully protected in relying upon,
(i) an Opinion of Counsel stating that:
(a) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance
with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute legal, valid and binding obligations of the Company, enforceable
in accordance with their terms, subject to applicable bankruptcy,
insolvency, moratorium, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, no Event of Default with respect to any of the Securities shall
have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 3.1 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series; provided that such order,
opinion and certificates, with appropriate modifications to cover such future
issuances, shall be delivered at or before the time of issuance of the first
Security of such series.
<PAGE>
27
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 3.1.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9 together with a written statement (which
need not comply with Section 1.2 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
Section 3.4 Temporary Securities. (a) Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form, or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities. In the case of Securities of any series,
such temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 3.4(b) or as otherwise provided in or
pursuant to a Board Resolution) if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto) the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
<PAGE>
28
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 3.3.
Until so exchanged, the temporary Securities of any series shall be entitled to
in all respects the same benefits under this Indenture as definitive Securities
of such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution,
this Section 3.4(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company
("DTC"). If any such temporary Security is issued in global form, then such
temporary global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 3.1, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary global Security,
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 3.1; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary global Security only
in compliance with the requirements of Section 3.3.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor
<PAGE>
29
following the Exchange Date when the account holder instructs Euroclear or
CEDEL, as the case may be, to request such exchange on his behalf and delivers
to Euroclear or CEDEL, as the case may be, a certificate in the form set forth
in Exhibit A-1 to this Indenture (or in such other form as may be established
pursuant to Section 3.1), dated no earlier than 15 days prior to the Exchange
Date, copies of which certificate shall be available from the offices of
Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 3.1, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee
of a certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
3.1), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 3.1). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 3.4(b) and of the third paragraph of Section 3.3 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
<PAGE>
30
Section 3.5 Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby appointed "Security Registrar" for the purpose
of registering Registered Securities and transfers of Registered Securities on
such Security Register as herein provided. In the event that the Trustee shall
cease to be Security Registrar, it shall have the right to examine the Security
Register at all reasonable times.
Subject to the provisions of this Section 3.5, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 3.5, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 3.1, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 3.3) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 3.1,
at the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any
<PAGE>
31
such permitted exchange may be effected if the Bearer Securities are accompanied
by payment in funds acceptable to the Company in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there is
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 10.2, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in a
permitted exchange for a Registered Security of the same series and like tenor
after the close of business at such office or agency on (i) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is DTC, then, unless the terms of such global Security expressly permit
such global Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such global Security selected or approved by the Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Securities Exchange Act of 1934 if so required by applicable law or
regulation, the Company shall appoint a successor depositary with respect to
such global Security or Securities. If (x) a successor depositary for such
global Security or Securities is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such unwillingness,
inability or ineligibility, (y) an Event of Default has occurred and is
continuing and the beneficial owners representing a majority in principal amount
of the applicable series of Securities represented by such global Security or
Securities
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32
advise DTC to cease acting as depositary for such global Security or Securities
or (z) the Company, in its sole discretion, determines at any time that all
Outstanding Securities (but not less than all) of any series issued or issuable
in the form of one or more global Securities shall no longer be represented by
such global Security or Securities, then the Company shall execute, and the
Trustee shall authenticate and deliver, definitive Securities of like series,
rank, tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such global Security or Securities. If any beneficial
owner of an interest in a permanent global Security is otherwise entitled to
exchange such interest for Securities of such series and of like tenor and
principal amount of another authorized form and denomination, as specified as
contemplated by Section 3.1 and provided that any applicable notice provided in
the permanent global Security shall have been given, then without unnecessary
delay but in any event not later than the earliest date on which such interest
may be so exchanged, the Company shall execute, and the Trustee shall
authenticate and deliver, definitive Securities in aggregate principal amount
equal to the principal amount of such beneficial owner's interest in such
permanent global Security. On or after the earliest date on which such interests
may be so exchanged, such permanent global Security shall be surrendered for
exchange by DTC or such other depositary as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose; provided, however, that no such exchanges may occur during a period
beginning at the opening of business 15 days before any selection of Securities
to be redeemed and ending on the relevant Redemption Date if the Security for
which exchange is requested may be among those selected for redemption; and
provided further that no Bearer Security delivered in exchange for a portion of
a permanent global Security shall be mailed or otherwise delivered to any
location in the United States. If a Registered Security is issued in exchange
for any portion of a permanent global Security after the close of business at
the office or agency where such exchange occurs on (i) any Regular Record Date
and before the opening of business at such office or agency on the relevant
Interest Payment Date or (ii) any Special Record Date and the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, interest or Defaulted Interest, as the case may be, will not
be payable on such Interest Payment Date or proposed date for payment, as the
case may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the
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33
Security Registrar) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6, 11.7 or 13.6 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i)
to issue, register the transfer of or exchange any Security if such Security may
be among those selected for redemption during a period beginning at the opening
of business 15 days before selection of the Securities to be redeemed under
Section 11.3 and ending at the close of business on (A) if such Securities are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if such Securities are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall
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34
authenticate and deliver, in lieu of any such destroyed, lost or stolen Security
or in exchange for the Security to which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or stolen), a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or to the Security to which such destroyed, lost or stolen
coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to, Bearer Securities
shall, except as otherwise provided in Section 10.2, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 3.1, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
Section 3.7 Payment of Interest; Interest Rights Preserved. Except as
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 3.1, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the
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35
office or agency of the Company maintained for such purpose pursuant to Section
10.2; provided, however, that each installment of interest on any Registered
Security may at the Company's option be paid by (i) mailing a check for such
interest, payable to or upon the written order of the Person entitled thereto
pursuant to Section 3.8, to the address of such Person as it appears on the
Security Register or (ii) transfer to an account maintained by the payee located
inside the United States.
Unless otherwise provided as contemplated by Section 3.1 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 3.1, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 3.1, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment
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36
(which shall not be less than 30 days after such notice is received by the
Trustee) and at the same time the Company shall deposit with the Trustee an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Registered Securities of such series at his address as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
The Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each place of payment, but such publications shall
not be a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
In case a Bearer Security of any series is surrendered at the office or
agency in a Place of Payment for such series in exchange for a Registered
Security of such series after the close of business at such office or
agency on any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon
relating to such proposed date of payment and Defaulted Interest will not
be payable on such proposed date of payment in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable
only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed
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37
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 3.8 Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 3.5 and 3.7) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the Holder of any Bearer Security and the Holder of any
coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
Section 3.9 Cancellation. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee
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38
for any such purpose shall be promptly canceled by it; provided, however, where
the Place of Payment is located outside of the United States, the Paying Agent
at such Place of Payment may cancel the Securities surrendered to it for such
purposes prior to delivering the Securities to the Trustee. The Company may at
any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. Canceled Securities and coupons held by the Trustee
shall be destroyed by the Trustee and the Trustee shall deliver a certificate of
such destruction to the Company, unless by a Company Order the Company directs
their return to it.
Section 3.10 Computation of Interest. Except as otherwise specified as
contemplated by Section 3.1 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture. This Indenture
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities of such series herein expressly provided for and any right to receive
Additional Amounts), and the Trustee, upon receipt of a Company Order, and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series when:
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 3.5, (ii) Securities
and coupons of
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39
such series which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6, (iii) coupons appertaining to
Securities called for redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as provided in Section 11.6, and (iv)
Securities and coupons of such series for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust,
as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose (A) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable, (B) Government Obligations that
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (C) a combination
thereof, sufficient in each case to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest, and any Additional Amounts with respect thereto, to the date
of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions
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40
precedent herein provided for relating to the satisfaction and discharge of
this Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 6.7, the obligations of the Company to any Authenticating Agent under
Section 6.12 and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations
of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive.
Section 4.2 Application of Trust Funds. Subject to the provisions of
the last paragraph of Section 10.3, all amounts deposited with the Trustee
pursuant to Section 4.1 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any), and any interest and
Additional Amounts for whose payment such amounts have been deposited with or
received by the Trustee, but such amounts need not be segregated from other
funds except to the extent required by law. All moneys deposited with the
Trustee pursuant to Section 4.01 (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be returned to the Company
upon Company Request.
ARTICLE 5
REMEDIES
Section 5.1 Events of Default. "Event of Default," wherever used
herein with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body)
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its
Maturity; or
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41
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with) and
continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(5) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property of any of
them, or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
(7) any other Event of Default provided with respect to Securities of
that series.
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42
As used in this Section 5.1, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
Section 5.2 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable. If an Event of Default specified in Section 5.1(5) or 5.1(6)
occurs, the principal of, and accrued interest (including Additional Amounts)
on, all the Securities shall automatically, and without any declaration or other
action on the part of the Trustee or any Holder, become immediately due and
payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency or currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 3.1 for the Securities of such series):
(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that series and
any related coupons,
(B) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates borne
by or provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional Amounts
at the rate or rates borne by or provided for in such Securities, and
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43
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium, if any) or
interest on Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related
coupon when such interest or Additional Amount becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its
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44
rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.4 Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts, if
any, owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby directed by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall request the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the Trustee
and any predecessor Trustee, their agents and counsel, and any other amounts due
the Trustee or any predecessor Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding; provided; however, that the Trustee
may, on behalf of the Holders, vote
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45
for the election of a trustee in bankruptcy or similar official and be a member
of a creditors' or other similar committee.
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities or Coupons. All rights of action and claims under this Indenture or
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
Section 5.6 Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest and any
Additional Amounts, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest and
any Additional Amounts payable, in respect of which or for the benefit of
which such money has been collected, ratably, without preference or
priority of any kind, according to the aggregate amounts due and payable on
such Securities and coupons for principal (and premium, if any), interest
and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
Section 5.7 Limitation on Suits. No Holder of any Security of any
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the
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46
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts. Notwithstanding any other
provision in this Indenture, the Holder of any Security or coupon shall have the
right which is absolute and unconditional to receive payment of the principal of
(and premium, if any) and (subject to Sections 3.5 and 3.7) interest on, and any
Additional Amounts in respect of, such Security or payment of such coupon on the
respective due dates expressed in such Security or coupon (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be) and, if applicable, to convert such Security in accordance with the
provisions of the applicable supplemental indenture or Board Resolutions and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 5.9 Restoration of Rights and Remedies. If the Trustee or any
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
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47
Section 5.10 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 3.6, 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 permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
Section 5.12 Control by Holders of Securities. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
Section 5.13 Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security of
such series or any related coupons, or
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48
(2) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 5.14 Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.15 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
ARTICLE 6
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
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49
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee (as Trustee, Paying Agent, Authenticating
Agent or Security Registrar) shall be subject to the provisions of this Section.
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50
Section 6.2 Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest on
or any Additional Amounts with respect to any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any default
or breach of the character specified in Section 5.1(4) with respect to the
Securities and coupons of such series, no such notice to Holders shall be given
until at least 90 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to the Securities
of such series.
Section 6.3 Certain Rights of Trustee. Subject to the provisions of
TIA Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 3.3
which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may request and, in the absence
of bad faith on its part, rely upon an Officers' Certificate and Opinion of
Counsel;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
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51
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to make
reasonable examination of the books, records and premises of the Company,
personally or by agent or attorney following reasonable notice to the
Company;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
Section 6.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee
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52
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 6.5 May Hold Securities. The Trustee, any Paying Agent,
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
Section 6.6 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 6.7 Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel) except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its own part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.l(5) or Section 5.1(6), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
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53
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium, if any) or interest
on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
Section 6.8 Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article. If the Trustee has or shall
acquire a conflicting interest within the meaning of the TIA, the Trustee shall
either eliminate such interest or resign to the extent and in the manner
provided by and subject to the provisions of the TIA and this Indenture.
Section 6.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
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54
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 6.8 and shall
fail to resign after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
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55
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided for notices to the Holders of Securities in Section 1.6. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 6.10 Acceptance of Appointment by Successor. (a) In case of
the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article 9 hereof, wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall
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56
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 6.11 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
Section 6.12 Appointment of Authenticating Agent. At any time when any
of the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption or
repayment thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the Company.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating
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Agent. Each Authenticating Agent shall be acceptable to the Company and shall at
all times be a bank or trust company or corporation organized and doing business
and in good standing under the laws of the United States of America or of any
State or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authorities. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 1.6. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
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If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
as Trustee
By: ,
as Authenticating Agent
By: ,
Authorized Signatory
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Disclosure of Names and Addresses of Holders. Every Holder
of Securities or coupons, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
Section 7.2 Reports by Trustee. Within 60 days after May 15 of each
year commencing with the first May 15 after the first issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such May
15 if required by TIA Section 313(a). A copy of each such report shall at the
time of such transmission to Holders be filed by the Trustee with each stock
exchange upon which any Securities are listed with the Commission and the
Company. The Company will notify the Trustee when any Securities are listed on
any stock exchange and of any delisting thereof.
Section 7.3 Reports by Company. The Company will:
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(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Sections 13(a) or 13(b) or Section 15(d) of
the Securities Exchange Act of 1934; or, if the Company is not required to
file information, documents or reports pursuant to either of such Sections,
then it will file with the Trustee, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) file with the Trustee and the Commission, if applicable, and
transmit by mail to the Holders of Securities, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided
in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission and other information as may be
required pursuant to the TIA at the time and in the manner provided
pursuant to such Act.
Section 7.4 Company to Furnish Trustee Names and Addresses of Holders.
