<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 7, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TELE-COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 84-1260157
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
TERRACE TOWER II
5619 DTC PARKWAY
ENGLEWOOD, COLORADO 80111-3000
(303) 267-5500
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STEPHEN M. BRETT, ESQ. COPY TO:
TELE-COMMUNICATIONS, INC. ROBERT W. MURRAY JR., ESQ.
TERRACE TOWER II BAKER & BOTTS, L.L.P.
5619 DTC PARKWAY 885 THIRD AVENUE
ENGLEWOOD, COLORADO 80111-3000 NEW YORK, NEW YORK 10022-4834
(303) 267-5500
(NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this registration statement as determined by
market conditions.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED
SECURITIES TO BE AGGREGATE AMOUNT AGGREGATE OFFERING MAXIMUM AGGREGATE AMOUNT OF
REGISTERED TO BE REGISTERED PRICE PER UNIT OFFERING PRICE(1)(3) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Tele-Communications,
Inc. Series A TCI Group
Common Stock, par value
$1.00 per share(2)....... (4) (4) $1,000,000,000 $344,827.59(4)
- --------------------------
Series Preferred Stock,
par value $.01 per
share....................
- --------------------------
Debt Securities of TCI
Communications, Inc......
</TABLE>
===============================================================================
(1) In United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies.
(2) Includes such presently indeterminate number of shares which may be (a)
issuable from time to time upon conversion of the Debt Securities and
Series Preferred Stock registered hereunder and (b) necessary to adjust the
number of shares from time to time reserved for issuance upon such
conversion in accordance with the anti-dilution provisions of the Debt
Securities or Series Preferred Stock, respectively, as a result of a stock
split, stock dividend or other adjustment to or change in the outstanding
shares of Series A TCI Group Common Stock.
(3) Such amount includes the principal amount of any Debt Securities issued at
their principal amount and the issue price rather than the principal amount
of any Debt Securities issued at an original issue discount. No separate
consideration will be received for shares of Series A TCI Group Common
Stock that are issuable upon conversion of Debt Securities or Series
Preferred Stock that are convertible into Series A TCI Group Common Stock.
In no event will the aggregate initial offering price of all securities
registered hereby exceed $1 billion. Such securities may be sold from time
to time separately or in any combination of units.
(4) The aggregate amount to be registered and the aggregate offering price per
unit have been omitted pursuant to Securities Act Release No. 6964. The
registration fee has been calculated in accordance with Rule 457(o) under
the Securities Act of 1933.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 7, 1996
PROSPECTUS
TELE-COMMUNICATIONS, INC.
SERIES A TCI GROUP COMMON STOCK
SERIES PREFERRED STOCK
DEBT SECURITIES
Tele-Communications, Inc. (the "Company") from time to time may offer (i)
shares of Tele-Communications, Inc. Series A TCI Group Common Stock, par value
$1.00 per share ("TCI Group Series A Common Stock"), (ii) shares of the
Company's Series Preferred Stock, par value $.01 per share ("Series Preferred
Stock"), which may be issued in the form of depositary shares evidencing
depositary receipts ("Depositary Shares") and (iii) debentures, notes, bonds or
other evidences of indebtedness of the Company ("Debt Securities") (TCI Group
Series A Common Stock, Series Preferred Stock and Debt Securities in respect of
which this Prospectus is being delivered are collectively referred to as the
"Offered Securities"), or any combination of the foregoing, at an aggregate
initial offering price not to exceed $1 billion (or the equivalent thereof
denominated in one or more foreign currencies, foreign currency units or
composite currencies), at prices and on terms to be determined at or prior to
the time of sale. Shares of TCI Group Series A Common Stock may be offered in
amounts, at market prices prevailing at the time of sale or at prices and on
terms to be determined at or prior to the time of sale and set forth in a
supplement to this Prospectus. See "Description of Common Stock." Series
Preferred Stock may be issued as a series of convertible Series Preferred Stock
which, unless previously redeemed or otherwise purchased, will be convertible
at any time during the conversion period specified in a supplement to this
Prospectus into shares of TCI Group Series A Common Stock. Series Preferred
Stock may be offered as separate series in amounts, at prices and on terms to
be determined at the time of sale and set forth in a supplement to this
Prospectus. See "Description of Series Preferred Stock." Debt Securities may be
offered as convertible Debt Securities which, unless previously redeemed or
otherwise purchased, will be convertible at any time during the conversion
period specified in a supplement to this Prospectus into shares of TCI Group
Series A Common Stock. Debt Securities may be issued as Original Issue Discount
Securities to be sold at a substantial discount below their principal amount
and, if issued, certain terms thereof will be set forth in a supplement to this
Prospectus. Debt Securities may be issued in registered form without coupons
attached ("Registered Debt Securities") or in bearer form with or without
coupons attached ("Bearer Debt Securities"). Bearer Debt Securities will be
offered only to non-United States persons (subject to certain exceptions) and
to branches, located outside the United States, of certain United States
financial institutions. See "Description of Debt Securities--Limitations on
Issuance of Bearer Debt Securities." Debt Securities may be offered as separate
series in amounts, at prices and on terms to be determined at the time of sale
and set forth in a supplement to this Prospectus.
Certain terms of the Offered Securities in respect of which this Prospectus
is being delivered will be set forth in an accompanying Prospectus Supplement
("Prospectus Supplement"). In the case of TCI Group Series A Common Stock, the
Prospectus Supplement will include the number of shares being offered, the
initial public offering price and terms of the offering and sale thereof. In
the case of a series of Series Preferred Stock, the Prospectus Supplement will
include the designation, the number of shares being offered, the initial public
offering price, any redemption provisions, any conversion rights, the
liquidation preference per share, the dividend rate (or method of calculation
thereof), dates on which dividends shall be payable and dates from which
dividends shall accrue, whether such series of Series Preferred Stock will be
offered in the form of Depositary Shares and the terms of the offering and sale
thereof. In the case of Debt Securities, the Prospectus Supplement will
include, where applicable, the specific designation (including whether senior,
senior subordinated or subordinated and whether convertible), aggregate
principal amount, maturity (which may be fixed or extendible), interest rate or
rates (which may be fixed or variable), if any, and time of payment of
interest, if any, authorized denominations, currency or currencies in which
principal, premium, if any, and interest are payable, initial conversion price
or conversion rate and any specific terms relating to the adjustment thereof
that are in addition to or different from those described herein, the period
during which any convertible Debt Securities may be converted, any terms for a
sinking fund or for redemption, purchase or exchange at the option of the
Company or the holder (including the form or method of payment, which may
include cash, Debt Securities of another series or other forms of
consideration), any covenants or events of default that are in addition to or
different from those described herein, the designation and qualification of any
trustee with respect to the Debt Securities, other specific terms of the Debt
Securities and the terms of the offer and sale thereof.
The Company may sell Offered Securities on a negotiated or competitive bid
basis to or through underwriters or dealers designated from time to time, which
may be a group of underwriters represented by one or more managing
underwriters. In addition, the Offered Securities may be sold directly by the
Company to other purchasers or through agents. See "Plan of Distribution." The
names of any such underwriters, dealers, managing underwriters, purchasers, or
agents involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters, dealers,
purchasers or agents will be set forth in the Prospectus Supplement. The
Company reserves the sole right to accept and, together with its agents, from
time to time, to reject in whole or in part any proposed purchase of the
Offered Securities to be made directly or through agents. See "Plan of
Distribution" for possible indemnification arrangements for agents, dealers and
underwriters.
This Prospectus may not be used to consummate sales unless accompanied by the
Prospectus Supplement applicable to the Offered Securities being sold.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1996.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a registration statement on Form S-3
(Registration No. 333- ) (together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the TCI Group Series A
Common Stock, Series Preferred Stock and Debt Securities that may be offered
hereby. This Prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information
pertaining to the Company and the TCI Group Series A Common Stock, Series
Preferred Stock and Debt Securities that may be offered hereby, reference is
made to the Registration Statement. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Commission. Reports and
other information filed under the Exchange Act by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Regional Offices of the Commission located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission by the Company
(File No. 0-20421) and are incorporated into this Prospectus by reference and
made a part hereof:
1. The Annual Report on Form 10-K of the Company for the year ended
December 31, 1994, as amended by Form 10K/A (Amendment No. 1).
2. The Quarterly Reports on Form 10-Q of the Company for the quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995 (as amended
by Form 10Q/A (Amendment No. 1)).
3. The Current Reports on Form 8-K of the Company dated January 23,
1995,February 3, 1995 (as amended by Form 8-K/A (Amendment No. 1)),
February 13, 1995, February 15, 1995, April 6, 1995, April 20, 1995
(as amended by Form 8-K/A (Amendment No. 1)), May 4, 1995 (as amended
by Form 8-K/A (Amendment No. 1)), July 26, 1995, August 10, 1995 and
December 18, 1995.
4. The financial statements and notes thereto of TeleCable Corporation as
of December 31, 1993 and 1992 and for each of the years in the two-
year period ended December 31, 1993, included in the Current Report on
Form 8-K of the Company dated August 26, 1994.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior
to the termination of the offering of the securities offered hereby shall be
deemed to be incorporated herein by reference and to be a part hereof from the
respective dates of the filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such previous statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
2
<PAGE>
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference herein, other
than certain exhibits to such documents. Such requests should be addressed to
Stephen M. Brett, Esq., Executive Vice President, Secretary and General
Counsel, Tele-Communications, Inc., Terrace Tower II, 5619 DTC Parkway,
Englewood, Colorado 80111-3000; telephone (303) 267-5500.
3
<PAGE>
THE COMPANY
The Company, through its subsidiaries and affiliates, is principally engaged
in the construction, acquisition, ownership and operation of cable television
systems and in the provision of satellite-delivered programming services to
various distribution media, principally cable television systems. The Company
is also involved, as an investor and developer, in new television and
telecommunications ventures and technologies. The Company is the largest
provider of cable television services in the United States, based on the
number of basic subscribers served by the Company and its subsidiaries and
affiliates at September 30, 1995.
The executive offices of the Company are located at Terrace Tower II, 5619
DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. Unless
the context indicates otherwise, as used in this Prospectus the "Company"
means Tele-Communications, Inc. and its consolidated subsidiaries.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities, together with
internally generated funds, may be used (i) to repay, redeem or repurchase
outstanding indebtedness of the Company, (ii) for general operations of the
Company, including acquisitions, capital expenditures and working capital
requirements or (iii) for such other purposes as may be specified in the
related Prospectus Supplement. All or a portion of such proceeds may be
advanced to affiliates of the Company in the form of loans or as a
contribution to capital.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to combined fixed charges and preferred stock
dividends of the Company was 1.02, 1.22 and 1.19 for the years ended December
31, 1992, 1993 and 1994, respectively, and 1.04 for the nine months ended
September 30, 1994. The ratio of earnings to combined fixed charges and
preferred stock dividends of the Company was less than 1.00 for the years
ended December 31, 1990 and 1991, and for the nine months ended September 30,
1995; thus, earnings available for combined fixed charges and preferred stock
dividends were inadequate to cover combined fixed charges and preferred stock
dividends for such periods. The amounts of the coverage deficiencies were $399
million and $177 million for the years ended December 31, 1990 and 1991,
respectively, and $171 million for the nine months ended September 30, 1995.
For the ratio calculations, earnings available for combined fixed charges and
preferred stock dividends consists of earnings (losses) before income taxes
plus combined fixed charges and preferred stock dividends (minus capitalized
interest), distributions from and (earnings) losses of less than 50%-owned
affiliates with debt not guaranteed by the Company (net of earnings not
distributed of less than 50%-owned affiliates), and minority interest in
earnings (losses) of consolidated subsidiaries (including an amount
representing the pretax earnings which would be required to cover preferred
stock dividend requirements of consolidated subsidiaries). Combined fixed
charges and preferred stock dividends consist of (i) interest (including
capitalized interest) on debt, including interest of less than 50%-owned
affiliates with debt guaranteed by the Company and excluding interest to 50%-
owned affiliates, (ii) the Company's proportionate share of interest of 50%-
owned affiliates, (iii) that portion of rental expense the Company believes to
be representative of interest (one-third of rental expense), (iv) amortization
of debt expense, (v) that portion of minority interests in earnings of
consolidated subsidiaries that represents the amount of pretax earnings that
would be required to cover preferred stock dividend requirements excluding
similarly adjusted preferred stock dividend requirements of consolidated
subsidiaries to 50%-owned affiliates, and (vi) the amount representing the
pretax earnings which would be required to cover preferred stock dividend
requirements of 50%-owned affiliates, other than amounts payable to the
Company. The Company has guaranteed the debt of certain less than 50%-owned
affiliates and certain other entities in which it has an interest. Combined
fixed charges and preferred stock dividends of $710,000, $506,000, $2,517,000,
$13,833,000 and $5,777,000 relating to such guarantees for the years ended
December 31, 1990, 1991, 1992, 1993 and 1994, respectively, and combined fixed
charges and preferred stock dividends of $10,676,000 and $4,866,000 relating
to such guarantees for the nine months ended September 30, 1994 and 1995,
respectively, have not been included in combined fixed charges and preferred
stock dividends.
4
<PAGE>
HOLDING COMPANY STRUCTURE
The Company is a holding company and its assets consist almost entirely of
investments in its subsidiaries. As a holding company, the Company's ability
to meet its financial obligations, including any obligation to pay dividend,
interest, principal or other payments with respect to Offered Securities, is
dependent on the earnings of, or other funds available to, such subsidiaries
and the distribution or other payment of such earnings or other funds to the
Company in the form of dividends, loans or other advances, payment or
reimbursement of management fees and expenses and repayment of loans and
advances from the Company. The Company's subsidiaries are separate and
distinct legal entities and will have no obligation, contingent or otherwise,
to pay any amounts due pursuant to any Offered Securities or to make any funds
available therefor, whether by dividends, loans or other payments. The payment
of dividends or the making of loans and advances to the Company by its
subsidiaries may be subject to statutory or regulatory restrictions, are
contingent upon the earnings of those subsidiaries and are subject to various
business considerations. Further, certain of the Company's subsidiaries are
subject to loan agreements that prohibit or limit the transfer of funds by
such subsidiaries to the Company in the form of loans, advances or dividends
and require that such subsidiaries' indebtedness to the Company be subordinate
to the indebtedness under such loan agreements. The amount of net assets of
subsidiaries subject to such restrictions exceeds the Company's consolidated
net assets.
Moreover, almost all of the consolidated liabilities of the Company have
been incurred by its subsidiaries. Therefore, the Company's rights and the
rights of its creditors, including holders of any Offered Securities, to
participate in the distribution of assets of any subsidiary upon the latter's
liquidation or reorganization will be subject to prior claims of the
subsidiary's creditors, including trade creditors, except to the extent that
the Company may itself be a creditor with recognized claims against the
subsidiary (in which case the claims of the Company would still be subject to
the prior claims of any secured creditor of such subsidiary and of any holder
of indebtedness of such subsidiary that is senior to that held by the
Company). At September 30, 1995, the Company's subsidiaries had total Debt of
approximately $12.9 billion (including guarantees of indebtedness of others
and the unaccreted portion of indebtedness issued at a discount, but excluding
indebtedness owed to the Company).
DESCRIPTION OF COMMON STOCK
The Restated Certificate of Incorporation, as amended, of the Company (the
"Charter") provides that the Company is authorized to issue 2,777,375,096
shares of capital stock, including (i) 2,725,000,000 shares of common stock
(the "Common Stock"), of which 1,750,000,000 shares are designated Tele-
Communications, Inc. Series A TCI Group Common Stock, 150,000,000 shares are
designated Tele-Communications, Inc. Series B TCI Group Common Stock (the "TCI
Group Series B Common Stock" and collectively with the TCI Group Series A
Common Stock, the "TCI Group Common Stock"), 750,000,000 shares are designated
Tele-Communications, Inc. Series A Liberty Media Group Common Stock (the "LMG
Series A Common Stock"), and 75,000,000 shares are designated Tele-
Communications, Inc. Series B Liberty Media Group Common Stock (the "LMG
Series B Common Stock" and, collectively with the LMG Series A Common Stock,
the "Liberty Media Group Common Stock"), and (ii) 52,375,096 shares of
preferred stock (the "Preferred Stock"), of which 700,000 shares are
designated Class A Preferred Stock, par value $0.01 per share (the "Class A
Preferred Stock"), 1,675,096 shares are designated Class B 6% Cumulative
Redeemable Exchangeable Junior Preferred Stock, par value $.01 per share (the
"Class B Preferred Stock"), and 50,000,000 shares are designated Series
Preferred Stock, issuable in series. For a description of the Preferred Stock
and each outstanding class and series of Preferred Stock as of the date of
this Prospectus, see "Description of Series Preferred Stock."
The Prospectus Supplement relating to any shares of TCI Group Series A
Common Stock constituting Offered Securities will set forth (i) the number of
shares offered, (ii) the initial public offering price (which may be the
prevailing market price at the time of sale) and (iii) other terms of the
offering and sale of the TCI Group Series A Common Stock. The TCI Group Series
A Common Stock is traded in the Nasdaq National Market under the symbol
"TCOMA."
5
<PAGE>
OUTSTANDING COMMON STOCK.
The following description of certain terms of the TCI Group Common Stock and
the Liberty Media Group Common Stock does not purport to be complete and is
qualified in its entirety by reference to the Charter, which is included as an
exhibit to the Registration Statement of which this Prospectus forms a part.
See "Available Information."
As of November 1, 1995, 571,576,645 shares of TCI Group Series A Common
Stock (net of shares held by subsidiaries of the Company), 84,801,554 shares
of TCI Group Series B Common Stock, 142,892,796 shares of LMG Series A Common
Stock and 21,200,336 shares of LMG Series B Common Stock were issued and are
outstanding. As of that date, 68,295,414 shares of TCI Group Series A Common
Stock and 17,080,230 shares of LMG Series A Common Stock were reserved for
issuance upon conversion, exchange or exercise of outstanding convertible or
exchangeable securities and options. Such amounts are exclusive, however, of
shares of TCI Group Series B Common Stock and LMG Series B Common Stock which
are convertible into shares of TCI Group Series A Common Stock and LMG Series
A Common Stock, respectively.
Certain Definitions
As used in this section "Outstanding Common Stock," the following terms have
the meanings specified below:
"Committed Acquisition Shares" means (a) the shares of LMG Series A Common
Stock that the Company had, prior to the record date for the Distribution,
agreed to issue, but as of such record date had not issued, and (b) the shares
of LMG Series A Common Stock that are issuable upon conversion, exercise or
exchange of Convertible Securities that the Company had, prior to the record
date for the Distribution, agreed to issue, but as of such record date had not
issued, in each case including obligations of the Company to issue shares of
the Company's Class A Common Stock, par value $1.00 per share (which has been
redesignated the TCI Group Series A Common Stock), which as a result of the
Distribution constitute obligations to issue, among other securities, LMG
Series A Common Stock or Convertible Securities which are convertible into or
exercisable or exchangeable for LMG Series A Common Stock; provided, however
that Committed Acquisition Shares will not include any shares of Liberty Media
Group Common Stock issuable upon conversion, exercise or exchange of Pre-
Distribution Convertible Securities. The type and amount of Committed
Acquisition Shares issuable will be appropriately adjusted to reflect
subdivisions and combinations of the LMG Series A Common Stock and dividends
or distributions of shares of LMG Series A Common Stock or LMG Series B Common
Stock to holders of LMG Series A Common Stock and other reclassifications of
the LMG Series A Common Stock, in each case occurring (or the record date for
which occurs) after the Distribution.
"Convertible Securities" means any securities of the Company (other than any
series of Common Stock) that are convertible into, exchangeable for or
evidence the right to purchase any shares of any series of Common Stock,
whether upon conversion, exercise, exchange, pursuant to anti-dilution
provisions of such securities or otherwise.
The "Distribution" means the distribution paid by the Company on August 10,
1995 of one-fourth of one share of LMG Series A Common Stock on each
outstanding share of the TCI Group Series A Common Stock and one-fourth of one
share of LMG Series B Common Stock on each outstanding share of the TCI Group
Series B Common Stock to holders of record on August 4, 1995.
The "Inter-Group Interest" means any equity value of the Company
attributable to the Liberty Media Group that is not represented by outstanding
shares of Liberty Media Group Common Stock. The Inter-Group Interest is
represented by the Number of Shares Issuable with Respect to the Inter-Group
Interest.
The "Inter-Group Interest Fraction" means a fraction the numerator of which
is the Number of Shares Issuable with Respect to the Inter-Group Interest and
the denominator of which is the sum of such Number of
6
<PAGE>
Shares Issuable with Respect to the Inter-Group Interest and the aggregate
number of shares of Liberty Media Group Common Stock outstanding.
The "Liberty Media Group" means:
(a) the interest of the Company or any of its subsidiaries in Liberty
Media Corporation or any of its subsidiaries (including any successor
thereto by merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business Transaction
(as defined below under "--Conversion and Redemption--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock")) and their
respective properties and assets,
(b) all assets and liabilities of the Company or any of its subsidiaries
to the extent attributed to any of the properties or assets referred to in
clause (a) of this sentence, whether or not such assets or liabilities are
assets and liabilities of Liberty Media Corporation or any of its
subsidiaries (or a successor as described in clause (a) of this sentence),
(c) all assets and properties contributed or otherwise transferred to the
Liberty Media Group from the TCI Group, and
(d) the interest of the Company or any of its subsidiaries in the
businesses, assets and liabilities acquired by the Company or any of its
subsidiaries for the Liberty Media Group, as determined by the Board of
Directors of the Company (the "Board of Directors");
provided that (i) from and after any dividend or other distribution with
respect to any shares of Liberty Media Group Common Stock (other than a
dividend or other distribution payable in shares of Liberty Media Group Common
Stock, with respect to which adjustment will be made as described in clause
(a) of the definition of "Number of Shares Issuable with Respect to the Inter-
Group Interest," or in other securities of the Company attributed to the
Liberty Media Group for which provision will be made as described in the
penultimate sentence of this definition), the Liberty Media Group will no
longer include an amount of assets or properties equal to the aggregate amount
of such kind of assets or properties so paid in respect of shares of Liberty
Media Group Common Stock multiplied by a fraction the numerator of which is
equal to the Inter-Group Interest Fraction in effect immediately prior to the
record date for such dividend or other distribution and the denominator of
which is equal to the Outstanding Interest Fraction in effect immediately
prior to the record date for such dividend or other distribution and (ii) from
and after any transfer of assets or properties from the Liberty Media Group to
the TCI Group, the Liberty Media Group will no longer include the assets or
properties so transferred. If the Company pays a dividend or makes any other
distribution with respect to shares of Liberty Media Group Common Stock
payable in securities of the Company attributed to the Liberty Media Group
other than Liberty Media Group Common Stock, the TCI Group will be deemed to
hold an amount of such other securities equal to the amount so distributed
multiplied by the fraction specified in clause (i) of this definition
(determined as of a
time immediately prior to the record date for such dividend or other
distribution), and to the extent interest or dividends are paid or other
distributions are made on such other securities so distributed to the holders
of Liberty Media Group Common Stock, the Liberty Media Group will no longer
include a corresponding ratable amount of the kind of assets paid as such
interest or dividends or other distributions in respect of such securities so
deemed to be held by the TCI Group. The Company may also, to the extent any
such other securities constitute Convertible Securities which are at the time
convertible, exercisable or exchangeable, cause such Convertible Securities
deemed to be held by the TCI Group to be deemed to be converted, exercised or
exchanged (and to the extent the terms of such Convertible Securities require
payment or delivery of consideration in order to effect such conversion,
exercise or exchange, the Liberty Media Group will in such case include an
amount of the kind of properties or assets required to be paid or delivered as
such consideration for the amount of the Convertible Securities deemed
converted, exercised or exchanged as if such Convertible Securities were
outstanding), in which case such Convertible Securities will no longer be
deemed to be held by the TCI Group or attributed to the Liberty Media Group.
"Market Value" of any class or series of capital stock of the Company on any
day means the average of the high and low reported sales prices regular way of
a share of such class or series on such day (if such day is a
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trading day, and if such day is not a trading day, on the trading day
immediately preceding such day) or in case no such reported sale takes place
on such trading day, the average of the reported closing bid and asked prices
regular way of a share of such class or series on such trading day, in either
case on the Nasdaq National Market, or if the shares of such class or series
are not quoted on such Nasdaq National Market on such trading day, the average
of the closing bid and asked prices of a share of such class or series in the
over-the-counter market on such trading day as furnished by any New York Stock
Exchange member firm selected from time to time by the Company, or if such
closing bid and asked prices are not made available by any such New York Stock
Exchange member firm on such trading day, the market value of a share of such
class or series as determined by the Board of Directors; provided, that for
purposes of determining the ratios described under "--Conversion and
Redemption-Conversion at the Option of the Company" and "--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock" and "--
Liquidation Rights," (a) the "Market Value" of any share of any series of the
Common Stock on any day prior to the "ex" date or any similar date for any
dividend or distribution paid or to be paid with respect to such series of the
Common Stock will be reduced by the fair market value of the per share amount
of such dividend or distribution as determined by the Board of Directors and
(b) the "Market Value" of any share of any series of the Common Stock on any
day prior to (i) the effective date of any subdivision (by stock split or
otherwise) or combination (by reverse stock split or otherwise) of outstanding
shares of such series of the Common Stock or (ii) the "ex" date or any similar
date for any dividend or distribution with respect to any such series of the
Common Stock in shares of such series of the Common Stock will be
appropriately adjusted to reflect such subdivision, combination, dividend or
distribution.
The "Number of Shares Issuable with Respect to the Inter-Group Interest" is
currently zero and will from time to time be
(a) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of the
LMG Series A Common Stock and dividends or distributions of shares of LMG
Series A Common Stock or LMG Series B Common Stock to holders of LMG Series
A Common Stock and other reclassifications of LMG Series A Common Stock,
(b) decreased (but not to less than zero) by (i) the aggregate number of
shares of LMG Series A Common Stock issued or sold by the Company after the
Distribution other than Committed Acquisition Shares, the proceeds of which
are attributed to the TCI Group, (ii) the aggregate number of shares of LMG
Series A Common Stock issued or delivered upon conversion, exercise or
exchange of Convertible Securities (other than Pre-Distribution Convertible
Securities and Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares), the proceeds
of which are attributed to the TCI Group, (iii) the aggregate number of
shares of LMG Series A Common Stock issued or delivered by the Company as a
dividend or distribution to holders of TCI Group Series A Common
Stock and TCI Group Series B Common Stock, (iv) the aggregate number of
shares of LMG Series A Common Stock issued or delivered upon the
conversion, exercise or exchange of any Convertible Securities (other than
Pre-Distribution Convertible Securities and Convertible Securities which
are convertible into or exercisable or exchangeable for Committed
Acquisition Shares) issued or delivered by the Company after the
Distribution as a dividend or distribution or by reclassification or
exchange to holders of TCI Group Series A Common Stock and TCI Group Series
B Common Stock and (v) the aggregate number of shares of LMG Series A
Common Stock (rounded, if necessary, to the nearest whole number), equal to
the aggregate fair value (as determined by the Board of Directors) of
assets or properties attributed to the Liberty Media Group that are
transferred from the Liberty Media Group to the TCI Group in consideration
of a reduction in the Number of Shares Issuable with Respect to the Inter-
Group Interest, divided by the Market Value of one share of LMG Series A
Common Stock as of the date of such transfer, and
(c) increased by (i) the aggregate number of any shares of LMG Series A
Common Stock and LMG Series B Common Stock which are retired or otherwise
cease to be outstanding following their purchase with funds attributed to
the TCI Group, (ii) a number (rounded, if necessary, to the nearest whole
number), equal to the fair value (as determined by the Board of Directors)
of assets or properties, theretofore attributed to the TCI Group that are
contributed to the Liberty Media Group in consideration of an increase
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in the Number of Shares Issuable with Respect to the Inter-Group Interest,
divided by the Market Value of one share of LMG Series A Common Stock as of
the date of such contribution and (iii) the aggregate number of shares of
LMG Series A Common Stock and LMG Series B Common Stock into or for which
Convertible Securities are deemed to be converted, exercised or exchanged
pursuant to the last sentence of the definition of "TCI Group."
The Company will not issue or sell shares of LMG Series B Common Stock in
respect of a reduction in the Number of Shares Issuable with Respect to the
Inter-Group Interest. Whenever a change in the Number of Shares Issuable with
Respect to the Inter-Group Interest occurs, the Company will prepare and file
a statement of such change with the Secretary of the Company.
The "Outstanding Interest Fraction" means a fraction the numerator of which
is the aggregate number of shares of Liberty Media Group Common Stock
outstanding and the denominator of which is the sum of such aggregate number
of shares of Liberty Media Group Common Stock outstanding and the Number of
Shares Issuable with Respect to the Inter-Group Interest.
"Pre-Distribution Convertible Securities" means Convertible Securities that
were outstanding on the record date for the Distribution and were, prior to
such date, convertible into or exercisable or exchangeable for shares of the
Company's Class A Common Stock, par value $1.00 per share (which has been
redesignated TCI Group Series A Common Stock).
The "TCI Group" means as of any date of determination thereof:
(a) the interest of the Company or any of its subsidiaries in all of the
businesses in which the Company or any of its subsidiaries (or any of their
predecessors or successors) is or has been engaged, directly or indirectly,
and the respective assets and liabilities of the Company or any of its
subsidiaries, other than any businesses, assets or liabilities of the
Liberty Media Group;
(b) a proportionate interest in the businesses, assets and liabilities of
the Liberty Media Group equal to the Inter-Group Interest Fraction as of
such date;
(c) from and after any dividend or other distribution with respect to
shares of Liberty Media Group Common Stock (other than a dividend or other
distribution payable in shares of Liberty Media Group Common Stock, with
respect to which adjustment will be made as described in clause (a) of the
definition of "Number of Shares Issuable with Respect to the Inter-Group
Interest," or in other securities of the Company attributed to the Liberty
Media Group, for which provision will be made as described in the
penultimate sentence of this definition), an amount of assets or properties
theretofore included in the Liberty
Media Group equal to the aggregate amount of such kind of assets or
properties so paid in respect of such dividend or other distribution with
respect to shares of Liberty Media Group Common Stock multiplied by a
fraction the numerator of which is equal to the Inter-Group Interest
Fraction in effect immediately prior to the record date for such dividend
or other distribution and the denominator of which is equal to the
Outstanding Interest Fraction in effect immediately prior to the record
date for such dividend or other distribution; and
(d) any assets or properties transferred from the Liberty Media Group to
the TCI Group;
provided that, from and after any contribution or transfer of any assets or
properties from the TCI Group to the Liberty Media Group, the TCI Group will
no longer include such assets or properties so contributed or transferred
(other than pursuant to its interest in the businesses, assets and liabilities
of the Liberty Media Group described in clause (b) above). If the Company pays
a dividend or makes any other distribution with respect to shares of Liberty
Media Group Common Stock payable in other securities of the Company attributed
to the Liberty Media Group, the TCI Group will be deemed to hold an amount of
such other securities equal to the amount so distributed multiplied by the
fraction specified in clause (c) of this definition (determined as of a time
immediately prior to the record date for such dividend or other distribution),
and to the extent interest or dividends are paid or other distributions are
made on such other securities so distributed to holders of Liberty
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Media Group Common Stock, the TCI Group will include a corresponding ratable
amount of the kind of assets paid as such interest or dividends or other
distributions in respect of such securities so deemed to be held by the TCI
Group. The Company may also, to the extent any such other securities
constitute Convertible Securities which are at the time convertible,
exercisable or exchangeable, cause such Convertible Securities deemed to be
held by the TCI Group to be deemed to be converted, exercised or exchanged
(and to the extent the terms of such Convertible Securities require payment or
delivery of consideration in order to effect such conversion, exercise or
exchange, the TCI Group will in such case no longer include an amount of the
kind of properties or assets required to be paid or delivered as such
consideration for the amount of the Convertible Securities deemed converted,
exercised or exchanged as if such Convertible Securities were outstanding), in
which case such Convertible Securities will no longer be deemed to be held by
the TCI Group or attributed to the Liberty Media Group.
Voting Rights
Holders of TCI Group Series A Common Stock are entitled to one vote for each
share of such stock held, holders of TCI Group Series B Common Stock are
entitled to ten votes for each share of such stock held, holders of LMG Series
A Common Stock are entitled to one vote for each share of such stock held and
holders of LMG Series B Common Stock are entitled to ten votes for each share
of such stock held, on all matters presented to such stockholders. Except as
may otherwise be required by the laws of the State of Delaware or, with
respect to any class of the Preferred Stock or any series of such a class, in
the Charter (including any resolution or resolutions providing for the
establishment of such class or series pursuant to authority vested in the
Board of Directors by the Charter), the holders of TCI Group Common Stock and
the holders of Liberty Media Group Common Stock and the holders of each class
or series of the Preferred Stock, if any, entitled to vote thereon will vote
as one class for all purposes. See "--Other Matters."
Neither the holders of TCI Group Series A Common Stock or TCI Group Series B
Common Stock, nor the holders of LMG Series A Common Stock or LMG Series B
Common Stock, have any rights to vote as a separate class or series on any
matter coming before the stockholders of the Company, except with respect to
certain limited class and series voting rights provided under the Delaware
General Corporation Law (the "DGCL"). Under the DGCL, the approval of the
holders of a majority of the outstanding shares of any class of capital stock
of a corporation, voting separately as a class, is required to approve any
amendment to the charter that would alter or change the powers, preferences or
special rights of the shares of such class so as to affect them adversely,
provided that, if any amendment would alter or change the powers, preferences
or special rights of one or more series of the class so as to affect them
adversely, but would not so affect the entire class, then only the shares of
the series so affected by the amendment would be entitled to vote thereon
separately as a class.
Dividends
Dividends on TCI Group Common Stock and Liberty Media Group Common Stock are
limited to legally available funds of the Company under the DGCL and subject
to the prior payment of dividends on outstanding shares of the Preferred
Stock. The DGCL limits the amount of distributions on each series of the
Common Stock to the funds of the Company legally available for that purpose,
which are determined on the basis of the entire corporation and not just the
Liberty Media Group or the TCI Group. Consequently, the amount of legally
available funds will be reduced by the amount of any net losses of the Liberty
Media Group or the TCI Group and any dividends or distributions on, or
repurchases of, the TCI Group Common Stock or the Liberty Media Group Common
Stock and dividends on, or certain repurchases of, the Preferred Stock.
Certain loan agreements to which certain subsidiaries of the Company are
parties or are subject contain restricted payment provisions that limit the
amount of dividends, other than stock dividends, that those companies may pay.
Future loan agreements may also contain similar restrictions and limits.
Dividends on the TCI Group Common Stock, in addition to the limitations set
forth above, are further limited to an amount not in excess of the TCI Group
Available Dividend Amount, which is intended to be similar to the amount that
would be legally available for the payment of dividends on the TCI Group
Common Stock
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under the DGCL if the TCI Group were a separate Delaware corporation. There
can be no assurance that there will be a TCI Group Available Dividend Amount.