(a) The Company will furnish or cause to be furnished to the Trustee:
(i) semi-annually, not later than 10 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the
Holders of Registered Securities of such series as of such Regular Record
Date, or if there is no Regular Record Date for interest for such series of
Securities, semi-annually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series, and
such information, if any, concerning the holders of Bearer Securities that
is known to the Company or any Paying Agent other than the Company;
provided, however, that the Company and such Paying Agents shall have no
obligation to investigate any matter relating to any holder of a Bearer
Security or a coupon appertaining thereto; and
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(ii) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
(b) The Company shall provide the Trustee with at least 30 days' prior
notice of any change in location of its principal executive offices or other
principal place of business.
ARTICLE 8
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
Section 8.1 Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease, transfer, convey or otherwise dispose of all
or substantially all of its assets to, or merge with or into any other Person,
provided that in any such case, (1) either the Company shall be the continuing
corporation, or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
or leases the Company's assets substantially as an entirety is a corporation,
partnership, limited liability company or trust organized and existing under the
laws of any United States jurisdiction and expressly assumes the due and
punctual payment of the principal of (and premium, if any) and any interest
(including all Additional Amounts, if any, payable pursuant to this Indenture on
all of the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company and shall have provided for conversion
rights, if applicable, in accordance with the relevant supplemental indenture or
Board Resolution, by supplemental indenture, complying with Article 9 hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation and (2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or such
Person or any Subsidiary as a result thereof as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of Default,
and no event which, after notice or the lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing.
Section 8.2 Rights and Duties of Successor Corporation. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor Person, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as
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the party of the first part, and the predecessor corporation, except in the
event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor Person thereupon may cause to be
signed, and may issue either in its own name or in the name of the Company, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
Section 8.3 Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease, transfer, conveyance or other dispositions
permitted under Section 8.1 is also subject to the condition that the Trustee
receive an Officers' Certificate and an Opinion of Counsel to the effect that
any such consolidation, merger, sale, lease, transfer or conveyance or other
dispositions and the assumption by any successor Person, complies with the
provisions of this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or
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(2) to add to the covenants of the Company for the equal and ratable
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default
are to be for the benefit of less than all series of Securities, stating
that such Events of Default are expressly being included solely for the
benefit of such series); provided, however, that in respect of any such
additional Events of Default 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 default or may limit the remedies
available to the Trustee upon such default or may limit the right of the
Holders of a majority in aggregate principal amount of that or those series
of Securities to which such additional Events of Default apply to waive
such default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the Holders of Securities of any series or any
related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.1 and 3.1, including the
provisions and procedures relating to Securities convertible into Common
Stock or Preferred Stock, as the case may be; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more
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63
series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture; provided such provisions shall not
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 4.1, 14.2 and
14.3; provided that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect; or
(11) to make any change that does not adversely affect the rights of
any holder of Securities of the applicable series; or
(12) to make any change to comply with any requirement of the
Commission in connection with the qualification of the Indenture under TIA;
or
(13) to provide for the issuance of uncertificated Securities of one
or more series in addition to or in place of certificated Securities;
provided, however, that the uncertificated Securities are issued in
registered form for purposes of Section 163(f) of the Code or in a manner
such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code.
Section 9.2 Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
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64
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any Security;
or reduce the principal amount thereof or the rate or amount of interest
thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change any obligation of
the Company to pay Additional Amounts pursuant to Section 10.8 (except as
contemplated by Section 8.1(1) and permitted by Section 9.1(1)), or reduce
the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2 or the amount thereof provable in
bankruptcy pursuant to Section 5.4, or adversely affect any right of
repayment at the option of the Holder of any Security, or change any Place
of Payment where, or the currency or currencies, currency unit or units or
composite currency or currencies in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption or repayment at the option of the Holder, on
or after the Redemption Date or the Repurchase Date, as the case may be);
or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture;
(3) make any change that adversely affects the right to convert any
Security;
(4) modify the provisions of the Indenture relating to the ranking of
the Securities in a manner adverse to the Holders of the Securities;
(5) impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Securities; or
(6) modify any of the provisions of this Section, Section 5.13 or
Section 10.8, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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65
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
Section 9.3 Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.1) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 9.4 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
Section 9.5 Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 9.6 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
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ARTICLE 10
COVENANTS
Section 10.1 Payment of Principal, Premium, if any, Interest and
Additional Amounts. The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 10.8 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless otherwise
specified with respect to Securities of any series pursuant to Section 3.1, at
the option of the Company, all payments of principal may be paid by check to the
registered Holder of the Registered Security or other person entitled thereto
against surrender of such Security.
Section 10.2 Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency. If Securities of a series
are issuable as Bearer Securities, the Company will maintain: (A) in the Borough
of Manhattan, The City of New York, an office or agency where any Registered
Securities of that series may be presented or surrendered for payment or
conversion, where any Registered Securities of that series may be surrendered
for registration of transfer, where Securities of that series may be surrendered
for exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment or conversion in the circumstances described in the following
paragraph (and not otherwise); (B) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series which is located outside the
United States, an office or agency where Securities of that series and related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of that series pursuant to Section
10.8) or conversion; provided, however, that if the Securities of that series
are listed on the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange
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shall so require, the Company will maintain a Paying Agent for the Securities of
that series in Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demand to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee (except that Bearer Securities of that series and the related coupons
may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Bearer Securities of that series pursuant to
Section 10.8) or conversion at the offices specified in the Security, in London,
England, and the Company hereby appoints the same as its agent to receive such
presentations, surrenders, notices and demands), and the Company hereby appoints
the Trustee its agent to receive all such presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; provided, however, that, if the Securities of a series are payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any Additional Amounts payable on Securities of such series
pursuant to Section 10.8) shall be made at the office of the Company's Paying
Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium, interest or
Additional Amounts, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture, is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency. Unless otherwise specified with respect to
any Securities pursuant to
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Section 3.1 with respect to a series of Securities, the Company hereby
designates as a Place of Payment for each series of Securities the office or
agency of the Company in the Borough of Manhattan, The City of New York, and
initially appoints the Trustee at its Corporate Trust Office as Paying Agent in
such city and as its agent to receive all such presentations, surrenders, notice
and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
Section 10.3 Money for Securities Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any series
of any Securities and any related coupons, it will, on or before each due date
of the principal of (and premium, if any), or interest on or Additional Amounts
in respect of, any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) sufficient to pay the
principal (and premium, if any) or interest or Additional Amounts so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, before each due date of
the principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities or Additional Amounts in trust
for
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the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest or Additional Amounts; and
(3) at any time during the continuance of any Event of Default upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium, if any) or
interest on, or any Additional Amounts in respect of, any Security of any series
and remaining unclaimed for two years after such principal (and premium, if
any), interest or Additional Amounts has become due and payable shall be paid to
the Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 10.4 Existence. Subject to Article 8, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises,
except to the extent that the Board of Directors shall determine that the
failure to do so would not have a material adverse effect on the business,
assets, financial condition or results of operation of the Company (a "Material
Adverse Effect"); provided, however, that the Company shall not be required to
preserve any right or franchise if the Board
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of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 10.5 Maintenance of Properties. The Company will cause all of
it properties used or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, except to the extent that the failure to do so would not have a
Material Adverse Effect on the Company; provided, however, that the Company
shall not be required to continue the operation or maintenance of any such
property or be prevented from disposing of such property if the Board of
Directors shall determine that such discontinuance or disposal is desirable in
the conduct of the business of the Company or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
Section 10.6 Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary and have a Material Adverse Effect; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 10.7 Statement as to Compliance. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year of the Company, a
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all terms, conditions and provisions under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 10.7, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
Section 10.8 Additional Amounts. If any Securities of a series provide
for the payment of Additional Amounts, the Company will pay to the Holder of any
Security of such series or any coupon appertaining thereto Additional Amounts as
may be specified as contemplated by Section 3.1. Whenever in this Indenture
there is mentioned, in any context except in the case of Section 5.2(1), the
payment of the principal of or any premium or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or
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exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided by the terms of such
series established pursuant to Section 3.1 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
such terms and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
Except as otherwise specified as contemplated by Section 3.1, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is made,
and at least 10 days prior to each date of payment of principal and any premium
or interest if there has been any change with respect to the matters set forth
in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. In the event that the Trustee or any Paying Agent, as the
case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled (i) to assume that no such
withholding or deduction is required with respect to any payment of principal or
interest with respect to any Securities of a series or related coupons until it
shall have received a certificate advising otherwise and (ii) to make all
payments of principal and interest with respect to the Securities of a series or
related coupons without withholding or deductions until otherwise advised. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
The obligations of the Company under this Section shall survive any
termination, defeasance or discharge of the Indenture or applicable Security.
Section 10.9 Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
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Sections 10.4 to 10.6, inclusive, if before the time for such compliance the
Holders of at least a majority in principal amount of all outstanding Securities
of such series, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
ARTICLE 11
REDEMPTION OF SECURITIES
Section 11.1 Applicability of Article. Securities of any series which
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
3.1 for Securities of any series) in accordance with this Article.
Section 11.2 Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
all or any part of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 11.4 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 11.3 Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and,
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in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
Section 11.4 Notice of Redemption. Notice of redemption shall be given
in the manner provided in Section 1.6, not less than 30 days nor more than 60
days prior to the Redemption Date, unless a shorter period is specified by the
terms of such series established pursuant to Section 3.1, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 11.6, if any, and Additional Amounts, if
any,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 11.6, if
any, will become due and payable upon each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon shall
cease to accrue on and after said date,
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(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and accrued interest, if any, or for conversion,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by
all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company,
the Trustee for such series and any Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 3.5 or otherwise,
the last date, as determined by the Company, on which such exchanges may be
made,
(10) the CUSIP number of such Security, if any, and
(11) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or rate
and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by
the Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
Section 11.5 Deposit of Redemption Price. Not later than 11:00 a.m. on
the Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not do
in the case of a sinking fund payment under Article 12, segregate and hold in
trust as provided in Section 10.3) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) sufficient to pay on
the Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
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Section 11.6 Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 10.2)
and, unless otherwise specified as contemplated by Section 3.1, only upon
presentation and surrender of coupons for such interest; and provided further
that, except as otherwise provided with respect to Securities convertible into
Common Stock or Preferred Stock, installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 10.2) and, unless otherwise specified as contemplated by Section 3.1,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
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Section 11.7 Securities Redeemed in Part. Any Registered Security
which is to be redeemed only in part (pursuant to the provisions of this Article
or of Article 12) shall be surrendered at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE 12
SINKING FUNDS
Section 12.1 Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any mandatory sinking
fund payment with respect to the Securities of a series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series, (1) deliver Outstanding Securities of such series (other than any
previously called for redemption) together, in the case of any Bearer Securities
of such series, with all unmatured coupons appertaining thereto and (2) apply as
a credit Securities of such series which have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities, as provided for by the terms of such Securities, or which have
otherwise been acquired by the Company; provided that such Securities so
delivered or applied as a credit have not been previously so credited. Such
Securities shall be received and credited for such purpose by the
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Trustee at the applicable Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.
Section 12.3 Redemption of Securities for Sinking Fund. Not less than
60 days prior to each sinking fund payment date for Securities of any series,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 12.2, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and will also deliver to the Trustee any
Securities to be so delivered and credited. If such Officers' Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the amount
therein specified. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
ARTICLE 13
REPURCHASE AT THE OPTION OF HOLDERS
Section 13.1 Applicability of Article. Repurchase of Securities of any
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
3.1) in accordance with this Article.
Section 13.2 Repurchase of Securities. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repurchase Date specified in or pursuant to the terms of
such Securities. The Company covenants that not later than 12:00 noon on the
Repurchase Date it will deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3) an amount
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of money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 3.1 for the Securities of
such series) sufficient to pay the principal (or, if so provided by the terms of
the Securities of any series, a percentage of the principal) of, and (except if
the Repurchase Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof, as the case may be, to be repaid on such
date.
Section 13.3 Notice; Exercise of Repurchase Right. (a) On or before
the 15th day after the Company knows or reasonably should know an event giving
rise to a repurchase right has occurred, the Company, or at the written request
of the Company, the Trustee (in the name and at the expense of the Company),
shall give notice of the occurrence of such event and of the repurchase right
set forth herein arising as a result thereof by first-class mail, postage
prepaid, or by telefacsimile with written acknowledgment of transmittal to each
Holder of the Securities at such Holder's address appearing in the Security
Register. The Company shall also deliver a copy of such notice of a repurchase
right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and
(4) the instructions a Holder must follow to exercise its repurchase
right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred such an event.
(b) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the 30th day after the
date of transmittal of the notice referred to in (a) above (i) written notice of
the Holder's exercise of such right, which notice shall set forth the name of
the Holder, the principal amount of the Security or Securities (or portion of a
Security) to be repurchased, and a statement that an election to exercise the
repurchase right is being made thereby, and (ii) the Security or Securities with
respect to which the repurchase right is being exercised, duly endorsed for
transfer to the Company. Such written notice shall be irrevocable. If the
Repurchase Date falls between any Regular Record Date and the corresponding
succeeding Interest Payment Date, Securities to be repurchased must be
accompanied by payment from the Holder of an amount equal to
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the interest thereon which the registered Holder thereof is to receive on such
Interest Payment Date.
Section 13.4 When Securities Presented for Repurchase Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repurchase Date therein
specified, and on and after such Repurchase Date (unless the Company shall
default in the payment of such Securities on such Repurchase Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repurchase
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repurchase Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
Repurchase Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 10.2) and, unless
otherwise specified pursuant to Section 3.1, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repurchase Date shall be payable (but without interest thereon,
unless the Company shall default in the payment thereof) to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 3.7.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repurchase Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 13.2 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 10.2) and, unless
otherwise specified as contemplated by Section 3.1, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest,
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if any, thereon accrued to such Repurchase Date) shall, until paid, bear
interest from the Repurchase Date at the rate of interest or Yield to Maturity
(in the case of Original Issue Discount Securities) set forth in such Security.