The "TCI Group Available Dividend Amount," as of any date, means either (a)
the excess of (i) an amount equal to the total assets of the TCI Group less
the total liabilities (not including preferred stock) of the TCI Group as of
such date over (ii) the aggregate par value of, or any greater amount
determined to be capital in respect of, all outstanding shares of TCI Group
Common Stock and each class or series of the Preferred Stock attributed to the
TCI Group or (b) in case there is no such excess, an amount equal to the
Company Earnings (Loss) Attributable to the TCI Group (if positive) for the
fiscal year in which such date occurs and/or the preceding fiscal year. The
"Company Earnings (Loss) Attributable to the TCI Group," for any period, means
the net earnings or loss of the TCI Group for such period determined on a
basis consistent with the determination of the net earnings or loss of the TCI
Group for such period as presented in the combined financial statements of the
TCI Group for such period, including income and expenses of the Company
attributed to the operations of the TCI Group on a substantially consistent
basis, including without limitation, corporate administrative costs, net
interest and income taxes.
Dividends on the Liberty Media Group Common Stock, in addition to the
limitations set forth in the first paragraph under this caption, are further
limited to an amount not in excess of the Liberty Media Group Available
Dividend Amount, which is intended to be similar to the amount that would be
legally available for the payment of dividends on the Liberty Media Group
Common Stock under the DGCL if the Liberty Media Group were a separate
Delaware corporation. There can be no assurance that there will be a Liberty
Media Group Available Dividend Amount.
The "Liberty Media Group Available Dividend Amount," as of any date, means
the product of the Outstanding Interest Fraction and either (a) the excess of
(i) an amount equal to the total assets of the Liberty Media Group less the
total liabilities (not including preferred stock) of the Liberty Media Group
as of such date over (ii) the aggregate par value of, or any greater amount
determined to be capital in respect of, all outstanding shares of Liberty
Media Group Common Stock and each class or series of the Preferred Stock
attributed to the Liberty Media Group or (b) in case there is no such excess,
an amount equal to the Company Earnings (Loss) Attributable to the Liberty
Media Group (if positive) for the fiscal year in which such date occurs and/or
the preceding fiscal year. The "Company Earnings (Loss) Attributable to the
Liberty Media Group," for any period, means the net earnings or loss of the
Liberty Media Group for such period determined on a basis consistent with the
determination of the net earnings or loss of the Liberty Media Group for such
period as presented in the combined financial statements of the Liberty Media
Group for such period, including income and expenses of the Company attributed
to the operations of the Liberty Media Group on a substantially consistent
basis, including without limitation, corporate administrative costs, net
interest and income taxes.
Except for dividends declared or paid as described below under "--Share
Distributions" and "--Conversion and Redemption-Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock," any dividends paid on the
TCI Group Series A Common Stock or the TCI Group Series B Common Stock will be
paid only on both series, in equal amounts per share, and any dividends paid
on the LMG Series A Common Stock or the LMG Series B Common Stock will be paid
only on both series, in equal amounts per share.
The Board of Directors, subject to the provisions described herein under "--
Dividends" and below under "--Share Distributions," has the authority and
discretion to declare and pay dividends on the TCI Group Common Stock or the
Liberty Media Group Common Stock in equal or unequal amounts, notwithstanding
the relationship between the TCI Group Available Dividend Amount and the
Liberty Media Group Available Dividend Amount, the respective amounts of prior
dividends declared on, or liquidation rights of, the TCI Group Common Stock or
the Liberty Media Group Common Stock or any other factor.
At the time of any dividend or other distribution on the outstanding shares
of Liberty Media Group Common Stock (including any dividend of Net Proceeds
from the Disposition of all or substantially all of the properties
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and assets of the Liberty Media Group as described below under "--Conversion
and Redemption-Mandatory Dividend, Redemption or Conversion of Liberty Media
Group Common Stock"), the TCI Group will (if at such time there is an Inter-
Group Interest) be credited, and the Liberty Media Group will be charged (in
addition to the charge for the dividend or other distribution paid or
distributed in respect of outstanding shares of Liberty Media Group Common
Stock), with an amount equal to the product of (i) the aggregate amount of
such dividend or distribution paid or distributed in respect of outstanding
shares of Liberty Media Group Common Stock times (ii) a fraction the numerator
of which is the Inter-Group Interest Fraction and the denominator of which is
the Outstanding Interest Fraction.
Share Distributions
Distributions on TCI Group Common Stock. If at any time a distribution paid
in TCI Group Common Stock, Liberty Media Group Common Stock, or any other
securities of the Company or any other person (a "share distribution") is to
be made with respect to the TCI Group Common Stock, such share distribution
will be declared and paid only as follows:
(i) a share distribution consisting of shares of TCI Group Series A
Common Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series A Common Stock) to holders of
TCI Group Series A Common Stock and TCI Group Series B Common Stock, on an
equal per share basis; or consisting of shares of TCI Group Series B Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series B Common Stock) to holders of
TCI Group Series A Common Stock and TCI Group Series B Common Stock, on an
equal per share basis; or consisting of shares of TCI Group Series A Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series A Common Stock) to holders of
TCI Group Series A Common Stock and, on an equal per share basis, shares of
TCI Group Series B Common Stock (or like Convertible Securities convertible
into or exercisable or exchangeable for shares of TCI Group Series B Common
Stock) to holders of TCI Group Series B Common Stock;
(ii) a share distribution consisting of shares of LMG Series A Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of LMG Series A Common Stock) to holders of TCI
Group Series A Common Stock and TCI Group Series B Common Stock, on an
equal per share basis; provided that the sum of (A) the aggregate number of
shares of LMG Series A Common Stock to be so issued (or the number of such
shares which would be issuable upon conversion, exercise or exchange of any
Convertible Securities to be so issued) and (B) the number of shares of
such series that are subject to issuance upon conversion, exercise or
exchange of any Convertible Securities then outstanding that are attributed
to the TCI Group (other than Pre-Distribution Convertible Securities and
other than Convertible Securities convertible into or exercisable or
exchangeable for Committed Acquisition Shares) is less than or equal to the
Number of Shares Issuable with Respect to the Inter- Group Interest; and
(iii) a share distribution consisting of any class or series of
securities of the Company or any other person other than TCI Group Common
Stock or Liberty Media Group Common Stock (or Convertible Securities
convertible into or exercisable or exchangeable for shares of TCI Group
Common Stock or Liberty Media Group Common Stock), either on the basis of a
distribution of identical securities, on an equal per share basis, to
holders of TCI Group Series A Common Stock and TCI Group Series B Common
Stock or on the basis of a distribution of one class or series of
securities to holders of TCI Group Series A Common Stock and another class
or series of securities to holders of TCI Group Series B Common Stock,
provided that the securities so distributed (and, if the distribution
consists of Convertible Securities, the securities into which such
Convertible Securities are convertible or for which they are exercisable or
exchangeable) do not differ in any respect other than their relative voting
rights and related differences in designation, conversion, redemption and
share distribution provisions, with holders of shares of TCI Group Series B
Common Stock receiving the class or series having the higher relative
voting rights (without regard to whether such rights differ to a greater or
lesser extent than the corresponding differences in voting rights,
designation, conversion, redemption and share distribution provisions
between the TCI Group Series A Common Stock and the TCI Group Series B
Common Stock), provided that if the securities so distributed
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constitute capital stock of a subsidiary of the Company, such rights will
not differ to a greater extent than the corresponding differences in voting
rights, designation, conversion, redemption and share distribution
provisions between the TCI Group Series A Common Stock and the TCI Group
Series B Common Stock, and provided in each case that such distribution is
otherwise made on an equal per share basis.
The Company will not reclassify, subdivide or combine the TCI Group Series A
Common Stock without reclassifying, subdividing or combining the TCI Group
Series B Common Stock, on an equal per share basis, and the Company will not
reclassify, subdivide or combine the TCI Group Series B Common Stock without
reclassifying, subdividing or combining the TCI Group Series A Common Stock,
on an equal per share basis.
Distributions on Liberty Media Group Common Stock. If at any time a share
distribution is to be made with respect to the Liberty Media Group Common
Stock, such share distribution will be declared and paid only as follows (or
as described under "--Conversion and Redemption" with respect to the
redemptions and other distributions referred to therein):
(i) a share distribution consisting of shares of LMG Series A Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of LMG Series A Common Stock) to holders of LMG
Series A Common Stock and LMG Series B Common Stock, on an equal per share
basis; or consisting of shares of LMG Series B Common Stock (or Convertible
Securities convertible into or exercisable or exchangeable for shares of
LMG Series B Common Stock) to holders of LMG Series A Common Stock and LMG
Series B Common Stock, on an equal per share basis; or consisting of shares
of LMG Series A Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of LMG Series A Common Stock) to
holders of LMG Series A Common Stock and, on an equal per share basis,
shares of LMG Series B Common Stock (or like Convertible Securities
convertible into or exercisable or exchangeable for shares of LMG Series B
Common Stock) to holders of LMG Series B Common Stock; and
(ii) a share distribution consisting of any class or series of securities
of the Company or any other person other than as described in the foregoing
clause (i) and other than TCI Group Common Stock (or Convertible Securities
convertible into or exercisable or exchangeable for shares of TCI Group
Series A Common Stock or TCI Group Series B Common Stock), either on the
basis of a distribution of identical securities, on an equal per share
basis, to holders of LMG Series A Common Stock and LMG Series B Common
Stock or on the basis of a distribution of one class or series of
securities to holders of LMG Series A Common Stock and another class or
series of securities to holders of LMG Series B Common Stock, provided that
the securities so distributed (and, if the distribution consists of
Convertible Securities, the securities into which such Convertible
Securities are convertible or for which they are exercisable or
exchangeable) do not differ in any respect other than their relative voting
rights and related differences in designation, conversion, redemption and
share distribution provisions, with holders of shares of LMG Series B
Common Stock receiving the class or series having the higher relative
voting rights (without regard to
whether such rights differ to a greater or lesser extent than the
corresponding differences in voting rights, designation, conversion,
redemption and share distribution provisions between the LMG Series A
Common Stock and the LMG Series B Common Stock), provided that if the
securities so distributed constitute capital stock of a subsidiary of the
Company, such rights will not differ to a greater extent than the
corresponding differences in voting rights, designation, conversion,
redemption and share distribution provisions between the LMG Series A
Common Stock and the LMG Series B Common Stock, and provided in each case
that such distribution is otherwise made on an equal per share basis.
The Company will not reclassify, subdivide or combine the LMG Series A
Common Stock without reclassifying, subdividing or combining the LMG Series B
Common Stock, on an equal per share basis, and the Company will not
reclassify, subdivide or combine the LMG Series B Common Stock without
reclassifying, subdividing or combining the LMG Series A Common Stock, on an
equal per share basis.
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Conversion and Redemption
Conversion at the Option of the Holder. Each share of TCI Group Series B
Common Stock is convertible, at the option of the holder thereof, into one
share of TCI Group Series A Common Stock. Each share of LMG Series B Common
Stock is convertible, at the option of the holder thereof, into one share of
LMG Series A Common Stock. Shares of TCI Group Series A Common Stock are not
convertible into shares of TCI Group Series B Common Stock, and shares of LMG
Series A Common Stock are not convertible into shares of LMG Series B Common
Stock.
Conversion at the Option of the Company. The Board of Directors may at any
time declare that (i) all of the outstanding shares of LMG Series A Common
Stock will be converted into a number (or fraction) of fully paid and
nonassessable shares of TCI Group Series A Common Stock equal to the Optional
Conversion Ratio, and (ii) all of the outstanding shares of LMG Series B
Common Stock will be converted into a number (or fraction) of fully paid and
nonassessable shares of TCI Group Series B Common Stock equal to the Optional
Conversion Ratio.
For these purposes, the "Optional Conversion Ratio" means the quotient
(calculated to the nearest five decimal places) obtained by dividing (x) the
Liberty Media Group Common Stock Per Share Value by (y) the average Market
Value of one share of TCI Group Series A Common Stock over the 20-trading day
period ending on the trading day preceding the Appraisal Date.
The "Liberty Media Group Private Market Value" means an amount equal to the
private market value of the Liberty Media Group as of the last day of the
calendar month preceding the month in which the last of the two appraisers
referred to in the immediately following sentence are selected (the last day
of such calendar month is hereinafter referred to as the "Appraisal Date"). In
the event that the Company determines to establish the Liberty Media Group
Private Market Value, two investment banking firms of recognized national
standing will be designated to determine the private market value of the
Liberty Media Group, one designated by the Company (the "First Appraiser") and
one designated by a committee of the Board of Directors all of whose members
are independent directors as determined under Nasdaq National Market rules
(the "Second Appraiser"). The date upon which the last of such appraisers is
selected is hereinafter referred to as the "Selection Date." Not later than 20
days after the Selection Date, the First Appraiser and the Second Appraiser
will each determine its initial view as to the private market value of the
Liberty Media Group as of the Appraisal Date and will consult with one another
with respect thereto. Not later than the 30th day after the Selection Date,
the First Appraiser and the Second Appraiser will each have determined its
final view as to such private market value. If the higher of the respective
final views of the First Appraiser and the Second Appraiser as to such private
market value (the "Higher Appraised Amount") is not more than 120% of the
lower of such respective final views (the "Lower Appraised Amount"), the
Liberty Media Group Private Market Value (subject to any adjustment described
in the second succeeding paragraph) will be the average of those two amounts.
If the Higher Appraised Amount is more than 120% of the Lower Appraised
Amount, the First Appraiser and the Second Appraiser will agree upon
and jointly designate a third investment banking firm of recognized national
standing (the "Mutually Designated Appraiser") to determine such private
market value. The Mutually Designated Appraiser will not be provided with any
of the work of the First Appraiser and Second Appraiser. The Mutually
Designated Appraiser will, no later than the 20th day after the date the
Mutually Designated Appraiser is designated, determine such private market
value (the "Mutually Appraised Amount"), and the Liberty Media Group Private
Market Value (subject to any adjustment described in the second succeeding
paragraph) will be (i) if the Mutually Appraised Amount is between the Lower
Appraised Amount and the Higher Appraised Amount, (a) the average of (1) the
Mutually Appraised Amount and (2) the Lower Appraised Amount or the Higher
Appraised Amount, whichever is closer to the Mutually Appraised Amount, or (b)
the Mutually Appraised Amount, if neither the Lower Appraised Amount nor the
Higher Appraised Amount is closer to the Mutually Appraised Amount, or (ii) if
the Mutually Appraised Amount is greater than the Higher Appraised Amount or
less than the Lower Appraised Amount, the average of the Higher Appraised
Amount and the Lower Appraised Amount. For these purposes, if any such
investment banking firm expresses its final view of the private market value
of the Liberty Media Group as a
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range of values, such investment banking firm's final view of such private
market value will be deemed to be the midpoint of such range of values.
Each of the investment banking firms referred to in the preceding paragraph
will be instructed to determine the private market value of the Liberty Media
Group as of the Appraisal Date based upon the amount a willing purchaser would
pay to a willing seller, in an arm's length transaction, if it were acquiring
the Liberty Media Group, as if the Liberty Media Group were a publicly traded
non-controlled corporation and the purchaser was acquiring all of the capital
stock of such corporation and without consideration of any potential
regulatory constraints limiting the potential purchasers of the Liberty Media
Group other than that which would have existed if the Liberty Media Group were
a publicly traded non-controlled entity.
Following the determination of the Liberty Media Group Private Market Value,
the investment banking firms whose final views of the private market value of
the Liberty Media Group were used in the calculation of the Liberty Media
Group Private Market Value will determine the Adjusted Outstanding Shares of
Liberty Media Group Common Stock together with any further appropriate
adjustments to the Liberty Media Group Private Market Value resulting from
such determination. The "Adjusted Outstanding Shares of Liberty Media Group
Common Stock" means a number, as determined by such investment banking firms
as of the Appraisal Date, equal to the sum of the number of shares of Liberty
Media Group Common Stock outstanding, the Number of Shares Issuable with
Respect to the Inter-Group Interest, the number of Committed Acquisition
Shares issuable, the number of shares of Liberty Media Group Common Stock
issuable upon the conversion, exercise or exchange of all Pre-Distribution
Convertible Securities and the number of shares of Liberty Media Group Common
Stock issuable upon the conversion, exercise or exchange of those Convertible
Securities (other than Pre-Distribution Convertible Securities and other than
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares) the holders of which would
derive an economic benefit from conversion, exercise or exchange of such
Convertible Securities which exceeds the economic benefit of not converting,
exercising or exchanging such Convertible Securities. The "Liberty Media Group
Common Stock Per Share Value" means the quotient obtained by dividing the
Liberty Media Group Private Market Value by the Adjusted Outstanding Shares of
Liberty Media Group Common Stock, provided that if such investment banking
firms do not agree on the determinations provided for in this paragraph, the
Liberty Media Group Common Stock Per Share Value will be the average of the
quotients so obtained on the basis of the respective determinations of such
firms.
If the Company determines to convert shares of LMG Series A Common Stock
into TCI Group Series A Common Stock and shares of LMG Series B Common Stock
into TCI Group Series B Common Stock at the Optional Conversion Ratio, such
conversion will occur on a conversion date on or prior to the 120th day
following the Appraisal Date. If the Company determines not to undertake such
conversion, the Company may at any time thereafter undertake to reestablish
the Liberty Media Group Common Stock Per Share Value as of a subsequent date.
Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common
Stock. Upon the sale, transfer, assignment or other disposition, whether by
merger, consolidation, sale or contribution of assets or stock or otherwise (a
"Disposition "), in one transaction or a series of related transactions by the
Company and its subsidiaries of all or substantially all of the properties and
assets of the Liberty Media Group to one or more persons, entities or groups
(other than (a) in connection with the Disposition by the Company of all of
the Company's properties and assets in one transaction or a series of related
transactions in connection with the liquidation, dissolution or winding up of
the Company, (b) a dividend, other distribution or redemption in accordance
with any provision described under "--Dividends," "--Share Distributions," "--
Redemption in Exchange for Stock of Subsidiary" or "--Liquidation Rights," (c)
to any person, entity or group which the Company, directly or indirectly,
after giving effect to the Disposition, controls or (d) in connection with a
Related Business Transaction), the Company is required, on or prior to the
85th trading day following the consummation of such Disposition, to either:
(i) subject to the limitations described above under "--Dividends,"
declare and pay a dividend in cash and/or securities or other property
(other than a dividend or distribution of Common Stock) to the holders
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of the outstanding shares of Liberty Media Group Common Stock equally on a
share for share basis (subject to the provisions described in the last
sentence of the paragraph herein which defines the term "Net Proceeds"), in
an aggregate amount equal to the product of the Outstanding Interest
Fraction as of the record date for determining the holders entitled to
receive such dividend and the Net Proceeds of such Disposition;
(ii) provided that there are assets of the Company legally available
therefor and the Liberty Media Group Available Dividend Amount would have
been sufficient to pay a dividend in lieu thereof as described in clause
(i) of this paragraph, then:
(A) if such Disposition involves all (not merely substantially all)
of the properties and assets of the Liberty Media Group, redeem all
outstanding shares of LMG Series A Common Stock and LMG Series B Common
Stock in exchange for cash and/or securities or other property (other
than Common Stock) in an aggregate amount equal to the product of the
Adjusted Outstanding Interest Fraction as of the date of such
redemption and the Net Proceeds of such Disposition, such aggregate
amount to be allocated (subject to the provisions described in the last
sentence of the paragraph herein which defines the term "Net Proceeds")
to shares of LMG Series A Common Stock and LMG Series B Common Stock in
the ratio of the number of shares of each such series outstanding (so
that the amount of consideration paid for the redemption of each share
of LMG Series A Common Stock and each share of LMG Series B Common
Stock is the same); or
(B) if such Disposition involves substantially all (but not all) of
the properties and assets of the Liberty Media Group, apply an
aggregate amount of cash and/or securities or other property (other
than Common Stock) equal to the product of the Outstanding Interest
Fraction as of the date shares are selected for redemption and the Net
Proceeds of such Disposition to the redemption of outstanding shares of
LMG Series A Common Stock and LMG Series B Common Stock, such aggregate
amount to be allocated (subject to the provisions described in the last
sentence of the paragraph herein which defines the term "Net Proceeds")
to shares of LMG Series A Common Stock and LMG Series B Common Stock in
the ratio of the number of shares of each such series outstanding, and
the number of shares of each such series to be redeemed to equal the
lesser of (x) the whole number nearest the number determined by
dividing the aggregate amount so allocated to the redemption of such
series by the average Market Value of one share of LMG Series A Common
Stock during the ten-trading day period beginning on the 16th trading
day following the consummation of such Disposition and (y) the number
of shares of such series outstanding (so that the amount of
consideration paid for the redemption of each share of LMG Series A
Common Stock and each share of LMG Series B Common Stock is the same);
or
(iii) convert (A) each outstanding share of LMG Series A Common Stock
into a number (or fraction) of fully paid and nonassessable shares of TCI
Group Series A Common Stock and (B) each outstanding share of LMG Series B
Common Stock into a number (or fraction) of fully paid and nonassessable
shares
of TCI Group Series B Common Stock, in each case equal to 110% of the
average daily ratio (calculated to the nearest five decimal places) of the
Market Value of one share of LMG Series A Common Stock to the Market Value
of one share of TCI Group Series A Common Stock during the ten-trading day
period referred to in clause (ii)(B) of this paragraph.
For these purposes, "substantially all of the properties and assets of the
Liberty Media Group" means a portion of such properties and assets that
represents at least 80% of the then-current market value (as determined by the
Board of Directors) of the properties and assets of the Liberty Media Group as
of such date.
A "Related Business Transaction" means any Disposition of all or
substantially all of the properties and assets of the Liberty Media Group in
which the Company receives as proceeds of such Disposition primarily equity
securities (including, without limitation, capital stock, convertible
securities, partnership or limited partnership interests and other types of
equity securities, without regard to the voting power or contractual or other
management or governance rights related to such equity securities) of the
purchaser or acquiror of such
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assets and properties of the Liberty Media Group, any entity which succeeds
(by merger, formation of a joint venture enterprise or otherwise) to such
assets and properties of the Liberty Media Group or a third party issuer,
which purchaser, acquiror or other issuer is engaged or proposes to engage
primarily in one or more businesses similar or complementary to the businesses
conducted by the Liberty Media Group prior to such Disposition, as determined
in good faith by the Board of Directors.
The "Adjusted Outstanding Interest Fraction" means a fraction the numerator
of which is the number of outstanding shares of Liberty Media Group Common
Stock and the denominator of which is the sum of (a) such number of
outstanding shares, (b) the Number of Shares Issuable with Respect to the
Inter-Group Interest, (c) the number of shares of Liberty Media Group Common
Stock issuable upon conversion, exercise or exchange of Pre-Distribution
Convertible Securities and (d) the number of Committed Acquisition Shares
issuable.
The "Net Proceeds" with respect to any Disposition of any of the properties
and assets of the Liberty Media Group means an amount if any, equal to the
gross proceeds of such Disposition after any payment of, or reasonable
provision for, (a) any taxes payable by the Company in respect of such
Disposition or in respect of any resulting dividend or redemption (or which
would have been payable but for the utilization of tax benefits attributable
to the TCI Group), (b) any transaction costs, including, without limitation,
any legal, investment banking and accounting fees and expenses and (c) any
liabilities and other obligations (contingent or otherwise) of, or attributed
to, the Liberty Media Group, including, without limitation, any indemnity or
guarantee obligations incurred in connection with the Disposition or any
liabilities for future purchase price adjustments and any preferential amounts
plus any accumulated and unpaid dividends and other obligations (without
duplication of amounts allocated for the satisfaction of the Company's
obligations with respect to Pre-Distribution Convertible Securities and
Committed Acquisition Shares issuable which are included in the determination
of the Adjusted Outstanding Interest Fraction) in respect of Preferred Stock
attributed to the Liberty Media Group. The Company may elect to pay the
dividend or redemption price referred to in clause (i) or (ii) above either in
the same form as the proceeds of the Disposition were received or in any other
combination of cash or securities or other property (other than Common Stock)
that the Board of Directors determines will have an aggregate market value on
a fully distributed basis, of not less than the amount of the Net Proceeds. If
the dividend or redemption price is paid in the form of securities of an
issuer other than the Company, the Board of Directors may determine either to
(x) pay the dividend or redemption price in the form of separate classes or
series of securities, with one class or series of such securities to holders
of LMG Series A Common Stock and another class or series of securities to
holders of LMG Series B Common Stock, provided that such securities (and, if
such securities are convertible into or exercisable or exchangeable for shares
of another class or series of securities, the securities so issuable upon such
conversion, exercise or exchange) do not differ in any respect other than
their relative voting rights and related differences in designation,
conversion, redemption and share distribution provisions with holders of
shares of LMG Series B Common Stock receiving the class or series having the
higher relative voting rights (without regard to whether such rights differ to
a greater or lesser extent than the corresponding differences in voting
rights, designation, conversion, redemption and share distribution provisions
between the LMG Series A Common Stock and the LMG Series B Common Stock),
provided that if such securities constitute capital stock of a subsidiary of
the Company, such rights will not differ to a greater extent than the
corresponding differences in voting rights, designation, conversion,
redemption and share distribution provisions between the LMG Series A Common
Stock and LMG Series B Common Stock, and otherwise such securities will be
distributed on an equal per share basis, or (y) pay the dividend or redemption
price in the form of a single class of securities without distinction between
the shares received by the holders of LMG Series A Common Stock and LMG Series
B Common Stock.
At the time of any dividend made as a result of a Disposition referred to
above, the TCI Group will be credited, and the Liberty Media Group will be
charged (in addition to the charge for the dividend paid in respect of
outstanding shares of Liberty Media Group Common Stock), with an amount equal
to the product of (i) the aggregate amount paid in respect of such dividend
times (ii) a fraction the numerator of which is the Inter-Group Interest
Fraction and the denominator of which is the Outstanding Interest Fraction.
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<PAGE>
Redemption in Exchange for Stock of Subsidiary. At any time at which all of
the assets and liabilities attributed to the Liberty Media Group have become
and continue to be held directly or indirectly by any one or more corporations
all of the capital stock of which is owned by the Company (the "Liberty Media
Group Subsidiaries"), the Board of Directors may, subject to the availability
of assets of the Company legally available therefor, redeem on a pro rata
basis, all of the outstanding shares of Liberty Media Group Common Stock in
exchange for an aggregate number of outstanding fully paid and nonassessable
shares of common stock of each Liberty Media Group Subsidiary equal to the
product of the Adjusted Outstanding Interest Fraction and the number of all of
the outstanding shares of common stock of such Liberty Media Group Subsidiary.
In effecting such a redemption, the Board of Directors may determine either
to (i) redeem shares of LMG Series A Common Stock and LMG Series B Common
Stock in exchange for shares of separate classes or series of common stock of
each Liberty Media Group Subsidiary with relative voting rights and related
differences in designation, conversion, redemption and share distribution
provisions not greater than the corresponding differences in voting rights,
designation, conversion, redemption and share distribution provisions between
the LMG Series A Common Stock and LMG Series B Common Stock, with holders of
shares of LMG Series B Common Stock receiving the class or series having the
higher relative voting rights, or (ii) redeem shares of LMG Series A Common
Stock and LMG Series B Common Stock in exchange for shares of a single class
of common stock of each Liberty Media Group Subsidiary without distinction
between the shares distributed to the holders of the two series of Liberty
Media Group Common Stock. If the Company determines to undertake a redemption
as described in clause (i) of the preceding sentence, the outstanding shares
of common stock of each Liberty Media Group Subsidiary not distributed to
holders of Liberty Media Group Common Stock would consist solely of the class
or series having the lower relative voting rights.
Certain Provisions Respecting Convertible Securities. Unless the provisions
of any class or series of Pre-Distribution Convertible Securities or
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares provide specifically to the
contrary, after any conversion date or redemption date on which all
outstanding shares of Liberty Media Group Common Stock were converted or
redeemed, any share of Liberty Media Group Common Stock that is issued on
conversion, exercise or exchange of any Pre-Distribution Convertible
Securities or any Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares will, immediately
upon issuance pursuant to such conversion, exercise or exchange and without
any notice or any other action on the part of the Company or the Board of
Directors or the holder of such share of Liberty Media Group Common Stock, be
converted into or redeemed in exchange for, as applicable, the kind and amount
of shares of capital stock, cash and/or other securities or property that a
holder of such Pre-Distribution Convertible Securities or any Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares would have been entitled to receive pursuant to
the terms of such securities had such terms provided that the conversion,
exercise or exchange privilege in effect immediately prior to any such
conversion or redemption of all outstanding shares of Liberty Media Group
Common Stock would be adjusted so that the holder of any such Pre-Distribution
Convertible Securities or any Convertible Securities which are convertible
into or exercisable or exchangeable
for Committed Acquisition Shares thereafter surrendered for conversion,
exercise or exchange would be entitled to receive the kind and amount of
shares of capital stock, cash and/or other securities or property such holder
would have received as a result of such action had such securities been
converted, exercised or exchanged immediately prior thereto. With respect to
any Convertible Securities which are created, established or otherwise first
authorized for issuance subsequent to the record date for the Distribution
(other than Pre-Distribution Convertible Securities and Convertible Securities
which are convertible into or exercisable or exchangeable for Committed
Acquisition Shares), the terms and provisions of which do not provide for
adjustments specifying the kind and amount of capital stock, cash and/or
securities or other property that such holder would be entitled to receive
upon the conversion, exercise or exchange of such Convertible Securities
following any conversion date or redemption date on which all outstanding
shares of Liberty Media Group Common Stock were converted or redeemed, then
upon such conversion, exercise or exchange of such Convertible Securities, any
share of Liberty Media Group Common Stock that is issued on conversion,
exercise or exchange of any such Convertible Securities will, immediately upon
issuance pursuant to such conversion, exercise or exchange and without any
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<PAGE>
notice or any other action on the part of the Company or the Board of
Directors or the holder of such share of Liberty Media Group Common Stock, be
redeemed in exchange for, to the extent assets of the Company are legally
available therefor, the amount of $.01 per share in cash.
General Conversion and Redemption Provisions. Not later than the 10th
trading day following the consummation of a Disposition referred to above
under "--Mandatory Dividend, Redemption or Conversion of Liberty Media Group
Common Stock," the Company will announce publicly by press release (i) the Net
Proceeds of such Disposition, (ii) the number of outstanding shares of LMG
Series A Common Stock and LMG Series B Common Stock, (iii) the number of
shares of LMG Series A Common Stock and LMG Series B Common Stock into or for
which Convertible Securities are then convertible, exercisable or exchangeable
and the conversion, exercise or exchange prices thereof (and stating which, if
any, of such Convertible Securities constitute Pre-Distribution Convertible
Securities or Convertible Securities which are convertible into or exercisable
or exchangeable for Committed Acquisition Shares) and the number of Committed
Acquisition Shares issuable, (iv) the Outstanding Interest Fraction as of a
recent date preceding the date of such notice and (v) the Adjusted Outstanding
Interest Fraction as of a recent date preceding the date of such notice. Not
earlier than the 26th trading day and not later than the 30th trading day
following the consummation of such Disposition, the Company will announce
publicly by press release which of the actions described in clauses (i), (ii)
or (iii) of the first paragraph under "--Mandatory Dividend, Redemption or
Conversion of Liberty Media Group Common Stock" it has irrevocably determined
to take.
If the Company determines to pay a dividend described in clause (i) of the
first paragraph under "--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock," the Company will, not later than the 30th
trading day following the consummation of such Disposition, cause to be given
to each holder of outstanding shares of LMG Series A Common Stock and LMG
Series B Common Stock, and to each holder of Convertible Securities
convertible into or exercisable or exchangeable for shares of either such
series (unless provision for notice is otherwise made pursuant to the terms of
such Convertible Securities), a notice setting forth (i) the record date for
determining holders entitled to receive such dividend, which will be not
earlier than the 40th trading day and not later than the 50th trading day
following the consummation of such Disposition, (ii) the anticipated payment
date of such dividend (which will not be more than 85 trading days following
the consummation of such Disposition), (iii) the kind of shares of capital
stock, cash and/or other securities or property to be distributed in respect
of shares of LMG Series A Common Stock and LMG Series B Common Stock, (iv) the
Net Proceeds of such Disposition, (v) the Outstanding Interest Fraction as of
a recent date preceding the date of such notice, (vi) the number of
outstanding shares of LMG Series A Common Stock and LMG Series B Common Stock
and the number of shares of LMG Series A Common Stock and LMG Series B Common
Stock into or for which outstanding Convertible Securities are then
convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof and (vii) in the case of a notice to holders of
Convertible Securities, a statement to the effect that holders of such
Convertible Securities will be entitled to receive such dividend only if they
appropriately convert, exercise or exchange them prior to the record date
referred to in clause (i) of this sentence. Such notice will be sent by first-
class mail, postage prepaid, at such holder's address as the same appears on
the transfer books of the Company.
If the Company determines to undertake a redemption of shares of Liberty
Media Group Common Stock following a Disposition of all (not merely
substantially all) of the properties and assets of the Liberty Media Group as
described in clause (ii)(A) of the first paragraph under "--Mandatory
Dividend, Redemption or Conversion of Liberty Media Group Common Stock," the
Company will cause to be given to each holder of outstanding shares of LMG
Series A Common Stock and LMG Series B Common Stock and to each holder of
Convertible Securities convertible into or exercisable or exchangeable for
shares of either such series (unless provision for notice is otherwise made
pursuant to the terms of such Convertible Securities), a notice setting forth
(i) a statement that all shares of Liberty Media Group Common Stock
outstanding on the redemption date will be redeemed, (ii) the redemption date
(which will not be more than 85 trading days following the consummation of
such Disposition), (iii) the kind of shares of capital stock, cash and/or
other securities or property to be paid as a redemption price in respect of
shares of Liberty Media Group Common Stock
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<PAGE>
outstanding on the redemption date, (iv) the Net Proceeds of such Disposition,
(v) the Adjusted Outstanding Interest Fraction as of a recent date preceding
the date of such notice, (vi) the place or places where certificates for
shares of Liberty Media Group Common Stock, properly endorsed or assigned for
transfer (unless the Company waives such requirement), are to be surrendered
for delivery of certificates for shares of such capital stock, cash and/or
other securities or property, (vii) the number of outstanding shares of LMG
Series A Common Stock and LMG Series B Common Stock and the number of shares
of LMG Series A Common Stock and LMG Series B Common Stock into or for which
outstanding Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange prices thereof (and
stating which, if any, of such Convertible Securities constitute Pre-
Distribution Convertible Securities or Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares) and the number of Committed Acquisition Shares issuable, and (viii) in
the case of a notice to holders of Convertible Securities, a statement to the
effect that holders of such Convertible Securities will be entitled to
participate in such redemption only if such holders appropriately convert,
exercise or exchange such Convertible Securities on or prior to the redemption
date referred to in clause (ii) of this sentence and a statement as to what,
if anything, such holders will be entitled to receive pursuant to the terms of
such Convertible Securities or, if applicable, the provision described under
"--Certain Provisions Respecting Convertible Securities" if such holders
convert, exercise or exchange such Convertible Securities following such
redemption date. Such notice will be sent by first-class mail, postage
prepaid, not less than 35 trading days nor more than 45 trading days prior to
the redemption date, at such holder's address as the same appears on the
transfer books of the Company.
If the Company determines to undertake a redemption of shares of Liberty
Media Group Common Stock following a Disposition of substantially all (but not
all) of the properties and assets of the Liberty Media Group as described in
clause (ii)(B) of the first paragraph under "--Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock," the Company will, not
later than the 30th trading day following the consummation of such
Disposition, cause to be given to each holder of record of outstanding shares
of LMG Series A Common Stock and LMG Series B Common Stock, and to each holder
of Convertible Securities convertible into or exercisable or exchangeable for
shares of either such series (unless provision for notice is otherwise made
pursuant to the terms of such Convertible Securities), a notice setting forth
(i) a date not earlier than the 40th trading day and not later than the 50th
trading day following the consummation of such Disposition which will be the
date on which shares of the Liberty Media Group Common Stock then outstanding
will be selected for redemption, (ii) the anticipated redemption date (which
will not be more than 85 trading days following the consummation of such
Disposition), (iii) the kind of shares of capital stock, cash and/or other
securities or property to be paid as a redemption price in respect of shares
of Liberty Media Group Common Stock selected for redemption, (iv) the Net
Proceeds of such Disposition, (v) the Outstanding Interest Fraction as of a
recent date preceding the date of such notice, (vi) the number of outstanding
shares of LMG Series A Common Stock and LMG Series B Common Stock and the
number of shares of LMG Series A Common Stock and LMG Series B Common Stock
into or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion or exercise prices thereof,
(vii) in the case of a notice to holders of Convertible Securities, a
statement to the effect that holders of such Convertible Securities will be
entitled to participate in such selection for redemption only if such holders
appropriately convert, exercise or exchange such Convertible Securities on or
prior to the date referred to in clause (i) of this sentence and a statement
as to what,
if anything, such holders will be entitled to receive pursuant to the terms of
such Convertible Securities if such holders convert, exercise or exchange such
Convertible Securities following such date and (viii) a statement that the
Company will not be required to register a transfer of any shares of Liberty
Media Group Common Stock for a period of 15 trading days next preceding the
date referred to in clause (i) of this sentence. Promptly following the date
referred to in clause (i) of the preceding sentence, but not earlier than the
40th trading day and not later than the 50th trading day following the
consummation of such Disposition, the Company will cause to be given to each
holder of shares of LMG Series A Common Stock and LMG Series B Common Stock to
be redeemed, a notice setting forth (i) the number of shares of LMG Series A
Common Stock and LMG Series B Common Stock held by such holder to be redeemed,
(ii) a statement that such shares of LMG Series A Common Stock and LMG Series
B Common Stock will be redeemed, (iii) the redemption date (which will not be
more than 85 trading days following the consummation of such Disposition),
(iv) the kind and per share amount of shares of capital
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<PAGE>
stock, cash and/or other securities or property to be received by such holder
with respect to each share of such Liberty Media Group Common Stock to be
redeemed, including details as to the calculation thereof, and (v) the place
or places where certificates for shares of such Liberty Media Group Common
Stock, properly endorsed or assigned for transfer (unless the Company waives
such requirement), are to be surrendered for delivery of certificates for
shares of such capital stock, cash and/or other securities or property. The
notices referred to in this paragraph will be sent by first-class mail,
postage prepaid, at such holder's address as the same appears on the transfer
books of the Company. The outstanding shares of Liberty Media Group Common
Stock to be redeemed will be redeemed by the Company pro rata among the
holders of Liberty Media Group Common Stock or by such other method as may be
determined by the Board of Directors to be equitable.
In the event of any conversion as described above under "--Conversion at the
Option of the Company" or "--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock," the Company will cause to be given to each
holder of outstanding shares of LMG Series A Common Stock and LMG Series B
Common Stock and to each holder of Convertible Securities convertible into or
exercisable or exchangeable for shares of either such series (unless provision
for such notice is otherwise made pursuant to the terms of such Convertible
Securities), a notice setting forth (i) a statement that all outstanding
shares of Liberty Media Group Common Stock will be converted, (ii) the
conversion date (which will not be more than 85 trading days following the
consummation of such Disposition in the event of a conversion pursuant to the
provisions described under "--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock" and which will not be more than 120 days
after the Appraisal Date in the event of a conversion pursuant to the
provisions described under "--Conversion at the Option of the Company"), (iii)
the per share number of shares of TCI Group Series A Common Stock or TCI Group
Series B Common Stock, as applicable, to be received with respect to each
share of LMG Series A Common Stock or LMG Series B Common Stock, including
details as to the calculation thereof, (iv) the place or places where
certificates for shares of Liberty Media Group Common Stock, properly endorsed
or assigned for transfer (unless the Company waives such requirement), are to
be surrendered, (v) the number of outstanding shares of LMG Series A Common
Stock and LMG Series B Common Stock, the number of Committed Acquisition
Shares issuable and the number of shares of LMG Series A Common Stock and LMG
Series B Common Stock into or for which outstanding Convertible Securities are
then convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof and (vi) in the case of a notice to holders of
Convertible Securities, a statement to the effect that holders of such
Convertible Securities will be entitled to participate in such conversion only
if such holders appropriately convert, exercise or exchange such Convertible
Securities on or prior to the conversion date referred to in clause (ii) of
this sentence and a statement as to what, if anything, such holders will be
entitled to receive pursuant to the terms of such Convertible Securities or,
if applicable, the provision described under "--Certain Provisions Respecting
Convertible Securities" if such holders convert, exercise or exchange such
Convertible Securities following such conversion date. Such notice will be
sent by first-class mail, postage prepaid, not less than 35 trading days nor
more than 45 trading days prior to the conversion date, at such holder's
address as the same appears on the transfer books of the Company.
If the Company determines to redeem shares of LMG Series A Common Stock and
LMG Series B Common Stock as described above under "--Redemption in Exchange
for Stock of Subsidiary," the Company will promptly cause to be given to each
holder of LMG Series A Common Stock and LMG Series B Common Stock
and to each holder of Convertible Securities convertible into or exercisable
or exchangeable for shares of either such series (unless provision for such
notice is otherwise made pursuant to the terms of such Convertible
Securities), a notice setting forth (i) a statement that all outstanding
shares of Liberty Media Group Common Stock will be redeemed in exchange for
shares of common stock of the Liberty Media Group Subsidiaries, (ii) the
redemption date, (iii) the Adjusted Outstanding Interest Fraction as of a
recent date preceding the date of such notice, (iv) the place or places where
certificates for shares of Liberty Media Group Common Stock, properly endorsed
or assigned for transfer (unless the Company waives such requirement), are to
be surrendered for delivery of certificates for shares of common stock of the
Liberty Media Group Subsidiaries, (v) the number of outstanding shares of LMG
Series A Common Stock and LMG Series B Common Stock and the number of shares
of LMG Series A Common Stock and LMG Series B Common Stock into or for which
outstanding Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange
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prices thereof (and stating which, if any, of such Convertible Securities
constitute Pre-Distribution Convertible Securities or Convertible Securities
which are convertible into or exercisable or exchangeable for Committed
Acquisition Shares) and the number of Committed Acquisition Shares issuable,
and (vi) in the case of a notice to holders of Convertible Securities, a
statement to the effect that holders of such Convertible Securities will be
entitled to receive shares of common stock of the Liberty Media Group
Subsidiaries upon redemption only if such holders appropriately convert,
exercise or exchange such Convertible Securities on or prior to the redemption
date referred to in clause (ii) of this sentence and a statement as to what,
if anything, such holders will be entitled to receive pursuant to the terms of
such Convertible Securities or, if applicable, the provisions described under
"--Certain Provisions Respecting Convertible Securities" if such holders
convert, exercise or exchange such Convertible Securities following the
redemption date. Such notice will be sent by first-class mail, postage
prepaid, not less than 35 trading days nor more than 45 trading days prior to
the redemption date, at such holder's address as the same appears on the
transfer books of the Company.
Neither the failure to mail any notice to any particular holder of Liberty
Media Group Common Stock or of Convertible Securities nor any defect therein
will affect the sufficiency thereof with respect to any other holder of
outstanding shares of Liberty Media Group Common Stock or of Convertible
Securities, or the validity of any conversion or redemption.
The Company will not be required to issue or deliver fractional shares of
any class of capital stock or any fractional securities to any holder of
Liberty Media Group Common Stock upon any conversion, redemption, dividend or
other distribution described above. In connection with the determination of
the number of shares of any class of capital stock that is issuable or the
amount of securities that is deliverable to any holder of record upon any such
conversion, redemption, dividend or other distribution (including any
fractions of shares or securities), the Company may aggregate the number of
shares of Liberty Media Group Common Stock held at the relevant time by such
holder of record. If the number of shares of any class of capital stock or the
amount of securities remaining to be issued or delivered to any holder of
Liberty Media Group Common Stock is a fraction, the Company will, if such
fraction is not issued or delivered to such holder, pay a cash adjustment in
respect of such fraction in an amount equal to the fair market value of such
fraction on the fifth trading day prior to the date such payment is to be made
(without interest). For purposes of the preceding sentence, "fair market
value" of any fraction will be (i) in the case of any fraction of a share of
capital stock of the Company, the product of such fraction and the Market
Value of one share of such capital stock and (ii) in the case of any other
fractional security, such value as is determined by the Board of Directors.
No adjustments in respect of dividends will be made upon the conversion or
redemption of any shares of Liberty Media Group Common Stock; provided,
however, that if the conversion date or the redemption date with respect to
the Liberty Media Group Common Stock is subsequent to the record date for the
payment of a dividend or other distribution thereon or with respect thereto,
the holders of shares of Liberty Media Group Common Stock at the close of
business on such record date will be entitled to receive the dividend or other
distribution payable on or with respect to such shares on the date set for
payment of such dividend or other distribution, notwithstanding the conversion
or redemption of such shares or the Company's default in payment of the
dividend or distribution due on such date.
Before any holder of shares of Liberty Media Group Common Stock will be
entitled to receive certificates representing shares of any kind of capital
stock or cash and/or securities or other property to be received by such
holder with respect to any conversion or redemption of shares of Liberty Media
Group Common Stock, such holder is required to surrender at such place as the
Company will specify certificates for such shares, properly endorsed or
assigned for transfer (unless the Company waives such requirement). The
Company will as soon as practicable after such surrender of certificates
representing shares of Liberty Media Group Common Stock deliver to the person
for whose account such shares were so surrendered, or to the nominee or
nominees of such person, certificates representing the number of whole shares
of the kind of capital stock or cash and/or securities or other property to
which such person is entitled, together with any payment for fractional
securities referred to above. If less than all of the shares of Liberty Media
Group Common Stock represented by any one certificate are to be redeemed, the
Company will issue and deliver a new certificate for the shares of Liberty
Media Group
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Common Stock not redeemed. The Company will not be required to register a
transfer of (i) any shares of Liberty Media Group Common Stock for a period of
15 trading days next preceding any selection of shares of Liberty Media Group
Common Stock to be redeemed or (ii) any shares of Liberty Media Group Common
Stock selected or called for redemption. Shares selected for redemption may
not thereafter be converted pursuant to the provisions described under "--
Conversion at the Option of the Holder."
From and after any applicable conversion date or redemption date, all rights
of a holder of shares of Liberty Media Group Common Stock that were converted
or redeemed will cease except for the right, upon surrender of the
certificates representing shares of Liberty Media Group Common Stock, to
receive certificates representing shares of the kind and amount of capital
stock or cash and/or securities or other property for which such shares were
converted or redeemed, together with any payment for fractional securities and
such holder will have no other or further rights in respect of the shares of
Liberty Media Group Common Stock so converted or redeemed, including, but not
limited to, any rights with respect to any cash, securities or other property
which are reserved or otherwise designated by the Company as being held for
the satisfaction of the Company's obligations to pay or deliver any cash,
securities or other property upon the conversion, exercise or exchange of any
Convertible Securities outstanding as of the date of such conversion or
redemption or any Committed Acquisition Shares which may then be issuable. No
holder of a certificate that, immediately prior to the applicable conversion
date or redemption date for the Liberty Media Group Common Stock, represented
shares of Liberty Media Group Common Stock will be entitled to receive any
dividend or other distribution with respect to shares of any kind of capital
stock into or in exchange for which the Liberty Media Group Common Stock was
converted or redeemed until surrender of such holder's certificate for a
certificate or certificates representing shares of such kind of capital stock.
Upon such surrender, there will be paid to the holder the amount of any
dividends or other distributions (without interest) which theretofore became
payable with respect to a record date after the conversion date or redemption
date, as the case may be, but that were not paid by reason of the foregoing,
with respect to the number of whole shares of the kind of capital stock
represented by the certificate or certificates issued upon such surrender.
From and after a conversion date or redemption date, as the case may be, for
any shares of Liberty Media Group Common Stock, the Company will, however, be
entitled to treat the certificates for shares of Liberty Media Group Common
Stock that have not yet been surrendered for conversion or redemption as
evidencing the ownership of the number of whole shares of the kind or kinds of
capital stock for which the shares of Liberty Media Group Common Stock
represented by such certificates have been converted or redeemed,
notwithstanding the failure to surrender such certificates.
The Company will pay any and all documentary, stamp or similar issue or
transfer taxes that may be payable in respect of the issue or delivery of any
shares of capital stock and/or other securities on conversion or redemption of
shares of Liberty Media Group Common Stock. The Company will not, however, be
required to pay any tax that may be payable in respect of any transfer
involved in the issue and delivery of any shares of capital stock in a name
other than that in which the shares of Liberty Media Group Common Stock so
converted or redeemed were registered and no such issue or delivery will be
made unless and until the person requesting such issue has paid to the Company
the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.
Liquidation Rights
In the event of a liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, after payment or provision for payment of
the debts and other liabilities of the Company and subject to the prior
payment in full of the preferential amounts to which any class or series of
the Company Preferred Stock is entitled, (i) the holders of the shares of TCI
Group Common Stock will share equally, on a share for share basis, in a
percentage of the funds of the Company remaining for distribution to its
common stockholders equal to 100% of such funds multiplied by the average
daily ratio (expressed as a decimal) of X/Z for the 20-trading day period
ending on the trading day prior to the date of the public announcement of such
liquidation, dissolution or winding up, and (ii) the holders of the shares of
Liberty Media Group Common Stock will share equally, on a share for share
basis, in a percentage of the funds of the Company remaining for distribution
to its common stockholders equal to 100% of such funds multiplied by the
average daily ratio (expressed as a decimal) of Y/Z
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for such 20-trading day period, where X is the aggregate Market Capitalization
of the TCI Group Series A Common Stock and the TCI Group Series B Common
Stock, Y is the aggregate Market Capitalization of the LMG Series A Common
Stock and the LMG Series B Common Stock, and Z is the aggregate Market
Capitalization of the TCI Group Series A Common Stock, the TCI Group Series B
Common Stock, the LMG Series A Common Stock and the LMG Series B Common Stock.
Neither a consolidation, merger nor sale of assets will be construed to be a
"liquidation," "dissolution" or "winding up" of the Company. The "Market
Capitalization" of any class or series of capital stock of the Company on any
trading day means the product of (i) the Market Value of one share of such
class or series on such trading day and (ii) the number of shares of such
class or series outstanding on such trading day.
No holder of Liberty Media Group Common Stock will have any special right to
receive specific assets of the Liberty Media Group in the case of any
dissolution, liquidation or winding up of the Company.
Determinations by the Board of Directors
The Charter provides that any determinations made by the Board of Directors
under any provision described under "--Outstanding Common Stock" will be final
and binding on all stockholders of the Company, except as may otherwise be
required by law. Such a determination would not be binding if it were
established that the determination was made in breach of a fiduciary duty of
the Board of Directors. The Company will prepare a statement of any such
determination by the Board of Directors respecting the fair market value of
any properties, assets or securities and will file such statement with the
Secretary of the Company.
Preemptive Rights
Holders of the TCI Group Common Stock and Liberty Media Group Common Stock
do not have any preemptive rights to subscribe for any additional shares of
capital stock or other obligations convertible into or exercisable for shares
of capital stock that may hereafter be issued by the Company.
OTHER MATTERS
The DGCL, the Charter and the Company's Bylaws contain provisions which may
serve to discourage or make more difficult a change in control of the Company
without the support of the Board of Directors or without meeting various other
conditions. The principal provisions of the DGCL and the aforementioned
corporate governance documents are outlined below.
DGCL Section 203, in general, prohibits a "business combination" between a
corporation and an "interested stockholder" within three years of the date
such stockholder became an "interested stockholder," unless (i) prior to such
date the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, exclusive of shares owned
by directors who are also officers and by certain employee stock plans or
(iii) on or
after such date, the business combination is approved by the board of
directors and authorized by the affirmative vote at a stockholders' meeting of
at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. The term "business combination" is defined to include,
among other transactions between the interested stockholder and the
corporation or any direct or indirect majority-owned subsidiary thereof, a
merger or consolidation; a sale, pledge, transfer or other disposition
(including as part of a dissolution) of assets having an aggregate market
value equal to 10% or more of either the aggregate market value of all assets
of the corporation on a consolidated basis or the aggregate market value of
all the outstanding stock of the corporation; certain transactions that would
increase the interested stockholder's proportionate share ownership of the
stock of any class or series of the corporation or such subsidiary; and any
receipt by the interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or through the
corporation or any such subsidiary. In general, and subject to certain
exceptions, an "interested
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stockholder" is any person who is the owner of 15% or more of the outstanding
voting stock (or, in the case of a corporation with classes of voting stock
with disparate voting power, 15% or more of the voting power of the
outstanding voting stock) of the corporation, and the affiliates and
associates of such person. The term "owner" is broadly defined to include any
person that individually or with or through his or its affiliates or
associates, among other things, beneficially owns such stock, or has the right
to acquire such stock (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement or understanding or upon
the exercise of warrants or options or otherwise or has the right to vote such
stock pursuant to any agreement or understanding, or has an agreement or
understanding with the beneficial owner of such stock for the purpose of
acquiring, holding, voting or disposing of such stock. The restrictions of
DGCL Section 203 do not apply to corporations that have elected, in the manner
provided therein, not to be subject to such section or, with certain
exceptions, which do not have a class of voting stock that is listed on a
national securities exchange or authorized for quotation on an interdealer
quotation system of a registered national securities association or held of
record by more than 2,000 stockholders. The Charter does not contain any
provision "opting out" of the application of DGCL Section 203 and the Company
has not taken any of the actions necessary for it to "opt out" of such
provision. As a result, the provisions of Section 203 will remain applicable
to transactions between the Company and any of its "interested stockholders."
The Charter also contains certain provisions which could make a change in
control of the Company more difficult. For example, the Charter requires,
subject to the rights, if any, of any class or series of the Preferred Stock,
the affirmative vote of 66 2/3% of the total voting power of the outstanding
shares of Voting Stock (as defined herein), voting together as a single class,
to approve (i) a merger or consolidation of the Company with, or into, another
corporation, other than a merger or consolidation which does not require the
consent of stockholders under the DGCL or a merger or consolidation which has
been approved by 75% of the members of the Board of Directors (in which case,
in accordance with the DGCL, the affirmative vote of a majority of the total
voting power of the outstanding Voting Stock would, with certain exceptions,
be required for approval), (ii) the sale, lease or exchange of all or
substantially all of the property and assets of the Company or (iii) the
dissolution of the Company. "Voting Stock" is currently defined as the TCI
Group Common Stock, the Liberty Media Group Common Stock and any class or
series of the Preferred Stock entitled to vote generally with the holders of
the Common Stock on matters submitted to stockholders for a vote.
The Charter provides for a Board of Directors of not less than three
members, divided into three classes of approximately equal size, with each
class to be elected for a three-year term at each annual meeting of
stockholders. The exact number of directors, currently eight, is fixed by the
Board of Directors. The holders of TCI Group Common Stock, Liberty Media Group
Common Stock, Class B Preferred Stock and Series C Preferred Stock, voting
together as a single class, vote in elections for directors. Stockholders of
the Company do not have cumulative voting rights.
The Charter authorizes the issuance of 50,000,000 shares of Series Preferred
Stock, of which 33,901,240 remained available for designation as of January
25, 1996. Under the Charter, the Board of Directors is authorized, without
further action by the stockholders of the Company, to establish the
preferences, limitations and relative rights of the Series Preferred Stock.
See "Description of Series Preferred Stock." In addition, 1,900,000,000 shares
of the TCI Group Common Stock and 825,000,000 shares of Liberty Media Group
Common Stock are currently authorized by the Charter, of which 1,143,097,437
and 660,906,868, respectively, remained available for issuance as of November
1, 1995 (without taking into consideration shares reserved for issuance upon
conversion, exchange or exercise of outstanding convertible or exchangeable
securities and options). The issue and sale of shares of TCI Group Common
Stock, Liberty Media Group Common Stock and/or Series Preferred Stock could
occur in connection with an attempt to acquire control of the Company, and the
terms of such shares of Series Preferred Stock could be designed in part to
impede the acquisition of such control. On January 25, 1996, the Company
issued (i) 7,259,380 shares of the Series G Preferred Stock, each share of
which is initially convertible into 1.05 shares of TCI Group Series A Common
Stock and (ii) 7,259,380 shares of the Series H Preferred Stock, each share of
which is initially convertible into 0.2625 of a share of LMG Series A Common
Stock.
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The Charter requires the affirmative vote of 66 2/3% of the total voting
power of the outstanding shares of Voting Stock, voting together as a single
class, to approve any amendment, alteration or repeal of any provision of the
Charter or the addition or insertion of other provisions therein.
The Charter and the Company's Bylaws provide that a special meeting of
stockholders will be held at any time, subject to the rights of the holders of
any class or series of Preferred Stock, upon the call of the Secretary of the
Company upon (i) the written request of the holders of not less than 66 2/3%
of the total voting power of the outstanding shares of Voting Stock or (ii) at
the request of not less than 75% of the members of the Board of Directors.
Subject to the rights of any class or series of the Preferred Stock, the
Company's Bylaws require that written notice of the intent to make a
nomination at a meeting of stockholders must be received by the Secretary of
the Company, at the Company's principal executive offices, not later than (a)
with respect to an election of directors to be held at an annual meeting of
stockholders, 90 days in advance of such meeting, and (b) with respect to an
election of directors to be held at a special meeting of stockholders, the
close of business on the seventh day following the day on which notice of such
meeting is first given to stockholders. The notice must contain: (1) the name
and address of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (2) a representation that the stockholder
is a holder of record of Voting Stock entitled to vote at the meeting and
intends to appear in person or by proxy at the meeting to nominate the person
or persons specified in the notice; (3) a description of all arrangements or
understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (4) such other information
regarding each nominee proposed by such stockholder as would have been
required to be included in a proxy statement filed pursuant to the proxy rules
of the Commission had each proposed nominee been nominated, or intended to be
nominated, by the Board of Directors; and (5) the consent of each nominee to
serve as a director of the Company if so elected. Any action to remove
directors is required to be for "cause" (as defined in the Charter) and be
approved by the holders of 66 2/3% of the total voting power of the
outstanding shares entitled to vote in the election of directors.
DESCRIPTION OF SERIES PREFERRED STOCK
The Company is authorized to issue up to 50,000,000 shares of Series
Preferred Stock. The Series Preferred Stock is issuable, from time to time, in
one or more series, with such powers, designations, preferences and relative
participating, optional or other rights, and qualifications, limitations or
restrictions thereof, as is stated and expressed in a resolution or
resolutions providing for the issue of each such series adopted by the Board
of Directors. All shares of any one series of the Series Preferred Stock are
required to be alike in every particular. Except to the extent otherwise
provided in the resolution or resolutions providing for the issue of any
series of Series Preferred Stock, the holders of shares of such series will
have no voting rights except as may be required by Delaware law. As of the
date of this Prospectus, there are five series of Series Preferred Stock
outstanding. See "Outstanding Preferred Stock" below.
As described under "Description of Depositary Shares" below, the Company
may, at its option, elect to offer Depositary Shares evidenced by depositary
receipts, each representing an interest in a fraction (to be specified in the
Prospectus Supplement relating to the particular series of Series Preferred
Stock) of a share of the particular series of Series Preferred Stock, issued
and deposited with a depositary, in lieu of offering any shares of such Series
Preferred Stock. See "Description of Depositary Shares."
Series Preferred Stock constituting Offered Securities shall have the
dividend, liquidation, redemption, and voting rights set forth below unless
otherwise provided in a Prospectus Supplement relating to such Series
Preferred Stock. Reference is made to the Prospectus Supplement relating to a
particular series of the Series Preferred Stock offered thereby for specific
terms, including: (a) the designation of such series of Series Preferred Stock
and the number of shares offered; (b) the amount of liquidation preference per
share; (c) the initial public offering price at which such series of Series
Preferred Stock will be issued; (d) the dividend rate (or method of
calculation), the dates on which dividends shall be payable and the dates from
which dividends shall commence to cumulate, if any; (e) any redemption or
sinking fund provisions; (f) any conversion or exchange rates; (g)
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whether the Company has elected to offer Depositary Shares as described below
under "Description of Depositary Shares;" (h) any voting rights; and (i) any
other rights, preferences, privileges, limitations, and restrictions of such
series of Series Preferred Stock.
Each series of Series Preferred Stock, when issued, will be fully paid and
nonassessable and will have no preemptive rights. The rights of the holders of
each series of the Series Preferred Stock to receive dividends and
distributions of assets will be subordinate to those of the Company's general
creditors, but superior to the rights of holders of any capital stock of the
Company ranking junior to such series of Series Preferred Stock as to the
payment of dividends, rights of redemption and rights on liquidation,
including the TCI Group Common Stock and the Liberty Group Common Stock.
DIVIDEND RIGHTS
Holders of a series of Series Preferred Stock constituting Offered
Securities will be entitled to receive, when, as, and if declared by the Board
of Directors, out of funds of the Company legally available therefor, cash
dividends on such dates and at such rates as are set forth in, or as are
determined by the method described in, the Prospectus Supplement relating to
such series of Series Preferred Stock. Such rate may be fixed or variable or
both. Each such dividend will be payable to the holders of record as they
appear on the stock books of the Company (or, if applicable, the records of
the Depositary (as hereinafter defined) referred to under "Description of
Depositary Shares") on such record dates, fixed by the Board of Directors, as
specified in the Prospectus Supplement relating to such series of Series
Preferred Stock.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Series Preferred Stock. If
the Board of Directors fails to declare a dividend payable on a dividend
payment date on any series of Series Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
dates. Dividends on the shares of each series of Series Preferred Stock for
which dividends are cumulative will accrue from the date on which the Company
initially issues shares of such series.
Unless otherwise specified in the applicable Prospectus Supplement, if at
any time the Company shall have failed to pay, or declare and set aside the
consideration sufficient to pay, full dividends on any series of Series
Preferred Stock constituting Offered Securities for the immediately preceding
dividend period (or, if such series is cumulative, for all prior dividend
periods), and until such dividends (or, if such series of Series Preferred
Stock is cumulative, full cumulative dividends) are paid, or declared and the
consideration sufficient to pay the same in full is set aside for such purpose
and for no other purpose, the Company may not (i) declare or pay any dividend
on or make any distribution with respect to any class or series of capital
stock of the Company ranking pari passu with or junior to such series of
Series Preferred Stock, except for dividends declared and paid on any such
stock ranking on a parity basis with such series of Series Preferred Stock
contemporaneously and on a pro rata basis with dividends declared and paid on
such series of Series Preferred Stock, or (ii) redeem or otherwise acquire any
shares of such series of Series Preferred Stock, any parity stock, or any
junior stock unless all then outstanding shares of such series of Series
Preferred Stock and any other class or series of parity stock that by the
terms of the instrument creating or evidencing such parity stock is required
to be redeemed under such circumstances are redeemed. Unless otherwise
specified in the applicable Prospectus Supplement, the failure of the Company
to pay, or declare and set aside the consideration sufficient to pay, full
dividends (or, if such series of Series Preferred Stock is cumulative, full
cumulative dividends) on any series of Series Preferred Stock shall not
prevent the Company from (i) paying any dividends on junior stock solely in
shares of junior stock or the redemption or other acquisition of junior stock
solely in exchange for (together with a cash adjustment for fractional shares,
if any) shares of junior stock or (ii) paying any dividends on parity stock
solely in shares of parity stock or junior stock (or both) or the redemption
or other acquisition of shares of such series of Series Preferred Stock or
parity stock solely in exchange for shares of junior stock.
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LIQUIDATION PREFERENCES
In the event of any liquidation, dissolution, or winding up of the Company,
whether voluntary or involuntary, the holders of each series of Series
Preferred Stock constituting Offered Securities will be entitled to receive
out of the assets of the Company available for distribution to stockholders,
before any distribution of assets is made to the holders of any capital stock
of the Company ranking junior to the shares of such series of Series Preferred
Stock, the amount set forth in the Prospectus Supplement relating to such
series of Series Preferred Stock. If, upon any voluntary or involuntary
liquidation, dissolution, or winding up of the Company, the assets of the
Company available for distribution to the holders of shares of such series of
Series Preferred Stock and any other shares of capital stock of the Company
ranking on a parity with shares of such series of Series Preferred Stock upon
liquidation will not be sufficient to pay in full all amounts to which such
holders are entitled, no such distribution will be made on account of any
other class or series of capital stock ranking on a parity as to liquidation
preference with the shares of such series of Series Preferred Stock unless
proportionate distributative amounts are paid on account of shares of such
series of Series Preferred Stock and shares of such parity stock ratably in
proportion to the full respective preferential amounts to which they are
entitled. After payment to the holders of such series of Series Preferred
Stock of the full preferential amounts of the liquidating distribution to
which they are entitled, the holders thereof will be entitled to no further
participation in any distribution of assets by the Company.
REDEMPTION
Offered Securities consisting of a series of Series Preferred Stock may be
redeemable, in whole or from time to time in part, at the option of the
Company or the holder (or both), and may be subject to mandatory redemption
pursuant to a sinking fund or otherwise, in each case upon terms, at the
times, and at the redemption prices set forth in the Prospectus Supplement
relating to such series. Unless otherwise provided in the applicable
Prospectus Supplement, shares of a series of Series Preferred Stock redeemed
by the Company will be restored to the status of authorized but unissued
shares of Series Preferred Stock.
Unless otherwise specified in the applicable Prospectus Supplement, in the
event that fewer than all of the outstanding shares of a series of Series
Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or
pro rata (subject to rounding to avoid fractional shares) as may be determined
by the Company in its sole discretion to be equitable. From and after the
redemption date (unless default is made by the Company in providing for the
payment of the redemption price plus accumulated and unpaid dividends, if any)
dividends will cease to accumulate on the shares of such series of Series
Preferred Stock called for redemption and all rights of the holders thereof
(except the right to receive the redemption price plus accumulated and unpaid
dividends, if any) will cease.
Unless otherwise specified in the applicable Prospectus Supplement, if the
Company fails to redeem any shares of a series of Series Preferred Stock
constituting Offered Securities required to be redeemed on a redemption date,
and until such shares are redeemed in full, the Company may not declare or pay
any dividend on or make any distribution with respect to any class or series
of capital stock ranking junior to such series of Series Preferred Stock, and
neither the Company nor any subsidiary may redeem any parity stock or junior
stock, or purchase or otherwise acquire any shares of such series of Series
Preferred Stock, parity stock or junior stock. Unless otherwise specified in
the applicable Prospectus Supplement, the failure of the Company to so redeem
shares of such series of Series Preferred stock shall not prevent the Company
from (i) paying any dividends on junior stock solely in shares of junior stock
or the redemption or other acquisition of junior stock solely in exchange for
(together with a cash adjustment for fractional shares, if any) shares of
junior stock or (ii) the redemption or other acquisition of shares of such
series of Series Preferred Stock or parity stock solely in exchange for shares
of parity stock or junior stock (or both).
OUTSTANDING PREFERRED STOCK
The Charter provides that the Company is authorized to issue (i) 52,375,096
shares of Preferred Stock, of which 700,000 shares are designated Class A
Preferred Stock, par value $0.01 per share (the "Class A Preferred
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Stock"), 1,675,096 shares are designated Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock, par value $.01 per share (the "Class B
Preferred Stock"), and 50,000,000 shares are designated Series Preferred
Stock. All of the shares of Class A Preferred Stock have previously been
redeemed and retired and may not be reissued, thereby reducing the number of
authorized shares of Preferred Stock. Of the Series Preferred Stock, 80,000
shares are designated Convertible Preferred Stock, Series C (the "Series C
Preferred Stock"), 1,000,000 shares are designated Convertible Preferred
Stock, Series D (the "Series D Preferred Stock"), 400,000 shares are
designated Redeemable Convertible Preferred Stock, Series E (the "Series E
Preferred Stock"), 500,000 shares are designated Convertible Redeemable
Participating Preferred Stock, Series F (the "Series F Preferred Stock"),
7,259,380 shares are designated Redeemable Convertible TCI Group Preferred
Stock, Series G (the "Series G Preferred Stock") and 7,259,380 shares are
designated Redeemable Convertible Liberty Media Group Preferred Stock, Series
H (the "Series H Preferred Stock"). All of the shares of Series E Preferred
Stock have previously been redeemed and retired with the effect that such
shares have been restored to the status of authorized and unissued shares of
Series Preferred Stock and may be issued as shares of another series of Series
Preferred Stock, but not as Series E Preferred Stock.
As of January 25, 1996, 1,675,096 shares of Class B Preferred Stock (of
which 55,070 shares are held by subsidiaries of the Company), 70,575 shares of
Series C Preferred Stock, 999,569 shares of Series D Preferred Stock, 277,064
shares of Series F Preferred Stock, 7,259,380 shares of Series G Preferred
Stock and 7,259,380 shares of Series H Preferred Stock were issued and
outstanding. All of the outstanding shares of Series F Preferred Stock are
held by subsidiaries of the Company. Based on the number of shares of Series
Preferred Stock authorized and outstanding on January 25, 1996, 33,901,240
shares of Series Preferred Stock remain available for designation under the
Charter.
The following description of certain terms of the outstanding Preferred
Stock does not purport to be complete and is qualified in its entirety by
reference to the Charter (including the Certificate of Designations with
respect to each outstanding series of Series Preferred Stock).
Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock.
Subject to the prior preferences and other rights of any class or series of
Preferred Stock ranking prior to the Class B Preferred Stock with respect to
the payment of dividends, the holders of Class B Preferred Stock are entitled
to receive preferential cumulative dividends, when and as declared by the
Board of Directors out of unrestricted funds legally available therefor.
Dividends accrue cumulatively (but without compounding) at an annual rate of
6% of the stated liquidation value of $100 per share (the "Stated Liquidation
Value"), whether or not such dividends are declared or funds are legally
available for payment of dividends. Accrued dividends are payable annually
and, in the sole discretion of the Board of Directors, may be declared and
paid in cash, in shares of TCI Group Series A Common Stock or in any
combination of the foregoing. Accrued dividends not paid as provided above on
any dividend payment date accumulate and such accumulated unpaid dividends may
be declared and paid in cash, shares of TCI Group Series A Common Stock or any
combination thereof at any time without reference to any regular dividend
payment date, to holders of record of Class B Preferred Stock as of a special
record date fixed by the Board of Directors. No Interest or additional
dividends will accrue or be payable with respect to any dividend payment on
the Class B Preferred Stock that may be in arrears or with respect to that
portion of any other payment on the Class B Preferred Stock that is in arrears
which consists of accumulated or accrued and unpaid dividends.
Upon the liquidation, dissolution or winding up of the Company, the holders
of Class B Preferred Stock will be entitled, after payment of preferential
amounts on any class or series of Preferred Stock ranking prior to the Class B
Preferred Stock with respect to liquidating distributions, to receive from the
assets of the Company available for distribution to stockholders an amount in
cash or property or a combination thereof, per share, equal to the Stated
Liquidation Value thereof, plus all accumulated and accrued but unpaid
dividends thereon to the date of payment.