Section 13.5 Securities Not Repurchased on Repurchase Date. If any
Security surrendered for repurchase shall not be so paid on the Repurchase Date,
the principal of such Security shall, until paid, bear interest from the
Repurchase Date at a rate borne by such Security.
Section 13.6 Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE 14
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.1 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. The Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 14.2 (if applicable) or Section 14.3
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
Section 14.2 Defeasance and Discharge. Upon the Company's exercise of
the above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 14.4 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 14.5 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
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receive, solely from the trust fund described in Section 14.4 and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any) and interest, if any, on such Securities and any coupons appertaining
thereto when such payments are due, (B) the Company's obligations with respect
to such Securities under Sections 3.5, 3.6, 10.2 and 10.3 and with respect to
the payment of Additional Amounts, if any, on such Securities as contemplated by
Section 10.8, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article
14, the Company may exercise its option under this Section notwithstanding the
prior exercise of its option under Section 14.3 with respect to such Securities
and any coupons appertaining thereto.
Section 14.3 Covenant Defeasance. Upon the Company's exercise of the
above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under
Sections 10.4 to 10.6, inclusive, and, if specified pursuant to Section 3.1, its
obligations under any other covenant, with respect to such Outstanding
Securities and any coupons appertaining thereto on and after the date the
conditions set forth in Section 14.4 are satisfied (hereinafter, "covenant
defeasance"), and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with Sections 10.4 to 10.6, inclusive, or such other
covenant, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Outstanding Securities and any coupons appertaining thereto, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any such
Section or such other covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a default or an Event
of Default under Section 5.1(4) (with respect to any of Sections 10.4, 10.5 or
10.6) or 5.1(7) or otherwise, as the case may be, but, except as specified
above, the remainder of this Indenture and such Securities and any coupons
appertaining thereto shall be unaffected thereby.
Section 14.4 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 14.2 or Section 14.3
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 6.8 who shall agree to comply with the provisions of this Article 14
applic able to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit in which
such Securities and any coupons
<PAGE>
82
appertaining thereto are then specified as payable at Stated Maturity, or (2)
Government Obligations applicable to such Securities and coupons appertaining
thereto (determined on the basis of the currency, currencies or currency unit in
which such Securities and coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment of principal of (and
premium, if any) and interest, if any, on such Securities and any coupons
appertaining thereto, money in an amount, or (3) a combination thereof, in any
case, in an amount, sufficient, without consideration of any reinvestment of
such principal and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of (and premium, if any) and interest, if any, on such Outstanding
Securities and any coupons appertaining thereto on the Stated Maturity of such
principal or installment of principal or interest and (ii) any mandatory sinking
fund payments or analogous payments applicable to such Outstanding Securities
and any coupons appertaining thereto on the day on which such payments are due
and payable in accordance with the terms of this Indenture and of such
Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 5.1(5) and 5.1(6) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(d) In the case of an election under Section 14.2, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
<PAGE>
83
(e) In the case of an election under Section 14.3, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 14.2 or the covenant defeasance under
Section 14.3 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 14.2 or Section 14.3 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities, if then listed on any securities
exchange, will not be delisted as a result of such deposit.
(h) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Article 6 and for purposes
of the TIA with respect to any securities of the Company.
(i) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 3.1.
Section 14.5 Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.3, all money and Government Obligations (or other
property as may be provided pursuant to Section 3.1) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 14.5, the "Trustee") pursuant to Section 14.4 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if
<PAGE>
84
any, but such money need not be segregated from other funds except to the extent
required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 3.1, if, after a deposit referred to in Section 14.4(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 3.1 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 14.4(a) has been made in respect of such
Security, or (b) a Currency Conversion Event occurs in respect of the currency
or currency unit in which the deposit pursuant to Section 14.4(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any), and
interest, if any, on such Security as the same becomes due out of the proceeds
yielded by converting (from time to time in the case of any such election) the
amount or other property deposited in respect of such Security into the currency
or currency unit in which such Security becomes payable as a result of such
election or Currency Conversion Event based on the applicable market exchange
rate for such currency or currency unit in effect on the second Business Day
prior to each payment date, except, with respect to a Currency Conversion Event,
for such currency or currency unit in effect (as nearly as feasible) at the time
of the Currency Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 14.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 6.7, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 14.4 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance, as applicable, in
accordance with this Article.
Section 14.6 Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 14.2 or 14.3 by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article until such
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 14.2 or 14.3; provided,
<PAGE>
85
however, that if the Company makes any payment of principal of, premium, if any,
or interest on any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or the Paying Agent.
* * * * *
<PAGE>
86
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
CD RADIO INC.
By:
Title:
Attest:
Title:
as Trustee
By:
Title:
Attest:
Title:
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the day of , before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he/she resides
at , , that he/she is of CD RADIO INC., one of the
parties described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto by authority of CD RADIO INC.'s board
of directors.
[Notarial Seal]
Notary Public
COMMISSION EXPIRES
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the day of , before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he/she resides
at , that he/she is of , one of the parties
described in and which executed the foregoing instrument, and that he/she signed
his/her name thereto by authority of the Board of Trustees.
[Notarial Seal]
Notary Public
COMMISSION EXPIRES
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise CD Radio Inc. or its agent that such financial institution
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in
addition, if the owner is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures
<PAGE>
if any applicable statement herein is not correct on such date, and in the
absence of any such notification it may be assumed that this certification
applies as of such date.
This certificate excepts and does not relate to [U.S.$] __________ of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
[To be dated no earlier than the 15th day prior
to (i) the Exchange Date or (ii) the relevant
Interest Payment Date occurring prior to the
Exchange Date, as applicable]
[Name of Person Making
Certification]
(Authorized Signatory)
Name:
Title:
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$] _____________
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein
referred to as "financial institutions") purchasing for their own account or for
resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such financial institution has agreed, on
its own behalf or through its agent, that we may advise CD Radio Inc. or its
agent that such financial institution will comply with the requirements of
Section 165(j)(3)(A), (B) or (c) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by United States or
foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the
<PAGE>
above-referenced certificates of Member Organizations and (ii) as of the date
hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
[To be dated no earlier than the Exchange Date
or the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of
New York, Brussels Office,] as
Operator of the Euroclear System
[Cedel S.A.]
By:
<PAGE>
Exhibit 4.6.2
CD RADIO INC.
AND
Trustee
Indenture
Dated as of September 15, 1999
Subordinated Indebtedness Securities
<PAGE>
TABLE OF CONTENTS
<TABLE>
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ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION.........................................................1
Section 1.1 Definitions....................................................................1
Section 1.2 Compliance Certificates and Opinions..........................................11
Section 1.3 Form of Documents Delivered to Trustee........................................12
Section 1.4 Acts of Holders...............................................................12
Section 1.5 Notices, etc., to Trustee and Company.........................................15
Section 1.6 Notice to Holders; Waiver.....................................................15
Section 1.7 Effect of Headings and Table of Contents......................................17
Section 1.8 Successors and Assigns........................................................17
Section 1.9 Separability Clause...........................................................17
Section 1.10 Benefits of Indenture.........................................................17
Section 1.11 Governing Law.................................................................17
Section 1.12 Legal Holidays................................................................17
Section 1.13 Personal Immunity from Liability for Incorporators,
Stockholders, Etc.............................................................18
Section 1.14 Conflict with Trust Indenture Act.............................................18
ARTICLE 2 SECURITIES FORMS..............................................................18
Section 2.1 Forms of Securities...........................................................18
Section 2.2 Form of Trustee's Certificate of Authentication...............................19
Section 2.3 Securities Issuable in Global Form............................................19
ARTICLE 3 THE SECURITIES................................................................20
Section 3.1 Amount Unlimited; Issuable in Series..........................................20
Section 3.2 Denominations.................................................................25
Section 3.3 Execution, Authentication, Delivery and Dating................................25
Section 3.4 Temporary Securities..........................................................28
Section 3.5 Registration, Registration of Transfer and Exchange...........................30
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities..............................34
Section 3.7 Payment of Interest; Interest Rights Preserved................................35
Section 3.8 Persons Deemed Owners.........................................................37
Section 3.9 Cancellation..................................................................38
Section 3.10 Computation of Interest.......................................................39
ARTICLE 4 SATISFACTION AND DISCHARGE....................................................39
Section 4.1 Satisfaction and Discharge of Indenture.......................................39
Section 4.2 Application of Trust Funds....................................................40
ARTICLE 5 REMEDIES......................................................................41
Section 5.1 Events of Default.............................................................41
</TABLE>
i
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Section 5.2 Acceleration of Maturity; Rescission and Annulment............................42
Section 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee....................................................................43
Section 5.4 Trustee May File Proofs of Claim..............................................44
Section 5.5 Trustee May Enforce Claims Without Possession of Securities or
Coupons.......................................................................45
Section 5.6 Application of Money Collected................................................45
Section 5.7 Limitation on Suits...........................................................46
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts..............................47
Section 5.9 Restoration of Rights and Remedies............................................47
Section 5.10 Rights and Remedies Cumulative................................................47
Section 5.11 Delay or Omission Not Waiver..................................................47
Section 5.12 Control by Holders of Securities..............................................48
Section 5.13 Waiver of Past Defaults.......................................................48
Section 5.14 Waiver of Usury, Stay or Extension Laws.......................................48
Section 5.15 Undertaking for Costs.........................................................49
ARTICLE 6 THE TRUSTEE...................................................................49
Section 6.1 Certain Duties and Responsibilities...........................................49
Section 6.2 Notice of Defaults............................................................50
Section 6.3 Certain Rights of Trustee.....................................................51
Section 6.4 Not Responsible for Recitals or Issuance of Securities........................52
Section 6.5 May Hold Securities...........................................................52
Section 6.6 Money Held in Trust...........................................................52
Section 6.7 Compensation and Reimbursement................................................53
Section 6.8 Corporate Trustee Required; Eligibility; Conflicting
Interests.....................................................................53
Section 6.9 Resignation and Removal; Appointment of Successor.............................54
Section 6.10 Acceptance of Appointment by Successor........................................55
Section 6.11 Merger, Conversion, Consolidation or Succession to
Business......................................................................57
Section 6.12 Appointment of Authenticating Agent...........................................57
ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY...................................................................59
Section 7.1 Disclosure of Names and Addresses of Holders..................................59
Section 7.2 Reports by Trustee............................................................59
Section 7.3 Reports by Company............................................................59
Section 7.4 Company to Furnish Trustee Names and Addresses
of Holders....................................................................60
</TABLE>
ii
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ARTICLE 8 CONSOLIDATION, MERGER, SALE, LEASE OR
CONVEYANCE....................................................................61
Section 8.1 Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain
Conditions....................................................................61
Section 8.2 Rights and Duties of Successor Corporation....................................61
Section 8.3 Officers' Certificate and Opinion of Counsel..................................62
ARTICLE 9 SUPPLEMENTAL INDENTURES.......................................................62
Section 9.1 Supplemental Indentures without Consent of Holders............................62
Section 9.2 Supplemental Indentures with Consent of Holders...............................64
Section 9.3 Execution of Supplemental Indentures..........................................65
Section 9.4 Effect of Supplemental Indentures.............................................66
Section 9.5 Conformity with Trust Indenture Act...........................................66
Section 9.6 Reference in Securities to Supplemental Indentures............................66
ARTICLE 10 COVENANTS.....................................................................66
Section 10.1 Payment of Principal, Premium, if any, Interest and Additional
Amounts.......................................................................66
Section 10.2 Maintenance of Office or Agency...............................................67
Section 10.3 Money for Securities Payments to Be Held in Trust.............................68
Section 10.4 Existence.....................................................................70
Section 10.5 Maintenance of Properties.....................................................70
Section 10.6 Payment of Taxes and Other Claims.............................................71
Section 10.7 Statement as to Compliance....................................................71
Section 10.8 Additional Amounts............................................................71
Section 10.9 Waiver of Certain Covenants...................................................72
ARTICLE 11 REDEMPTION OF SECURITIES......................................................73
Section 11.1 Applicability of Article......................................................73
Section 11.2 Election to Redeem; Notice to Trustee.........................................73
Section 11.3 Selection by Trustee of Securities to Be Redeemed.............................73
Section 11.4 Notice of Redemption..........................................................73
Section 11.5 Deposit of Redemption Price...................................................75
Section 11.6 Securities Payable on Redemption Date.........................................75
Section 11.7 Securities Redeemed in Part...................................................76
ARTICLE 12 SINKING FUNDS.................................................................77
Section 12.1 Applicability of Article......................................................77
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.........................77
Section 12.3 Redemption of Securities for Sinking Fund.....................................77
ARTICLE 13 REPURCHASE AT THE OPTION OF HOLDERS...........................................78
Section 13.1 Applicability of Article......................................................78
Section 13.2 Repurchase of Securities......................................................78
</TABLE>
iii
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Section 13.3 Notice; Exercise of Repurchase Right..........................................78
Section 13.4 When Securities Presented for Repurchase Become Due and
Payable.......................................................................79
Section 13.5 Securities Not Repurchased on Repurchase Date.................................80
Section 13.6 Securities Repaid in Part.....................................................80
ARTICLE 14 DEFEASANCE AND COVENANT DEFEASANCE............................................81
Section 14.1 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance.............................................81
Section 14.2 Defeasance and Discharge......................................................81
Section 14.3 Covenant Defeasance...........................................................81
Section 14.4 Conditions to Defeasance or Covenant Defeasance...............................82
Section 14.5 Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.........................................84
Section 14.6 Reinstatement.................................................................85
ARTICLE 15 SUBORDINATION.................................................................86
Section 15.1 Agreement to Subordinate......................................................86
Section 15.2 Liquidation; Dissolution; Bankruptcy..........................................86
Section 15.3 Default on Senior Indebtedness................................................86
Section 15.4 Acceleration of Securities....................................................87
Section 15.5 When Distribution Must Be Paid Over...........................................87
Section 15.6 Notice by Company.............................................................87
Section 15.7 Subrogation...................................................................87
Section 15.8 Relative Rights...............................................................87
Section 15.9 Subordination May Not Be Impaired by Trust....................................88
Section 15.10 Distribution or Notice to Representative......................................88
Section 15.11 Rights of Trustee and Paying Agent............................................88
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
iv
<PAGE>
CD RADIO INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the
"TIA") and Indenture, dated as of September 15, 1999.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
310(a)(1).............................................. 6.7
(b)(2)............................................. 6.7
(b)................................................ 6.7, 6.8
312(a)................................................. 7.4
312(c)................................................. 7.1
313(a)................................................. 7.2
(c)................................................. 7.2
314(a)................................................. 7.3
(a)(4).............................................. 10.9
(c)(1).............................................. 1.2
(c)(2).............................................. 1.2
(e)................................................. 1.2
315(b)................................................. 6.1
316(a) (last sentence)................................. 1.1 ("Outstanding")
(a)(1)(A)........................................... 5.12
(a)(1)(B)........................................... 5.13
(b)................................................. 5.8
317(a)(1).............................................. 5.3
(a)(2).............................................. 5.4
318(a)................................................. 1.11
(c)................................................. 1.11
</TABLE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the TIA, which
provides that the provisions of Sections 310 through 317 of the TIA are a part
of and govern every qualified indenture, whether or not physically contained in
the Indenture.