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Subject to the prior preferences and other rights of any class or series of
Preferred Stock ranking prior to or on parity with the Class B Preferred
Stock, the Class B Preferred Stock is redeemable at the option of the Company,
in whole at any time or in part from time to time, for a redemption price per
share payable in cash equal to the Stated Liquidation Value thereof, plus all
accumulated and accrued but unpaid dividends thereon to and including the
redemption date. The Company does not have any mandatory obligation to redeem
the Class B Preferred Stock as of any fixed date, at the option of the holders
or otherwise.
The Class B Preferred Stock is exchangeable at the option of the Company in
whole but not in part at any time for junior subordinated debt securities of
the Company ("Junior Exchange Notes"). If the Company exercises its optional
exchange right, each holder of outstanding shares of Class B Preferred Stock
will be entitled to receive in exchange therefor newly issued Junior Exchange
Notes of a series authorized and established for the purpose of such exchange,
the aggregate principal amount of which will be equal to the aggregate Stated
Liquidation Value of the shares of Class B Preferred Stock so exchanged by
such holder, plus all accumulated and accrued but unpaid dividends thereon to
and including the exchange date. The Junior Exchange Notes will mature on the
fifteenth anniversary of the date of issuance and will be subject to earlier
redemption at the option of the Company, in whole or in part, for a redemption
price equal to the principal amount thereof plus accrued but unpaid interest.
Interest will accrue, and be payable annually, on the principal amount of the
Junior Exchange Notes at a rate per annum to be determined prior to issuance
by adding a spread of 215 basis points to the "Fifteen Year Treasury Rate" (as
defined in the Indenture pursuant to which the Junior Exchange Notes will be
issued). Interest will accrue on overdue principal at the same rate, but will
not accrue on overdue interest.
The Class B Preferred Stock ranks senior to the TCI Group Common Stock and
the Liberty Media Group Common Stock and junior to the Series C Preferred
Stock, the Series D Preferred Stock, the Series F Preferred Stock, the Series
G Preferred Stock and the Series H Preferred Stock as to dividend rights,
rights to redemption and rights on liquidation.
For so long as any dividends are in arrears on the Class B Preferred Stock
or any class or series of Preferred Stock ranking pari passu with the Class B
Preferred Stock which is entitled to payment of cumulative dividends prior to
the redemption, exchange, purchase, or other acquisition of the Class B
Preferred Stock, and until all dividends accrued up to the immediately
preceding dividend payment date on the Class B Preferred Stock and such parity
stock have been paid or declared and set apart so as to be available for
payment in full thereof and for no other purpose, neither the Company nor any
subsidiary thereof may redeem, exchange, purchase, or otherwise acquire any
shares of Class B Preferred Stock, any such parity stock or any class or
series of its capital stock ranking junior to the Class B Preferred Stock, or
set aside any money or assets for such purpose, unless all of the outstanding
shares of Class B Preferred Stock and such parity stock are redeemed. For so
long as any dividends are in arrears on the Class B Preferred Stock and until
all dividends accrued up to the immediately preceding dividend payment date on
the Class B Preferred Stock have been paid or declared and set apart so as to
be available for payment in full thereof and for no other purpose, the Company
may not declare or pay any dividend on or make any distribution with respect
to any junior stock or parity stock or set aside any money or assets for any
such purpose, except for dividends declared and paid on parity stock
contemporaneously and on a pro rata basis with dividends declared and paid on
the Class B Preferred Stock. If the Company fails to redeem or exchange shares
of Class B Preferred Stock on a date fixed for redemption or exchange, and
until such shares are redeemed or exchanged in full, the Company may not
redeem or exchange any parity stock or junior stock,
declare or pay any dividend on or make any distribution with respect to any
junior stock, or set aside money or assets for such purpose and neither the
Company nor any subsidiary thereof may purchase or otherwise acquire any Class
B Preferred Stock, parity stock or junior stock or set aside any money or
assets for any such purpose. The failure of the Company to pay any dividends
on any class or series of parity stock or to redeem or exchange on any date
fixed for redemption or exchange any shares of Class B Preferred Stock will
not prevent the Company from (i) paying any dividends on junior stock solely
in shares of junior stock or the redemption, purchase or other acquisition of
junior stock solely in exchange for (together with a cash adjustment for
fractional shares, if any), or (but only in the case of a failure to pay
dividends on any parity stock) through the application
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of the proceeds from the sale of, shares of junior stock; or (ii) the payment
of dividends on any parity stock solely in shares of parity stock and/or
junior stock or the redemption, exchange, purchase, or other acquisition of
Class B Preferred Stock or parity stock solely in exchange for (together with
a cash adjustment for fractional shares, if any), or (but only in the case of
a failure to pay dividends on any parity stock) through the application of the
proceeds from the sale of, parity stock and/or junior stock.
The Class B Preferred Stock has no voting rights, except as required by the
DGCL, and except that the holders of Class B Preferred Stock have the right to
vote with the TCI Group Common Stock and the Liberty Media Group Common Stock,
on the basis of one vote per share, in any general election of directors of
the Company.
Convertible Preferred Stock, Series C.
Each share of Series C Preferred Stock is convertible, at the option of the
holder, into 100 shares of TCI Group Series A Common Stock and 25 shares of
LMG Series A Common Stock, subject to anti-dilution adjustments. The dividend,
liquidation and redemption features of the Series C Preferred Stock, each of
which is discussed in greater detail below, are determined by reference to the
liquidation value of the Series C Preferred Stock, which as of any date of
determination is equal, on a per share basis, to the sum of (i) $2,375, plus
(ii) all dividends accrued on such share through the dividend payment date on
or immediately preceding such date of determination to the extent not paid on
or before such date, plus (iii) for purposes of determining liquidation and
redemption payments, all unpaid dividends accrued on the sums of clauses (i)
and (ii) above, to such date of determination.
Subject to the prior preferences and other rights of any class or series of
preferred stock ranking senior to or on a parity with the Series C Preferred
Stock, the holders of Series C Preferred Stock are entitled to receive
preferential cumulative cash dividends out of funds legally available
therefor. Dividends accrue cumulatively at an annual rate of 5 1/2% of the
liquidation value per share, whether or not such dividends are declared or
funds are legally or contractually available for payment of dividends, except
that if the Company fails to redeem shares of Series C Preferred Stock
required to be redeemed on a redemption date, dividends will thereafter accrue
cumulatively at an annual rate of 15% of the liquidation value per share.
Dividends not paid on any dividend payment date will be added to the
liquidation value on such date and remain a part thereof until such dividends
and all dividends accrued thereon are paid in full. Dividends will accrue on
unpaid dividends at the rate of 5 1/2% per annum (15% under the circumstances
described above), unless such dividends remain unpaid for two consecutive
quarters in which event such rate will increase to 15% per annum until such
dividends and all dividends, accrued thereon, are paid in full.
Upon the dissolution, liquidation or winding up of the Company, holders of
the Series C Preferred Stock will be entitled to receive from the assets of
the Company available for distribution to stockholders an amount in cash, per
share, equal to the liquidation value of the Series C Preferred Stock.
The Series C Preferred Stock is subject to optional redemption by the
Company at any time after August 8, 2001, in whole or in part, at a redemption
price, per share, equal to the then liquidation value of the Series C
Preferred Stock. Subject to the prior preferences and other rights of any
other class or series of Preferred Stock ranking senior to or on a parity with
the Series C Preferred Stock and subject to any prohibition or restriction
contained in any instrument evidencing indebtedness of the Company, the Series
C Preferred Stock is required to be redeemed by the Company at any time on or
after August 8, 2001 at the option of the holder, in whole or in part
(provided that the aggregate liquidation value of the shares to be redeemed is
in excess of $1 million), in each case at a redemption price, per share, equal
to the then liquidation value.
The Series C Preferred Stock ranks senior to the TCI Group Common Stock, the
Liberty Media Group Common Stock and the Class B Preferred Stock and on a
parity basis with the Series D Preferred Stock, the Series F Preferred Stock,
the Series G Preferred Stock and the Series H Preferred Stock as to dividend
rights, rights to redemption and rights on liquidation.
For so long as any dividends are in arrears on the Series C Preferred Stock
and until all dividends accrued up to the immediately preceding dividend
payment date on the Series C Preferred Stock have been paid or declared
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and set apart so as to be available for payment in full thereof and for no
other purpose, the Company may not redeem or otherwise acquire any shares of
Series C Preferred Stock or any shares of any class or series of its capital
stock ranking junior to the Series C Preferred Stock, unless all of the
outstanding shares of Series C Preferred Stock are redeemed. For so long as
any dividends are in arrears on the Series C Preferred Stock and until all
dividends accrued up to the immediately preceding dividend payment date on the
Series C Preferred Stock have been paid or declared and set apart so as to be
available for payment in full thereof and for no other purpose, the Company
may not declare or pay any dividend on or make any other distribution with
respect to any junior stock or set aside any money or assets for such purpose,
except that the Company may pay a dividend on any class or series of junior
stock solely in shares of capital stock ranking junior to the Series C
Preferred Stock. If the Company fails to redeem shares of Series C Preferred
Stock required to be redeemed on a redemption date, and until all then
outstanding shares of Series C Preferred Stock are redeemed in full, the
Company may not redeem any junior stock, or otherwise acquire any shares of
such stock or Series C Preferred Stock, except that the Company may acquire
shares of Series C Preferred Stock pursuant to a purchase or exchange offer
made to holders of all outstanding shares of Series C Preferred Stock, if as
to holders of all outstanding shares of Series C Preferred Stock, the terms of
the purchase or exchange offer for all such shares are identical.
The holders of Series C Preferred Stock are entitled to vote on an as
converted basis on all matters submitted to a vote of holders of TCI Group
Common Stock and Liberty Media Group Common Stock and any other class of
capital stock of the Company entitled to vote generally on the election of
directors. Holders of Series C Preferred Stock are not entitled to vote as a
separate class except as otherwise may be required by the DGCL.
Convertible Preferred Stock, Series D.
Each share of Series D Preferred Stock is convertible, at the option of the
holder, into 10 shares of TCI Group Series A Common Stock and two and one-half
shares of LMG Series A Common Stock, subject to anti-dilution adjustments. If
the Company distributes to all holders of TCI Group Series A Common Stock
rights or warrants to subscribe for or purchase shares of the capital stock
(other than TCI Group Series A Common Stock or TCI Group Series B Common
Stock) of the Company or a subsidiary of the Company which capital stock (a)
is common stock of its issuer or (b) participates in one or more business
operations of the issuer thereof in such a manner that if such operations were
owned by a corporation and such capital stock were issued thereby such capital
stock would be common stock of such corporation ("Special Securities"), each
holder of Series D Preferred Stock will have the option, in lieu of any
antidilution adjustment that would otherwise apply to the conversion rate of
the Series D Preferred Stock, to exchange shares of Series D Preferred Stock
for shares of a new series of convertible preferred stock of the issuer of the
Special Securities having terms similar to the Series D Preferred Stock but
convertible into Special Securities.
The dividend, liquidation and redemption features of the Series D Preferred
Stock, each of which is discussed below, are determined by reference to the
liquidation value of the Series D Preferred Stock, which as of any date of
determination is equal, on a per share basis, to the sum of (i) $300, plus
(ii) all dividends accrued on such share through the dividend payment date on
or immediately preceding such date of determination to the extent not paid on
or before such date, plus (iii) for purposes of determining liquidation and
redemption payments, an amount equal to all unpaid dividends accrued on the
sum of clauses (i) and (ii) above, to such date of determination.
Subject to the prior preferences and other rights of any class or series of
preferred stock ranking senior to or on a parity with the Series D Preferred
Stock with respect to the payment or declaration of dividends, the holders of
Series D Preferred Stock are entitled to receive preferential cumulative cash
dividends out of funds legally available therefor. Dividends accrue on a daily
basis at an annual rate of 5 1/2% of the liquidation value
per share, whether or not such dividends are declared or funds are legally or
contractually available for payment of dividends, except that if the Company
fails to redeem shares of Series D Preferred Stock required to be redeemed on
a redemption date, dividends thereafter will accrue cumulatively at an annual
rate of 10% of the liquidation value per share until such shares are redeemed.
To the extent any cash dividends are not paid on any dividend payment date,
the amount of such dividends will be automatically converted, to the extent
permissible
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under the DGCL, into shares of TCI Group Series A Common Stock at a conversion
rate equal to 95% of the then "current market price" (as defined in the
Certificate of Designations establishing the Series D Preferred Stock) of TCI
Group Series A Common Stock, and upon issuance of TCI Group Series A Common
Stock to holders of Series D Preferred Stock in respect of such conversion
such dividend will be deemed paid for all purposes. Dividends not so paid or
deemed paid on any dividend payment date are added to the liquidation value on
such date and remain a part thereof until such dividends and all dividends
accrued thereon are paid in full. Dividends will accrue on such unpaid
dividends at the rate of 5 1/2% per annum (10% under the circumstances
described above), unless such dividends remain unpaid for two consecutive
quarters, in which event such rate will increase to 10% per annum until such
dividends and all dividends accrued thereon are paid in full.
Upon the dissolution, liquidation or winding up of the Company, holders of
the Series D Preferred Stock will be entitled to receive from the assets of
the Company available for distribution to stockholders an amount in cash, per
share, equal to the liquidation value of the Series D Preferred Stock.
The Series D Preferred Stock is subject to optional redemption by the
Company at any time after the fifth anniversary of its issuance, in whole or
from time to time in part, at a redemption price, per share, equal to the then
liquidation value of the Series D Preferred Stock. Shares of Series D
Preferred Stock may also be redeemed at the option of the Company after the
third anniversary of the issue date, in whole or from time to time part, at a
redemption price per share equal to the then liquidation value of the Series D
Preferred Stock, if the market value per share of TCI Group Series A Common
Stock has exceeded $37.50 for the period specified in the Certificate of
Designations establishing the Series D Preferred Stock. Subject to the prior
preferences and other rights of any other class or series of Preferred Stock
ranking senior to or on a parity basis with the Series D Preferred Stock and
subject to any prohibition or restriction contained in any instrument
evidencing indebtedness of the Company, any holder of Series D Preferred
Stock, at such holder's option, may require the Company, at any time after the
tenth anniversary of the issuance of such Series D Preferred Stock, to redeem
all or a portion of such holder's shares of Series D Preferred Stock, provided
that the aggregate liquidation value of the shares to be redeemed is in excess
of $50,000 (or, if all of the shares of Series D Preferred Stock held by such
holder have an aggregate liquidation value of less than $50,000, all but not
less than all of such shares of Series D Preferred Stock), in each case at a
redemption price, per share, equal to the then liquidation value of the
Series D Preferred Stock. If the Company fails to effect any redemption of
Series D Preferred Stock called for redemption or which a holder has validly
requested be redeemed, the holders thereof will have the option to convert
their shares of Series D Preferred Stock into TCI Group Series A Common Stock
at a conversion rate equal to the quotient obtained by dividing the redemption
price by 95% of the "current market price" of the TCI Group Series A Common
Stock on the redemption date, provided that in the case of a failure by the
Company to redeem shares at the request of a holder, the exercise of the
foregoing conversion right will be delayed for one year.
The Series D Preferred Stock ranks senior to the TCI Group Common Stock, the
Liberty Media Group Common Stock and the Class B Preferred Stock and on a
parity basis with the Series C Preferred Stock, the Series F Preferred Stock,
the Series G Preferred Stock and the Series H Preferred Stock as to dividend
rights, rights to redemption and rights on liquidation.
For so long as any dividends are in arrears on the Series D Preferred Stock
and until all dividends accrued up to the immediately preceding dividend
payment date on the Series D Preferred Stock have been paid or declared and
set apart so as to be available for payment in full thereof and for no other
purpose, the Company may not redeem or otherwise acquire any shares of Series
D Preferred Stock or any shares of any class or series of its capital stock
ranking pari passu with or junior to the Series D Preferred Stock, unless all
of the outstanding shares of Series D Preferred Stock are redeemed. For so
long as any dividends are in arrears on the Series D Preferred Stock and until
all dividends accrued up to the immediately preceding dividend payment date on
the
Series D Preferred Stock have been paid or declared and set apart so as to be
available for payment in full thereof and for no other purpose, the Company
may not declare or pay any dividend on or make any other distribution with
respect to any junior stock or set aside any money or assets for such purpose,
except that the Company may pay a dividend on any class or series of junior
stock solely in shares of capital stock ranking junior to the Series D
Preferred Stock. If the Company fails to redeem shares of Series D Preferred
Stock required to be redeemed
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on a redemption date, and until all then outstanding shares of Series D
Preferred Stock are redeemed in full, the Company may not redeem any junior
stock, or otherwise acquire any shares of such stock or Series D Preferred
Stock, except that the Company may acquire shares of Series D Preferred Stock
pursuant to a purchase or exchange offer made to holders of all outstanding
shares of Series D Preferred Stock, if as to holders of all outstanding shares
of Series D Preferred Stock the terms of the purchase or exchange offer for
all such shares are identical.
The Series D Preferred Stock has no voting rights, except as required by the
DGCL and except that without the consent of the holders of 66 2/3% in
liquidation value of the Series D Preferred Stock, the Company may not create
any series of Preferred Stock that is senior as to dividend rights, rights to
redemption, or rights on liquidation to the Series D Preferred Stock.
Convertible Redeemable Participating Preferred Stock, Series F
Shares of Series F Preferred Stock are convertible, at the option of the
holder, into TCI Group Series A Common Stock at a rate of 1287.51 shares of
TCI Group Series A Common Stock for each share of Series F Preferred Stock,
subject to anti-dilution adjustments. In addition, any shares of Series F
Preferred Stock which cease to be held by the Company or a subsidiary of the
Company will automatically be converted into shares of TCI Group Series A
Common Stock. The anti-dilution provisions of the Series F Preferred Stock
provide that the conversion rate of the Series F Preferred Stock will be
adjusted (i) in the event of a dividend or distribution on the outstanding
shares of TCI Group Series A Common Stock in shares of TCI Group Series A
Common Stock, by adjusting the then-current conversion rate such that the
holder of Series F Preferred Stock thereafter surrendered for conversion would
receive the number of shares of TCI Group Series A Common Stock which it would
have been entitled to receive had such shares of Series F Preferred Stock been
converted prior to the record date for such dividend or distribution and (ii)
in the event of a dividend or distribution to holders of TCI Group Series A
Common Stock of any securities, evidences of indebtedness or other assets
(other than cash dividends or shares of TCI Group Series A Common Stock), then
the conversion rate will be adjusted by multiplying the then-current
conversion rate by a fraction, the numerator of which is the current market
price of a share of TCI Group Series A Common Stock and the denominator of
which is such current market price less the fair market value (as determined
by the Board of Directors) of the securities, evidences of indebtedness or
assets so distributed.
The holders of the Series F Preferred Stock are entitled to participate, on
an as-converted basis, with the holders of the TCI Group Series A Common
Stock, with respect to any cash dividends or distributions declared and paid
on the TCI Group Series A Common Stock. Dividends or distributions on the TCI
Group Series A Common Stock which are not paid in cash would result in the
adjustment of the applicable conversion rate as described above.
Upon the dissolution, liquidation or winding up of the Company, holders of
the Series F Preferred Stock are entitled to receive from the assets of the
Company available for distribution to stockholders an amount in cash or
property or a combination thereof, per share of Series F Preferred Stock,
equal to the sum of (x) $.01 and (y) the amount to be distributed per share of
TCI Group Series A Common Stock in such liquidation, dissolution or winding up
multiplied by the applicable conversion rate of a share of Series F Preferred
Stock.
The Series F Preferred Stock is subject to optional redemption by the
Company at any time, in whole or in part, at a redemption price, per share,
equal to $24,875 (as adjusted in respect of stock splits, reverse splits and
other events affecting the shares of Series F Preferred Stock), plus any
dividends which have been declared but are unpaid as of the date fixed for
such redemption. The Company may elect to pay the redemption price (or
designated portion thereof) of the shares of Series F Preferred Stock called
for redemption by issuing to the holder thereof, in respect of its shares to
be redeemed, a number of shares of TCI Group Series A Common Stock equal to
the aggregate redemption price (or designated portion thereof) of such shares
divided by the average market price of the TCI Group Series A Common Stock for
a period specified, and subject to the adjustments described, in the
certificate of designations establishing the Series F Preferred Stock.
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The Series F Preferred Stock ranks senior to the TCI Group Common Stock and
Liberty Media Group Common Stock and the Class B Preferred Stock and on a
parity with the Series C Preferred Stock, the Series D Preferred Stock, the
Series G Preferred Stock and the Series H Preferred Stock as to dividend
rights, rights to redemption and rights on liquidation.
If at any time the Company has declared a dividend on the Series F Preferred
Stock and failed to pay or set aside consideration sufficient to pay such
dividend, or if the Company declares a cash dividend on the shares of TCI
Group Series A Common Stock and fails to pay or set aside the participating
dividend required to be paid to the holders of the Series F Preferred Stock,
then (i) the Company may not declare or pay any dividend on or make any
distribution with respect to any parity stock or junior stock or set aside any
money or assets for any such purpose until such dividend payable to the
holders of Series F Preferred Stock has been paid or consideration sufficient
to pay such dividend has been set aside for such purpose, and (ii) neither the
Company nor any subsidiary thereof may redeem, exchange, purchase or otherwise
acquire any shares of Series F Preferred Stock, parity stock or junior stock,
or set aside any money or assets for any such purpose, unless all then
outstanding shares of such parity stock required to be redeemed under such
circumstances are redeemed. If the Company fails to redeem shares of Series F
Preferred Stock required to be redeemed on a redemption date, the Company may
not declare or pay any dividend on or make any distribution with respect to
any junior stock or set aside money or assets for any such purpose, and
neither the Company nor any subsidiary may redeem any parity stock or junior
stock, or purchase or otherwise acquire any Series F Preferred Stock, parity
stock or junior stock, or set aside any money or assets for any such purpose,
until such shares of Series F Preferred Stock are redeemed. The failure of the
Company to pay any dividends on any class or series of parity stock or to
redeem on any date fixed for redemption any shares of Series F Preferred Stock
will not prevent the Company from (i) paying any dividends on junior stock
solely in shares of junior stock or the redemption or other acquisition of
junior stock solely in exchange for (together with a cash adjustment for
fractional shares, if any) shares of junior stock; or (ii) the payment of
dividends on any parity stock solely in shares of parity stock and/or junior
stock or the redemption or other acquisition of parity stock solely in
exchange for (together with a cash adjustment for fractional shares, if any),
or through the application of the proceeds from the sale of, shares of parity
stock and/or junior stock.
The Series F Preferred Stock has no voting rights, except as required by the
DGCL, and except that at such time as any shares of Series F Preferred Stock
are not held by the Company or its majority-owned subsidiaries, such shares
will vote with the TCI Group Common Stock and the Liberty Media Group Common
Stock, on the basis of one vote per share, in any general election of
directors of the Company (together with any other class or series of Preferred
Stock entitled to vote thereon with the Common Stock).
Redeemable Convertible TCI Group Preferred Stock, Series G.
If the sum of (i) the last reported sale price of the TCI Group Series A
Common Stock plus (ii) one-fourth of the last reported sale price of the LMG
Series A Common Stock, equals or exceeds $27 (as adjusted for stock dividends,
stock splits, reclassifications or combinations of the TCI Group Series A
Common Stock and the LMG Series A Common Stock) for any ten consecutive
trading days during the 65 consecutive trading days ending on the last trading
day immediately preceding January 25, 1997 (the "Contingency"), then no
dividends will accrue or be payable on the Series G Preferred Stock. If the
Contingency is not met, and only in such event, then subject to the prior
preferences and other rights of any class or series of Preferred Stock ranking
prior to the Series G Preferred Stock with respect to the payments of
dividends, the holders of Series G Preferred Stock will be entitled to receive
cumulative dividends, when and as declared by the Board of Directors out of
unrestricted funds legally available therefor, in preference to dividends on
Common Stock and the Class B Preferred Stock. Dividends will accrue on the
Series G Preferred Stock from and after the first anniversary of issuance if
the Contingency is not met, on a daily basis at the rate of 4% per annum of
the Liquidation Preference per share, whether or not such dividends are
declared or funds are available for payment of dividends. The "Liquidation
Preference" of a share of Series G Preferred Stock as of any date in question
means an amount equal to the sum of (i) the stated liquidation value of $21.60
per share, plus (ii) an amount equal to all dividends accrued on such share
which have been added to and remain a part of the Liquidation Preference as of
such date, plus (iii) for purposes of
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determining liquidation and redemption payments, an amount equal to all unpaid
dividends accrued on the sum of the amounts specified in clauses (i) and (ii)
above during the period from the immediately preceding dividend payment date
through and including the date in question. Dividends not paid on any dividend
payment date are added to the Liquidation Preference on such date and remain a
part thereof until such dividends are paid. The rate per annum at which
dividends will accrue on that portion of the Liquidation Preference that
consists of
unpaid dividends that were added to the Liquidation Preference on a dividend
payment date and that remain unpaid on the next succeeding dividend payment
date will increase to 8.625% per annum from and after such next succeeding
dividend payment date. Accrued dividends are payable semiannually on each
February 1 and August 1 to holders of record of the shares on the preceding
January 15 and July 15, respectively, and, in the sole discretion of the Board
of Directors, may be declared and paid in cash, in shares of TCI Group Series
A Common Stock or in any combination of the foregoing. Accrued dividends not
paid as provided above on any dividend payment date accumulate and such
accumulated unpaid dividends may be declared and paid in cash, shares of TCI
Group Series A Common Stock or any combination thereof at any time without
reference to any regular dividend payment, to holders of record of Series G
Preferred Stock as of a special record date fixed by the Board of Directors.
Upon the liquidation, dissolution or winding up of the Company, the holders
of Series G Preferred Stock will be entitled, after payment of preferential
amounts on any class or series of Preferred Stock ranking prior to the Series
G Preferred Stock with respect to liquidating distributions, to receive from
the assets of the Company available for distribution to stockholders an amount
in cash or property or a combination thereof, per share, equal to the
Liquidation Preference thereof as of the date of payment or distribution.
Subject to the rights of any class or series of Preferred Stock ranking
prior to or on a parity with Series G Preferred Stock, the Series G Preferred
Stock is redeemable at the option of the Company, in whole at any time or in
part from time to time on or after February 1, 2001 for a redemption price per
share payable in cash equal to the Liquidation Preference thereof on such
redemption date. Subject to the rights of any class or series of Preferred
Stock ranking prior to or on a parity with the Series G Preferred Stock, the
Company shall redeem the Series G Preferred Stock out of funds legally
available therefor on February 1, 2016, for a redemption price per share
payable in cash equal to the Liquidation Preference thereof on such redemption
date.
The Series G Preferred Stock ranks senior to the TCI Group Common Stock and
Liberty Media Group Common Stock and the Class B Preferred Stock and on a
parity with all other currently outstanding classes and series of Preferred
Stock as to dividend rights, rights to redemption and rights on liquidation.
Each share of Series G Preferred Stock is convertible, at the option of the
holder, at any time prior to the close of business on the business day
immediately prior to the redemption thereof, into 1.05 shares of TCI Group
Series A Common Stock, subject to adjustment upon the occurrence of certain
events described below. The kind and amount of securities, assets or other
property that as of any date are issuable or deliverable upon conversion of a
share of Series G Preferred Stock are referred to herein as the "Conversion
Rate." No fractional shares of TCI Group Series A Common Stock or scrip will
be issued upon conversion of the Series G Preferred Stock. A holder otherwise
entitled to a fractional share shall receive cash, which may be paid by check,
in an amount equal to the same fraction of the last reported sale price of a
share of TCI Group Series A Common Stock on the last full trading day prior to
the conversion date. Upon conversion of shares of Series G Preferred Stock,
the rights of the holder of the shares so converted, as a holder thereof, will
cease.
To convert a share of Series G Preferred Stock, a holder must surrender the
certificate(s) representing the shares to be converted at the office of the
Company or any transfer agent for the Series G Preferred Stock, which
certificate(s) shall be duly endorsed to the Company or accompanied by duly
executed instruments of transfer to the Company, with signatures guaranteed
(such endorsements or instruments of transfer to be in form satisfactory to
the Company), together with a written notice to the Company at such office of
the election to convert the same, specifying the number of shares to be
converted and the name(s) (with addresses) in which the certificate(s) for
shares of TCI Group Series A Common Stock are to be issued. If any transfer is
involved in the issuance or delivery of any certificate(s) for shares of TCI
Group Series A Common Stock in a name other than
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that of the registered holder of the shares of Series G Preferred Stock
surrendered for conversion, such holder shall also deliver to the Company a
sum sufficient to pay all transfer or similar taxes (or evidence satisfactory
to the Company of payment thereof). The date on which the foregoing
requirements are satisfied is the conversion date.
The Conversion Rate of the Series G Preferred Stock is subject to adjustment
upon the occurrence of certain events, including (i) the payment of a dividend
or the making of a distribution in shares of TCI Group Series A Common Stock
to holders of TCI Group Series A Common Stock, (ii) the payment of a dividend
or the making of a distribution to holders of TCI Group Series A Common Stock
payable in shares of the Company's capital stock (other than TCI Group Series
A Common Stock or rights, warrants or options for its capital stock), (iii)
the subdivision of the outstanding shares of TCI Group Series A Common Stock
into a greater number of shares, (iv) the combination of the outstanding
shares of TCI Group Series A Common Stock into a smaller number of shares, (v)
the issuance by reclassification of the shares of TCI Group Series A Common
Stock of any shares of the Company's capital stock (other than rights,
warrants or options for its capital stock), (vi) the distribution to all
holders of TCI Group Series A Common Stock of rights, warrants or options
entitling them (for a period expiring within 45 days after the record date for
the determination of stockholders entitled to receive such distribution) to
purchase shares of TCI Group Series A Common Stock or securities convertible
into TCI Group Series A Common Stock (other than the TCI Group Series B Common
Stock) at a price per share (or, in the case of such convertible securities,
having a conversion price per share after adding thereto an allocable portion
of the exercise price of the right, warrant or option to purchase such
convertible securities) less than the Current Market Price on the
Determination Date (each as defined in the Certificate of Designations) per
share of TCI Group Series A Common Stock, (vii) the distribution to all
holders of TCI Group Series A Common Stock of assets or debt securities or
rights, warrants or options to purchase securities (excluding cash dividends
or distributions other than any Extraordinary Cash Dividend (as defined in the
Certificate of Designations) and excluding dividends and distributions
referred to in the preceding clauses of this sentence) and (viii) certain
mergers, consolidations, sales of assets or binding share exchanges. In the
case of any such dividend or distribution on the TCI Group Series A Common
Stock of shares of capital stock, subdivision, combination or reclassification
(other than a dividend, distribution or reclassification in which the Series G
Preferred Stock becomes convertible into shares of more than one class or
series of the Company's capital stock, any one of which is redeemable or
exchangeable at the election of the Company ("Redeemable Capital Stock"), if
the Company elects to treat such dividend, distribution or reclassification as
a distribution of assets by the Company), the holder of each outstanding share
of Series G Preferred Stock will have the right to convert such share of
Series G Preferred Stock into the kind and amount of securities which such
holder would have owned immediately after such event if such share of Series G
Preferred Stock had been converted immediately before the record date for an
effective date of, as the case may be, such event. In the case of any such
merger, consolidation, binding share exchange or sale of assets, the holder of
each outstanding share of Series G Preferred Stock will have the right to
convert such share of Series G Preferred Stock into the kind and amount of
securities, cash or other assets receivable upon such transaction by a holder
of the number of shares of TCI Group Series A Common Stock into which such
share of Series G Preferred Stock could have been converted immediately before
the effective date of such transaction (assuming, if applicable, such holder
failed to exercise any rights of election and received per share of TCI Group
Series A Common Stock the kind and amount of securities, cash or other assets
received per share by a plurality of the non-electing shares of the TCI Group
Series A Common Stock). In the case of any such issuance of rights, warrants
or options which expire within 45 days after the record date for the
determination of stockholders entitled to receive the rights, warrants or
options, or any such distribution of assets, debt securities or certain
rights, warrants or options to purchase securities (or, in the case of any
dividend, distribution or reclassification in which the Series G Preferred
Stock becomes convertible into shares of more than one class or series of the
Company's capital stock, any one of which is Redeemable Capital Stock, if the
Company elects to treat such dividend, distribution or reclassification as a
distribution of assets by the Company), the Conversion Rate will be adjusted
pursuant to formulas contained in the Certificate of Designations. In certain
cases of distributions of assets, debt securities or certain rights, warrants
or options to purchase securities to holders of TCI Group Series A Common
Stock, rather than being entitled to an adjustment in the Conversion Rate, the
holder of a share of Series G Preferred Stock upon conversion thereof will be
entitled to receive, in
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addition to the shares of TCI Group Series A Common Stock into which such
share of Series G Preferred Stock is convertible, the kind and amount of
assets, debt securities, rights, warrants or options comprising the
distribution that such holder would have received if such holder had converted
such share of Series G Preferred Stock immediately prior to the record date
for determining the holders of TCI Group Series A Common Stock entitled to
receive the distribution.
Subject to the provisions described in the immediately following paragraph,
if the holders of Series G Preferred Stock would be entitled to receive upon
conversion thereof any Redeemable Capital Stock, and such Redeemable Capital
Stock is redeemed, exchanged or otherwise acquired in full, then, from and
after such event (a "Redemption Event"), the holders of Series G Preferred
Stock then outstanding shall be entitled to receive upon conversion of such
shares, in lieu of shares of such Redeemable Capital Stock, the kind and
amount of securities, cash or other assets receivable upon such Redemption
Event by a holder of the number of shares of Redeemable Capital Stock into
which such shares of Series G Preferred Stock could have been converted
immediately prior to the effectiveness of such Redemption Event (assuming that
such holder failed to exercise any applicable right of election with respect
thereto and received per share of such Redeemable Capital Stock the kind and
amount of securities, cash or other assets received per share by the holders
of a plurality of the non-electing shares thereof) and, thereafter, the
holders of the Series G Preferred Stock shall have no other conversion rights
with respect to such Redeemable Capital Stock.
Notwithstanding the foregoing, the provisions described in the immediately
preceding paragraph shall not apply, and the holders of any shares of Series G
Preferred Stock that are not exchanged as described in the second sentence of
this paragraph shall not have any conversion rights with respect to Redeemable
Capital Stock so redeemed, exchanged or otherwise acquired, after the
Redemption Event relating thereto, if (i) the redemption price for the shares
of such Redeemable Capital Stock is paid in whole or in part in securities
("Redemption Securities") of an issuer other than the Company (the "Other
Issuer") and (ii) in connection with such Redemption Event, the "Mirror
Preferred Stock Condition" is met, as such term is defined in the Certificate
of Designations. Generally, the Mirror Preferred Stock Condition shall be
satisfied if the Company makes appropriate provisions so that holders of
Series G Preferred Stock shall have the right, exercisable on the effective
date of the Redemption Event, to exchange their shares of Series G Preferred
Stock for convertible preferred stock of the Company and convertible preferred
stock of the Other Issuer that together have an aggregate liquidation
preference equal to the liquidation preference of the Series G Preferred Stock
to be so exchanged (as in effect on the effective date of the Redemption
Event) and that otherwise each have terms, conditions, designations, dividend
rights, voting powers, rights on liquidation and other preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions applicable to such convertible preferred stock
that are identical or as nearly so as is practicable in the good faith
judgment of the Board of Directors, to those of the Series G Preferred Stock
for which such convertible preferred stock is to be exchanged, except that
applicable time periods under the Series G Preferred Stock will be tacked to
corresponding time periods under such convertible preferred stock, and except
that (x) the convertible preferred stock of the Other Issuer will be
convertible into the kind and amount of Redemption Securities, cash and other
assets that the holder of a share of Series G Preferred Stock in respect of
which such convertible preferred stock is issued would have received in the
Redemption Event, had such shares of Series G Preferred Stock been converted
prior to the Redemption Event, and (y) the convertible preferred stock of the
Company will not be convertible into, and the holders thereof will have no
conversion rights thereunder with respect to, the Redeemable Capital Stock
subject to the Redemption Event. The Mirror Preferred Stock Condition shall be
deemed to have been satisfied in connection with any Redemption Event only if
the Board of Directors determines (i) that receipt of such convertible
preferred stock of the Company and/or the Other Issuer in exchange for the
Series G Preferred Stock in connection with such Redemption Event would not
result in the recognition of gain or loss by the holders of such Series G
Preferred Stock for United States federal income tax purposes; (ii) that an
adjustment made in the Conversion Rate of the Series G Preferred Stock with
respect to such Redemption Event, as described in the immediately preceding
paragraph, would result in the recognition of gain or loss by the holders of
Series G Preferred Stock for United States federal income tax purposes; or
(iii) that receipt of Redemption Securities in redemption of the Redeemable
Capital Stock to be redeemed in such
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<PAGE>
Redemption Event would result in the recognition of gain or loss by the
holders of such Redeemable Capital Stock.
No adjustment in the Conversion Rate need be made unless the adjustment
would require an increase or decrease of at least 1% in the Conversion Rate;
but any such adjustment which is not made shall be carried forward and taken
into account in any subsequent adjustment. No adjustment to the Conversion
Rate need be made if the holders of Series G Preferred Stock may participate
in the transaction or in certain other cases.
For so long as any dividends are in arrears on the Series G Preferred Stock
or any class or series of Preferred Stock ranking on a parity with the Series
G Preferred Stock which is entitled to payment of cumulative dividends prior
to the redemption, exchange, purchase, or other acquisition of the Series G
Preferred Stock, and until all dividends accrued up to the immediately
preceding dividend payment date on the Series G Preferred Stock and such
parity stock have been paid or declared and set apart so as to be available
for payment in full thereof and for no other purpose, neither the Company nor
any subsidiary thereof may redeem, exchange, purchase, or otherwise acquire
any shares of Series G Preferred Stock, any parity stock or any class or
series of its capital stock ranking junior to the Series G Preferred Stock, or
set aside any money or assets for such purpose, unless all of the then
outstanding shares of Series G Preferred Stock and such parity stock and any
other parity stock that by its terms is required to be redeemed under such
circumstances are redeemed. For so long as any dividends are in arrears on the
Series G Preferred Stock and until all dividends accrued up to the immediately
preceding dividend payment date on the Series G Preferred Stock have been paid
or declared and set apart so as to be available for payment in full thereof
and for no other purpose, the Company may not declare or pay any dividend on
or make any distribution with respect to any junior stock or parity stock or
set aside any money or assets for any such purpose, except for dividends
declared and paid on parity stock contemporaneously and on a pro rata basis
with dividends declared and paid on the Series G Preferred Stock. If the
Company fails to redeem shares of Series G Preferred Stock on a date fixed for
redemption, and until such shares are redeemed in full, the Company may not
redeem any junior stock or, except for contemporaneous pro rata redemptions,
any parity stock, declare or pay any dividend on or make any distribution with
respect to any junior stock, or, except as provided above, parity stock or set
aside money or assets for such purpose and neither the Company nor any
subsidiary thereof may purchase or otherwise acquire any Series G Preferred
Stock, parity stock or junior stock or set aside any money or assets for any
such purpose. The failure of the Company to pay any dividends on any class or
series of parity stock or to redeem on any date fixed for redemption any
shares of Series G Preferred Stock will not prevent (i) the payment of
dividends on junior stock solely in shares of junior stock or the redemption,
purchase or other acquisition of junior stock solely in exchange for (together
with a cash adjustment for fractional shares, if any), or (but only in the
case of a failure to pay dividends on any parity stock) through the
application of the proceeds from the sale of shares of junior stock; (ii) the
payment of dividends on any parity stock solely in shares of parity stock
and/or junior stock or the redemption, exchange, purchase, or other
acquisition of Series G Preferred Stock or parity stock solely in exchange for
(together with a cash adjustment for fractional shares, if any), or (but only
in the case of a failure to pay dividends on any parity stock) through the
application of the proceeds from the sale of, parity stock and/or junior
stock; or (iii) the purchase or acquisition of shares of Series G Preferred
Stock pursuant to a purchase or exchange offer made to all holders of
outstanding shares of Series G Preferred Stock, provided that the terms of the
purchase or exchange offer shall be identical for all shares of Series G
Preferred Stock and all accrued dividends on such shares shall have been paid
or shall have been declared and irrevocably set apart in trust for the benefit
of the holders of shares of Series G Preferred Stock and for no other purpose.
The Series G Preferred Stock has no voting rights, except (i) as required by
the DGCL, and (ii) that the holders of Series G Preferred Stock have the right
to vote with the TCI Group Common Stock, the Liberty Media Group Common Stock,
the Class B Preferred Stock and any other class or series of Preferred Stock
entitled to vote in any general election of directors, on the basis of one
vote per share, in any general election of directors of the Company. The
number of authorized shares of Series G Preferred Stock may be increased or
decreased (but not below the number of shares of Series G Preferred Stock then
outstanding) by the affirmative vote of the holders of at least 66 2/3% of the
then outstanding Voting Securities (as defined in the Charter) voting together
as a single class.
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<PAGE>
Redeemable Convertible Liberty Media Group Preferred Stock, Series H.
If the sum of (i) the last reported sale price of the TCI Group Series A
Common Stock plus (ii) one-fourth of the last reported sale price of the LMG
Series A Common Stock, equals or exceeds $27 (as adjusted for stock dividends,
stock splits, reclassifications or combinations of the TCI Group Series A
Common Stock and the LMG Series A Common Stock) for any ten consecutive
trading days during the 65 consecutive trading days ending on the last trading
day immediately preceding January 25, 1997 (the "Contingency"), then no
dividends will accrue or be payable on the Series H Preferred Stock. If the
Contingency is not met, and only in such event, then subject to the prior
preferences and other rights of any class or series of Preferred Stock ranking
prior to the Series H Preferred Stock with respect to the payment of
dividends, the holders of Series H Preferred Stock will be entitled to receive
cumulative dividends, when and as declared by the Board of Directors out of
unrestricted funds legally available therefor, in preference to dividends on
Common Stock and the Class B Preferred Stock. Dividends will accrue on the
Series H Preferred Stock from and after the first anniversary of issuance, if
the Contingency is not met, on a daily basis at the rate of 4% per annum of
the Liquidation Preference per share, whether or not such dividends are
declared or funds are available for payment of dividends. The "Liquidation
Preference" of a share of Series H Preferred Stock as of any date in question
means an amount equal to the sum of (i) the stated liquidation value of $5.40
per share, plus (ii) an amount equal to all dividends accrued on such share
which have been added to and remain a part of the Liquidation Preference as of
such date, plus (iii) for purposes of determining liquidation and redemption
payments, an amount equal to all unpaid dividends accrued on the sum of the
amounts specified in clauses (i) and (ii) above during the period from the
immediately preceding dividend payment date through and including the date in
question. Dividends not paid on any dividend payment date are added to the
Liquidation Preference on such date and remain a part thereof until such
dividends are paid. The rate per annum at which dividends will accrue on that
portion of the Liquidation Preference that consists of unpaid dividends that
were added to the Liquidation Preference on a dividend payment date and that
remain unpaid on the next succeeding dividend payment date will increase to
8.625% per annum from and after such next succeeding dividend payment date.
Accrued dividends are payable semiannually on each February 1 and August 1 to
holders of record of the shares on the preceding January 15 and July 15,
respectively, and, in the sole discretion of the Board of Directors, may be
declared and paid in cash, in shares of TCI Group Series A Common Stock or in
any combination of the foregoing. Accrued dividends not paid as provided above
on any dividend payment date accumulate and such accumulated unpaid dividends
may be declared and paid in cash, shares of TCI Group Series A Common Stock or
any combination thereof at any time without reference to any regular dividend
payment, to holders of record of Series H Preferred Stock as of a special
record date fixed by the Board of Directors.
Upon the liquidation, dissolution or winding up of the Company, the holders
of Series H Preferred Stock will be entitled, after payment of preferential
amounts on any class or series of Preferred Stock ranking prior to the Series
H Preferred Stock with respect to liquidating distributions, to receive from
the assets of the Company available for distribution to stockholders an amount
in cash or property or a combination thereof, per share, equal to the
Liquidation Preference thereof as of the date of payment or distribution.
Subject to the rights of any class or series of Preferred Stock ranking
prior to or on a parity with Series H Preferred Stock, the Series H Preferred
Stock is redeemable at the option of the Company, in whole at any time or in
part from time to time on or after February 1, 2001, for a redemption price
per share payable in cash equal to the Liquidation Preference thereof on such
redemption date. Subject to the rights of any class or series of Preferred
Stock ranking prior to or on a parity with the Series H Preferred Stock, the
Company shall redeem the Series H Preferred Stock out of funds legally
available therefor on February 1, 2016, for a redemption price per share
payable in cash equal to the Liquidation Preference thereof on such redemption
date.
The Series H Preferred Stock ranks senior to the TCI Group Common Stock and
Liberty Media Group Common Stock and the Class B Preferred Stock and on a
parity with all other currently outstanding classes and series of Preferred
Stock as to dividend rights, rights to redemption and rights on liquidation.
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Each share of Series H Preferred Stock is convertible, at the option of the
holder, at any time prior to the close of business on the business day
immediately prior to the redemption thereof, into .2625 of one share of LMG
Series A Common Stock, subject to adjustment upon the occurrence of certain
events described below. The kind and amount of securities, assets or other
property that as of any date are issuable or deliverable upon conversion of a
share of Series H Preferred Stock are referred to hereafter as the "Conversion
Rate." No fractional shares of LMG Series A Common Stock or scrip will be
issued upon conversion of the Series H Preferred Stock. A holder otherwise
entitled to a fractional share shall receive cash, which may be paid by check,
in an amount equal to the same fraction of the last reported sale price of a
share of LMG Series A Common Stock on the last full trading day prior to the
conversion date. Upon conversion of shares of Series H Preferred Stock, the
rights of the holder of the shares so converted, as a holder thereof, will
cease.
To convert a share of Series H Preferred Stock, a holder must surrender the
certificate(s) representing the shares to be converted at the office of the
Company or any transfer agent for the Series H Preferred Stock, which
certificate(s) shall be duly endorsed to the Company or accompanied by duly
executed instruments of transfer to the Company, with signatures guaranteed
(such endorsements or instruments of transfer to be in form satisfactory to
the Company), together with a written notice to the Company at such office of
the election to convert the same, specifying the number of shares to be
converted and the name(s) (with addresses) in which the certificate(s) for
shares of LMG Series A Common Stock are to be issued. If any transfer is
involved in the issuance or delivery of any certificate(s) for shares of LMG
Series A Common Stock in a name other than that of the registered holder of
the shares of Series H Preferred Stock surrendered for conversion, such holder
shall also deliver to the Company a sum sufficient to pay all transfer or
similar taxes (or evidence satisfactory to the Company of payment thereof).
The date on which the foregoing requirements are satisfied is the conversion
date.
The Conversion Rate of the Series H Preferred Stock is subject to adjustment
upon the occurrence of certain events, including (i) the payment of a dividend
or the making of a distribution in shares of LMG Series A Common Stock to
holders of LMG Series A Common Stock, (ii) the payment of a dividend or the
making of a distribution to holders of LMG Series A Common Stock payable in
shares of the Company's capital stock (other than LMG Series A Common Stock or
rights, warrants or options for its capital stock), (iii) the subdivision of
the outstanding shares of LMG Series A Common Stock into a greater number of
shares, (iv) the combination of the outstanding shares of LMG Series A Common
Stock into a smaller number of shares, (v) the issuance by reclassification of
the shares of LMG Series A Common Stock of any shares of the Company's capital
stock (other than rights, warrants or options for its capital stock), (vi) the
distribution to all holders of LMG Series A Common Stock of rights, warrants
or options entitling them (for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
distribution) to purchase shares of LMG Series A Common Stock or securities
convertible into LMG Series A Common Stock (other than the LMG Series B Common
Stock) at a price per share (or, in the case of such convertible securities,
having a conversion price per share after adding thereto an allocable portion
of the exercise price of the right, warrant or option to purchase such
convertible securities) less than the Current Market Price on the
Determination Date (each as defined in the Certificate of Designations) per
share of LMG Series A Common Stock, (vii) the distribution to all holders of
LMG Series A Common Stock of assets or debt securities or rights, warrants or
options to purchase securities (excluding cash dividends or distributions
other than any Extraordinary Cash Dividend (as defined in the Certificate of
Designations) and excluding dividends and distributions referred to in the
preceding clauses of this sentence), and (viii) certain mergers,
consolidations, sales of assets or binding share exchanges. In the case of any
such dividend or distribution on the LMG Series A Common Stock of shares of
capital stock, subdivision, combination or reclassification (other than a
dividend, distribution or reclassification in which the Series H Preferred
Stock becomes convertible into shares of more than one class or series of the
Company's capital stock, any of which is Redeemable Capital Stock, if the
Company elects to treat such dividend, distribution or reclassification as a
distribution of assets by the Company), the holder of each outstanding share
of Series H Preferred Stock will have the right to convert such share of
Series H Preferred Stock into the kind and amount of securities which such
holder would have owned immediately after such event if such share of Series H
Preferred Stock had been converted immediately before the record date for or
effective date of, as the case may be, such event. In the case of any such
merger, consolidation, binding share exchange or sale of assets, the holder
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of each outstanding share of Series H Preferred Stock will have the right to
convert such share of Series H Preferred Stock into the kind and amount of
securities, cash or other assets receivable upon such transaction by a holder
of the number of shares of LMG Series A Common Stock into which such share of
Series H Preferred Stock could have been converted immediately before the
effective date of such transaction (assuming, if applicable, such holder
failed to exercise any rights of election and received, per share of LMG
Series A Common Stock, the kind and amount of securities, cash or other assets
received per share by a plurality of the non-electing shares of the LMG Series
A Common Stock). In the case of any such issuance of rights, warrants or
options which expire within 45 days after the record date for the
determination of stockholders entitled to receive the rights, warrants or
options, or any such distribution of assets, debt securities or certain
rights, warrants or options to purchase securities (or, in the case of any
dividend, distribution or reclassification in which the Series H Preferred
Stock becomes convertible into shares of more than one class or series of the
Company's capital stock, any of which is Redeemable Capital Stock, if the
Company elects to treat such dividend, distribution or reclassification as a
distribution of assets by the Company), the Conversion Rate will be adjusted
pursuant to formulas contained in the Certificate of Designations. In certain
cases of distributions of assets, debt securities or certain rights, warrants
or options to purchase securities to holders of LMG Series A Common Stock,
rather than being entitled to an adjustment in the Conversion Rate, the holder
of a share of Series H Preferred Stock upon conversion thereof will be
entitled to receive, in addition to the shares of LMG Series A Common Stock
into which such share of Series H Preferred Stock is convertible, the kind and
amount of assets, debt securities, rights, warrants or options comprising the
distribution that such holder would have received if such holder had converted
such share of Series H Preferred Stock immediately prior to the record date
for determining the holders of LMG Series A Common Stock entitled to receive
the distribution.
Subject to the provisions described in the immediately following paragraph,
if (i) the Company redeems all the outstanding shares of LMG Series A Common
Stock in accordance with the terms thereof, or (ii) the holders of Series H
Preferred Stock would be entitled to receive upon conversion thereof any other
Redeemable Capital Stock, and such Redeemable Capital Stock is redeemed,
exchanged or otherwise acquired in full, then, from and after either such
event (a "Redemption Event"), the holders of Series H Preferred Stock then
outstanding shall be entitled to receive upon conversion of such shares of
Series H Preferred Stock, in lieu of shares of LMG Series A Common Stock or
such Redeemable Capital Stock, as the case may be, the kind and amount of
securities, cash or other assets receivable upon such Redemption Event by a
holder of the number of shares of LMG Series A Common Stock or such Redeemable
Capital Stock, as the case may be, into which such shares of Series H
Preferred Stock could have been converted immediately prior to the
effectiveness of such Redemption Event (assuming that such holder failed to
exercise any applicable right of election with respect thereto and received
per share of LMG Series A Common Stock or per share of such Redeemable Capital
Stock, as the case may be, the kind and amount of securities, cash or other
assets received per share by the holders of a plurality of the non-electing
shares thereof) and, thereafter, the holders of the Series H Preferred Stock
shall have no other conversion rights with respect to the LMG Series A Common
Stock or such Redeemable Capital Stock, as the case may be.
Notwithstanding the foregoing, the provisions described in the immediately
preceding paragraph shall not apply, and the holders of any shares of Series H
Preferred Stock that are not exchanged as described in the second sentence of
this paragraph shall not have any conversion rights with respect to the LMG
Series A Common Stock or such Redeemable Capital Stock, as the case may be,
after the Redemption Event relating thereto, if (i) the redemption price for
the shares of LMG Series A Common Stock or such Redeemable Capital Stock, as
the case may be, is paid in whole or in part in securities ("Redemption
Securities") of an issuer other than the Company (the "Other Issuer") and (ii)
in connection with such Redemption Event, the "Mirror Preferred Stock
Condition" is met, as such term is defined in the Certificate of Designations.
Generally, the Mirror Preferred Stock Condition shall be satisfied if the
Company makes appropriate provisions so that holders of Series H Preferred
Stock shall have the right, exercisable on the effective date of the
Redemption Event to exchange their shares of Series H Preferred Stock for (A)
if the Series H Preferred Stock is not then convertible into any security,
cash or assets other than the stock that is the subject of the Redemption
Event (i.e., LMG Series A Common Stock or such Redeemable Capital Stock, as
the case may be), convertible preferred stock of the Other
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Issuer having a liquidation preference equal to the liquidation preference of
the Series H Preferred Stock to be so exchanged, as in effect on the effective
date of the Redemption Event, or (B) if the Series H Preferred Stock is then
convertible into any security, cash or assets in addition to the stock that is
the subject of the Redemption Event (any such additional securities, cash or
assets, collectively, the "Additional Conversion Property"), convertible
preferred stock of the Company and convertible preferred stock of the Other
Issuer having an aggregate liquidation preference equal to the liquidation
preference of the Series H Preferred Stock to be so exchanged, as in effect on
the effective date of the Redemption Event; provided, however, that in either
case, the convertible preferred stock into which shares of Series H Preferred
Stock may be exchanged shall otherwise have terms, conditions, designations,
dividend rights, voting powers, rights on liquidation and other preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions applicable to such convertible
preferred stock that are identical, or as nearly so as is practicable in the
good faith judgment of the Board of Directors, to those of the Series H
Preferred Stock for which such convertible preferred stock is to be exchanged,
except that applicable time periods under the Series H Preferred Stock will be
tacked to corresponding time periods under such convertible preferred stock,
and except that (x) the convertible preferred stock of the Other Issuer will
be convertible into the kind and amount of Redemption Securities, cash and
other assets that the holders of shares of Series H Preferred Stock in respect
of which such convertible preferred stock is issued would have received in the
Redemption Event had such shares of Series H Preferred Stock been converted in
full prior to the Redemption Event, and (y) any convertible preferred stock of
the Company will be convertible into the Additional Conversion Property, and
will not be convertible into, and the holders thereof will have no conversion
rights thereunder with respect to, the LMG Series A Common Stock or Redeemable
Capital Stock, as the case may be, subject to the Redemption Event. The Mirror
Preferred Stock Condition shall be deemed to have been satisfied in connection
with any Redemption Event only if the Board of Directors determines (i) that
receipt of such convertible preferred stock of the Company and/or the Other
Issuer in exchange for Series H Preferred Stock in connection with such
Redemption Event would not result in the recognition of gain or loss by the
holders of such Series H Preferred Stock for United States federal income tax
purposes; (ii) that an adjustment made in the Conversion Rate of the Series H
Preferred Stock with respect to such Redemption Event, as described in the
immediately preceding paragraph, would result in the recognition of gain or
loss by the holders of Series H Preferred Stock for United States federal
income tax purposes; or (iii) that receipt of Redemption Securities in
redemption of the LMG Series A Common Stock or Redeemable Capital Stock to be
redeemed in such Redemption Event would result in the recognition of gain or
loss by the holders of such LMG Series A Common Stock or Redeemable Capital
Stock, as the case may be.
No adjustment in the Conversion Rate need be made unless the adjustment
would require an increase or decrease of at least 1% in the Conversion Rate;
but any such adjustment which is not made shall be carried forward and taken
into account in any subsequent adjustment. No adjustment to the Conversion
Rate need be made if the holders of Series H Preferred Stock may participate
in the transaction or in certain other cases.
For so long as any dividends are in arrears on the Series H Preferred Stock
or any class or series of Preferred Stock ranking on a parity with the Series
H Preferred Stock which is entitled to payment of cumulative dividends prior
to the redemption, exchange, purchase, or other acquisition of the Series H
Preferred Stock, and until all dividends accrued up to the immediately
preceding dividend payment date on the Series H Preferred Stock and such
parity stock have been paid or declared and set apart so as to be available
for payment in full thereof and for no other purpose, neither the Company nor
any subsidiary thereof may redeem, exchange, purchase, or otherwise acquire
any shares of Series H Preferred Stock, any parity stock or any class or
series of its capital stock ranking junior to the Series H Preferred Stock, or
set aside any money or assets for such purpose, unless all of the then
outstanding shares of Series H Preferred Stock and such parity stock and any
other parity stock that by its terms is required to be redeemed under such
circumstances are redeemed. For so long as any dividends are in arrears on the
Series H Preferred Stock and until all dividends accrued up to the immediately
preceding dividend payment date on the Series H Preferred Stock have been paid
or declared and set apart so as to be available for payment in full thereof
and for no other purpose, the Company may not declare or pay any dividend on
or make any distribution with respect to any junior stock or parity stock or
set aside any money or assets for any such purpose, except for dividends
declared and paid on parity stock contemporaneously and on a pro rata
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basis with dividends declared and paid on the Series H Preferred Stock. If the
Company fails to redeem shares of Series H Preferred Stock on a date fixed for
redemption, and until such shares are redeemed in full, the Company may not
redeem any junior stock or, except for contemporaneous pro rata redemptions,
any parity stock, declare or pay any dividend on or make any distribution with
respect to any junior stock or, except as provided above, parity stock, or set
aside money or assets for such purpose and neither the Company nor any
subsidiary thereof may purchase or otherwise acquire any Series H Preferred
Stock, parity stock or junior stock or set aside any money or assets for any
such purpose. The failure of the Company to pay any dividends on any class or
series of parity stock or to redeem on any date fixed for redemption any
shares of Series H Preferred Stock will not prevent (i) the payment of
dividends on junior stock solely in shares of junior stock or the redemption,
purchase or other acquisition of junior stock solely in exchange for (together
with a cash adjustment for fractional shares, if any), or (but only in the
case of a failure to pay dividends on any parity stock) through the
application of the proceeds from the sale of, shares of junior stock; (ii) the
payment of dividends on any parity stock solely in shares of parity stock
and/or junior stock or the redemption, exchange, purchase, or other
acquisition of Series H Preferred Stock or parity stock solely in exchange for
(together with a cash adjustment for fractional shares, if any), or (but only
in the case of a failure to pay dividends on any parity stock) through the
application of the proceeds from the sale of, parity stock and/or junior
stock; or (iii) the purchase or acquisition of shares of Series H Preferred
Stock pursuant to a purchase or exchange offer made to all holders of
outstanding shares of Series H Preferred Stock, provided that the terms of the
purchase or exchange offer shall be identical for all shares of Series H
Preferred Stock and all accrued dividends on such shares shall have been paid
or shall have been declared and irrevocably set apart in trust for the benefit
of the holders of shares of Series H Preferred Stock and for no other purpose.
The Series H Preferred Stock has no voting rights, except (i) as required by
the DGCL, and (ii) that the holders of Liberty Media Group Preferred Stock
have the right to vote with the TCI Group Common Stock, the Liberty Media
Group Common Stock, the Class B Preferred Stock and any other class or series
of Preferred Stock entitled to vote in any general election of directors, on
the basis of one vote per share, in any general election of directors of the
Company. The number of authorized shares of Series H Preferred Stock may be
increased or decreased (but not below the number of shares of Series H
Preferred Stock then outstanding) by the affirmative vote of the holders of at
least 66 2/3% of the then outstanding Voting Securities (as defined in the
Charter) voting together as a single class.
DESCRIPTION OF DEPOSITARY SHARES
If so indicated in the applicable Prospectus Supplement, shares of a
particular series of Series Preferred Stock constituting Offered Securities
will be represented by Depositary Receipts (as defined below) evidencing
Depositary Shares each equivalent to a specified fractional interest in a
share of such series of Series Preferred Stock. The description set forth
below and in any Prospectus Supplement of certain provisions of the Deposit
Agreement (as defined below) and of the Depositary Shares and Depositary
Receipts does not purport to be complete and is subject to and qualified in
its entirety by reference to the Deposit Agreement and Depositary Receipts
relating to such series of Series Preferred Stock, forms of which are filed as
exhibits to the Registration Statement of which this Prospectus forms a part.
GENERAL
The Company may, at its option, elect to offer interests in fractions of
shares of a series of Series Preferred Stock in lieu of shares of such series
of Series Preferred Stock. In such event, the Company will provide for the
issuance by a Depositary of receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent an interest in a fraction (to be set
forth in the related Prospectus Supplement) of a share of a particular series
of the Series Preferred Stock as described below.
The shares of any series of Series Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company
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selected by the Company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000 (the
"Depositary"). The Prospectus Supplement relating to a series of Series
Preferred Stock represented by Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fraction of a share of a series of Series Preferred Stock underlying such
Depositary Share, to all the rights and preferences of the series of Series
Preferred Stock underlying such Depositary Share (including dividend, voting,
redemption, conversion, and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive Depositary Receipts, the Depositary
may, upon the written order of the Company, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) the definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions in respect of shares of a series of Series Preferred Stock to
the record holders of Depositary Shares in proportion, insofar as practicable,
to the number of Depositary Shares owned by such holders.
In the event of a distribution other than cash in respect of shares of a
series of Series Preferred Stock, the Depositary will distribute property
received by it to the record holders of Depositary Shares in proportion,
insofar as practicable, to the number of Depositary Shares owned by such
holders, unless the Depositary determines that it is not feasible to make such
distribution, in which case the Depositary may, with the approval of the
Company, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including sale (at public or private
sale) of such property and distribution of the net proceeds from such sale to
such holders.
The amount distributed in any of the foregoing cases will be reduced by any
amount required to be withheld by the Company or the Depositary on account of
taxes.
REDEMPTION OF DEPOSITARY SHARES
If a series of Series Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Depositary resulting from the redemption, in whole or
in part, of such series of Series Preferred Stock held by the Depositary. The
redemption price per Depositary Share will be equal to the applicable fraction
of the redemption price per share payable with respect to such series of
Series Preferred Stock. Whenever the Company redeems shares of a series of
Series Preferred Stock held by the Depositary, the Depositary will redeem as
of the same redemption date the number of Depositary Shares relating to shares
of such series of Series Preferred Stock so redeemed. If less than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected by lot or pro rata as may be determined by the Depositary to
be equitable.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences, or privileges shall be offered with respect to the shares of a
series
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of Series Preferred Stock underlying the Depositary Shares, or (ii) the
Depositary shall receive notice of any meeting at which holders of shares of
such series of Series Preferred Stock are entitled to vote or of which holders
of shares of such series of Series Preferred Stock are entitled to notice, or
of any election on the part of the Company to call for redemption any shares
of such series of Series Preferred Stock, the Depositary shall in each such
instance fix a record date (which shall be the same date as the record date
for the shares of such series of Series Preferred Stock) for the determination
of the holders of Depositary Shares (x) who shall be entitled to receive such
dividend, distribution, rights, preferences, or privileges, (y) who shall be
entitled to give instructions for the exercise of voting rights at any such
meeting or to receive notice of such meeting, or (z) who shall be subject to
such redemption, subject to the provisions of the Deposit Agreement.
VOTING
Upon receipt of notice of any meeting at which holders of shares of a series
of Series Preferred Stock underlying the Depositary Shares are entitled to
vote, the Depositary will mail the information contained in such notice of
meeting to the record holders of Depositary Shares relating to such series of
Series Preferred Stock. Each record holder of Depositary Shares on the record
date (which will be the same date as the record date for the underlying series
of Series Preferred Stock) will be entitled to instruct the Depositary as to
the exercise of the voting rights pertaining to the number of shares of the
series of Series Preferred Stock represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the
number of shares of the series of Series Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company has
agreed to take all reasonable action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so.
The Depositary will abstain from voting shares of a series of Series
Preferred Stock to the extent it does not receive specific written voting
instructions from the holders of Depositary Shares representing such series of
Series Preferred Stock.
WITHDRAWAL OF UNDERLYING PREFERRED STOCK
Unless otherwise indicated in the applicable Prospectus Supplement, upon
surrender of Depositary Receipts at the Corporate Office (as defined in the
Deposit Agreement) of the Depositary, the owner of the Depositary Shares
evidenced thereby will be entitled to delivery at such office of certificates
evidencing the number of shares of the series of Series Preferred Stock (but
only in whole shares of such series of Series Preferred Stock) represented by
such Depositary Receipts. If the Depositary Receipts delivered by a holder
evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing
the number of whole shares of the series of Series Preferred Stock to be
withdrawn, the Depositary will at the same time deliver to such holder a new
Depositary Receipt or Receipts evidencing such excess number of Depositary
Shares.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of Depositary Receipts and any provision of the Deposit Agreement
may at any time be amended by agreement between the Company and the
Depositary. However, any amendment that imposes any fees, taxes, or other
charges payable by holders of Depositary Shares (other than taxes and other
governmental charges, fees, and other expenses payable by such holders as
stated under "Charges of Depositary"), or that otherwise prejudices any
substantial existing right of holders of Depositary Shares, will not take
effect as to outstanding Depositary Shares until the expiration of 90 days
after notice of such amendment has been mailed to the record holders of
outstanding Depositary Shares. Every holder of Depositary Shares at the time
any such amendment becomes effective shall be deemed to consent and agree to
such amendment and to be bound by the Deposit Agreement, as so amended.
Whenever so directed by the Company, the Depositary will terminate the
Deposit Agreement after mailing notice of such termination to the record
holders of all Depositary Shares then outstanding at least 30 days prior to
the date fixed in such notice for such termination. The Depositary may
likewise terminate the Depositary
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Agreement if at any time 45 days shall have expired after the Depositary shall
have delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its
appointment. If any Depositary Shares remain outstanding after the date of
termination, the Depositary thereafter will discontinue the transfer of
Depositary Shares, will suspend the distribution of dividends to the holders
thereof, and will not give any further notices (other than notice of such
termination) or perform any further acts under the Deposit Agreement except as
provided below and except that the Depositary will continue to collect
dividends on the series of Series Preferred Stock underlying such Depositary
Shares and any other distributions with respect thereto. At any time after the
expiration of two years from the date of termination, the Depositary may sell
shares of the series of Series Preferred Stock then held by it at public or
private sale, at such place or places and upon such terms as it deems proper
and may thereafter hold the net proceeds of any such sale, together with any
money and other property then held by it, without liability for interest
hereon, for the pro rata benefit of the holders of Depositary Shares. The
Company does not presently intend to terminate any Deposit Agreement or to
permit the resignation of any Depositary without appointing a successor
depositary.
CHARGES OF DEPOSITARY
The Company will pay all charges of the Depositary, including charges in
connection with the initial deposit of shares of any series of Series
Preferred Stock, the initial execution and delivery of the Depositary
Receipts, the distribution of information to the holders of Depositary
Receipts with respect to matters on which such series of Series Preferred
Stock is entitled to vote, withdrawals of shares of such series of Series
Preferred Stock, or redemption or conversion of shares of such series of
Series Preferred Stock, except for taxes (including transfer taxes, if any)
and other governmental charges and such other charges as are provided in the
Deposit Agreement to be at the expense of holders of Depositary Receipts.
MISCELLANEOUS
The Depositary will make available for inspection by holders of Depositary
Receipts at its Corporate Office any reports and communications from the
Company that are delivered to the Depositary and made generally available to
the holders of shares of the series of Series Preferred stock underlying the
Depositary Shares.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control from or in performing
its obligations under the Deposit Agreement.
DESCRIPTION OF DEBT SECURITIES
The Company may offer Debt Securities consisting of Senior Debt Securities,
Senior Subordinated Debt Securities or Subordinated Debt Securities, any of
which Debt Securities may be issued as Convertible Debt Securities, or any
combination of the foregoing. The Debt Securities will represent unsecured
general obligations of the Company. The Senior Debt Securities will be senior
to all subordinated indebtedness of the Company, and pari passu (equally and
ratably) with other unsecured, unsubordinated indebtedness of the Company. The
Senior Subordinated Debt Securities will be subordinate in right of payment to
certain other debt obligations of the Company, pari passu with certain other
senior subordinated indebtedness of the Company and senior to certain other
subordinated indebtedness of the Company. The Subordinated Debt Securities
will be subordinate in right of payment to certain other debt obligations of
the Company and pari passu with certain other subordinated indebtedness of the
Company. At September 30, 1995, the Company had no Debt (as defined under
"Senior Debt Securities--Definitions") (excluding indebtedness to
subsidiaries). The Company is a holding company and substantially all of the
consolidated liabilities of the Company have been incurred by its
subsidiaries. At September 30, 1995, the Company's subsidiaries had total Debt
of approximately $12.9 billion (including guarantees of indebtedness of others
and the unaccreted portion of indebtedness issued at a discount, but excluding
indebtedness owed to the Company). At that date, the Company's subsidiaries
also had an aggregate of approximately $2.8 billion in undrawn lines of credit
(excluding amounts related to lines of credit which provide availability to
support commercial paper). The Debt Securities will be effectively
subordinated to
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all existing and future liabilities, including trade payables, of the
Company's subsidiaries, except to the extent that the Company may itself be a
creditor with recognized claims against such subsidiary. See "Holding Company
Structure."