<PAGE>
INDENTURE, dated as of September 15, 1999, between CD RADIO INC., a
Delaware corporation (hereinafter called the "Company"), having its principal
office at 1221 Avenue of the Americas, 36th Floor, New York, New York 10020 and
, a corporation organized under the laws of , as
Trustee hereunder (hereinafter called the "Trustee"), having its Corporate
Trust Office at .
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its
lawful purposes subordinated debt securities (hereinafter called the
"Securities") evidencing its subordinated indebtedness, and has duly authorized
the execution and delivery of this Indenture to provide for the issuance from
time to time of the Securities, unlimited as to principal amount, to bear
interest at the rates or formulas, to mature at such times and to have such
other provisions as shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939 that are deemed to be incorporated into this Indenture and shall, to the
extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all the holders of the Securities, as
follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
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(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper," as
used in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(4) the word "including" means "including without limitation," and
(5) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Additional Amounts" means any additional amounts which are required
by a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 6.11.
"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 5.1.
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"Bearer Security" means any Security established pursuant to Section
2.1 which is payable to bearer.
"Board of Directors" means the board of directors of the Company, the
executive committee of that board or any committee of that board duly authorized
to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 3.1, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or
its successor.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Depositary" has the meaning specified in Section 3.4.
"Common Stock" means, with respect to any Person, capital stock issued
by such Person other than Preferred Stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chief Executive
Officer, Chief Financial Officer, the President or a Vice President of the
Company and delivered to the Trustee.
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"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at .
"corporation" means a corporation, association, partnership, companies
(including limited liability companies) joint-stock company or business trust.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Currency Conversion Event" means the cessation of use of (i) a
Foreign Currency both by the government of the country which issued such
currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit (or composite currency) other than the ECU for the
purposes for which it was established.
"Custodian" has the meaning specified in Section 5.1.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"DTC" has the meaning specified in Section 3.4.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article 5.
"Foreign Currency" means any currency, currency unit or composite
currency, including the ECU, issued by the government of one or more countries
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5
other than the United States of America or by any recognized confederation or
association of such governments.
"GAAP" means generally accepted accounting principles, as in effect
from time to time, as used in the United States, applied on a consistent basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the foreign
currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 3.1; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the particular series of Securities for which such Person is Trustee established
as contemplated by Section 3.1, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or
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6
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less than
the principal face amount thereof at original issuance.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 10.8,
includes such Additional Amounts.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Material Adverse Effect" has the meaning specified in Section 10.4.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or who may be an employee of or other counsel for the
Company and who shall be reasonably satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
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(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities, except to the extent provided in Sections 14.2
and 14.3, with respect to which the Company has effected defeasance
and/or covenant defeasance as provided in Article 14;
(iv) Securities which have been paid pursuant to Section 3.6 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(v) Securities converted into Common Stock or Preferred Stock
pursuant to or in accordance with this Indenture if the terms of such
Securities provide for convertibility pursuant to Section 3.1;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.2, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 3.1 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the
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principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 3.1, and
(iv) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of or
within any series, means the place or places where the principal of (and
premium, if any) and interest on such Securities are payable as specified as
contemplated by Sections 3.1 and 10.2.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Stock" means, with respect to any Person, capital shares
issued by such Person that are entitled to a preference or priority over any
other capital shares issued by such Person upon any distribution of such
Person's assets, whether by dividend or upon liquidation, dissolution or winding
up.
"Redemption Date," when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture as set forth in such Security.
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"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is registered in
the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 3.1, whether or not a
Business Day.
"Repurchase Date" means, when used with respect to any
Security to be repaid at the option of the Holder, the date fixed for such
repayment by or pursuant to this Indenture.
"Repurchase Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Representative" means the indenture trustee or other trustee, agent
or representative for an issue of Senior Indebtedness.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or vice-chairman of the Board of Directors, the chairman or
vice-chairman of the executive committee of the Board of Directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president,") the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any corporate trust
officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
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"Senior Indebtedness" means: (1) the principal, premium, if any,
interest and all other amounts owed in respect of all the Company's (A)
indebtedness for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments, (2) all of the Company's capital
lease obligations, (3) all obligations issued or assumed by the Company as the
deferred purchase price of property, all of the Company's conditional sale
obligations and all of the Company's obligations under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business), (4) all of the Company's obligations for the reimbursement of any
letter of credit, banker's acceptance, security purchase facility or similar
credit transaction, (5) all obligations of the type referred to in clauses (1)
through (4) above of other persons for the payment of which the Company is
responsible or liable as obligor, guarantor or otherwise, and (6) all
obligations of the type referred to in clauses (1) through (5) above of other
persons secured by any lien on any of the Company's properties or assets
(whether or not such obligation is assumed by the Company), except for (x) any
such indebtedness that is by its terms subordinated to or pari passu with the
Securities and (y) any indebtedness between or among the Company or affiliates
of the Company, including all other debt securities and guarantees in respect of
those debt securities issued to any trust, or trustees of such trust,
partnership or other entity affiliated with the Company that is, directly or
indirectly, a financing vehicle of the Company (a "Financing Entity") in
connection with the issuance by such Financing Entity of preferred securities or
other securities that rank pari passu with, or junior to, the Securities.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation a majority of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries of the Company, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
that ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
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"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as in force at the date hereof; provided, however, that in the event the Trust
Indenture Act of 1939 or such rules and regulations are amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 and such rules and regulations as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 3.1, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 3.1, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
Section 1.2 Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 10.8) shall include:
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(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4 Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by
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agents duly appointed in writing. If Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of the supplemental indenture with respect to
such series, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section 1.4.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited, the Bearer Securities therein described; or such facts may be proved
by the certificate or affidavit of the Person holding such Bearer Securities, if
such certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, or (2) such Bearer Security
is produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered
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Security, or (4) such Bearer Security is no longer Outstanding. The ownership of
Bearer Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) (i) If the Company shall solicit from the Holders of
Registered Securities any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company may, at its option,
in or pursuant to a Board Resolution, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but
the Company shall have no obligation to do so; provided that the
Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in clause
(e)(iii) below. Notwithstanding TIA Section 316(c), such record date
shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be
deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the
record date.
(ii) Subject to clause (e)(iii) below, in the absence of any such
record date fixed by the Company, regardless as to whether a
solicitation of the Holders is occurring on behalf of the Company or
any Holder, the Trustee may, at its option, fix in advance a record
date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Trustee shall have no obligation to do so. Any such
record date shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later
than the date of such solicitation.
(iii) The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled
to join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 5.2, (iii) any
request to institute proceedings referred to in Section 5.7(2), or
(iv) any direction referred to in Section 5.12. If
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15
any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders,
shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder
unless taken on or prior to any applicable expiration date by Holders
of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent
the Trustee from setting a new record date for any action (whereupon
the record date previously set shall automatically and without any
action by any Person be cancelled and of no effect), nor shall
anything in this paragraph be construed to render ineffective any
action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee,
at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable expiration date to be
given to the Company in writing and to each Holder of Securities in
the manner set forth in Section 1.6.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
Section 1.5 Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration; provided that notices to the Trustee shall only be
deemed given when actually received by the Trustee,
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.6 Notice to Holders; Waiver. Where this Indenture provides
for notice of any event to Holders of Registered Securities by the Company or
the
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16
Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders of Registered Securities is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
of Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein. Any notice mailed to a Holder in the manner
herein prescribed shall be conclusively deemed to have been received by such
Holder, whether or not such Holder actually receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 3.1, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in New York
City and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. Any
such notice shall be deemed to have been given on the date of such publication
or, if published more than once, on the date of the first such publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
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17
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 1.7 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.8 Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 1.9 Separability Clause. In case any provision in this
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.10 Benefits of Indenture. Nothing in this Indenture or in
the Securities or coupons, express or implied, shall give to any Person, other
than the parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 1.11 Governing Law. This Indenture and the Securities and
coupons shall be governed by and construed in accordance with the law of the
State of New York without regard to conflicts of laws principles. This Indenture
is subject to the provisions of the TIA that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
Section 1.12 Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repurchase Date, sinking fund payment date, Stated
Maturity or Maturity of any Security or the last date on which a Holder has the
right to convert his Securities shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium, if any) need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repurchase Date or
sinking fund payment date, or at the Stated Maturity or Maturity or on such last
day for conversion; provided that no interest shall accrue on the amount so
payable for the period from and after such Interest
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18
Payment Date, Redemption Date, Repurchase Date, sinking fund payment date,
Stated Maturity or Maturity or on such last day for conversion, as the case may
be.
Section 1.13 Personal Immunity from Liability for Incorporators,
Stockholders, Etc. No recourse shall be had for the payment of the principal of
or premium, if any, or interest, if any, on any Security, or for any claim based
thereon, or otherwise in respect of any Security, or based on or in respect of
this Indenture or any indenture supplemental hereto, against any incorporator,
or against any past, present or future stockholder, director or officer, as
such, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released as
a condition of, and as consideration for, the execution of this Indenture and
the issue of Securities.
Section 1.14 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with a provision of the TIA which is
required under such Act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the TIA which may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be. To the extent a Security conflicts with a
provision in the Indenture, the Indenture governs.
ARTICLE 2
SECURITIES FORMS
Section 2.1 Forms of Securities. The Registered Securities, if any, of
each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms as shall be established in one or
more indentures supplemental hereto or approved from time to time by or pursuant
to a Board Resolution in accordance with Section 3.1, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which the Securities
may be listed or any depositary therefor, or to conform to usage or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
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19
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
Section 2.2 Form of Trustee's Certificate of Authentication. Subject
to Section 6.12, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
as Trustee
By
Authorized Signatory
Section 2.3 Securities Issuable in Global Form. If Securities of or
within a series are issuable in global form, as specified as contemplated by
Section 3.1, then, notwithstanding clause (8) of Section 3.1 and the provisions
of Section 3.2, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified therein
or in the Company Order to be delivered to the Trustee pursuant to Section 3.3
or 3.4. Subject to the provisions of Section 3.3 and, if applicable, Section
3.4, the Trustee shall deliver and redeliver any Security in permanent global
form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 3.3 or 3.4 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to
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20
the reduction in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of Section
3.3.
Notwithstanding the provisions of Section 3.7, unless otherwise
specified as contemplated by Section 3.1, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE 3
THE SECURITIES
Section 3.1 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 3.3, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (22) below) if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall distinguish
the Securities of such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6, 11.7 or 13.6);
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21
(3) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if other
than in the manner provided in Section 3.4;
(4) the date or dates, or the method by which such date or dates will
be determined, on which the principal and premium, if any, of the
Securities of the series shall be payable or the method of that
determination or the right to defer any interest payments;
(5) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by
which such rate or rates shall be determined, the date or dates from which
such interest shall accrue or the method by which such date or dates shall
be determined, the Interest Payment Dates on which such interest will be
payable and the Regular Record Date, if any, for the interest payable on
any Registered Security on any Interest Payment Date, or the method by
which such date shall be determined, and the basis upon which interest
shall be calculated if other than that of a 360-day year of twelve 30-day
months;
(6) the place or places, if any, other than or in addition to the
Borough of Manhattan, New York City, where the principal of (and premium,
if any), interest, if any, on, and Additional Amounts, if any, payable in
respect of, Securities of the series shall be payable, any Registered
Securities of the series may be surrendered for registration of transfer,
exchange or conversion and notices or demands to or upon the Company in
respect of the Securities of the series and this Indenture may be served;
(7) the period or periods within which, the date or dates on which,
the price or prices at which, the currency or currencies, currency unit or
units or composite currency or currencies in which, and other terms and
conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have the
option;
(8) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods
within which or the date or dates on which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in
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22
which, and other terms and conditions upon which Securities of the series
shall be redeemed, repaid or purchased, in whole or in part, pursuant to
such obligation;
(9) the terms, if any, upon which the Securities of the series may be
convertible into or exchanged for Securities of another series, Common
Stock or Preferred Stock, as the case may be, and the terms and conditions
upon which such conversion shall be effected (including the initial
conversion or exchange price or rate, the conversion or exchange period,
any adjustment of the applicable conversion price and any requirements
relative to the reservation of such shares for purposes of conversion or
exchange);
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series
shall be issuable;
(11) if other than Dollars, the Foreign Currency or Currencies in
which payment of the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series shall be
payable or in which the Securities of the series shall be denominated;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be determined
with reference to an index, formula or other method (which index, formula
or method may be based, without limitation, on one or more currencies,
currency units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
(13) if the principal amount payable at the stated maturity of the
Securities of the series will not be determinable as of any one or more
dates before the Stated Maturity, the amount that will be deemed to be the
principal amount as of any date for any purpose, including the principal
amount thereof which will be due and payable upon any Maturity other than
the Stated Maturity or which will be deemed to be outstanding as of any
date (or, in any such case, the manner in which the deemed principal amount
is to be determined), and if necessary, the manner of determining the
equivalent thereof in United States currency;
(14) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies, currency unit or units or composite currency or currencies
other than that in which such Securities are denominated or stated to be
payable, the
<PAGE>
23
period or periods within which, and the terms and conditions upon which,
such election may be made, and the time and manner of, and identity of the
exchange rate agent with responsibility for, determining the exchange rate
between the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are denominated or stated
to be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so
payable;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2
or, if applicable, the portion of the principal amount of Securities of the
series that is convertible in accordance with the provisions of this
Indenture, or the method by which such portion shall be determined;
(16) the applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms
then set forth in such Indenture relating to permitted consolidations,
mergers or sales of assets;
(17) the applicability, if any, of Section 14.2 and/or Section 14.3 to
the Securities of the series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Article 14;
(18)(a) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both,
any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may be
exchanged for Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any Securities of
the series are to be issuable initially in temporary global form and
whether any Securities of the series are to be issuable in permanent global
form with or without coupons and, if so, whether beneficial owners of
interests in any such permanent global Security may exchange such interests
for Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 3.5, and, if
Registered Securities of the series are to be issuable as a global
Security, the identity of the depositary for such series;
(18)(b) the date as of which any Bearer Securities of the series and
any temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of the
first Security of the series to be issued;
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24
(18)(c) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and/or terms of such certificates, documents or conditions;
(19) the appointment of any trustee, any authenticating or paying
agents, transfer agent or registrars;
(20) the terms, if any, of any guarantee of the payment of principal,
premium and interest with respect to the Securities of the series and any
corresponding changes to the provisions of the applicable indenture as then
in effect;
(21) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Securities of the series of any properties,
assets, moneys, proceeds, securities or other collateral, including whether
certain provisions of the TIA are applicable and any corresponding changes
to provisions of the applicable indenture as then in effect and including
provisions addressing priority, perfection and escrow arrangements related
to the security interest;
(22) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are consistent
with the Events of Default or covenants set forth herein, and any change in
the right of the Trustee or the Holders of the Securities to declare the
principal premium and interest with respect to debt securities due and
payable;
(23) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(24) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(25) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 10.8 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have
the option to redeem such Securities rather than pay such Additional
Amounts (and the terms of any such option); and
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25
(26) any other terms of the series.
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 3.3) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.
Section 3.2 Denominations. The Securities of each series shall be
issuable in such denominations as shall be specified as contemplated by Section
3.1. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
Section 3.3 Execution, Authentication, Delivery and Dating. The
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by the Chief Executive Officer, Chief Financial Officer, the
President or a Vice President of the Company and attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these individuals
on the Securities and coupons may be manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of
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26
such Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities; provided, however, that, in connection
with its original issuance, no Bearer Security shall be mailed or otherwise
delivered to any location in the United States; and provided further that,
unless otherwise specified with respect to any series of Securities pursuant to
Section 3.1, a Bearer Security may be delivered in connection with its original
issuance only if the Person entitled to receive such Bearer Security shall have
furnished a certificate to Euroclear or CEDEL, as the case may be, in the form
set forth in Exhibit A-1 to this Indenture or such other certificate as may be
specified with respect to any series of Securities pursuant to Section 3.1,
dated no earlier than 15 days prior to the earlier of the date on which such
Bearer Security is delivered and the date on which any temporary Security first
becomes exchangeable for such Bearer Security in accordance with the terms of
such temporary Security and this Indenture. If any Security shall be represented
by a permanent global Bearer Security, then, for purposes of this Section and
Section 3.4, the notation of a beneficial owner's interest therein upon original
issuance of such Security or upon exchange of a portion of a temporary global
Security shall be deemed to be delivery in connection with its original issuance
of such beneficial owner's interest in such permanent global Security. Except as
permitted by Section 3.6, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and cancelled.
If all the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon,
(i) an Opinion of Counsel stating that:
(a) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture and issued by the Company in
the manner and subject to any
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27
conditions specified in such Opinion of Counsel, will constitute
legal, valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency, moratorium, reorganization and other similar laws of
general applicability relating to or affecting the enforcement of
creditors' rights generally and to general equitable principles; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, no Event of Default with respect to any of the Securities shall
have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 3.1 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series; provided that such order,
opinion and certificates, with appropriate modifications to cover such future
issuances, shall be delivered at or before the time of issuance of the first
Security of such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 3.1.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9 together with a written statement (which
need not comply with Section 1.2 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security
<PAGE>
28
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
Section 3.4 Temporary Securities. (a) Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form, or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities. In the case of Securities of any series,
such temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 3.4(b) or as otherwise provided in or
pursuant to a Board Resolution) if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto) the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 3.3.
Until so exchanged, the temporary Securities of any series shall be entitled to
in all respects the same benefits under this Indenture as definitive Securities
of such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution,
this Section 3.4(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company
("DTC"). If any such temporary Security is issued in global form, then such
temporary global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive
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29
Securities, in aggregate principal amount equal to the principal amount of such
temporary global Security, executed by the Company. On or after the Exchange
Date, such temporary global Security shall be surrendered by the Common
Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 3.1, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary global Security,
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 3.1; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary global Security only
in compliance with the requirements of Section 3.3.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 3.1), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this
<PAGE>
30
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 3.1, interest payable on a temporary global Security
on an Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and CEDEL on such
Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a
certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
3.1), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 3.1). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 3.4(b) and of the third paragraph of Section 3.3 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
Section 3.5 Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby appointed "Security Registrar" for the purpose
of registering Registered Securities and transfers of Registered Securities on
such Security Register as herein provided. In the event that the Trustee shall
cease to be Security Registrar, it shall have the right to examine the Security
Register at all reasonable times.
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31
Subject to the provisions of this Section 3.5, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 3.5, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 3.1, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 3.3) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 3.1,
at the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 10.2, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant
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32
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is DTC, then, unless the terms of such global Security expressly permit
such global Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such global Security selected or approved by the Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Securities Exchange Act of 1934 if so required by applicable law or
regulation, the Company shall appoint a successor depositary with respect to
such global Security or Securities. If (x) a successor depositary for such
global Security or Securities is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such unwillingness,
inability or ineligibility, (y) an Event of Default has occurred and is
continuing and the beneficial owners representing a majority in principal amount
of the applicable series of Securities represented by such global Security or
Securities advise DTC to cease acting as depositary for such global Security or
Securities or (z) the Company, in its sole discretion, determines at any time
that all Outstanding Securities (but not less than all) of any series issued or
issuable in the form of one or more global Securities shall no longer be
represented by such global Security or Securities, then the Company shall
execute, and the Trustee shall authenticate and deliver, definitive Securities
of like series, rank, tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such global Security or
Securities. If any beneficial owner of an interest in a permanent global
Security is otherwise entitled to exchange such interest for Securities of such
series and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 3.1 and provided that any
applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver, definitive Securities
in aggregate principal amount equal to the principal amount of
<PAGE>
33
such beneficial owner's interest in such permanent global Security. On or after
the earliest date on which such interests may be so exchanged, such permanent
global Security shall be surrendered for exchange by DTC or such other
depositary as shall be specified in the Company Order with respect thereto to
the Trustee, as the Company's agent for such purpose; provided, however, that no
such exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities to be redeemed and ending on the
relevant Redemption Date if the Security for which exchange is requested may be
among those selected for redemption; and provided further that no Bearer
Security delivered in exchange for a portion of a permanent global Security
shall be mailed or otherwise delivered to any location in the United States. If
a Registered Security is issued in exchange for any portion of a permanent
global Security after the close of business at the office or agency where such
exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date or (ii)
any Special Record Date and the opening of business at such office or agency on
the related proposed date for payment of Defaulted Interest, interest or
Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent global Security is payable
in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6, 11.7 or 13.6 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i)
to issue, register the transfer of or exchange any Security if such Security may
be among those selected for redemption during a period beginning at the opening
of business 15 days before selection of the Securities to be redeemed under
Section 11.3 and ending at the close of business on (A) if such Securities are
issuable only as Registered
<PAGE>
34
Securities, the day of the mailing of the relevant notice of redemption and (B)
if such Securities are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if such Securities are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption, or (ii) to register the transfer of or
exchange any Registered Security so selected for redemption in whole or in part,
except, in the case of any Registered Security to be redeemed in part, the
portion thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series and like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption or (iv)
to issue, register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
any interest on and any
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35
Additional Amounts with respect to, Bearer Securities shall, except as otherwise
provided in Section 10.2, be payable only at an office or agency located outside
the United States and, unless otherwise specified as contemplated by Section
3.1, any interest on Bearer Securities shall be payable only upon presentation
and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
Section 3.7 Payment of Interest; Interest Rights Preserved. Except as
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 3.1, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 10.2; provided, however, that each
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 3.8, to the address of
such Person as it appears on the Security Register or (ii) transfer to an
account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 3.1 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 3.1, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be,
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36
with respect to that portion of such permanent global Security held for its
account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 3.1, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment (which shall not be less than 30 days after such notice is
received by the Trustee) and at the same time the Company shall deposit
with the Trustee an amount of money in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities
of such series are payable (except as otherwise specified pursuant to
Section 3.1 for the Securities of such series) equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted
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37
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Registered Securities of such series at
his address as it appears in the Security Register not less than 10 days
prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons
in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2). In case a Bearer Security of any series is
surrendered at the office or agency in a Place of Payment for such series
in exchange for a Registered Security of such series after the close of
business at such office or agency on any Special Record Date and before the
opening of business at such office or agency on the related proposed date
for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 3.8 Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 3.5 and 3.7) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the
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38
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the Holder of any Bearer Security and the Holder of any
coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
Section 3.9 Cancellation. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it;
provided, however, where the Place of Payment is located outside of the United
States, the Paying Agent at such Place of Payment may cancel the Securities
surrendered to it for such purposes prior to delivering the Securities to the
Trustee. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. Canceled Securities and coupons held by
the Trustee
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39
shall be destroyed by the Trustee and the Trustee shall deliver a certificate of
such destruction to the Company, unless by a Company Order the Company directs
their return to it.
Section 3.10 Computation of Interest. Except as otherwise specified as
contemplated by Section 3.1 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture. This Indenture
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities of such series herein expressly provided for and any right to receive
Additional Amounts), and the Trustee, upon receipt of a Company Order, and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series when:
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 3.5, (ii) Securities
and coupons of such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.6, (iii) coupons
appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in
Section 11.6, and (iv) Securities and coupons of such series for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
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40
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above,
has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose (A) an amount of
money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such
series are payable, (B) Government Obligations that through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, sufficient in each case to pay and discharge
the entire indebtedness on such Securities and such coupons not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest, and any Additional
Amounts with respect thereto, to the date of such deposit (in the
case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture as to such series have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 6.7, the obligations of the Company to any Authenticating Agent under
Section 6.12 and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations
of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive.
Section 4.2 Application of Trust Funds. Subject to the provisions of
the last paragraph of Section 10.3, all amounts deposited with the Trustee
pursuant to Section 4.1 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any), and any interest and
Additional Amounts for whose payment such
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41
amounts have been deposited with or received by the Trustee, but such amounts
need not be segregated from other funds except to the extent required by law.
All moneys deposited with the Trustee pursuant to Section 4.01 (and held by it
or any Paying Agent) for the payment of Securities subsequently converted shall
be returned to the Company upon Company Request.
ARTICLE 5
REMEDIES
Section 5.1 Events of Default. "Event of Default," wherever used
herein with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be occasioned by the provisions of Article 15 or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body)
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days (whether or not such payment is prohibited by the provisions of
Article 15); or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its
Maturity (whether or not such payment is prohibited by the provisions of
Article 15); or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with) and
continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(5) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
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42
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property of any of
them, or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
(7) any other Event of Default provided with respect to Securities of
that series.
As used in this Section 5.1, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
Section 5.2 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable. If an Event of Default specified in Section 5.1(5) or 5.1(6)
occurs, the principal of, and accrued interest (including Additional Amounts)
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43
on, all the Securities shall automatically, and without any declaration or other
action on the part of the Trustee or any Holder, become immediately due and
payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency or currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 3.1 for the Securities of such series):
(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that
series and any related coupons,
(B) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
borne by or provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium, if any) or
interest on Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related
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44
coupon when such interest or Additional Amount becomes due and payable
and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
Section 5.4 Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
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45
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts, if
any, owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby directed by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall request the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the Trustee
and any predecessor Trustee, their agents and counsel, and any other amounts due
the Trustee or any predecessor Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding; provided; however, that the Trustee
may, on behalf of the Holders, vote for the election of a trustee in bankruptcy
or similar official and be a member of a creditors' or other similar committee.