The Senior Debt Securities will be issued under an Indenture to be executed
by the Company and a trustee designated in accordance with the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act") (the "Senior Indenture");
the Senior Subordinated Debt Securities will be issued under an Indenture to
be executed by the Company and a trustee designated in accordance with the
Trust Indenture Act (the "Senior Subordinated Indenture"); and the
Subordinated Debt Securities will be issued under an Indenture to be executed
by the Company and a trustee designated in accordance with the Trust Indenture
Act (the "Subordinated Indenture"). In this Prospectus, the Senior Indenture,
the Senior Subordinated Indenture and the Subordinated Indenture are sometimes
collectively referred to as the Indentures and individually as an Indenture
and the Trustee under the Senior Indenture, the Trustee under the Senior
Subordinated Indenture and the Trustee under the Subordinated Indenture are
sometimes collectively referred to as the Trustees and individually as a
Trustee. The terms of the Senior Debt Securities, the Senior Subordinated Debt
Securities and the Subordinated Debt Securities include those stated in the
respective Indentures and in any supplemental indenture, and those made part
of the Indentures by reference to the Trust Indenture Act, as in effect on the
date of the Indentures. The Indentures (or form thereof, as the case may be)
are filed as exhibits to the Registration Statement. The Debt Securities are
subject to all such terms and holders of Debt Securities are referred to the
respective Indentures and the Trust Indenture Act for a statement of such
terms. See "Additional Information."
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, all provisions of the Indentures. As used in this section
"Description of Debt Securities," unless the context indicates otherwise, the
term "Company" means Tele-Communications, Inc. and does not include any of its
subsidiaries. All other capitalized terms used in this section and not
otherwise defined have the meanings assigned to them in the Indentures.
Whenever particular sections or defined terms of each Indenture are referred
to, such sections or defined terms are incorporated by reference as part of
the statements made, and such statements are qualified in their entirety by
such reference.
GENERAL
The Indentures do not limit the amount of Debt Securities which can be
issued thereunder and provide that Debt Securities may be issued in one or
more series, in such form, with such terms and up to the aggregate principal
amount authorized from time to time by the Company. (Sections 2.01 and 2.02 of
the Indentures)
Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities consisting of Debt Securities: (i) the designation
(including whether they are Senior Debt Securities, Senior Subordinated Debt
Securities or Subordinated Debt Securities), aggregate principal amount,
authorized denominations and currency or currencies in which principal,
premium, if any, and interest on the Offered Securities are payable; (ii)
whether the Offered Securities are to be issuable initially in temporary
global form and whether any of the Offered Securities are issuable in
permanent global form as Global Securities; (iii) whether the Offered
Securities are to be issuable as Registered Debt Securities or Bearer Debt
Securities or both; (iv) the index or indices used to determine the amount of
payments of principal, premium, if any, and interest on the Offered
Securities; (v) the percentage of their principal amount at which such Offered
Securities will be issued; (vi) the date on which the Offered Securities will
mature (which may be fixed or extendible); (vii) the rate or rates (which may
be fixed or variable) per annum, if any, at which the Offered Securities will
bear interest and the date from which such interest will accrue; (viii) the
times at which any such interest will be payable and with respect to
Registered Debt Securities the record date for the interest payable on any
interest payment date; (ix) any mandatory or optional sinking fund or
analogous provisions; (x) the date or dates, if any, on or after which, or the
circumstances under which, and the price or prices (and form or method of
payment thereof) at which the Offered Securities may be redeemed, purchased or
exchanged at the option of the Company or any holder; (xi) the initial
conversion price per share or conversion rate at which Offered Securities that
are convertible will be converted into TCI Group Series A Common Stock, any
specific terms relating to the adjustment thereof that are in addition
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to or different from those described herein and the period during which such
Offered Securities may be so converted; (xii) if any covenants or Events of
Default that are in addition to or different from those described herein; and
(xiii) any other specific terms. Reference is made to the Prospectus
Supplement with respect to the designation and qualification of the Trustee
under each Indenture.
If the purchase price of any Offered Securities consisting of Debt
Securities is denominated in one or more foreign currencies, foreign currency
units or composite currencies, or if the principal, premium, if any, and
interest on any such Offered Securities are payable in one or more foreign
currencies, foreign currency units or composite currencies, the restrictions,
elections, general tax considerations, specific terms and other information
with respect to such Offered Securities and such foreign currency or
currencies or foreign currency unit or units or composite currencies will be
set forth in the applicable Prospectus Supplement.
Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be sold at a substantial discount below their principal
amount ("original issue discount"). The issue price of Offered Securities that
are Original Issue Discount Securities, the amount of the original issue
discount with respect thereto, the manner and rate or rates per annum (which
may be fixed or variable) at which such original issue discount shall accrue,
the yield to maturity represented thereby, the date or dates from or to which
or period or periods during which such original issue discount shall accrue,
the portion of the principal amount of such Offered Securities that will be
payable upon acceleration of the maturity thereof or upon the optional or
mandatory redemption, purchase or exchange thereof, and any other specific
terms thereof will be described in the Prospectus Supplement relating thereto,
together with special federal income tax and other considerations applicable
to such Offered Securities.
SENIOR DEBT SECURITIES
The Senior Indenture contains, among others, the following covenants which
will apply to Offered Securities that are Senior Debt Securities unless
otherwise provided in the Prospectus Supplement for such Offered Securities:
Change of Control. With respect to the Senior Debt Securities of any series,
if both (i) a Change of Control shall occur at any time after the date on
which Senior Debt Securities of such series are first issued and on or prior
to the maturity thereof (or during such other period as may be specified for
such series in the related Prospectus Supplement) and (ii) on any date which
occurs during the period commencing 90 days before and ending 90 days after
the date that a public filing has been made with the Commission or other
general public disclosure has been made indicating the occurrence of such
Change of Control, two or more National Rating Agencies shall downgrade their
respective ratings of the Senior Debt Securities from the ratings in effect at
the beginning of such 180-day period (each a "Downgrading Agency") (except
that if a National Rating Agency shall have downgraded its rating of the
Senior Debt Securities during the 90-day period prior to such public
disclosure, such National Rating Agency shall not be deemed a Downgrading
Agency if it upgrades its rating of the Senior Debt Securities, by the close
of business on the date of such public disclosure, to at least the rating it
had given to the Senior Debt Securities as of the beginning of such 180-day
period) (the occurrence of the conditions specified in both (i) and (ii) above
being a "Put Event") (except that a Put Event shall not be deemed to have
occurred if there are at least two National Rating Agencies that have ratings
of the Senior Debt Securities of such series in effect at the beginning of
such 180-day period that are not Downgrading Agencies), then each holder of
Senior Debt Securities of such series shall have the right to require the
Company to repurchase all or any portion of such holder's Senior Debt
Securities of such series at a purchase price equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase (or if the Senior Debt Securities of such series are Original Issue
Discount Securities, 100% of that portion of the principal amount specified in
the terms of that series that would be payable if the maturity thereof were
accelerated pursuant to the Senior Indenture), all as provided in, and subject
to the terms of, the Senior Indenture, as the Senior Indenture may be
supplemented in connection with the issuance of Senior Debt Securities
thereunder. Subsequent to the occurrence of a Put Event, the Company will give
a notice to each holder of Senior Debt Securities of such series setting
forth, among other things, details regarding the right of such holder to
require the Company to
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repurchase such holder's Senior Debt Securities of such series, the purchase
date, and the name and address of the Paying Agent (which for this purpose
will, in the case of Registered Securities, be the Trustee and, in the case of
Bearer Securities, will be a Paying Agent in a place of payment located
outside the United States) to which such Senior Debt Securities are to be
presented and surrendered. The Company will not be obligated, with respect to
the Senior Debt Securities of any series, to purchase such Senior Debt
Securities or give notice to the holders thereof with respect to more than one
Put Event. (Section 4.02 of the Senior Indenture) The obligation of the
Company to purchase Senior Debt Securities put to it pursuant to this covenant
will rank senior to its obligations in respect of the Senior Subordinated Debt
Securities and the Subordinated Debt Securities. The applicability of this
covenant is limited to the circumstances described above and this covenant is
not designed to, and may not, provide rights to the holders of Senior Debt
Securities in all circumstances in which the market value of the Senior Debt
Securities held by them may be adversely affected, whether as the result of
the Company's engaging in a highly leveraged transaction or otherwise.
The Company will comply with any applicable requirements of Rule 14e-1
promulgated under the Exchange Act and any applicable securities laws and
regulations in connection with the performance of its obligations under this
covenant.
Limitation on Liens. Subject to certain specified exceptions, as long as any
Senior Debt Securities of a series entitled to the benefit of this covenant
are outstanding, the Company will not, and will not permit any Restricted
Subsidiary to, create, incur or assume any Lien on Restricted Property to
secure the payment of Funded Debt of the Company or any Restricted Subsidiary
if immediately after the creation, incurrence or assumption of such Lien, the
aggregate outstanding principal amount of all Funded Debt of the Company and
the Restricted Subsidiaries that is secured by Liens on Restricted Property
would exceed fifteen percent (15%) of the Maximum Funded Debt Amount, unless
effective provision is made whereby the Senior Debt Securities (together with,
if the Company shall so determine, any other Funded Debt ranking equally with
the Senior Debt Securities, whether then existing or thereafter created) are
secured equally and ratably with (or prior to) such Funded Debt (but only for
so long as such Funded Debt is so secured). (Section 4.04 of the Senior
Indenture)
Limitation on Restricted Subsidiary Funded Debt. As long as any Senior Debt
Securities of a series entitled to the benefit of this covenant are
outstanding, the Company will not permit any Restricted Subsidiary to incur or
assume any Funded Debt if immediately after the incurrence or assumption of
such Funded Debt, the aggregate outstanding principal amount of all Funded
Debt of the Restricted Subsidiaries would exceed fifteen percent (15%) of the
Maximum Funded Debt Amount. Notwithstanding the foregoing, any Restricted
Subsidiary may incur Funded Debt to extend, renew or replace Funded Debt of
such Restricted Subsidiary provided that the principal amount of the Funded
Debt so incurred does not exceed the principal amount of the Funded Debt
extended, renewed or replaced thereby immediately prior to such extension,
renewal or replacement plus any premium, accrued and unpaid interest or
capitalized interest payable thereon. (Section 4.05 of the Senior Indenture)
The Senior Indenture do not limit the incurrence of Funded Debt, or any other
debt, secured or unsecured, by the Company, except as described under
"Limitation on Liens," or by any Unrestricted Subsidiary.
Designation of Restricted Subsidiaries. With respect to the Senior Debt
Securities of any series, the Company may designate an Unrestricted Subsidiary
as a Restricted Subsidiary or designate a Restricted Subsidiary as an
Unrestricted Subsidiary at any time, provided that (1) immediately after
giving effect to such designation, the Leverage Ratio of the Restricted Group
is not greater than 8.0:1 and the Company and the Restricted Subsidiaries are
in compliance with the "Limitation on Liens" and "Limitation on Restricted
Subsidiary Funded Debt" covenants, and (2) an Officers' Certificate with
respect to such designation is delivered to the Trustee within 75 days after
the end of the fiscal quarter of the Company in which such designation is made
(or, in the case of a designation made during the last fiscal quarter of the
Company's fiscal year, within 120 days after the end of such fiscal year),
which Officers' Certificate shall state the effective date of such
designation. The Company shall make the initial designation of Restricted
Subsidiaries with respect to the Senior Debt Securities of any series, and
deliver the required Officers' Certificate with respect thereto to the
Trustee, on
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or prior to the date of initial issuance of Senior Debt Securities of such
series. (Section 4.03 of the Senior Indenture)
Definitions. The following are certain of the terms defined in the Senior
Indenture (Section 1.01):
"Change of Control" means the acquisition by any person (other than the
Company or any Subsidiary, any employee stock ownership or other employee
benefit plan of the Company or of any Subsidiary or any Controlling Person)
during any period of twelve (12) consecutive months of beneficial ownership of
shares of Common Stock representing in the aggregate thirty percent (30%) or
more of the combined voting power of all shares of Common Stock, calculated on
a fully diluted basis as of the date immediately prior to the date of such
acquisition (or, if there be more than one acquisition during such twelve-
month period, the date of the last such acquisition); provided, however, that
notwithstanding the foregoing, no Change of Control shall be deemed to have
occurred if and for so long as the shares of Common Stock beneficially owned
by the Company, the Subsidiaries and the Controlling Persons represent in the
aggregate 30% or more of the combined voting power of all shares of Common
Stock calculated on a fully diluted basis.
"Company" means Tele-Communications, Inc., a Delaware corporation, until a
successor replaces it pursuant to the applicable provisions of the Indenture
and thereafter means the successor.
"Controlling Person" means each of (1) the Chairman of the Board of the
Company as of the date of the Indenture, (2) the Company of the Company as of
the date of the Indenture, (3) each of the directors of the Company as of the
date of the Senior Indenture, (4) the respective family members, estates and
heirs of each of the persons referred to in clauses (1) through (3) above and
any trust or other investment vehicle for the primary benefit of any of such
persons or their respective family members or heirs, (5) Kearns-Tribune
Corporation, a Delaware corporation, or any successor thereto by merger or
consolidation and (6) the trustee under the Company's Employee Stock Purchase
Plan or any successor plan or any other employee stock ownership or other
employee benefit plan of the Company or of any Subsidiary. As used with
respect to any person, the term "family member" means the spouse, siblings and
lineal descendants of such person. The trustee under the Company's Employee
Stock Purchase Plan or any successor plan or any other employee stock
ownership or other employee benefit plan of the Company or of any Subsidiary
shall be deemed to have beneficial ownership of all shares of common stock of
the Company held under the plan, whether or not allocated to or vested in
participants' accounts.
"Debt" of any person means:
(1) any indebtedness of such person (i) for borrowed money or (ii) evidenced
by a note, debenture or similar instrument (including a purchase money
obligation) given in connection with the acquisition of any property or
assets, including securities;
(2) any guarantee by such person of any indebtedness of others described in
the preceding clause (1); and
(3) any amendment, extension, renewal or refunding of any such indebtedness
or guarantee.
"Funded Debt" of any person means, as of the date as of which the amount
thereof is to be determined, without duplication, all indebtedness of such
person for borrowed money and all guaranties by such person of any
indebtedness of others for borrowed money, which by its terms has a final
maturity, duration or payment date more than one year from the date of
determination thereof (including, without limitation, any balance of such
indebtedness which was Funded Debt at the time of its creation maturing within
one year from such date of determination) or which has a final maturity,
duration or payment date within one year from such date of determination but
which by its terms may be renewed or extended at the option of such person for
more than one year from such date of determination, whether or not theretofore
renewed or extended. When used with respect to the Company or any Restricted
Subsidiary, the term "Funded Debt" excludes (1) any indebtedness of the
Company or any Restricted Subsidiary to the Company or another Restricted
Subsidiary, (2) any guarantee
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by the Company or any Restricted Subsidiary of indebtedness of the Company or
another Restricted Subsidiary, provided that such guarantee is not secured by
a Lien on Restricted Property, and (3) with respect to any series of Senior
Debt Securities, any indebtedness of the Company or any Restricted Subsidiary
to any Unrestricted Subsidiary which indebtedness is subordinated in right of
payment to the prior payment in full of the outstanding Senior Debt Securities
of such series on terms no less favorable to the holders of such Senior Debt
Securities than those contained in Article Ten of the subordinated Indenture
pursuant to which Subordinated Debt Securities issued by the Company are
subordinated to all Senior Debt of the Company (as defined therein), without
giving effect to any amendment, modification or supplement to, or discharge
of, the Subordinated Indenture after the date of the Senior Indenture, and
which indebtedness is not secured by a Lien on Restricted Property. For
purposes of determining the outstanding principal amount of Funded Debt at any
date, the amount of indebtedness issued at a price less than the principal
amount thereof shall be equal to the amount of the liability in respect
thereof at such date determined in accordance with generally accepted
accounting principles.
"Leverage Ratio" with respect to the Restricted Group means, as of the date
of and after giving effect to any designation of an Unrestricted Subsidiary as
a Restricted Subsidiary and/or any designation of a Restricted Subsidiary as
an Unrestricted Subsidiary, in each case in accordance with the "Designation
of Restricted Subsidiaries" covenant, the ratio of (1) the aggregate
outstanding principal amount of all Funded Debt of the Restricted Group as of
such date to (2) the product of four times the restricted Group Cash Flow for
the most recent full fiscal quarter for which financial information is
available on such date.
"Lien" means any mortgage, pledge, lien, security interest, or other similar
encumbrance.
"Maximum Funded Debt Amount" means, as of any date of determination thereof,
that amount which is equal to the product of (i) eight and (ii) the product of
(x) the Restricted Group Cash Flow for the most recent full fiscal quarter for
which financial information is available on such date and (y) four.
"National Rating Agency" means any of the following nationally recognized
statistical rating organizations (and, in each case, any successor thereto):
Duff & Phelps Credit Rating Co.; Moody's Investors Service, Inc.; Standard &
Poor's Securities, Inc.; and Fitch Investors Service, L.P.
"Principal Property" means, as of any date of determination, any property or
assets owned by any Restricted Subsidiary other than (1) any such property
which, in the good faith opinion of the Board of Directors, is not of material
importance to the business conducted by the Company and its Restricted
Subsidiaries taken as a whole and (2) any shares of any class of stock or any
other security of any Unrestricted Subsidiary.
"Restricted Group" means, as of any date of determination, the Company and
the Restricted Subsidiaries as of such date after giving effect to any
designation being made on such date in accordance with the "Designation of
Restricted Subsidiaries" covenant.
"Restricted Group Cash Flow" for any period means the Restricted Group Net
Income (as defined below) for such period, plus (A) the sum (without
duplication) of the aggregate of each of the following items of the Company
and the Restricted Subsidiaries for such period to the extent taken into
account as charges to Restricted Group Net Income for such period: (i)
interest expense, (ii) income tax expense, (iii) depreciation and amortization
expense and other noncash charges, (iv) extraordinary items and (v) after-tax
losses on sales of assets outside of the ordinary course of business not
otherwise included in extraordinary items in accordance with generally
accepted accounting principles, minus (B) the sum (without duplication) of the
aggregate of each of the following items of the Company and the Restricted
Subsidiaries for such period to the extent taken into account as credits to
Restricted Group Net Income for such period: (i) noncash credits, (ii)
extraordinary items, and (iii) after-tax gains on sales of assets outside of
the ordinary course of business not otherwise included in extraordinary items
in accordance with generally accepted accounting principles.
For purposes of this definition, (1) "Restricted Group Net Income" for any
period means the aggregate of the net income (loss) for such period of the
Company and the Restricted Subsidiaries, determined on a
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consolidated basis in accordance with generally accepted accounting
principles; provided, however, that (i) the net income (loss) of any person
accounted for by the equity method of accounting and the net income (loss) of
any Unrestricted Subsidiary shall be excluded, except that the net income of
any such person or Unrestricted Subsidiary shall be included to the extent of
the amount of dividends or distributions paid by such person or Unrestricted
Subsidiary to the Company or a Restricted Subsidiary during such period, and
(ii) except as otherwise provided in clause (2) below, the net income (loss)
of any other person acquired by the Company or any Restricted Subsidiary in a
transaction accounted for as a pooling of interests for any period prior to
the date of such acquisition shall be excluded; and (2) if the Company or any
Restricted subsidiary consummated any acquisition or deposition of assets
during the period for which Restricted Group Cash Flow is being calculated, or
consummated any acquisition or disposition of assets subsequent to such period
and on or prior to the date as of which the Leverage Ratio or Maximum Funded
Debt Amount, as applicable, is to be determined, then, in each such case, the
restricted Group Cash Flow for such period shall be calculated on a pro forma
basis as if such acquisition or disposition had occurred at the beginning of
such period.
"Restricted Property" means, as of any date of determination, any Principal
Property and any shares of stock of a Restricted Subsidiary owned by the
Company or a Restricted Subsidiary.
"Restricted Subsidiary" means, as of any date of determination, a
corporation a majority of whose voting stock is owned by the Company and/or
one or more Restricted Subsidiaries, which corporation has been, or is then
being, designated a Restricted Subsidiary in accordance with the "Designation
of Restricted Subsidiaries" covenant, unless and until designated an
Unrestricted Subsidiary in accordance with such covenant.
"Subsidiary" means a corporation a majority of whose voting stock is owned
by the Company and/or one or more Subsidiaries. Voting stock is capital stock
having voting power under ordinary circumstances to elect directors.
"Unrestricted Subsidiary" means, as of any date of determination, any
Subsidiary of the Company that is not a Restricted Subsidiary.
SENIOR SUBORDINATED DEBT SECURITIES
The following provisions will apply to Offered Securities that are Senior
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Offered Securities.
Subordination. The indebtedness evidenced by the Senior Subordinated Debt
Securities will be subordinate to the prior payment in full of all Senior Debt
as described below. The Indenture does not limit Senior Debt or any other
debt, secured or unsecured, of the Company or any subsidiary, except as
described under "Limitation on Subordinated Debt Superior to the Senior
Subordinated Debt Securities" below. Upon maturity (by acceleration or
otherwise) of any Senior Debt, payment in full must be made on such Senior
Debt (or duly provided for) before any payment is made on or in respect of the
Senior Subordinated Debt Securities (except payments made in capital stock of
the Company or in warrants, rights or options to purchase or acquire capital
stock of the Company, sinking fund payments made in Senior Subordinated Debt
Securities acquired by the Company before the maturity of such Senior Debt,
and payments made through the exchange of other debt obligations of the
Company for such Senior Subordinated Debt Securities in accordance with the
terms of such Senior Subordinated Debt Securities provided that such Debt
obligations are subordinated to Senior Debt at least to the extent that the
Senior Subordinated Debt Securities for which they are exchanged are so
subordinated in accordance with the Indenture). During the continuance of any
default in payment of the principal of, premium, if any, interest on, or other
amounts due in respect of, any Senior Debt, no payment may be made by the
Company on, or in respect of, the Senior Subordinated Debt Securities (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in Senior Subordinated Debt Securities acquired by the Company
before such default and notice thereof, and payments made through the exchange
of other debt obligations of the Company for such Senior Subordinated Debt
Securities in accordance with the terms of such Senior Subordinated Debt
Securities
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provided that such debt obligations are subordinated to Senior Debt at least
to the extent that the Senior Subordinated Debt Securities for which they are
exchanged are so subordinated in accordance with the Indenture). Upon any
distribution of assets of the Company in any dissolution, winding up,
liquidation or reorganization of the Company, payment of all amounts due in
respect of the Senior Subordinated Debt Securities will be subordinated, to
the extent and in the manner set forth in the Indenture, to the prior payment
in full of all Senior Debt. Such subordination will not prevent the occurrence
of any Event of Default. (Sections 10.01, 10.02, 10.03 and 10.11 of the
Indenture) The Indenture for the Senior Debt Securities contains a cross-
acceleration provision that would, among other things, permit the acceleration
of the maturity of any outstanding Senior Debt Securities in the event that
the maturity of any outstanding Senior Subordinated Debt Securities or
Subordinated Debt Securities were accelerated. See "Defaults and Remedies"
below. The instruments and agreements pursuant to which all or substantially
all of the Company's Senior Debt has been incurred also contain cross-default
or cross-acceleration provisions.
Securities Senior to Junior Subordinated Debt. The indebtedness evidenced by
the Senior Subordinated Debt Securities will be superior in right of payment
to all Junior Subordinated Debt as described below. Upon maturity (by
acceleration or otherwise) of the Senior Subordinated Debt Securities of any
series, payment in full must be made thereon, or duly provided for, before any
payment is made on or in respect of any Junior Subordinated Debt (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in instruments evidencing Junior Subordinated Debt of the same
issue acquired before the maturity of the Senior Subordinated Debt Securities
of such series, and payments made through the exchange of other debt
obligations of the Company for such Junior Subordinated Debt in accordance
with the terms of such Junior Subordinated Debt provided that such debt
obligations are subordinated to the Senior Subordinated Debt Securities at
least to the extent that the Junior Subordinated Debt for which they are
exchanged is so subordinated in accordance with the Indenture). During the
continuance of any default in payment of the principal of, premium, if any,
interest on, or other amounts due in respect of, the Senior Subordinated Debt
Securities of any series, no payment may be made by the Company on, or in
respect of, any Junior Subordinated Debt (except payments made in capital
stock of the Company or in warrants, rights or options to purchase or acquire
capital stock of the Company, sinking fund payments made in instruments
evidencing Junior Subordinated Debt of the same issue acquired before such
default and notice thereof, and payments made through the exchange of other
debt obligations of the Company for such Junior Subordinated Debt in
accordance with the terms of such Junior Subordinated Debt provided that such
debt obligations are subordinated to the Senior Subordinated Debt Securities
at least to the extent that the Junior Subordinated Debt for which they are
exchanged is so subordinated in accordance with the Indenture). Upon any
distribution of assets of the Company in any dissolution, winding up,
liquidation or reorganization of the Company, holders of the Senior
Subordinated Debt Securities will be entitled to receive payment in full of
all amounts due in respect thereof before the holders of any Junior
Subordinated Debt are entitled to receive any payment on account of such
Junior Subordinated Debt. (Section 4.05 of the Indenture)
Limitation on Subordinated Debt Superior to the Senior Subordinated Debt
Securities. As long as any Senior Subordinated Debt Securities remain
outstanding, the Company may not create or incur any Debt which is subordinate
or junior in right of payment to any Senior Debt if such Debt is superior in
right of payment to the Senior Subordinated Debt Securities. (Section 4.06 of
the Indenture)
Definitions. The following are certain of the terms defined in the Indenture
(Sections 4.06 and 10.01):
"Junior Subordinated Debt" means the principal of (premium, if any) and
interest on Debt of the Company created or incurred after the date of the
Indenture which by its terms is subordinate in right of payment to the Senior
Subordinated Debt Securities, including any Subordinated Debt Securities
issued under the Subordinated Indenture.
"Senior Debt" means the principal of (premium, if any) and interest on Debt
of the Company outstanding at any time other than (i) the Senior Subordinated
Debt Securities, (ii) the Company's outstanding 11 1/8% senior
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subordinated debentures due October 1, 2003, which shall rank pari passu with
the Senior Subordinated Debt Securities, (iii) any Subordinated Debt
Securities issued under the Subordinated Indenture, and (iv) Debt which by its
terms is not superior in right of payment to the Senior Subordinated Debt
Securities.
The definition of "Debt" in the Senior Subordinated Indenture is the same as
that in the Senior Indenture.
Nothing in the Senior Subordinated Indenture affords holders of Senior
Subordinated Debt Securities protection in the event of a highly leveraged
transaction, reorganization, restructuring, merger or similar, transaction
involving the Company or in the event of a change of control of the Company.
SUBORDINATED DEBT SECURITIES
The following provisions will apply to Offered Securities that are
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Offered Securities:
Subordination. The indebtedness evidenced by the Subordinated Debt
Securities will be subordinate to the prior payment in full of all Senior Debt
as described below. The Indenture does not limit Senior Debt or any other
debt, secured or unsecured, of the Company or any subsidiary. Upon maturity
(by acceleration or otherwise) of any Senior Debt, payment in full must be
made on such Senior Debt (or duly provided for) before any payment is made on
or in respect of the Subordinated Debt Securities (except payments made in
capital stock of the Company or in warrants, rights or options to purchase or
acquire capital stock of the Company, sinking fund payments made in
Subordinated Debt Securities acquired by the Company before the maturity of
such Senior Debt, and payments made through the exchange of other debt
obligations of the Company for such Subordinated Debt Securities in accordance
with the terms of such Subordinated Debt Securities provided that such debt
obligations are subordinated to Senior Debt at least to the extent that the
Subordinated Debt Securities for which they are exchanged are so subordinated
in accordance with the Indenture). During the continuance of any default in
payment of the principal of, premium, if any, interest on, or other amounts
due in respect of, any Senior Debt, no payment may be made by the Company on,
or in respect of, the Subordinated Debt Securities (except payments made in
capital stock of the Company or in warrants, rights or options to purchase or
acquire capital stock of the Company, sinking fund payments made in
Subordinated Debt Securities acquired by the Company before such default and
notice thereof, and payments made through the exchange of other debt
obligations of the Company for such Subordinated Debt Securities in accordance
with the terms of such Subordinated Debt Securities provided that such debt
obligations are subordinated to Senior Debt at least to the extent that the
Subordinated Debt Securities for which they are exchanged are so subordinated
in accordance with the Indenture). Upon any distribution of assets of the
Company in any dissolution, winding up, liquidation or reorganization of the
Company, payment of all amounts due in respect of the Subordinated Debt
Securities will be subordinated, to the extent and in the manner set forth in
the Indenture, to the prior payment in full of all Senior Debt. Such
subordination will not prevent the occurrence of any Event of Default.
(Sections 10.01, 10.02, 10.03 and 10.11 of the Indenture) The Indenture for
the Senior Debt Securities contains a cross-acceleration provision that would,
among other things, permit the acceleration of the maturity of any outstanding
Senior Debt Securities in the event that the maturity of any outstanding
Senior Subordinated Debt Securities or Subordinated Debt Securities were
accelerated. See "Defaults and Remedies" below. The instruments and agreements
pursuant to which all or substantially all of the Company's Senior Debt has
been incurred also contain cross-default or cross-acceleration provisions.
"Senior Debt" means the principal of (premium, if any) and interest on Debt
of the Company outstanding at any time other than (i) the Subordinated Debt
Securities, and (ii) Debt which by its terms is not superior in right of
payment to the Subordinated Debt Securities. The definition of "Debt" in the
Subordinated Indenture is the same as that in the Senior Indenture.
Nothing in the Subordinated Indenture affords holders of Subordinated Debt
Securities protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company or in the event of a change of control of the Company.
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CONVERTIBLE DEBT SECURITIES
In addition to the provisions described under the applicable of "Senior Debt
Securities", "Senior Subordinated Debt Securities" or "Subordinated Debt
Securities" above, the following provisions will apply to Offered Securities
that are convertible Debt Securities unless otherwise provided in the
Prospectus Supplement for such Offered Securities:
For purposes of the conversion provisions of each Indenture, "Company Stock"
means the TCI Group Series A Common Stock and any other capital stock into
which TCI Group Series A Common Stock may be changed after the date of such
Indenture. (Section 1.01 of the Indentures)
Conversion. The holder of any convertible Debt Security will have the right,
exercisable at any time up to and including the maturity date thereof (or such
shorter period as may be specified for any series of convertible Debt
Securities in the Prospectus Supplement relating thereto), unless previously
redeemed or otherwise purchased, to convert such Debt Security at the
principal amount thereof (or, if such Debt Security is an Original Issue
Discount Security, such portion of the principal amount thereof as is
specified in the terms of such Debt Security) into shares of Company Stock at
the conversion price or conversion rate set forth in the Prospectus
Supplement, subject to adjustment as described below. The holder of a
convertible Debt Security may convert a portion thereof if the portion to be
converted and the remaining portion of such Debt Security are in denominations
issuable for that series of Debt Securities. (Section 10.01 of the Senior
Indenture and Section 11.01 of the Senior Subordinated and Subordinated
Indentures) In the case of Debt Securities called for redemption, conversion
rights will expire at the close of business on such day on or prior to the
redemption date as may be specified in the Prospectus Supplement.
The conversion price or conversion rate of the convertible Debt Securities,
or the securities or other property to be received on conversion, is subject
to adjustment upon the occurrence of certain events, including (i) the payment
of a dividend or the making of a distribution in shares of Company Stock to
holders of Company Stock or the payment of a dividend or the making of a
distribution to holders of Company Stock payable in shares of the Company's
capital stock other than Company Stock; (ii) the subdivision, combination or
reclassification of outstanding shares of Company Stock; (iii) the issuance to
all holders of Company Stock of rights or warrants entitling them (for a
period not exceeding 45 days or such other period as may be specified in the
Prospectus Supplement) to purchase shares of Company Stock (or, unless
otherwise provided in the Prospectus Supplement, securities (other than the
convertible Debt Securities and shares of TCI Group Series B Common Stock)
convertible into Company Stock) at a price per share (or, in the case of such
convertible securities, having a conversion price per share after adding
thereto an allocable portion of the exercise price of the right or warrant to
purchase such convertible securities) less than the Average Market Price on
the Determination Date (each as defined in the Indentures) per share of such
Company Stock; (iv) the distribution to all holders of Company Stock of
evidences of indebtedness or assets (excluding cash dividends or distributions
unless otherwise provided in the Prospectus Supplement) or certain rights or
warrants (other than those referred to above); and (v) certain mergers,
consolidations or sales of assets. In the case of any such dividend or
distribution on the Company Stock of shares of capital stock, subdivision,
combination or reclassification, the holder of each outstanding convertible
Debt Security will have the right to convert such Debt Security into the kind
and amount of securities which he would have owned immediately after such
event if he had converted such Debt Security immediately before the record
date for or effective date of, as the case may be, such event. In the case of
any such merger, consolidation or sale of assets, the holder of each
outstanding convertible Debt Security will have the right to convert such Debt
Security into the kind and amount of securities, cash or other assets
receivable upon such merger, consolidation or sale by a holder of the number
of shares of Company Stock into which such Debt Security could have been
converted immediately before the effective date of such transaction (assuming
such holder of Company Stock failed to exercise any rights of election and
received per share of Parent Stock the kind and amount of securities, cash or
other assets received per share by a plurality of the non-electing shares.) In
the case of any such issuance of rights or warrants which expire within 45
days (or such other period as may be specified in the Prospectus Supplement)
after the record date for the determination of stockholders entitled to
receive the rights or warrants, or any such distribution of evidences of
indebtedness or assets or other rights or
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warrants, the conversion price or conversion rate will be adjusted pursuant to
formulas contained in the Indentures. However, no adjustment to the conversion
price or conversion rate need be made if the holders may participate in the
transaction or in certain other cases.
In addition to the foregoing adjustments, the Company will be permitted to
make such reductions in the conversion price or increases in the conversion
rate as it considers to be advisable. Unless otherwise provided in the
Prospectus Supplement, the Company is not required to make adjustments in the
conversion price or conversion rate of less than 1% of the initial conversion
price or conversion rate, as the case may be, but any adjustment that would
otherwise be required to be made will be taken into account in the computation
of any subsequent adjustment. No adjustment is required in respect of the
issuance of Company Stock under any dividend or interest reinvestment plan of
the Company. Fractional shares of Company Stock will not be issued upon
conversion, but, in lieu thereof, the Company will pay a cash adjustment. No
payment or adjustment will be made upon any conversion on account of any
interest (or, in the case of Original Issue Discount Securities, original
issue discount) accrued on the convertible Debt Securities surrendered for
conversion or on account of any dividends on the Company Stock issued upon
conversion. Convertible Debt Securities surrendered for conversion between the
record date for an interest payment, if any, and the interest payment date
(except convertible Debt Securities called for redemption on a redemption date
during such period) may be required to be accompanied by payment of an amount
equal to the interest thereon which the registered holder is to receive.
(Article Ten of the Senior Indenture and Article Eleven of the Senior
Subordinated and Subordinated Indentures)
DENOMINATION AND FORM
Unless otherwise indicated in the Prospectus Supplement, the Offered
Securities will be Registered Debt Securities denominated in U.S. Dollars and
will be issued only in denominations of $1,000 and integral multiples of
$1,000. (Section 2.03 of the Senior Subordinated and Subordinated Indentures
and Sections 2.01 and 2.03 of the Senior Indenture) Under the Senior
Indenture, Debt Securities of any series may be issuable as Registered Debt
Securities, Bearer Debt Securities (with or without coupons attached) or both,
and may be issuable in whole or in part in the form of one or more Global
Securities. In addition, the Senior Indenture provides that Debt Securities
may be denominated or payable in one or more foreign currencies, foreign
currency units or composite currencies. (Sections 2.01 and 2.02 of the Senior
Indenture) Unless otherwise indicated in the applicable Prospectus Supplement,
Bearer Debt Securities denominated in U.S. Dollars will be issued only in the
denomination of $5,000 with coupons attached. (Sections 2.01 and 2.03 of the
Senior Indenture) A Global Security will be issued in a denomination equal to
the aggregate principal amount of outstanding Debt Securities represented by
such Global Security. (Section 2.10 of the Senior Indenture and Section 2.15
of the Senior Subordinated and the Subordinated Indentures) The Prospectus
Supplement relating to a series of Debt Securities denominated other than in
U.S. Dollars will specify the authorized denominations thereof.
During the "restricted period," as defined in Treasury Regulation Section
1.163-5(c)(2)(i)(D)(7), no Bearer Debt Security may be offered or sold (or
resold in connection with its original issuance) in the United States or its
possessions or to a United States person (subject to certain exceptions).
Further, no Bearer Debt Security may be mailed or otherwise delivered to any
location in the United States or its possessions in connection with a sale
that occurred during the restricted period. Offered Securities that are Bearer
Debt Securities will be subject to certification requirements as to the
ownership of such Bearer Debt Security (including beneficial interests in a
Global Security representing such Bearer Debt Security) which will be
described in the applicable Prospectus Supplement. See "Limitations on
Issuance of Bearer Debt Securities."
REGISTRAR, PAYING AGENT, CONVERSION AGENT
The Company will maintain an office or agency where Registered Debt
Securities of each series may be presented for registration of transfer or for
exchange ("Registrar"), an office or agency where Debt Securities of each
series may be presented for payment ("Paying Agent") and an office or agency
where Debt Securities of each series that is convertible may be presented for
conversion ("Conversion Agent"). The Company may have one or more co-
Registrars, one or more additional Paying Agents and one or more additional
Conversion Agents
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with respect to any series of Debt Securities and the Company or any of its
subsidiaries may act as Paying Agent, Registrar or co-Registrar or Conversion
Agent. Unless otherwise indicated in an applicable Prospectus Supplement, each
Trustee will initially act as Paying Agent and Registrar for each series of
Debt Securities issued under its respective Indenture and as Conversion Agent
for any series that is convertible. The Company may change any Paying Agent,
Registrar or co-Registrar or Conversion Agent at any time without notice to
the holders of Debt Securities, except as described below with respect to Debt
Securities issued under the Senior Indenture. The Company will promptly notify
the Trustee of the name and address of any such Agent. (Section 2.05 of the
Indentures)
The Senior Indenture also provides that if Debt Securities of a series are
issuable as Bearer Debt Securities, the Company will maintain (i) in the
Borough of Manhattan, The City of New York, an office or agency where any
Registered Debt Securities of that series may be presented or surrendered for
payment and for registration of transfer, where Debt Securities of that series
may be surrendered for exchange and where Bearer Debt Securities of that
series and related coupons may be presented or surrendered for payment in the
circumstances described under "Payment" below, and (ii) subject to any laws or
regulations applicable thereto, in a place of payment for Debt Securities of
that series located outside the United States, an office or agency where any
Registered Debt Securities of that series may be surrendered for registration
of transfer, where Debt Securities of that series may be surrendered for
exchange and where Debt Securities of that series and any related coupons may
be presented and surrendered for payment, provided that if the Debt Securities
of that series are listed on The International Stock Exchange of the United
Kingdom and the Republic of Ireland, 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 Debt
Securities of that series in London, Luxembourg or any other required city
located outside the United States, as the case may be, so long as the Debt
Securities of that series are listed on such exchange. Any Paying Agents
outside the United States initially designated by the Company for the Offered
Securities will be named in the applicable Prospectus Supplement. The Company
will promptly notify the Trustee and the holders of Debt Securities of a
series of the location and any change in the location of any office or agency
which it is required to maintain for the Debt Securities of such series.
(Section 4.01 of the Senior Indenture)
TRANSFER AND EXCHANGE
Registered Debt Securities of any series (other than a Global Security,
except as provided under "Global Securities") will be exchangeable at the
option of the holder for other Registered Debt Securities of the same series
of any authorized denominations and of a like aggregate principal amount and
tenor. (Section 2.08 of the Indenture) In addition, if Debt Securities of any
series issued under the Senior Indenture are issuable as both Registered Debt
Securities and Bearer Debt Securities, then, if so provided with respect to
the Debt Securities of such series, at the option of the holder and subject to
the terms of such Indenture, Bearer Debt Securities (with, except as provided
below, all related unmatured coupons and all related matured coupons in
default) of such series will be exchangeable for Registered Debt Securities of
the same series of any authorized denominations and of a like aggregate
principal amount and tenor. Bearer Debt Securities surrendered in exchange for
Registered Debt Securities between a regular record date or, in certain
circumstances, a special record date, for an interest payment and the relevant
interest payment date shall be surrendered without the coupon relating to such
interest payment date attached and interest will not be payable on such
interest payment date in respect of the Registered Debt Security issued in
exchange for such Bearer Debt Security, but will be payable only to the holder
of such coupon in accordance with the terms of the Senior Indenture. Unless
otherwise specified in the applicable Prospectus Supplement, Bearer Debt
Securities will not be issued in exchange for Registered Debt Securities.
(Section 2.08 of the Senior Indenture)
Debt Securities of any series may be surrendered for exchange as provided
above, and Registered Debt Securities of any series (other than a Global
Security, except as provided under "Global Securities") may be surrendered for
registration of transfer, at the office or agency designated by the Company
for such purpose with respect to such series of Debt Securities. Bearer Debt
Securities will be transferable by delivery. (Section 2.14 of the Senior
Indenture) Every Registered Debt Security presented or surrendered for
registration of transfer or for
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exchange shall be duly endorsed or accompanied by appropriate transfer
documents duly executed. No service charge will be made for any registration
of transfer or exchange of Debt Securities, but the Company may require
payment of a sum sufficient to cover any taxes and other governmental charges
that may be imposed in relation thereto. (Section 2.08 of the Indentures)
The Company and the Registrar need not transfer or exchange any Debt
Securities selected for redemption or purchase (except, in the case of Debt
Securities to be redeemed or purchased in part, the portion thereof not to be
redeemed or purchased) or any Debt Securities in respect of which a notice
requiring the purchase or redemption thereof by the Company at the option of
the holder thereof has been given and not withdrawn by such holder in
accordance with the terms of such Debt Securities (as described, if
applicable, in the Prospectus Supplement) (except, in the case of Debt
Securities to be so purchased or redeemed in part, the portion thereof not to
be so purchased or redeemed). (Section 2.08 of the Indentures) A Bearer Debt
Security so selected for redemption or purchase or in respect of which a
notice requiring the redemption or purchase thereof by the Company at the
option of the holder thereof has been given and not so withdrawn may however,
if so provided with respect to the Debt Securities of such series, be
exchanged for a Registered Debt Security of that series and like tenor,
provided that such Registered Debt Security is simultaneously surrendered for
redemption or purchase, as the case may be. (Section 2.08 of the Senior
Indenture)
The Senior Subordinated Indenture and the Subordinated Indenture also
provide that the Registrar need not transfer or exchange any Debt Securities
of a particular series during a period of 15 days before a selection of Debt
Securities of such series to be redeemed. (Section 2.08 of the Senior
Subordinated and the Subordinated Indentures) The Senior Indenture provides
that the Company shall not be required to issue, register the transfer of or
exchange Debt Securities of any series during a period beginning at the
opening of business 15 days before any selection of Debt Securities of that
series to be redeemed and ending at the close of business on (i) if Debt
Securities of that series are issuable only as Registered Debt Securities, the
date of the mailing of the relevant notice of redemption, and (ii) if Debt
Securities of that series are issuable as Bearer Debt Securities, the date of
the first publication of the relevant notice of redemption or, if Debt
Securities of that series are also issuable as Registered Debt Securities and
there is no publication, the mailing of the relevant notice of redemption.
(Section 2.08 of the Senior Indenture)
Prior to due presentment of a Registered Debt Security for registration to
transfer, the person in whose name such Registered Debt Security is registered
may be treated as the owner of it for all purposes. (Section 2.14 of the
Indentures) The bearer of any Bearer Debt Security and the bearer of any
coupon appertaining thereto may be treated as the owner of such Bearer Debt
Security or coupon for all purposes. (Section 2.14 of the Senior Indenture)
GLOBAL SECURITIES
The Indentures provide that the Debt Securities of any series thereunder may
be issued in whole or in part in the form of one or more Global Securities,
which Global Securities may be issued in registered form (or, in the case of
Senior Debt Securities, bearer form) and in either temporary or permanent
form. (Sections 2.10 and 2.11 of the Senior Indenture and Sections 2.11 and
2.15 of the Senior Subordinated and Subordinated Indentures) Each Global
Security will be deposited with and, if it is issued in registered form, will
be registered in the name of the depositary (or a nominee of the depositary)
identified in the applicable Prospectus Supplement. (Section 2.10 of the
Senior Indenture and Section 2.15 of the Senior Subordinated and Subordinated
Indentures) So long as the depositary for a Global Security in registered
form, or its nominee, is the registered owner of the Global Security, the
depositary or its nominee, as the case may be, will be considered the sole
owner of the Debt Securities represented by such Global Security for all
purposes under the Indenture. (Section 2.14 of the Indentures) 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 for such Global Security to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by the depositary or any nominee to a successor depositary or
any nominee of such successor. (Section 2.08 of the Indentures) Unless
otherwise specified in the applicable Prospectus Supplement, if the depositary
with respect
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to any Global Security is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days of such time, or if the Company, in its sole
discretion, at any time determines that any series of Debt Securities issued
or issuable in the form of a Global Security shall no longer be represented by
such Global Security, then in either such event the Global Security shall be
exchanged for Debt Securities in definitive form pursuant to the applicable
Indenture. Further, if so specified by the Company with respect to the Debt
Securities of a series and described in the applicable Prospectus Supplement,
an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company and the
depositary for such Global Security, receive Debt Securities of such series in
definitive form. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
Debt Securities in authorized denominations and of like tenor of the series
represented by such Global Security, equal in principal amount to such
beneficial interest, and to have such Debt Securities registered in its name
(if the Debt Securities of such series are issuable as Registered Debt
Securities). (Section 2.08 of the Indentures) See, however, "Limitations on
Issuance of Bearer Debt Securities" below for a discussion of certain
restrictions on the delivery of a Bearer Debt Security in definitive form in
exchange for an interest in a Global Security. Except as described above,
unless otherwise specified in the applicable Prospectus Supplement, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered
the owners or holders thereof under the applicable Indenture.
Any specific terms of the depositary arrangement with respect to a series of
Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement. The Company anticipates that the following provisions
will apply to all 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
participants. Ownership of beneficial interests in a Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the depositary (with respect to beneficial interests of
participants in the depositary), or by participants in the depositary or
persons that may hold interest through such participants (with respect to
beneficial interests of persons other than participants in the depositary).
Ownership of beneficial interests in a Global Security will be limited to
participants or persons that hold interests through participants.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Debt Securities" below, payments of the principal of and any premium
and interest on Debt Securities registered in the name of or held by a
depositary or its nominee will be made to the depositary or its nominee, as
the case may be, as the registered owner or the holder of the Global Security
representing such Debt Securities. None of the Company, the Trustee, any
Paying Agent or the Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in Global Security
for such debt Securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. (Section 2.14 of the
Indentures)
The Company expects that the depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium or interest 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 such
depositary. The Company also expects that payments by participants to owners
of beneficial interests in such Global Security held through such participants
will be governed by standing instructions and customary practices, as is now
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants. With respect to a Global Security that represents in whole or in
part Debt Securities of a series that are issuable as Bearer Debt Securities,
receipt by owners of beneficial interests in such Global Security of payments
in respect of such Global Security will be subject to the restrictions
discussed under "Limitations on Issuance of Bearer Debt Securities" below.
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LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Debt Securities (including beneficial interests in a Global Security that
represents Bearer Debt Securities) may not be offered or sold (or resold in
connection with their original issuance) during the "restricted period," as
defined in Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7), in the United
States or its possessions or to United States persons (each as defined below)
other than to (i) a Qualifying Foreign Branch of a United States Financial
Institution (as defined below), (ii) a United States person who acquires and
holds the obligation through the Qualifying Foreign Branch of a United States
Financial Institution, (iii) a United States office of an "exempt
distributor," as defined in Treasury Regulation Section 1.163-
5(c)(2)(i)(D)(5), (iv) the United States office of an international
organization, as defined in Section 7701(a)(18) of the Internal Revenue Code
of 1986, as amended (the "Code") and the regulations thereunder, or (v) the
United States office of a foreign central bank, as defined in Section 895 of
the code and the regulations thereunder. In addition, Bearer Debt Securities
may not be delivered within the United States or its possessions in connection
with a sale that occurred during the restricted period. Any underwriters,
agents and dealers participating in the offering of Offered Securities must
agree that they will not offer any Bearer Debt Securities for sale or resale
in the United States or its possessions or the United States persons (other
than a person specified in clause (i), (ii), (iii), (iv) or (v) above) or
deliver Bearer Debt Securities within the United States or its possessions.
The term "Qualifying Foreign Branch of a United States Financial Institution"
means a branch located outside the United States of a United States financial
institution (as defined in Treasury Regulation Section 1.165-12(c)(1)(v)) that
provides a certificate within a reasonable time (or a blanket certificate in
the year the Debt Security is issued or either of the preceding two calendar
years) stating that it agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder. The term
"United States person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof and an estate
or trust the income of which is subject to United States federal income
taxation regardless of its source; the term "United States" means the United
States of America (including the States and the District of Columbia), and the
term "possessions" includes, but is not limited to, Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands.
United States federal tax laws and regulations also require that the owner
of an obligation issuable in bearer form or the financial institution (as
defined in the preceding paragraph) or clearing organization through which the
owner directly or indirectly holds such obligation must provide the issuer of
the obligation with a certificate on the earlier of the date of the first
actual payment of interest on the obligation or the date of delivery by the
issuer of the obligation in definitive form stating that on such date the
obligation is owned by (a) a person that is not a United States person, (b) a
person described in clause (i) or (ii) of the preceding paragraph, or (c) a
financial institution for purposes of resale during the restricted period, but
not for resale directly or indirectly to a United States person or to a person
within the United States or its possessions. A certificate described in clause
(a) or (b) above may not be given with respect to an obligation that is owned
by a financial institution for purposes of resale during the restricted
period. When the required certificate is provided by a clearing organization,
the certificate must be based upon statements provided to it by its member
organizations. For purposes of the foregoing, a "temporary global security,"
as defined in Treasury Regulation Section 1.163-5(c)(1)(ii)(B), is not
considered to be an obligation in definitive form. In compliance with the
foregoing, if the Offered Securities are of a series of Debt Securities
issuable as Bearer Debt Securities, the delivery thereof (including delivery
in exchange for an interest in a Global Security) and the payment of interest
thereon, as applicable, will be subject to the satisfaction of certification
requirements that will be specified by the Company in accordance with the
Senior Indenture in connection with the establishment of such series and will
be described in the applicable Prospectus Supplement. (Sections 2.02 and 2.04
of the Senior Indenture) The Senior Indenture also provides that no Bearer
Debt Security (including a Global Security that represents Bearer Debt
Securities) will be mailed or otherwise delivered to any location in the
United States or its possessions. (Section 2.04 of the Senior Indenture)
Bearer Debt Securities and any coupons appertaining thereto will bear a
legend substantially to the following effect: "Any United States person who
holds this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the Internal
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Revenue Code." Under Sections 165(j) and 1287(a) of the Code, holders that are
United States persons, with certain exceptions, will not be entitled to deduct
any loss on Bearer Debt Securities and must treat as ordinary income any gain
realized on the sale or other disposition (including the receipt of principal)
of Bearer Debt Securities.
PAYMENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Debt Securities (other
than a Global Security) will be made, subject to any applicable laws and
regulations, at the offices of such paying Agent or paying Agents outside the
United States as the Company may designate from time to time, except that, at
the option of the Company (or, if so specified in the applicable Prospectus
Supplement, at the option of the holder), payment of interest may be made by
check (provided the same is not mailed to an address inside the United States)
or by wire transfer to an account located outside the United States maintained
by the payee. (Sections 2.13 and 4.01 of the Senior Indenture) Unless
otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Debt Securities on any interest payment date will be made
only against surrender of the coupon relating to such interest payment date.
(Section 2.13 of the Senior Indenture) No payment with respect to any Bearer
Debt Security will 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 in the United States. Notwithstanding the
foregoing, payments of principal of and any premium and interest on Bearer
Debt Securities denominated and payable in U.S. Dollars will 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 of the full amount thereof in U.S. Dollars
at all offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 4.01 of
the Senior Indenture)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Debt Securities
(other than a Global Security) will be made at the office of such Paying Agent
or paying Agents as the Company may designate from time to time, except that
at the option of the Company payment of any interest may be made by check
mailed to the address of the person entitled thereto as such address shall
appear in the security register or, if so specified with respect to the
Registered Debt Securities of any series issued under the Senior Indenture, by
wire transfer to an account designated by such person. Payment of any
installment of interest on Registered Debt Securities will be made to the
person in whose name such Registered Debt Security is registered at the close
of business on the regular record date (or, in the case of defaulted interest,
special record date) for such interest payment. (Section 2.13 of the
Indentures)
All moneys paid by the Company to a Paying Agent for the payment of
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and the holder
of such Debt Security or any coupon appertaining thereto will thereafter look
only to the Company for payment thereof unless an applicable abandoned
property law designates another person. (Section 8.03 of the Indentures)
AMENDMENT, SUPPLEMENT, WAIVER
Subject to certain exceptions, the Indentures or the Debt Securities may be
amended or supplemented, and any past default or compliance with any provision
may be waived, insofar as the Debt Securities of any series are concerned,
with the consent of the holders of a majority in aggregate principal amount of
the outstanding Debt Securities of such series. (Sections 6.04 and 9.02 of the
Indentures) Without the consent of any holder of Debt Securities, the Company
and the Trustee may amend or supplement the Indentures or the Debt Securities
to cure any ambiguity, defect or inconsistency, to permit or facilitate the
issuance of Debt Securities in bearer form or to provide for uncertificated
Debt Securities in global form in addition to certificated Debt Securities (so
long as any "registration-required obligation," within the meaning of Section
163(f)(2) of the Code, is in registered form for purposes of the Code) or to
make certain other specified changes or any change that does not materially
adversely affect the rights of any holder of Debt Securities. (Section 9.01 of
the Indentures)
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SUCCESSOR CORPORATION
The Company may not consolidate with or merge into, or transfer its
properties and assets substantially as an entirety to, another corporation
unless (i) the successor corporation, which shall be a corporation organized
under the laws of the United States or a State thereof, assumes by
supplemental indenture all the obligations of the Company under the Debt
Securities and the Indentures, and (ii) after giving effect to such
transaction, no Event of Default shall have occurred and be continuing.
Thereafter, unless otherwise specified in the Prospectus Supplement, all such
obligations of the Company terminate. (Section 5.01 of the Indentures)
DEFAULTS AND REMEDIES
An Event of Default with respect to Debt Securities of any series is: (i)
default for 30 days in payment of any interest on the Debt Securities of that
series; (ii) default in payment of principal, premium or any other amount
(other than interest) due in respect of the Debt Securities of that series at
maturity, upon redemption (including default in the making of any mandatory
sinking fund payment), upon purchase by the Company at the option of the
holder or otherwise; (iii) failure by the Company for 30 days after receipt of
written notice as provided in the Indentures to comply with any of its other
agreements in the Indentures (other than agreements expressly included in the
Indentures solely for the benefit of a series of Debt Securities other than
that series or expressly made inapplicable to the Debt Securities of such
series) or the Debt Securities of that series; (iv) (for purposes of the
Senior Indenture only) acceleration of the maturity of any Debt of the Company
(including Senior Debt Securities of any other series) if the aggregate
principal amount (or, if applicable, issue price plus accrued original issue
discount) of the Debt the maturity of which has been accelerated exceeds five
percent (5%) of the aggregate principal amount of the Company's Funded Debt
then outstanding and such Debt is not paid, or such acceleration is not
rescinded or annulled or such acceleration is not contested by appropriate
proceedings and all consequences thereof that would have a material adverse
effect on the Company stayed, within 30 days after receipt of written notice
as provided in the Senior Indenture; provided, however, that if, after the
expiration of such 30-day period, the event of default that resulted in the
acceleration of the maturity of such Debt of the Company is remedied or cured
by the Company or waived by the holders of such Debt in any authorized manner
or otherwise ceases to exist, then the Event of Default described in this
clause (iv) resulting from such acceleration will be deemed cured and not
continuing; and (v) certain events of bankruptcy or insolvency. (Section 6.01
of the Indentures) If an Event of Default occurs with respect to the Debt
Securities of any series and is continuing, the Trustee or the holders of at
least 25% in aggregate principal amount of the Debt Securities of that series
may declare to be due and payable immediately (i) the principal amount of that
series (or, if the Debt Securities of that series are Original Issue Discount
Securities, that portion of the principal amount specified in the terms of
that series) and (ii) accrued interest, if any, thereon. The Indentures
provide for automatic acceleration of the maturity of such amounts upon the
occurrence of certain events of bankruptcy or insolvency. (Section 6.02 of the
Indentures) The Senior Indenture provides that a declaration of acceleration
of the maturity of the Senior Debt Securities of any series as a result of an
Event of Default described in clause (iv) above will be automatically annulled
if (x) the acceleration of the Debt that is the subject of such Event of
Default is declared void ab initio as a result of the Company's contest
thereof or (y) the declaration of acceleration of such Debt is rescinded or
annulled in any manner authorized by the instrument evidencing or creating
such Debt within 90 days of the declaration of acceleration of the Senior Debt
Securities of such series and, in the case of clause (y), the annulment of the
declaration of acceleration under the Senior Indenture would not conflict with
any judgment or decree, and, in the case of either clause (x) or (y), all
other existing Events of Default (other than the non-payment of amounts that
have become due with respect to such Senior Debt Securities solely by such
acceleration) with respect to Senior Debt Securities of that series have been
cured or waived. (Section 6.02 of the Senior Indenture) Holders of Debt
Securities may not enforce the Indentures or the Debt Securities except as
provided in the Indentures. (Section 6.06 of the Indentures) The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Debt Securities. (Section 7.01 of the Indentures) Subject to certain
limitations, holders of a majority in aggregate principal amount of the Debt
Securities of any series may direct the Trustee in its exercise of any trust
or power with respect to the Debt Securities of that series. (Section 6.05 of
the Indentures) The Trustee may withhold from holders of Debt Securities
notice of any continuing default (except a default in payment of principal,
premium, if any, interest or other amounts due) if it determines that
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withholding notice is in their interest. (Section 7.05 of the Indentures) The
Company is required to file periodic reports with the Trustee as to the
absence of default. (Section 4.07 of the Senior Indenture and Section 4.03 of
the Senior Subordinated and Subordinated Indentures)
NO PERSONAL LIABILITY
No past, present or future director, officer, employee or stockholder, as
such, of the Company or any successor thereof shall have any liability for any
obligations of the Company under the Debt Securities or the Indentures or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of Debt Securities by accepting a Debt Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Debt Securities. (Section 11.11 of the
Senior Indenture and Section 12.11 of the Senior Subordinated and Subordinated
Indentures)
SATISFACTION AND DISCHARGE
The Company's obligations under the Debt Securities of any series and the
applicable Indenture with respect to such series (except for the obligation to
pay the principal of and premium and interest, if any, on the Debt Securities
of such series and certain other specified obligations) will be satisfied and
discharged in accordance with the provisions of the Indenture if either (i)
all Debt Securities of such series and coupons, if any, appertaining thereto
previously authenticated and delivered (other than destroyed, lost or
wrongfully-taken Debt Securities or coupons which have been replaced or paid,
Debt Securities or coupons for whose payment money has theretofore been held
in trust and, after remaining unclaimed for two years, has been repaid to the
Company, and certain coupons appertaining to Bearer Securities surrendered for
exchange, redemption or purchase) have been delivered to the Trustee for
cancellation or (ii) the Company irrevocable deposits in trust with the
Trustee money or U.S. Government Obligations (or, in the case of the Senior
Indenture, Government Obligations) sufficient to pay the principal of and
premium and interest, if any, on all Debt Securities of such series and
coupons, if any, appertaining thereto not theretofore cancelled or delivered
to the Trustee for cancellation (other than Debt Securities and coupons
referred to in the parenthetical in clause (i) above) to maturity or
redemption, as the case may be. (Section 2.01 of the Indentures)
THE TRUSTEES
Information with respect to the Trustees under the Senior Indenture, the
Senior Subordinated Indenture and the Subordinated Indenture shall be provided
in the applicable Prospectus Supplement.
Any Trustee in its individual or any other capacity may become the owner or
pledgee of Debt Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not the Trustee
provided it complies with the terms of the Indenture. (Section 7.03 of the
Indentures)
ADDITIONAL INFORMATION
The Indentures (or form thereof, as the case may be) are exhibits to the
Registration Statement. Anyone who receives this Prospectus may obtain copies
of the Indentures (or form thereof, as the case may be) without charge by
writing to Stephen M. Brett, Esq., Senior Vice President of the Company, at
the address set forth under "The Company." The foregoing summaries of certain
provisions of the Indentures do not purport to be complete and are subject to,
and qualified in their entirety by reference to, all provisions of the
Indentures, including the definitions of certain terms. Wherever particular
provisions or defined terms of the Indentures are referred to, such provisions
or defined terms are incorporated herein by reference.
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PLAN OF DISTRIBUTION
The Company may sell the Offered Securities on a negotiated or competitive
bid basis to or through underwriters or dealers, and also may sell the Offered
Securities directly to other purchasers or through agents.
The distribution of the Offered Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
If Offered Securities are offered on a competitive bid basis, the Company
will receive bids by telephone or otherwise prior to a designated time. Each
bid will be required to be made for all Offered Securities and the Company
will reserve the right to reject all bids. If any bid is accepted, the Company
will accept the qualified bid which in its sole and final determination will
result in the lowest annual cost of money to it for the Offered Securities. No
underwriter will be entitled to submit or participate as a bidder in more than
one bid.
If an underwriter or underwriters are utilized in the sale, the Company will
execute an underwriting agreement with such underwriters and the names of the
underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of the Offered Securities. Unless otherwise indicated in the Prospectus
Supplement, the obligations of any underwriters to purchase the Offered
Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all of the Offered Securities if
any are purchased.
If a dealer is utilized in the sale, the Company will sell the Offered
Securities to the dealer as principal. The dealer may then resell the Offered
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
Offers to purchase Offered Securities may be solicited by the Company or
agents designated by the Company from time to time. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
Each underwriter, dealer and agent participating in the distribution of any
Offered Securities which are issuable in bearer form will agree that it will
not, directly or indirectly, offer any Offered Securities in bearer form for
sale or resale in the United States or its possessions or to United States
persons (subject to certain exceptions) or deliver any Offered Securities in
bearer form within the United States or its possessions. See "Description of
Debt Securities--Limitations on Issuance of Bearer Debt Securities."
In connection with the sale of the Offered Securities, underwriters, dealers
and agents may receive compensation in the form of discounts, concessions or
commissions from the Company or from purchasers of the Offered Securities for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of the Offered Securities may be deemed to be underwriters
as that term is defined in the Securities Act, and any discounts or
commissions received by them from the Company and any profits on the resale of
the Offered Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such person who may be deemed to be
an underwriter will be identified and any such compensation received from the
Company will be described in the Prospectus Supplement.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain specified institutions to
purchase Offered Securities from the Company at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future.
Institutions with whom such contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions but
shall in all cases be subject to the approval of the Company. Such contracts
will be subject only to those conditions set forth in the Prospectus
Supplement and the Prospectus Supplement will set forth the commission payable
for solicitation of such contracts.
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Agents, underwriters and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents, underwriters or
dealers may be required to make in respect thereof. Agents, underwriters and
dealers may be customers of, engage in transactions with, or perform services
for the Company in the ordinary course of business.
The anticipated place and time of delivery for the Offered Securities will
be set forth in the Prospectus Supplement.
LEGAL MATTERS
The legality of the TCI Group Series A Common Stock, the Series Preferred
Stock and the Debt Securities offered hereby will be passed upon for the
Company by Baker & Botts, L.L.P., 885 Third Avenue, New York, New York 10022-
4834. Jerome H. Kern, a partner of Baker & Botts, L.L.P., is a director of
Tele-Communications, Inc.
EXPERTS
The consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1994, and all related
financial statement schedules, which appear in Tele-Communications, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1994, as amended,
have been incorporated by reference herein in reliance upon the reports, dated
March 27, 1995, of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The reports of KPMG Peat Marwick
LLP covering the December 31, 1994 consolidated financial statements refer to
the adoption of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," in 1994.
The consolidated balance sheets of TeleWest Communications plc and
subsidiaries as of 31 December 1994 and 1993, and the related consolidated
statements of operations and cash flows for each of the years in the three-
year period ended 31 December 1994, which appear in 31 December 1994 Annual
Report on Form 10-K of Tele-Communications, Inc., as amended, have been
incorporated by reference herein in reliance upon the report of KPMG,
independent chartered accountants, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
The combined balance sheets of Cablevision (a combination of certain cable
television assets of Cablevision S.A., Televisora Belgrano S.A., Construred
S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and the related
combined statements of operations and deficit and cash flows for each of the
years in the three-year period ended December 31, 1994, which appear in the
Current Report on Form 8-K of Tele-Communications, Inc. dated April 20, 1995,
as amended, have been incorporated by reference herein in reliance upon the
report of KPMG Finsterbusch Pickenhavn Sibille, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The consolidated balance sheets of QVC, Inc. and subsidiaries as of January
31, 1994 and 1993, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the years in the three-year
period ended January 31, 1994, which appear in the Current Report on Form 8-K
of Tele-Communications, Inc. dated February 3, 1995, as amended, have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing. The report of KPMG Peat Marwick LLP covering the January 31,
1994 consolidated financial statements refers to a change in the method of
accounting for income taxes.
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The financial statements of TeleCable Corporation as of December 31, 1993
and 1992 and for each of the two years in the period ended December 31, 1993
incorporated in this Prospectus by reference to the Company's and TCI's
Current Report on Form 8-K dated August 26, 1994, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PRO-
SPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND ANY PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS AND
ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO
OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFOR-
MATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THEREOF THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THEREOF.
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TABLE OF CONTENTS
PROSPECTUS
<TABLE>
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PAGE
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<S> <C>
Available Information.................................................... 2
Incorporation of Documents by Reference.................................. 2
The Company ............................................................. 4
Use of Proceeds.......................................................... 4
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends............................................................... 4
Holding Company Structure................................................ 5
Description of Common Stock.............................................. 5
Description of Series Preferred Stock.................................... 26
Description of Depositary Shares......................................... 44
Description of Debt Securities........................................... 47
Plan of Distribution..................................................... 65
Legal Matters............................................................ 66
Experts.................................................................. 66
</TABLE>
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TELE-COMMUNICATIONS, INC.
SERIES A TCI GROUP
COMMON STOCK
SERIES PREFERRED STOCK
DEBT SECURITIES
----------------------
PROSPECTUS
----------------------
, 1996
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION.
The aggregate estimated expenses, other than underwriting discounts and
commissions, in connection with all offerings pursuant to this Registration
Statement are currently anticipated to be as follows:
<TABLE>
<S> <C>
Registration Fee................................................. $344,828
Blue Sky Fees and Expenses (including counsel fees).............. 20,000
Printing and Engraving Expenses.................................. 100,000
Legal Fees and Expenses.......................................... 200,000
Accounting Fees and Expenses..................................... 75,000
Fees of Indenture Trustee........................................ 45,000
Rating Agency Fees............................................... 100,000
Miscellaneous.................................................... 15,172
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Total........................................................ $900,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides, generally,
that a corporation shall have the power to indemnify any person who was or is
a party or is threatened to be made a party to any action, suit or proceeding
(except actions by or in the right of the corporation) by reason of the fact
that such person is or was a director or officer of the corporation against
all expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. A corporation may similarly indemnify such person for expenses
actually and reasonably incurred by him in connection with the defense or
settlement of any action or suit by or in the right of the corporation,
provided such person acted in good faith and in a manner be reasonably
believed to be in or not opposed to the best interests of the corporation,
and, in the case of claims, issues and matters as to which such person shall
have been adjudged liable to the corporation, provided that a court shall have
determined, upon application, that, despite the adjudication of liability but
in view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision may not eliminate or limit
the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under section 174 of Title 8, or (iv) for any transaction from
which the director derived an improper personal benefit. No such provision may
eliminate or limit the liability of a director for any act or omission
occurring prior to the date when such provision becomes effective.
Article V, Section E of the Company's Restated Certificate of
Incorporation provides as follows:
"1. Limitation on Liability.
To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a director of the
Corporation shall not be liable to the Corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a
director. Any repeal or modification of this paragraph 1 shall be
prospective only and shall not adversely affect any limitation, right
or protection of a director of the Corporation existing at the time of
such repeal or modification.
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2. Indemnification.
(a) RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is
made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative
or investigative (a "proceeding") by reason of the fact that he, or a
person for whom he is the legal representative, is or was a director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise or
nonprofit entity, including service with respect to employee benefit
plans, against all liability and loss suffered and expenses (including
attorneys' fees) reasonably incurred by such person. Such right of
indemnification shall inure whether or not the claim asserted is based
on matters which antedate the adoption of this Section E. The
Corporation shall be required to indemnify a person in connection with
a proceeding (or part thereof) initiated by such person only if the
proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation.
(b) PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees) incurred in defending any proceeding in
advance of its final disposition, provided, however, that the payment
of expenses incurred by a director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the director or officer to repay all amounts advanced if
it should be ultimately determined that the director or officer is not
entitled to be indemnified under this paragraph or otherwise.
(c) CLAIMS. If a claim for indemnification or payment of expenses
under this paragraph is not paid in full within 60 days after a written
claim therefor has been received by the Corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful
in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have
the burden of proving that the claimant was not entitled to the
requested indemnification or payment of expenses under applicable law.
(d) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
this paragraph shall not be exclusive of any other right which such
person may [have] or hereafter acquire under any statute, provision of
this Certificate the Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
(e) OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity shall
be reduced by any amount such person may collect as indemnification
from such other corporation, partnership, joint venture, trust,
enterprise or nonprofit entity.
3. Amendment or Repeal.
Any repeal or modification of the foregoing provisions of this Section
shall not adversely affect any right or protection hereunder or any
person in respect of any act or omission occurring prior to the time of
such repeal or modification."
Article II, Section 2.9 of the Company's Bylaws also contains an indemnity
provision, requiring the Company to indemnify members of the Board of
Directors and officers of the Company and their respective heirs, personal
representatives and successors in interest for or on account of any action
performed on behalf of the Company, to the fullest extent provided by the laws
of the State of Delaware and the Company's Certificate of Incorporation, as
then or thereafter in effect.