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities or Coupons. All rights of action and claims under this Indenture or
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
Section 5.6 Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on
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46
account of principal (or premium, if any) or interest and any Additional
Amounts, upon presentation of the Securities or coupons, or both, as the case
may be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: To the holders of Senior Indebtedness to the extent required
by the provisions of Article 15.
THIRD: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest and
any Additional Amounts payable, in respect of which or for the benefit of
which such money has been collected, ratably, without preference or
priority of any kind, according to the aggregate amounts due and payable on
such Securities and coupons for principal (and premium, if any), interest
and Additional Amounts, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company.
Section 5.7 Limitation on Suits. No Holder of any Security of any
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
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47
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts. Notwithstanding any other
provision in this Indenture, the Holder of any Security or coupon shall have the
right which is absolute and unconditional to receive payment of the principal of
(and premium, if any) and (subject to Sections 3.5 and 3.7) interest on, and any
Additional Amounts in respect of, such Security or payment of such coupon on the
respective due dates expressed in such Security or coupon (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be) and, if applicable, to convert such Security in accordance with the
provisions of the applicable supplemental indenture or Board Resolutions and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 5.9 Restoration of Rights and Remedies. If the Trustee or any
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 3.6, 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 permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every
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48
right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
Section 5.12 Control by Holders of Securities. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
Section 5.13 Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security of
such series or any related coupons, or
(2) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 5.14 Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby
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49
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 5.15 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
ARTICLE 6
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and
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50
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee (as Trustee, Paying Agent, Authenticating
Agent or Security Registrar) shall be subject to the provisions of this Section.
Section 6.2 Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest on
or any Additional Amounts with respect to any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any default
or breach of the character specified in Section 5.1(4) with respect to the
Securities and coupons of such series, no such notice to Holders shall be given
until at least 90 days after the occurrence thereof. For the purpose of this
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51
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to the Securities
of such series.
Section 6.3 Certain Rights of Trustee. Subject to the provisions of
TIA Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 3.3
which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may request and, in the absence
of bad faith on its part, rely upon an Officers' Certificate and Opinion
of Counsel;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or
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52
investigation, it shall be entitled to make reasonable examination of the
books, records and premises of the Company, personally or by agent or
attorney following reasonable notice to the Company;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
Section 6.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 6.5 May Hold Securities. The Trustee, any Paying Agent,
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
Section 6.6 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by
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law. The Trustee shall be under no liability for interest on any money received
by it hereunder except as otherwise agreed with the Company.
Section 6.7 Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel) except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its own part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.l(5) or Section 5.1(6), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium, if any) or interest
on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
Section 6.8 Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at
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54
least annually, pursuant to law or the requirements of Federal, State,
Territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article. If the Trustee has or shall acquire a conflicting interest
within the meaning of the TIA, the Trustee shall either eliminate such interest
or resign to the extent and in the manner provided by and subject to the
provisions of the TIA and this Indenture.
Section 6.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the Company or by
any Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the
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55
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided for notices to the Holders of Securities in Section 1.6. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 6.10 Acceptance of Appointment by Successor. (a) In case of
the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such
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56
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article 9 hereof, wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
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57
Section 6.11 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
Section 6.12 Appointment of Authenticating Agent. At any time when any
of the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption or
repayment thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the Company.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a bank or trust company or corporation organized and doing business and in
good standing under the laws of the United States of America or of any State or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such
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Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 1.6. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
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59
as Trustee
By: ,
as Authenticating Agent
By: ,
Authorized Signatory
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Disclosure of Names and Addresses of Holders. Every Holder
of Securities or coupons, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
Section 7.2 Reports by Trustee. Within 60 days after May 15 of each
year commencing with the first May 15 after the first issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such May
15 if required by TIA Section 313(a). A copy of each such report shall at the
time of such transmission to Holders be filed by the Trustee with each stock
exchange upon which any Securities are listed with the Commission and the
Company. The Company will notify the Trustee when any Securities are listed on
any stock exchange and of any delisting thereof.
Section 7.3 Reports by Company. The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Sections 13(a) or 13(b) or Section 15(d) of
the Securities Exchange Act of 1934; or, if the Company is not required to
file information, documents or reports pursuant to either of such Sections,
then it
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60
will file with the Trustee, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of
a security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) file with the Trustee and the Commission, if applicable, and
transmit by mail to the Holders of Securities, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided
in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission and other information as may be
required pursuant to the TIA at the time and in the manner provided
pursuant to such Act.
Section 7.4 Company to Furnish Trustee Names and Addresses of Holders.
(a) The Company will furnish or cause to be furnished to the Trustee:
(i) semi-annually, not later than 10 days after the Regular
Record Date for interest for each series of Securities, a list, in such
form as the Trustee may reasonably require, of the names and addresses of
the Holders of Registered Securities of such series as of such Regular
Record Date, or if there is no Regular Record Date for interest for such
series of Securities, semi-annually, upon such dates as are set forth in
the Board Resolution or indenture supplemental hereto authorizing such
series, and such information, if any, concerning the holders of Bearer
Securities that is known to the Company or any Paying Agent other than the
Company; provided, however, that the Company and such Paying Agents shall
have no obligation to investigate any matter relating to any holder of a
Bearer Security or a coupon appertaining thereto; and
(ii) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
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(b) The Company shall provide the Trustee with at least 30 days' prior
notice of any change in location of its principal executive offices or other
principal place of business.
ARTICLE 8
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
Section 8.1 Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease, transfer, convey or otherwise dispose of all
or substantially all of its assets to, or merge with or into any other Person,
provided that in any such case, (1) either the Company shall be the continuing
corporation, or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
or leases the Company's assets substantially as an entirety is a corporation,
partnership, limited liability company or trust organized and existing under the
laws of any United States jurisdiction and expressly assumes the due and
punctual payment of the principal of (and premium, if any) and any interest
(including all Additional Amounts, if any, payable pursuant to this Indenture on
all of the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company and shall have provided for conversion
rights, if applicable, in accordance with the relevant supplemental indenture or
Board Resolution, by supplemental indenture, complying with Article 9 hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation and (2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or such
Person or any Subsidiary as a result thereof as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of Default,
and no event which, after notice or the lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing.
Section 8.2 Rights and Duties of Successor Corporation. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor Person, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the predecessor corporation, except
in the event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor Person thereupon may cause to be
signed, and may issue either in its own name or in the name of the Company, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which
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62
previously shall have been signed and delivered by the officers of the Company
to the Trustee for authentication, and any Securities which such successor
Person thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
Section 8.3 Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease, transfer, conveyance or other dispositions
permitted under Section 8.1 is also subject to the condition that the Trustee
receive an Officers' Certificate and an Opinion of Counsel to the effect that
any such consolidation, merger, sale, lease, transfer or conveyance or other
dispositions and the assumption by any successor Person, complies with the
provisions of this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or
(2) to add to the covenants of the Company for the equal and ratable
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default
are to
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63
be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of
such series); provided, however, that in respect of any such additional
Events of Default 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 default or may limit the remedies available to the
Trustee upon such default or may limit the right of the Holders of a
majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive such
default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the Holders of Securities of any series or any
related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.1 and 3.1, including the
provisions and procedures relating to Securities convertible into Common
Stock or Preferred Stock, as the case may be; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture; provided such provisions shall not
adversely affect the interests of
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64
the Holders of Securities of any series or any related coupons in any
material respect; or
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 4.1, 14.2 and
14.3; provided that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect; or
(11) to make any change that does not adversely affect the rights of
any holder of Securities of the applicable series; or
(12) to make any change to comply with any requirement of the
Commission in connection with the qualification of the Indenture under TIA;
or
(13) to provide for the issuance of uncertificated Securities of one
or more series in addition to or in place of certificated Securities;
provided, however, that the uncertificated Securities are issued in
registered form for purposes of Section 163(f) of the Code or in a manner
such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code.
Section 9.2 Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any Security;
or reduce the principal amount thereof or the rate or amount of interest
thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change any obligation of
the Company to pay Additional Amounts pursuant to Section 10.8 (except as
contemplated by Section 8.1(1) and permitted by Section 9.1(1)), or reduce
the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2 or the amount thereof provable in
bankruptcy pursuant
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65
to Section 5.4, or adversely affect any right of repayment at the option of
the Holder of any Security, or change any Place of Payment where, or the
currency or currencies, currency unit or units or composite currency or
currencies in which, any Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption or repayment at the option of the Holder, on or after the
Redemption Date or the Repurchase Date, as the case may be); or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture;
(3) make any change that adversely affects the right to convert any
Security;
(4) modify the provisions of the Indenture relating to the ranking of
the Securities in a manner adverse to the Holders of the Securities;
(5) impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Securities; or
(6) modify any of the provisions of this Section, Section 5.13 or
Section 10.8, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
Section 9.3 Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the
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Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 9.4 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
Section 9.5 Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 9.6 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE 10
COVENANTS
Section 10.1 Payment of Principal, Premium, if any, Interest and
Additional Amounts. The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 10.8 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless
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67
otherwise specified with respect to Securities of any series pursuant to Section
3.1, at the option of the Company, all payments of principal may be paid by
check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
Section 10.2 Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency. If Securities of a series
are issuable as Bearer Securities, the Company will maintain: (A) in the Borough
of Manhattan, The City of New York, an office or agency where any Registered
Securities of that series may be presented or surrendered for payment or
conversion, where any Registered Securities of that series may be surrendered
for registration of transfer, where Securities of that series may be surrendered
for exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment or conversion in the circumstances described in the following
paragraph (and not otherwise); (B) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series which is located outside the
United States, an office or agency where Securities of that series and related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of that series pursuant to Section
10.8) or conversion; provided, however, that if the Securities of that series
are listed on the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the Company
will maintain a Paying Agent for the Securities of that series in Luxembourg or
any other required city located outside the United States, as the case may be,
so long as the Securities of that series are listed on such exchange; and (C)
subject to any laws or regulations applicable thereto, in a Place of Payment for
that series located outside the United States an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demand to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee (except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 10.8) or
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68
conversion at the offices specified in the Security, in London, England, and the
Company hereby appoints the same as its agent to receive such presentations,
surrenders, notices and demands), and the Company hereby appoints the Trustee
its agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; provided, however, that, if the Securities of a series are payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any Additional Amounts payable on Securities of such series
pursuant to Section 10.8) shall be made at the office of the Company's Paying
Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium, interest or
Additional Amounts, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture, is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency. Unless otherwise specified with respect to
any Securities pursuant to Section 3.1 with respect to a series of Securities,
the Company hereby designates as a Place of Payment for each series of
Securities the office or agency of the Company in the Borough of Manhattan, The
City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notice and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
Section 10.3 Money for Securities Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any series
of any Securities and any related coupons, it will, on or before each due date
of the
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principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) sufficient to pay the
principal (and premium, if any) or interest or Additional Amounts so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, before each due date of
the principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities or Additional Amounts in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest or Additional Amounts; and
(3) at any time during the continuance of any Event of Default upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying
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Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium, if any) or
interest on, or any Additional Amounts in respect of, any Security of any series
and remaining unclaimed for two years after such principal (and premium, if
any), interest or Additional Amounts has become due and payable shall be paid to
the Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 10.4 Existence. Subject to Article 8, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises,
except to the extent that the Board of Directors shall determine that the
failure to do so would not have a material adverse effect on the business,
assets, financial condition or results of operation of the Company (a "Material
Adverse Effect"); provided, however, that the Company shall not be required to
preserve any right or franchise if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
Section 10.5 Maintenance of Properties. The Company will cause all of
it properties used or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, except to the extent that the failure to do so would not have a
Material Adverse Effect on the Company; provided, however, that the Company
shall not be required to continue the operation or maintenance of any such
property or be prevented from disposing of such property if the Board of
Directors shall determine that such discontinuance or disposal
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is desirable in the conduct of the business of the Company or the business of
any Subsidiary and not disadvantageous in any material respect to the Holders.
Section 10.6 Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary and have a Material Adverse Effect; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 10.7 Statement as to Compliance. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year of the Company, a
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all terms, conditions and provisions under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 10.7, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
Section 10.8 Additional Amounts. If any Securities of a series provide
for the payment of Additional Amounts, the Company will pay to the Holder of any
Security of such series or any coupon appertaining thereto Additional Amounts as
may be specified as contemplated by Section 3.1. Whenever in this Indenture
there is mentioned, in any context except in the case of Section 5.2(1), the
payment of the principal of or any premium or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
by the terms of such series established pursuant to Section 3.1 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Except as otherwise specified as contemplated by Section 3.1, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is made,
and at least 10 days prior to each date of payment of principal and any premium
or interest if there has been any change with respect to the matters set forth
in the below-mentioned Officers'
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Certificate, the Company will furnish the Trustee and the Company's principal
Paying Agent or Paying Agents, if other than the Trustee, with an Officers'
Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
or any related coupons who are not United States persons without withholding for
or on account of any tax, assessment or other governmental charge described in
the Securities of the series. If any such withholding shall be required, then
such Officers' Certificate shall specify by country the amount, if any, required
to be withheld on such payments to such Holders of Securities of that series or
related coupons and the Company will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. In the event that
the Trustee or any Paying Agent, as the case may be, shall not so receive the
above-mentioned certificate, then the Trustee or such Paying Agent shall be
entitled (i) to assume that no such withholding or deduction is required with
respect to any payment of principal or interest with respect to any Securities
of a series or related coupons until it shall have received a certificate
advising otherwise and (ii) to make all payments of principal and interest with
respect to the Securities of a series or related coupons without withholding or
deductions until otherwise advised. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them or in reliance on any Officers' Certificate furnished pursuant to this
Section or in reliance on the Company's not furnishing such an Officers'
Certificate.
The obligations of the Company under this Section shall survive
any termination, defeasance or discharge of the Indenture or applicable
Security.
Section 10.9 Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 10.4 to 10.6, inclusive, if before the time for such compliance the
Holders of at least a majority in principal amount of all outstanding Securities
of such series, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
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ARTICLE 11
REDEMPTION OF SECURITIES
Section 11.1 Applicability of Article. Securities of any series which
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
3.1 for Securities of any series) in accordance with this Article.
Section 11.2 Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
all or any part of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 11.4 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 11.3 Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
Section 11.4 Notice of Redemption. Notice of redemption shall be given
in the manner provided in Section 1.6, not less than 30 days nor more than 60
days prior to the Redemption Date, unless a shorter period is specified by the
terms
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of such series established pursuant to Section 3.1, to each Holder of Securities
to be redeemed, but failure to give such notice in the manner herein provided to
the Holder of any Security designated for redemption as a whole or in part, or
any defect in the notice to any such Holder, shall not affect the validity of
the proceedings for the redemption of any other such Security or portion
thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 11.6, if any, and Additional Amounts, if
any,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 11.6, if
any, will become due and payable upon each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon shall
cease to accrue on and after said date,
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and accrued interest, if any, or for conversion,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by
all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption
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Price, unless security or indemnity satisfactory to the Company, the
Trustee for such series and any Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 3.5 or otherwise,
the last date, as determined by the Company, on which such exchanges may be
made,
(10) the CUSIP number of such Security, if any, and
(11) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or rate
and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by
the Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
Section 11.5 Deposit of Redemption Price. Not later than 11:00 a.m. on
the Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not do
in the case of a sinking fund payment under Article 12, segregate and hold in
trust as provided in Section 10.3) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) sufficient to pay on
the Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
Section 11.6 Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
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coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 10.2)
and, unless otherwise specified as contemplated by Section 3.1, only upon
presentation and surrender of coupons for such interest; and provided further
that, except as otherwise provided with respect to Securities convertible into
Common Stock or Preferred Stock, installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 10.2) and, unless otherwise specified as contemplated by Section 3.1,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
Section 11.7 Securities Redeemed in Part. Any Registered Security
which is to be redeemed only in part (pursuant to the provisions of this Article
or of Article 12) shall be surrendered at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
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ARTICLE 12
SINKING FUNDS
Section 12.1 Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any mandatory sinking
fund payment with respect to the Securities of a series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series, (1) deliver Outstanding Securities of such series (other than any
previously called for redemption) together, in the case of any Bearer Securities
of such series, with all unmatured coupons appertaining thereto and (2) apply as
a credit Securities of such series which have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities, as provided for by the terms of such Securities, or which have
otherwise been acquired by the Company; provided that such Securities so
delivered or applied as a credit have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
applicable Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund
payment shall be reduced accordingly.
Section 12.3 Redemption of Securities for Sinking Fund. Not less than
60 days prior to each sinking fund payment date for Securities of any series,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that
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series pursuant to Section 12.2, and the optional amount, if any, to be added in
cash to the next ensuing mandatory sinking fund payment, and will also deliver
to the Trustee any Securities to be so delivered and credited. If such Officers'
Certificate shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Company shall thereupon be obligated
to pay the amount therein specified. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 11.3 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 11.4. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 11.6 and 11.7.
ARTICLE 13
REPURCHASE AT THE OPTION OF HOLDERS
Section 13.1 Applicability of Article. Repurchase of Securities of any
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
3.1) in accordance with this Article.
Section 13.2 Repurchase of Securities. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repurchase Date specified in or pursuant to the terms of
such Securities. The Company covenants that not later than 12:00 noon on the
Repurchase Date it will deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 3.1 for the Securities of such series) sufficient to pay the principal
(or, if so provided by the terms of the Securities of any series, a percentage
of the principal) of, and (except if the Repurchase Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof, as
the case may be, to be repaid on such date.
Section 13.3 Notice; Exercise of Repurchase Right. (a) On or before
the 15th day after the Company knows or reasonably should know an event giving
rise to a repurchase right has occurred, the Company, or at the written request
of the Company, the Trustee (in the name and at the expense of the Company),
shall give notice of the occurrence of such event and of the repurchase right
set forth herein
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arising as a result thereof by first-class mail, postage prepaid, or by
telefacsimile with written acknowledgment of transmittal to each Holder of the
Securities at such Holder's address appearing in the Security Register. The
Company shall also deliver a copy of such notice of a repurchase right to the
Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and
(4) the instructions a Holder must follow to exercise its repurchase
right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred such an event.
(b) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the 30th day after the
date of transmittal of the notice referred to in (a) above (i) written notice of
the Holder's exercise of such right, which notice shall set forth the name of
the Holder, the principal amount of the Security or Securities (or portion of a
Security) to be repurchased, and a statement that an election to exercise the
repurchase right is being made thereby, and (ii) the Security or Securities with
respect to which the repurchase right is being exercised, duly endorsed for
transfer to the Company. Such written notice shall be irrevocable. If the
Repurchase Date falls between any Regular Record Date and the corresponding
succeeding Interest Payment Date, Securities to be repurchased must be
accompanied by payment from the Holder of an amount equal to the interest
thereon which the registered Holder thereof is to receive on such Interest
Payment Date.
Section 13.4 When Securities Presented for Repurchase Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repurchase Date therein
specified, and on and after such Repurchase Date (unless the Company shall
default in the payment of such Securities on such Repurchase Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be
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void. Upon surrender of any such Security for repayment in accordance with such
provisions, together with all coupons, if any, appertaining thereto maturing
after the Repurchase Date, the principal amount of such Security so to be repaid
shall be paid by the Company, together with accrued interest, if any, to the
Repurchase Date; provided, however, that coupons whose Stated Maturity is on or
prior to the Repurchase Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 10.2)
and, unless otherwise specified pursuant to Section 3.1, only upon presentation
and surrender of such coupons; and provided further that, in the case of
Registered Securities, installments of interest, if any, whose Stated Maturity
is on or prior to the Repurchase Date shall be payable (but without interest
thereon, unless the Company shall default in the payment thereof) to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.7.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repurchase Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 13.2 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 10.2) and, unless
otherwise specified as contemplated by Section 3.1, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repurchase Date) shall, until
paid, bear interest from the Repurchase Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
Section 13.5 Securities Not Repurchased on Repurchase Date. If any
Security surrendered for repurchase shall not be so paid on the Repurchase Date,
the principal of such Security shall, until paid, bear interest from the
Repurchase Date at a rate borne by such Security.
Section 13.6 Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or
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Securities of the same series, of any authorized denomination specified by the
Holder, in an aggregate principal amount equal to and in exchange for the
portion of the principal of such Security so surrendered which is not to be
repaid.
ARTICLE 14
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.1 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. The Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 14.2 (if applicable) or Section 14.3
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
Section 14.2 Defeasance and Discharge. Upon the Company's exercise of
the above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto and the provisions of Article 15 hereof shall cease to be
effective on the date the conditions set forth in Section 14.4 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 14.5 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 14.4 and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any) and interest, if any, on such Securities and any coupons appertaining
thereto when such payments are due, (B) the Company's obligations with respect
to such Securities under Sections 3.5, 3.6, 10.2 and 10.3 and with respect to
the payment of Additional Amounts, if any, on such Securities as contemplated by
Section 10.8, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article
14, the Company may exercise its option under this Section notwithstanding the
prior exercise of its option under Section 14.3 with respect to such Securities
and any coupons appertaining thereto.
Section 14.3 Covenant Defeasance. Upon the Company's exercise of the
above option applicable to this Section with respect to any Securities of or
within
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a series, the Company shall be released from its obligations under Sections 10.4
to 10.6, inclusive, and, if specified pursuant to Section 3.1, its obligations
under any other covenant, with respect to such Outstanding Securities and any
coupons appertaining thereto and the provisions of Article 15 hereof shall cease
to be effective, on and after the date the conditions set forth in Section 14.4
are satisfied (hereinafter, "covenant defeasance"), and such Securities and any
coupons appertaining thereto shall thereafter be deemed to be not "Outstanding"
for the purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with Sections 10.4
to 10.6, inclusive, or such other covenant, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to such Outstanding Securities and any
coupons appertaining thereto, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such Section or such other covenant, whether directly or indirectly, by reason
of any reference elsewhere herein to any such Section or such other covenant or
by reason of reference in any such Section or such other covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a default or an Event of Default under Section 5.1(4) (with respect
to any of Sections 10.4, 10.5 or 10.6) or 5.1(7) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Securities and any coupons appertaining thereto shall be unaffected thereby.
Section 14.4 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 14.2 or Section 14.3
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 6.8 who shall agree to comply with the provisions of this Article 14
applic able to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit in which
such Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2) Government Obligations applicable to such
Securities and coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment of principal of (and premium, if any) and interest, if any,
on such Securities and any coupons appertaining thereto, money in an amount, or
(3) a combination thereof, in any case, in an amount, sufficient, without
consideration of any reinvestment of such principal and interest, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall
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be applied by the Trustee (or other qualifying trustee) to pay and discharge,
(i) the principal of (and premium, if any) and interest, if any, on such
Outstanding Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (ii) any
mandatory sinking fund payments or analogous payments applicable to such
Outstanding Securities and any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this Indenture
and of such Securities and any coupons appertaining thereto.
(b) At the time of such deposit: (A) no default in the payment of
all or a portion of principal of (or premium, if any) or interest on or other
obligations in respect of any Senior Indebtedness shall have occurred and be
continuing, and no event of default with respect to any Senior Indebtedness
shall have occurred and be continuing and shall have resulted in such Senior
Indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable and (B) no other event with
respect to any Senior Indebtedness shall have occurred and be continuing
permitting (after notice or the lapse of time, or both) the holders of such
Senior Indebtedness (or a trustee on behalf of the holders thereof) to declare
such Senior Indebtedness due and payable prior to the date on which it would
otherwise have become due and payable, or, in the case of either clause (A) or
clause (B) above, each such default or event of default shall have been cured or
waived or shall have ceased to exist.
(c) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(d) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 5.1(5) and 5.1(6) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(e) In the case of an election under Section 14.2, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be
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subject to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance had not occurred.
(f) In the case of an election under Section 14.3, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 14.2 or the covenant defeasance under
Section 14.3 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 14.2 or Section 14.3 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities, if then listed on any securities
exchange, will not be delisted as a result of such deposit.
(i) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Article 6 and for purposes
of the TIA with respect to any securities of the Company.
(j) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 3.1.
Section 14.5 Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.3, all money and Government Obligations (or other
property as may be provided pursuant to Section 3.1) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 14.5, the "Trustee") pursuant to Section 14.4 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own
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85
Paying Agent) as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due thereon
in respect of principal (and premium, if any) and interest and Additional
Amounts, if any, but such money need not be segregated from other funds except
to the extent required by law. Money so held in trust shall not be subject to
the provisiuons of Article 15.
Unless otherwise specified with respect to any Security pursuant to
Section 3.1, if, after a deposit referred to in Section 14.4(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 3.1 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 14.4(a) has been made in respect of such
Security, or (b) a Currency Conversion Event occurs in respect of the currency
or currency unit in which the deposit pursuant to Section 14.4(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any), and
interest, if any, on such Security as the same becomes due out of the proceeds
yielded by converting (from time to time in the case of any such election) the
amount or other property deposited in respect of such Security into the currency
or currency unit in which such Security becomes payable as a result of such
election or Currency Conversion Event based on the applicable market exchange
rate for such currency or currency unit in effect on the second Business Day
prior to each payment date, except, with respect to a Currency Conversion Event,
for such currency or currency unit in effect (as nearly as feasible) at the time
of the Currency Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 14.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 6.7, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 14.4 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance, as applicable, in
accordance with this Article.
Section 14.6 Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 14.2 or 14.3 by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or
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otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
14.2 or 14.3; provided, however, that if the Company makes any payment of
principal of, premium, if any, or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held by
the Trustee or the Paying Agent.
ARTICLE 15
SUBORDINATION
Section 15.1 Agreement to Subordinate. The Company agrees, and each
Holder of Securities by accepting a Security agrees, that the indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article, to the prior payment in full of all
Senior Indebtedness and that the subordination is for the benefit of the holders
of Senior Indebtedness.
Section 15.2 Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest (including
interest accruing after the commencement of any such proceeding) to the
date of payment on the Senior Indebtedness before Holders of Securities
shall be entitled to receive any payment of principal of or interest on
Securities; and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Holders of Securities would be entitled but for this
Article shall be made to holders of Senior Indebtedness as their interests
may appear, except that Holders of Securities may receive securities that
are subordinated to Senior Indebtedness to at least the same extent as the
Securities.
Section 15.3 Default on Senior Indebtedness. The Company may not pay
principal of or interest on the Securities and may not acquire any Securities
for cash or property other than capital stock of the Company if:
(1) a default on Senior Indebtedness occurs and is continuing that
permits holders of such Senior Indebtedness to accelerate its maturity, and
<PAGE>
87
(2) the default is the subject of judicial proceedings or the Company
receives a notice of the default from a person who may give it pursuant to
Section 15.11. If the Company receives any such notice, a similar notice
received within nine months thereafter relating to the same default on the
same issue of Senior Debt shall not be effective for purposes of this
Section.
The Company may resume payments on the Securities and may acquire them
when:
(1) the default is cured or waived, or
(2) 120 days pass after the notice is given if the default is not the
subject of judicial proceedings,
if this Article otherwise permits the payment or acquisition at that time.
Section 15.4 Acceleration of Securities. If payment of the Securities
is accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration. The Company may pay the
Securities when 120 days pass after the acceleration occurs if this Article
permits the payment at that time.
Section 15.5 When Distribution Must Be Paid Over. If a distribution is
made to Holders of Securities that because of this Article should not have been
made to them, the Holders of Securities who receive the distribution shall hold
it in trust for holders of Senior Indebtedness and pay it over to them as their
interests may appear.
Section 15.6 Notice by Company. The Company shall promptly notify the
Trustee and any Paying Agent of any facts known to the Company that would cause
a payment of principal of or interest on Securities to violate this Article.
Section 15.7 Subrogation. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Holders of Securities shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to the Holders of Securities have been applied to the payment
of Senior Indebtedness. A distribution made under this Article to holders of
Senior Indebtedness which otherwise would have been made to Holders of
Securities is not, as between the Company and Holders of Securities, a payment
by the Company on Senior Indebtedness.
Section 15.8 Relative Rights. This Article defines the relative rights
of Holders of Securities and holders of Senior Indebtedness. Nothing in this
Indenture shall:
<PAGE>
88
(1) impair, as between the Company and Holders of Securities, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
(2) affect the relative rights of Holders of Securities and creditors
of the Company other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Holders of Securities from exercising
its available remedies upon an Event of Default, subject to the rights of
holders of Senior Indebtedness to receive distributions otherwise payable
to Holders of Securities.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still an Event of Default
as provided elsewhere herein.
Section 15.9 Subordination May Not Be Impaired by Trust. No right of
any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
Section 15.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative.
Section 15.11 Rights of Trustee and Paying Agent. The Trustee or any
Paying Agent may continue to make payments on the Securities until it receives
notice of facts that would cause a payment of principal of or interest on the
Securities to violate this Article. Only the Company, a Representative or a
holder of an issue of Senior Indebtedness that has no Representative may give
the notice.
* * * * *
<PAGE>
89
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
CD RADIO INC.
By:
Title:
Attest:
Title:
as Trustee
By:
Title:
Attest:
Title:
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the day of , before me personally came , to
me known, who, being by me duly sworn, did depose and say that he/she resides
at , , that he/she is of CD RADIO INC., one of the
parties described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto by authority of CD RADIO INC.'s board of
directors.
[Notarial Seal]
Notary Public
COMMISSION EXPIRES
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the day of , before me personally came , to me
known, who, being by me duly sworn, did depose and say that he/she resides
at , that he/she is of , one of the parties described in
and which executed the foregoing instrument, and that he/she signed his/her
name thereto by authority of the Board of Trustees.
[Notarial Seal]
Notary Public
COMMISSION EXPIRES
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as
set forth below, the above-captioned Securities held by you for our account (i)
are owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise CD Radio Inc. or its agent that such financial institution
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in
addition, if the owner is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the above-captioned Securities held by you for our account in accordance with
your Operating Procedures
<PAGE>
if any applicable statement herein is not correct on such date, and in the
absence of any such notification it may be assumed that this certification
applies as of such date.
This certificate excepts and does not relate to [U.S.$]
__________ of such interest in the above-captioned Securities in respect of
which we are not able to certify and as to which we understand an exchange for
an interest in a Permanent Global Security or an exchange for and delivery of
definitive Securities (or, if relevant, collection of any interest) cannot be
made until we do so certify.
We understand that this certificate may be required in
connection with certain tax legislation in the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
[To be dated no earlier than the 15th day prior
to (i) the Exchange Date or (ii) the relevant
Interest Payment Date occurring prior to the
Exchange Date, as applicable]
[Name of Person Making
Certification]
(Authorized Signatory)
Name:
Title:
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written
certifications that we have received in writing, by tested telex or by
electronic transmission from each of the persons appearing in our records as
persons entitled to a portion of the principal amount set forth below (our
"Member Organizations") substantially in the form attached hereto, as of the
date hereof, [U.S.$] _____________ principal amount of the above-captioned
Securities (i) is owned by person(s) that are not citizens or residents of the
United States, domestic partnerships, domestic corporations or any estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source ("United States person(s)"), (ii) is owned by United
States person(s) that are (a) foreign branches of United States financial
institutions (financial institutions, as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
financial institution has agreed, on its own behalf or through its agent, that
we may advise CD Radio Inc. or its agent that such financial institution will
comply with the requirements of Section 165(j)(3)(A), (B) or (c) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is
owned by United States or foreign financial institution(s) for purposes of
resale during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that
financial institutions described in clause (iii) above (whether or not also
described in clause (i) or (ii)) have certified that they have not acquired the
Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available
herewith for exchange (or, if relevant, collection of any interest) any portion
of the temporary global Security representing the above-captioned Securities
excepted in the
<PAGE>
above-referenced certificates of Member Organizations and (ii) as of the date
hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in
connection with certain tax legislation in the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
[To be dated no earlier than the Exchange Date
or the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of
New York, Brussels Office,] as
Operator of the Euroclear System
[Cedel S.A.]
By:
<PAGE>
EXHIBIT 5.1
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 Avenue of the Americas
New York, NY 10019-6064
September 21, 1999
CD Radio Inc.
1221 Avenue of the Americas
New York, New York 10020
Registration Statement on Form S-3 of
CD Radio Inc. (Registration No. 333-86003)
------------------------------------------
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 (the
"Registration Statement") filed by CD Radio Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission on August 27, 1999, as
amended on September 15, 1999, as provided by the Securities Act of 1933, as
amended (the "Securities Act"), we have been requested to render our opinion as
to the legality of the securities which the Company proposes to register under
the Registration Statement. The Registration Statement relates to the proposed
registration under the Securities Act of up to $500 million in securities which
may include any or all of: (i) debentures, notes and other debt securities in
one or more series (the "Debt Securities") which may be either senior debt
securities or subordinated debt securities of the Company; (ii) shares of
Preferred Stock of the Company (the "Preferred Shares"); (iii) shares of common
stock of the Company, par value $0.001 per share (the "Common Stock"); and (iv)
warrants to purchase Common Stock, Preferred Shares or Debt Securities (the
"Warrants" and, together
<PAGE>
2
with the Debt Securities, Preferred Shares and Common Stock, the "Securities").
The Securities may be offered and sold from time to time as indicated in the
prospectus which forms a part of the Registration Statement (the "Prospectus")
and as set forth in one or more supplements to the Prospectus (each, a
"Prospectus Supplement"). This opinion is furnished to you at your request to
enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17
C.F.R. Section 229.601(b)(5), in connection with the Registration Statement.
In connection with this opinion, we have examined a copy,
certified or otherwise identified to our satisfaction, of the Registration
Statement. In addition, we have examined: (1) those corporate records of the
Company as we have considered appropriate, including copies of its Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation") and
Amended and Restated By-laws (the "Bylaws"), as in effect on the date of this
letter, and certified copies of resolutions of the board of directors of the
Company relating to the Registration Statement; and (2) those other
certificates, agreements and documents as we deemed relevant and necessary as a
basis for the opinions expressed below.
In our examination of the documents referred to above, we have
assumed, without independent investigation, (1) the issuance, sale, amount and
terms of the Securities to be offered from time to time will be duly authorized
and established by proper action of the board of directors of the Company (each,
a "Board Action") and in accordance with the Company's Certificate of
Incorporation, Bylaws and applicable Delaware law; (2) prior to any issuance of
Preferred Shares, an appropriate Certificate or appropriate Certificates of
Designation relating to a class or
<PAGE>
3
series of the Preferred Shares to be sold under the Registration Statement will
have been duly authorized and adopted by Board Action and filed with the
Secretary of State of Delaware; (3) any Debt Securities will be issued in
accordance with one or more indentures (each, an "Indenture"), between the
Company and a financial institution identified in the Indenture as a trustee
(each, a "Trustee"), and the form of each Indenture will be filed by the Company
as an exhibit to a Current Report on Form 8-K prior to issuance of the Debt
Securities; (4) any Warrants will be issued under one or more warrant agreements
(each, a "Warrant Agreement") between the Company and a financial institution
identified in the Warrant Agreement as a warrant agent (each, a "Warrant
Agent"), and the form of each Warrant Agreement will be filed by the Company as
an exhibit to a Current Report on Form 8-K prior to issuance of the Warrants;
(5) the genuineness of all signatures; (6) the authenticity of all documents
submitted to us as originals; (7) the conformity to the original documents of
all documents submitted to us as certified, photostatic, reproduced or conformed
copies of validly existing agreements or other documents; (8) the authenticity
of the latter documents; (9) the statements regarding matters of fact in the
certificates, records, agreements, instruments and documents that we examined
are accurate and complete; and (10) the legal capacity of all individuals who
have executed any of the documents that we examined.
In expressing our opinions, we have also relied upon the
factual matters contained in the representations and warranties of the Company
made in the documents and upon certificates of public officials and officers of
the Company.
<PAGE>
4
Based on the above, and subject to the stated assumptions,
exceptions and qualifications, we are of the opinion that:
1. When the Registration Statement has become effective under
the Securities Act, upon due authorization by Board Action of an issuance of
shares of Common Stock, and upon issuance and delivery of certificates for
shares of Common Stock against payment for the shares in accordance with the
terms of the Board Action and any applicable underwriting agreement or purchase
agreement, and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement or upon the exercise of any Warrants for Common
Stock in accordance with the terms of the Warrants, or conversion or exchange of
Preferred Shares or Debt Securities that, by their terms, are convertible into
or exchangeable for shares of Common Stock, and receipt by the Company of any
additional consideration payable upon the conversion, exchange or exercise, the
shares of Common Stock represented by the certificates will be validly issued,
fully paid and non-assessable.
2. When (i) the Registration Statement has become effective
under the Securities Act, (ii) a series of the Preferred Shares has been duly
authorized and established by applicable Board Action, in accordance with the
terms of the Certificate of Incorporation, the Bylaws and applicable law, (iii)
an appropriate Certificate of Designation has been filed and (iv) the issuance
of those Preferred Shares has been appropriately authorized by applicable Board
Action, and, upon the issuance and delivery of certificates for the Preferred
Shares against payment in accordance with the terms of the Board Action and any
applicable underwriting or purchase agreement, and as contemplated by the
Registration Statement and/or the
<PAGE>
5
applicable Prospectus Supplement, those Preferred Shares will be validly issued,
fully paid and non-assessable.
3. When (i) the Registration Statement has become effective
under the Securities Act, (ii) an Indenture providing for the issuance of a
series of Debt Securities has been duly executed and delivered by the Company
and the Trustee named in the Indenture, (iii) the issuance of any series of Debt
Securities has been duly authorized by applicable Board Action and the terms of
the Debt Securities have been duly established in accordance with the provisions
of the Indenture and (iv) the Debt Securities have been duly executed on behalf
of the Company, duly authenticated by the Trustee and delivered against payment
in accordance with the terms of the Board Action, any applicable underwriting
agreement or purchase agreement, the Indenture and any applicable supplemental
indenture, and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement, the Debt Securities will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement may be (a) limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent conveyances and transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and (b) subject to
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
4. When (i) the Registration Statement has become effective
under the Securities Act, (ii) a Warrant Agreement conforming to the description
in the Registration Statement and/or the applicable Prospectus Supplement has
been duly
<PAGE>
6
authorized by applicable Board Action and delivered by the Company and the
Warrant Agent named in the Warrant Agreement, (iii) Warrants conforming to the
requirements of the related Warrant Agreement have been duly countersigned or
authenticated, as required, by the Warrant Agent and duly executed and delivered
on behalf of the Company against payment in accordance with the terms of the
Board Action, any applicable underwriting agreement or purchase agreement and
the applicable Warrant Agreement and as contemplated by the Registration
Statement and/or the applicable Prospectus Supplement, the Warrants will
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms, except as enforcement may be (a) limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent conveyances and transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and (b) subject to
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
To the extent that the obligations of the Company under any
Warrant Agreement may be dependent upon the following matters, we assume for
purposes of this opinion that (1) the applicable Warrant Agent is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (2) the Warrant Agent has the necessary
organizational and legal power and authority to perform its obligations under
the Warrant Agreement; (3) the Warrant Agent is duly qualified to engage in the
activities contemplated by the Warrant Agreement; (4) the Warrant Agreement has
been duly authorized, executed and delivered by the Warrant Agent and
constitutes the valid and binding obligation of the Warrant Agent
<PAGE>
7
enforceable against the Warrant Agent in accordance with its terms; and (5) the
Warrant Agent is in compliance, with respect to acting as a Warrant Agent under
the Warrant Agreement, with all applicable laws and regulations.
To the extent that the obligations of the Company under any
Indenture may be dependent upon the following matters, we assume for purposes of
this opinion that (1) the Trustee under the Indenture is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (2) the Trustee has the necessary organizational and legal power
and authority to perform its obligations under the Indenture; (3) the Trustee is
duly qualified to engage in the activities contemplated by the Indenture; (4)
the Indenture has been duly authorized, executed and delivered by the Trustee
and constitutes the valid and binding obligation of the Trustee enforceable
against the Trustee in accordance with its terms; and (5) the Trustee is in
compliance, with respect to acting as a trustee under the Indenture, with all
applicable laws and regulations.
Our opinions are limited to the laws of the State of New York,
the federal laws of the United States of America and the General Corporation Law
of the State of Delaware. Our opinions are rendered only with respect to the
laws, and the rules, regulations and orders under those laws, that are currently
in effect. Please be advised that no member of this firm is admitted to practice
in the State of Delaware.
We consent to the use of our name in the Registration
Statement and in the prospectus in the Registration Statement as it appears
under the caption "Legal Matters" and to the use of this opinion as an exhibit
to the Registration Statement. In giving this consent, we do not admit that we
come within the category of persons
<PAGE>
8
whose consent is required by the Securities Act or by the rules and regulations
under the Securities Act.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
____________________________________________
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