The Company has also entered into indemnification agreements with each of
its directors (each director, an "indemnitee"). The indemnification agreements
provide (i) for the prompt indemnification to the fullest extent permitted by
law against any and all expenses, including attorneys' fees and all other
costs, expenses and
II-2
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obligations paid or incurred in connection with investigating, defending,
being a witness or participating in (including on appeal), or in preparing for
("Expenses"), any threatened, pending or completed action, suit or proceeding,
or any inquiry or investigation ("Claim"), related to the fact that such
indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company or is or was serving at the Company's request as a director, officer,
employee, trustee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise, or by reason
of anything done or not done by a director or officer in any such capacity,
and against any and all judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection therewith) of any Claim, unless the Reviewing Party (one
or more members of the Board of Directors or other person appointed by the
Board of Directors, who is not a party to the particular claim, or independent
legal counsel) determines that such indemnification is not permitted under
applicable law and (ii) for the prompt advancement of Expenses, and for
reimbursement to the Company if the Reviewing Party determines that such
indemnitee is not entitled to such indemnification under applicable law. In
addition, the indemnification agreements provide (i) a mechanism through which
an indemnitee may seek court relief in the event the Reviewing Part determines
that the indemnitee would not be permitted to be indemnified under applicable
law (and therefore is not entitled to indemnification or expense advancement
under the indemnification agreement) and (ii) indemnification against all
expenses (including attorneys' fees), and advancement thereof if requested,
incurred by the indemnitee in seeking to collect an indemnity claim or
advancement of expenses from the Company or incurred in seeking to recover
under a directors' and officers' liability insurance policy, regardless of
whether successful or not. Furthermore, the indemnification agreements provide
that after there has been a "change in control" of the Company (as defined in
the indemnification agreements), other than a change in control approved by a
majority of directors who were directors prior to such change, then, with
respect to all determinations regarding a right to indemnify and the right to
advancement of Expenses. The Company will seek legal advice only from
independent legal counsel selected by the indemnitee and approved by the
Company.
The indemnification agreements impose upon the Company the burden of proving
that an indemnitee is not entitled to indemnification in any particular case
and negate certain presumptions that may otherwise be drawn against an
indemnitee seeking indemnification in connection with the termination of
actions in certain circumstances. Indemnitees' rights under the
indemnification agreements are not exclusive of any other rights they may have
under Delaware law, the Company's Bylaws or otherwise. Although not requiring
the maintenance of directors' and officers' liability insurance, the
indemnification agreements require that indemnitees be provided with the
maximum coverage available for any director or officer if there is such a
policy.
The Company may purchase liability insurance policies covering its directors
and officers.
In addition, pursuant to Section 6 of the form of Underwriting Agreement,
the Underwriter or Underwriters will agree to indemnify and hold harmless the
Company, its directors and officers and each person, if any, who controls the
Company within the meaning of the Securities Act of 1933, as amended, against
certain civil liabilities including civil liabilities under the Securities
Act.
ITEM 16. EXHIBITS.
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1 Form of Underwriting Agreement.*
4.1 Form of Senior Indenture.
4.2 Form of Senior Subordinated Indenture.
4.3 Form of Subordinated Indenture.
4.4 Form of Deposit Agreement.
</TABLE>
II-3
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<TABLE>
<C> <S>
4.5 Restated Certificate of Incorporation of the Company, as amended.
(Incorporated herein by reference to Exhibit 99.1 of the Company's
Current Report on Form 8-K, dated August 10, 1995 (Commission File No.
0-20421)).
4.6 Bylaws of the Company, as amended (Incorporated herein by reference to
Exhibit 3.2 of the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 (as amended by Form 10-K/A (Amendment No. 1))
(Commission File No. 0-20421)).
5 Opinion of Baker & Botts, L.L.P. regarding the legality of the securities
being registered.*
12 Calculation of Ratios of Earnings to Combined Fixed Charges and Preferred
Stock Dividends of the Company.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG.
23.3 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Price Waterhouse, LLP.
23.6 Consent of Baker & Botts, L.L.P. (included in Exhibit 5).
24 Power of Attorney (included on page II-7).
25.1 Statement of Eligibility of the Trustee under the Senior Indenture, on
Form T-1+.
25.2 Statement of Eligibility of the Trustee under the Senior Subordinated
Indenture, on Form T-1+.
25.3 Statement of Eligibility of the Trustee under the Subordinated Indenture,
on Form T-1.+
</TABLE>
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*To be filed by amendment.
+ To be filed separately pursuant to Section 305(b)(2) of the Trust Indenture
Act of 1939, as amended, and the rules and regulations prescribed by the
Commission thereunder.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement.
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
II-4
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Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrants
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrants' annual report pursuant to
section 13(a) or 15(d) of the Securities Exchange Act of 1934 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.
(5) If any of the Offered Securities are offered at competitive bidding,
(a) to use its best efforts to distribute prior to the opening of bids, to
prospective bidders, underwriters, and dealers, a reasonable number of
copies of a prospectus which at that time meets the requirements of section
10(a) of the Act, and relating to the securities offered at competitive
bidding, as contained in the registration statement together with any
supplements thereto and (b) to file an amendment to the registration
statement reflecting the results of bidding, the terms of the reoffering
and related matters to the extent required by the applicable form, not
later than the first use, authorized by the issuer after the opening of
bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the issuer
and no reoffering of such securities by the purchasers is proposed to be
made.
(6) 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 ("TIA") in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the TIA.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions described under Item 15 above, or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrants will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE, STATE OF COLORADO, ON
FEBRUARY 6, 1996.
Tele-Communications, Inc.
/s/ Stephen M. Brett
By: _________________________________
NAME: STEPHEN M. BRETT
TITLE: EXECUTIVE VICE-PRESIDENT
II-6
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen M. Brett, Esq. and Robert W. Murray
Jr., Esq., and each of them, his true and lawful attorneys-in-fact and agents
with full power of substitution and re-substitution for him and in his name,
place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them full power and authority, to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, to all intents and purposes and as fully as they might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents on their substitutes may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
Chairman of the
- ------------------------------------- Board and Director
(BOB MAGNESS) of TCI
/s/ John C. Malone President and February 6, 1996
- ------------------------------------- Director of TCI
(JOHN C. MALONE) (Principal
Executive and
Financial Officer)
Director of TCI
- -------------------------------------
(DONNE F. FISHER)
/s/ John W. Gallivan Director of TCI February 6, 1996
- -------------------------------------
(JOHN W. GALLIVAN)
/s/ Kim Magness Director of TCI February 6, 1996
- -------------------------------------
(KIM MAGNESS)
Director of TCI
- -------------------------------------
(ROBERT A. NAIFY)
/s/ Jerome H. Kern Director of TCI February 6, 1996
- -------------------------------------
(JEROME H. KERN)
/s/ Tony Coelho Director of TCI February 6, 1996
- -------------------------------------
(TONY COELHO)
/s/ Gary Bracken Principal Accounting February 6, 1996
- ------------------------------------- Officer
(GARY BRACKEN)
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
1 Form of Underwriting Agreement.*
4.1 Form of Senior Indenture.
4.2 Form of Senior Subordinated Indenture.
4.3 Form of Subordinated Indenture.
4.4 Form of Deposit Agreement.
4.5 Restated Certificate of Incorporation of the Company,
as amended. (Incorporated herein by reference to
Exhibit 99.1 of the Company's Current Report on Form
8-K, dated August 10, 1995 (Commission File No. 0-
20421)).
4.6 Bylaws of the Company, as amended (Incorporated herein
by reference to Exhibit 3.2 of the Company's Annual
Report on Form 10-K for the year ended December 31,
1994 (as amended by Form 10-K/A (Amendment No. 1))
(Commission File No. 0-20421)).
5 Opinion of Baker & Botts, L.L.P. regarding the legality
of the securities being registered.*
12 Calculation of Ratios of Earnings to Combined Fixed
Charges and Preferred Stock Dividends of the Company.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG.
23.3 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Price Waterhouse LLP.
23.6 Consent of Baker & Botts, L.L.P (included in Exhibit
5).
24 Power of Attorney (included on page II-7).
25.1 Statement of Eligibility of the Trustee under the
Senior Indenture, on Form T-1.+
25.2 Statement of Eligibility of the Trustee under the
Senior Subordinated Indenture, on Form T-1.+
25.3 Statement of Eligibility of the Trustee under the
Subordinated Indenture, on Form T-1.+
</TABLE>
- --------
* To be filed by amendment.
+ To be filed separately pursuant to Section 305(b)(2) of the Trust Indenture
Act of 1939, as amended, and the rules and regulations prescribed by the
Commission thereunder.
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELE-COMMUNICATIONS, INC.
AND
TRUSTEE
----------------
INDENTURE
DATED AS OF ,
----------------
DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
<C> <S> <C>
310 (a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.
(a)(4).............................................. N.A.
(b)................................................. 7.08; 7.10; 11.02
(c)................................................. N.A.
311 (a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312 (a)................................................. 2.07
(b)................................................. 11.03
(c)................................................. 11.03
313 (a)................................................. 7.06
(b)(1).............................................. N.A.
(b)(2).............................................. 7.06
(c)................................................. 11.02
(d)................................................. 7.06
314 (a)................................................. 4.06; 11.02
(b)................................................. N.A.
(c)(1).............................................. 11.04
(c)(2).............................................. 11.04
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 11.05
(f)................................................. N.A.
315 (a)................................................. 7.01(b)
(b)................................................. 7.05; 11.02
(c)................................................. 7.01(a)
(d)................................................. 7.01(c)
(e)................................................. 6.11
316 (a)(last sentence).................................. 11.06
(a)(1)(A)........................................... 6.05
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
317 (a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.06
318 (a)................................................. 11.01
</TABLE>
- --------
N.A. means Not Applicable.
2
<PAGE>
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE ONE
Definitions and Incorporation by Reference
1.01. Definitions.................................................... 6
1.02. Other Definitions.............................................. 12
1.03. Incorporation by Reference of Trust Indenture Act.............. 12
1.04. Rules of Construction.......................................... 12
ARTICLE TWO
The Securities
2.01. Forms Generally................................................ 13
2.02. Amount Unlimited; Issuable in Series........................... 13
2.03. Denominations.................................................. 16
2.04. Execution, Authentication, Delivery and Dating................. 16
Registrar, Paying Agent, Conversion Agent and Authenticating
2.05. Agent.......................................................... 18
2.06. Paying Agent to Hold Money and Securities in Trust............. 20
2.07. Securityholder Lists........................................... 20
2.08. Transfer and Exchange.......................................... 20
2.09. Replacement Securities......................................... 23
2.10. Securities in Global Form...................................... 24
2.11. Temporary Securities........................................... 25
2.12. Cancellation................................................... 25
2.13. Payment of Interest; Defaulted Interest........................ 26
2.14. Persons Deemed Owners.......................................... 26
ARTICLE THREE
Redemption
3.01. Applicability of Article....................................... 27
3.02. Notices to Trustee............................................. 27
3.03. Selection of Securities to be Redeemed......................... 28
3.04. Notice of Redemption........................................... 28
3.05. Effect of Notice of Redemption................................. 29
3.06. Deposit of Redemption Price.................................... 30
3.07. Securities Redeemed in Part.................................... 30
3.08. Conversion Arrangement on Call for Redemption.................. 30
ARTICLE FOUR
Covenants
4.01. Payment of Securities; Maintenance of Office or Agency......... 31
4.02. Change of Control.............................................. 32
4.03. Designation of Restricted Subsidiaries......................... 35
4.04. Limitation on Liens............................................ 35
4.05. Limitation on Restricted Subsidiary Funded Debt................ 36
4.06. SEC Reports.................................................... 36
4.07. Compliance Certificate......................................... 36
4.08. Corporate Existence............................................ 37
4.09. Waiver of Certain Covenants.................................... 37
4.10. No Lien Created................................................ 37
4.11. Calculation of Original Issue Discount......................... 37
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE FIVE
Successor Corporation
5.01. When Company May Merge, etc...................................... 37
ARTICLE SIX
Defaults and Remedies
6.01. Events of Default................................................ 38
6.02. Acceleration..................................................... 39
6.03. Other Remedies................................................... 39
6.04. Waiver of Existing Defaults...................................... 40
6.05. Control by Majority.............................................. 40
6.06. Limitation on Suits.............................................. 40
6.07. Rights of Holders to Receive Payment and to Convert.............. 40
6.08. Collection Suit by Trustee....................................... 41
6.09. Trustee May File Proofs of Claim................................. 41
6.10. Priorities....................................................... 41
6.11. Undertaking for Costs............................................ 41
ARTICLE SEVEN
Trustee
7.01. Duties of Trustee................................................ 41
7.02. Rights of Trustee................................................ 42
7.03. Individual Rights of Trustee..................................... 42
7.04. Trustee's and Authenticating Agent's Disclaimer.................. 43
7.05. Notice of Defaults............................................... 43
7.06. Reports by Trustee to Holders.................................... 43
7.07. Compensation and Indemnity....................................... 43
7.08. Replacement of Trustee........................................... 44
7.09. Successor Trustee by Merger, etc................................. 44
7.10. Eligibility; Disqualification.................................... 44
7.11. Preferential Collection of Claims Against Company................ 44
ARTICLE EIGHT
Discharge of Indenture
8.01. Termination of Company's Obligations............................. 45
8.02. Application of Trust Fund........................................ 45
8.03. Repayment to Company............................................. 46
ARTICLE NINE
Amendments, Supplements and Waivers
9.01. Without Consent of Holders....................................... 46
9.02. With Consent of Holders.......................................... 47
9.03. Compliance with Trust Indenture Act.............................. 47
9.04. Effect of Amendments and Supplements............................. 48
9.05. Notation on or Exchange of Securities............................ 48
9.06. Trustee to Sign Amendments, etc.................................. 48
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE TEN
Conversion
10.01. Applicability of Article....................................... 48
10.02. Conversion Privilege........................................... 48
10.03. Conversion Procedure........................................... 49
10.04. Fractional Shares.............................................. 49
10.05. Taxes on Conversion............................................ 50
10.06. Company to Provide Stock....................................... 50
10.07. Adjustment for Change in Capital Stock......................... 50
10.08. Adjustment for Rights Issue.................................... 51
10.09. Adjustments for Other Distributions............................ 51
10.10. Voluntary Adjustment........................................... 52
10.11. Certain Definitions............................................ 53
10.12. When Adjustment May Be Deferred................................ 54
10.13. When Adjustment Is Not Required................................ 54
10.14. Notice of Adjustment........................................... 54
10.15. Notice of Certain Transactions................................. 54
10.16. Consolidation, Merger or Sale of the Company................... 55
10.17. Company Determination Final.................................... 55
10.18. Trustee's and Conversion Agent's Disclaimer.................... 55
10.19. Simultaneous Adjustments....................................... 55
ARTICLE ELEVEN
Miscellaneous
11.01. Trust Indenture Act Controls................................... 56
11.02. Notices........................................................ 56
11.03. Communication by Holders with Other Holders.................... 57
11.04. Certificate and Opinion as to Conditions Precedent............. 57
11.05. Statements Required in Certificate or Opinion.................. 57
11.06. When Treasury Securities Disregarded........................... 58
11.07. Rules by Trustee and Agents.................................... 58
11.08. Legal Holidays................................................. 58
11.09. Governing Law.................................................. 58
11.10. No Adverse Interpretation of Other Agreements.................. 58
11.11. No Recourse Against Others..................................... 58
11.12. Successors..................................................... 58
11.13. Duplicate Originals............................................ 58
11.14. Table of Contents, Headings, Etc............................... 59
11.15. Acts of Holders................................................ 59
ARTICLE TWELVE
Meetings of Holders of Securities
12.01. Purposes for which Meetings May be Called...................... 60
12.02. Call, Notice and Place of Meetings............................. 60
12.03. Persons Entitled to Vote at Meetings........................... 60
12.04. Quorum; Action................................................. 61
Determination of Voting Rights; Conduct and Adjournment of
12.05. Meetings....................................................... 61
12.06. Counting Votes and Recording Action of Meetings................ 62
Signatures.............................................................. 63
</TABLE>
5
<PAGE>
INDENTURE dated as of , between TELE-COMMUNICATIONS, INC., a Delaware
corporation ("Company"), and , a ("Trustee").
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured debentures,
notes, bonds or other evidences of indebtedness ("Securities"), to be issued
in one or more series as provided in this Indenture.
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the respective Holders from time to time of the
Securities or of series thereof:
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
Additional Amounts means any additional amounts which are required hereby or
by any Security, under circumstances specified herein or therein, to be paid
by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.
Affiliate of any person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person.
Agent means any Registrar, Paying Agent, co-Registrar or Conversion Agent.
See Section 2.05.
Authenticating Agent means any person authorized by the Trustee pursuant
hereto to act on behalf of the Trustee to authenticate Securities of one or
more series.
Authorized Newspaper means a newspaper, in the English language or in an
official language of the place of publication, customarily published on each
day that is a Business Day in the place of publication, whether or not
published on days that are Legal Holidays in the place of publication, and of
general circulation in each place in connection with which the term is used or
in the financial community of each such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting
the foregoing requirements in and each case on any day that is a Business Day
in the place of publication.
Bearer Security means any Security which is established pursuant to this
Indenture which is payable to bearer.
Board of Directors means the Board of Directors of the Company or any
authorized committee thereof.
Business Day, except as may otherwise be provided in the form of Securities
of any particular series, means, with respect to any place of payment or other
location, each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
Legal Holiday in such place of payment or other location.
"Change of Control" means the acquisition by any person (other than the
Company, any Subsidiary or any Controlling Person) during any period of twelve
(12) consecutive months of beneficial ownership of shares of one or more
series of the common stock of the Company representing in the aggregate thirty
percent (30%) or more of the combined voting power of all shares of common
stock of the Company, calculated on a fully diluted basis as of the date
immediately prior to the date of such acquisition (or, if there be more than
one acquisition during such twelve-month period, the date of the last such
acquisition); provided, however, that notwithstanding the foregoing, no Change
of Control shall be deemed to have occurred if and for so long as the shares
of common stock beneficially owned by the Controlling Persons represent in the
aggregate 30% or more of the combined voting power of all shares of the common
stock of the Company calculated on a fully diluted basis.
6
<PAGE>
Company means Tele-Communications, Inc., a Delaware corporation, until a
successor replaces it pursuant to the applicable provisions of this Indenture
and thereafter means the successor.
Company Stock means the Tele-Communications, Inc. Series A TCI Group Common
Stock, $1.00 par value, as it exists on the date of this Indenture and any
other capital stock into which such Series A TCI Group Common Stock may
thereafter have been changed.
Controlling Person means each of (1) the Chairman of the Board of the
Company as of the date of this Indenture, (2) the President of the Company as
of the date of this Indenture, (3) each of the directors of the Company as of
the date of this Indenture, (4) the respective family members, estates and
heirs of each of the persons referred to in clauses (1) through (3) above and
any trust or other investment vehicle for the primary benefit of any of such
persons or their respective family members or heirs, (5) Kearns-Tribune
Corporation, a Delaware corporation, or any successor thereto by merger or
consolidation and (6) the trustee under the Company's Employee Stock Purchase
Plan or any successor plan or any other employee stock ownership or other
employee benefit plan of the Company or any Subsidiary. As used with respect
to any person, the term "family member" means the spouse, siblings and lineal
descendants of such person. The trustee under the Company's Employee Stock
Purchase Plan or any successor plan or any other employee stock ownership or
other employee benefit plan of the Company or of any Subsidiary shall be
deemed to have beneficial ownership of all shares of common stock of the
Company held under the plan, whether or not allocated to or vested in
participants' accounts.
Convertible Securities means any or all options, warrants, securities and
rights, except the Series B Stock and the Securities, which are convertible
into or exercisable or exchangeable for Company Stock or which otherwise
entitle the holder thereof to subscribe for, purchase or otherwise acquire
Company Stock.
coupon means any interest coupon appertaining to a Bearer Security.
Debt means, with respect to any person: (1) any indebtedness of such person
(i) for borrowed money or (ii) evidenced by a note, debenture or similar
instrument (including a purchase money obligation) given in connection with
the acquisition of any property or assets, including securities; (2) any
guarantee by such person of any indebtedness of others described in the
preceding clause (1); and (3) any amendment, renewal, extension or refunding
of any such indebtedness or guarantee.
Default means any event which is, or after notice or passage of time would
be, an Event of Default.
Dollar or $ or U.S. Dollar 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.
Funded Debt of any person means, as of the date as of which the amount
thereof is to be determined, without duplication, all indebtedness of such
person for borrowed money and all guaranties by such person of any
indebtedness of others for borrowed money, which by its terms has a final
maturity, duration or payment date more than one year from the date of
determination thereof (including, without limitation, any balance of such
indebtedness which was Funded Debt at the time of its creation maturing within
one year from such date of determination) or which has a final maturity,
duration or payment date within one year from such date of determination but
which by its terms may be renewed or extended at the option of such person for
more than one year from such date of determination, whether or not theretofore
renewed or extended. When used with respect to the Company or any Restricted
Subsidiary, the term "Funded Debt" excludes (1) any indebtedness of the
Company or any Restricted Subsidiary to the Company or another Restricted
Subsidiary, (2) any guarantee by the Company or any Restricted Subsidiary of
indebtedness of the Company or another Restricted Subsidiary, provided that
such guarantee is not secured by a Lien on Restricted Property, and (3) with
respect to any series of Securities, any indebtedness of the Company or any
Restricted Subsidiary to any Unrestricted Subsidiary which indebtedness is
subordinated in right of payment to the prior payment in full of the
outstanding Securities of such series on terms no less favorable to the
holders of such Securities than those contained in Article Ten of that certain
form of Indenture for subordinated debt securities filed as Exhibit 4.3 to the
Company's Registration
7
<PAGE>
Statement on Form S-3 (Reg. No. 33- ), pursuant to which the Company's
subordinated debt securities issued under such Indenture would be subordinated
to all Senior Debt of the Company (as defined therein), without giving effect
to any amendment, modification or supplement to, or discharge of, such form of
Indenture after the date hereof, and which indebtedness is not secured by a
Lien on Restricted Property. For purposes of determining the outstanding
principal amount of Funded Debt at any date, the amount of indebtedness issued
at a price less than the principal amount thereof shall be equal to the amount
of the liability in respect thereof at such date determined in accordance with
generally accepted accounting principles.
Government Obligations, with respect to any Security, means (i) direct
obligations of the government or governments which issued the currency in
which the principal of or any interest on such Security or any Additional
Amounts in respect thereof shall be payable, in each case where the payment or
payments thereunder are supported by the full faith and credit of such
government or governments or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of such government or
governments, in each case where the payment or payments thereunder are
unconditionally guaranteed as a full faith and credit obligation by such
government or governments, and which, in the case of (i) or (ii), are not
callable or redeemable at the option of the issuer or issuers 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 or other amount with respect to 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 or other amount with respect to the Government Obligation
evidenced by such depository receipt.
Holder or Securityholder means, when used with respect to any Security, in
the case of a Registered Security the person in whose name the 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, means the bearer
thereof.
Indenture means this Indenture as amended or supplemented from time to time
and, unless the context indicates otherwise, shall include the form and terms
of a particular series of Securities established as contemplated hereunder.
interest, when used with respect to an Original Issue Discount Security
which by its terms bears interest only after maturity or upon default in any
other payment due on such Security, means interest payable after maturity or
upon such a default, as the case may be.
Interest Payment Date means the date, if any, specified in the Securities of
any series or a coupon representing an installment of interest as the fixed
date on which an installment of interest on the Securities of that series or
such coupon is due and payable.
Leverage Ratio with respect to the Restricted Group means, as of the date of
and after giving effect to any designation of an Unrestricted Subsidiary as a
Restricted Subsidiary and/or any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, in each case in accordance with Section 4.03, the
ratio of (1) the aggregate outstanding principal amount of all Funded Debt of
the Restricted Group as of such date to (2) the product of four times the
Restricted Group Cash Flow for the most recent full fiscal quarter for which
financial information is available on such date.
Lien means any mortgage, pledge, lien, security interest, or other similar
encumbrance.
Maximum Funded Debt Amount means, as of any date of determination thereof,
that amount which is equal to the product of (i) eight and (ii) the product of
(x) the Restricted Group Cash Flow for the most recent full fiscal quarter for
which financial information is available on such date and (y) four.
8
<PAGE>
National Rating Agency means, when used with respect to Securities of any
series as of any date of determination, any of the following nationally
recognized statistical rating organizations (and, in each case, any successor
thereto) that rate the Securities of such series as of such date of
determination: Duff & Phelps Credit Rating Co.; Moody's Investors Service,
Inc.; Standard & Poor's Securities, Inc.; and Fitch Investors Service, L.P.
Officer means the Chairman of the Board, the President, any Vice President,
the Treasurer or the Secretary of the Company.
Officers' Certificate means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company
and delivered to the Trustee. See Sections 11.04 and 11.05.
Opinion of Counsel means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 11.04 and 11.05.
original issue discount of any debt security, including any Original Issue
Discount Security, means the difference between the principal amount of such
debt security and the initial issue price of such debt security (as set forth,
in the case of an Original Issue Discount Security, on the face of such
Security).
Original Issue Discount Security means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon
acceleration of the maturity thereof pursuant to Section 6.02.
outstanding, when used with respect to Securities of any series, means as of
the date of determination, all such Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment, redemption or purchase the Trustee or
any Paying Agent (other than the Company) holds in trust or the Company
(acting as its own Paying Agent) has set aside and segregated in trust on a
maturity date, redemption date, Purchase Date or, if so specified with
respect to the Securities of any series pursuant to Section 2.02 on a date
(or, if so specified, on the Business Day following a date) on which
Securities of such series are to be purchased by the Company pursuant to
any provision thereof providing for such purchase at the option of the
Holder or the Company, money (or securities if permitted by the terms of
such Securities) sufficient to pay Securities and any coupons appertaining
thereto payable on that date;
(iii) Securities with respect to which the Company has terminated its
obligations pursuant to Section 8.01 hereof; provided, however, that such
Securities shall continue to be outstanding for all purposes related to
those obligations that survive such termination as provided in Section 8.01
unless and until they cease to be outstanding in accordance with clauses
(i) or (ii) above or clause (iv) below; and
(iv) Securities which have been paid pursuant to Section 2.09 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;
provided, however, that in determining whether the Holders of the requisite
principal amount of outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver or taken any other action
hereunder or whether a quorum is present at a meeting of Holders, and for the
purpose of making the calculations required by TIA (S) 313, (x) the principal
amount of an Original Issue Discount Security that shall be deemed to be
outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.02,
and (y) the principal amount of a Security denominated in a foreign currency
or currencies or composite currency shall be the U.S. Dollar equivalent,
determined as of the date of original issuance of such Security, of the
principal amount of such Security (or, in the case of an Original Issue
Discount Security, the
9
<PAGE>
U.S. Dollar equivalent as of such date of original issuance of such Security
of the amount determined as provided in clause (x) above). Subject to the
provisions of Section 11.06, a Security does not cease to be outstanding
because the Company or one of its Affiliates holds the Security.
place of payment means, when used with respect to any Security, the place or
places where, subject to the provisions of Section 4.01, the principal of, or
interest on, or any Additional Amounts with respect to such Security are
payable as specified as contemplated by Section 2.02.
Predecessor Securities means, with respect to any Security, every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security, and, for the purpose of this definition, any
Security authenticated and delivered under Section 2.09 in exchange for or in
lieu of a mutilated, lost, destroyed or wrongfully-taken Security or a
Security to which a mutilated, lost, destroyed or wrongfully-taken coupon
appertains shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or wrongfully-taken Security or the Security to which the mutilated,
lost, destroyed or wrongfully-taken coupon appertains, as the case may be.
principal of a debt security, including any Security, means the amount
(including, without limitation, if and to the extent applicable, any premium
and, in the case of an Original Issue Discount Security, any accrued original
issue discount, but excluding interest) that is payable with respect to such
debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Company, upon any purchase or exchange at the option of the
Company or the holder of such debt security and upon any acceleration of the
maturity of such debt security).
principal amount of a debt security, including any Security, means (except
as otherwise provided in the definition of "Funded Debt" in this Section 1.01)
the principal amount as set forth on the face of such debt security.
Principal Property means, as of any date of determination, any property or
assets owned by any Restricted Subsidiary other than (1) any such property
which, in the good faith opinion of the Board of Directors, is not of material
importance to the business conducted by the Company and its Restricted
Subsidiaries taken as a whole and (2) any shares of any class of stock or any
other security of any Unrestricted Subsidiary.
Registered Security means any Security issued pursuant to this Indenture
which is registered in the security register.
Regular Record Date means the date, if any, specified in the Registered
Securities of any series as the record date for the determination of
Securityholders to whom interest is payable on the next succeeding Interest
Payment Date.
Restricted Group means, as of any date of determination, the Company and the
Restricted Subsidiaries as of such date after giving effect to any
designations being made on such date in accordance with Section 4.03.
Restricted Group Cash Flow for any period means the Restricted Group Net
Income (as defined below) for such period, plus (A) the sum (without
duplication) of the aggregate of each of the following items of the Company
and the Restricted Subsidiaries for such period to the extent taken into
account as charges to Restricted Group Net Income for such period: (i)
interest expense, (ii) income tax expense, (iii) depreciation and amortization
expense and other noncash charges, (iv) extraordinary items and (v) after-tax
losses on sales of assets outside of the ordinary course of business not
otherwise included in extraordinary items in accordance with generally
accepted accounting principles, minus (B) the sum (without duplication) of the
aggregate of each of the following items of the Company and the Restricted
Subsidiaries for such period to the extent taken into account as credits to
Restricted Group Net Income for such period: (i) noncash credits, (ii)
extraordinary items, and (iii) after-tax gains on sales of assets outside of
the ordinary course of business not otherwise included in extraordinary items
in accordance with generally accepted accounting principles.
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For purposes of this definition, (1) "Restricted Group Net Income" for any
period means the aggregate of the net income (loss) for such period of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however,
that (i) the net income (loss) of any person accounted for by the equity
method of accounting and the net income (loss) of any Unrestricted Subsidiary
shall be excluded, except that the net income of any such person or
Unrestricted Subsidiary shall be included to the extent of the amount of
dividends or distributions paid by such person or Unrestricted Subsidiary to
the Company or a Restricted Subsidiary during such period, and (ii) except as
otherwise provided in clause (2) below, the net income (loss) of any other
person acquired by the Company or any Restricted Subsidiary in a transaction
accounted for as a pooling of interests for any period prior to the date of
such acquisition shall be excluded; and (2) if the Company or any Restricted
Subsidiary consummated any acquisition or disposition of assets during the
period for which Restricted Group Cash Flow is being calculated, or
consummated any acquisition or disposition of assets subsequent to such period
and on or prior to the date as of which the Leverage Ratio or Maximum Funded
Debt Amount, as applicable, is to be determined, then, in each such case, the
Restricted Group Cash Flow for such period shall be calculated on a pro forma
basis as if such acquisition or disposition had occurred at the beginning of
such period.
Restricted Property means, as of any date of determination, any Principal
Property and any shares of stock of a Restricted Subsidiary owned by the
Company or a Restricted Subsidiary.
Restricted Subsidiary means, as of any date of determination, a corporation
a majority of whose voting stock is owned by the Company and/or one or more
Restricted Subsidiaries, which corporation has been, or is then being,
designated a Restricted Subsidiary in accordance with Section 4.03, unless and
until designated an Unrestricted Subsidiary in accordance with Section 4.03.
SEC means the Securities and Exchange Commission.
Securities means the Securities that are issued from time to time in one or
more series under this Indenture as such Securities are amended or
supplemented from time to time.
Series B Stock means the Tele-Communications, Inc. Series B TCI Group Common
Stock, $1.00 par value, of the Company as it exists on the date of this
Indenture and stock of any other class into which such Series B TCI Group
Common Stock may thereafter have been changed.
Subsidiary means a corporation a majority of whose voting stock is owned by
the Company and/or one or more Subsidiaries. Voting stock is capital stock
having voting power under ordinary circumstances to elect directors.
TIA means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-77bbbb)
as in effect on the date of this Indenture, except as provided in Section
9.03.
Trustee means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor and if at any time there is
more than one such party, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
Trust Officer means any officer or assistant officer in the corporate trust
department of the Trustee assigned by the Trustee to administer its corporate
trust matters.
United States, except as otherwise provided in or pursuant to this
Indenture, means the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
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United States Alien, except as otherwise provided in or pursuant to this
Indenture, means any person who, for United States Federal income tax
purposes, is a foreign corporation, a non-resident alien individual, a non-
resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or
a non-resident alien fiduciary of a foreign estate or trust.
Unrestricted Subsidiary means, as of any date of determination, any
Subsidiary of the Company that is not a Restricted Subsidiary.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
TERM DEFINED IN SECTION
<S> <C>
Act...................................................... 11.15
Average Market Price..................................... 10.11
Bankruptcy Law........................................... 6.01
Code..................................................... 9.01
Conversion Agent......................................... 2.05
current market price..................................... 10.11
Custodian................................................ 6.01
Determination Date....................................... 10.11
Downgrading Agency....................................... 4.02
Event of Default......................................... 6.01
Ex-Dividend Date......................................... 10.11
Legal Holiday............................................ 11.08
Paying Agent............................................. 2.05
Purchase Date............................................ 4.02
Put Event................................................ 4.02
Registrar................................................ 2.05
Threshold Rating......................................... 4.02
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
Commission means the SEC.
indenture securities means the Securities.
indenture security holder means a Securityholder.
indenture to be qualified means this Indenture.
indenture trustee or institutional trustee means the Trustee.
obligor on the indenture securities means the Company and any other
obligor thereon.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles in effect on
the date of this Indenture;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the plural include
the singular.
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ARTICLE TWO
The Securities
Section 2.01. Forms Generally.
The Securities of each series may be issued as Registered Securities without
coupons attached, or Bearer Securities with or without coupons attached, or
both, and may be issued in whole or in part in the form of one or more global
Securities as shall be specified as contemplated by Section 2.02. In the
absence of any contrary provisions with respect to the Securities of any
series, the Securities shall be issued as Registered Securities and shall not
be issuable upon the exercise of warrants. Bearer Securities shall be issued
with coupons attached unless otherwise provided with respect to the Securities
of any series as contemplated by Section 2.02.
The Securities of each series (including any temporary global Securities)
and related coupons, if any, shall be in one of the forms established from
time to time by or pursuant to a resolution of the Board of Directors or in or
pursuant to one or more indentures supplemental hereto, which shall set forth
the information required by Section 2.02. The Securities and coupons, if any,
shall have such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture or by a resolution
of the Board of Directors and may have such notations, legends or endorsements
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required by law, stock exchange
rule or usage. The Company shall approve the form or forms of Securities and
any coupons appertaining thereto and any notation, legend or endorsement on
them. If the form or forms of Securities of any series or coupons are
established by action taken pursuant to a resolution of the Board of Directors
or indenture supplemental hereto, a copy of an appropriate record of such
action 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
written order of the Company contemplated by Section 2.04 for the
authentication and delivery of such Securities or coupons.
Subject to Section 2.05, the form of the Trustee's certificate of
authentication to be borne by the Securities shall be substantially as
follows:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in
the within-mentioned Indenture.
as Trustee
By __________________________________
Authorized Signatory
Section 2.02. 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 or pursuant to a resolution of the Board of Directors or
established in or pursuant to one or more indentures supplemental hereto,
prior to the issuance of Securities of any series:
(1) the title of Securities of the series (which shall distinguish
Securities of the series from all other Securities);
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<PAGE>
(2) any limit upon the aggregate principal amount of Securities of the
series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Sections 2.08, 2.09, 2.11, 3.07 or 9.05 and except for
any Securities which pursuant to Section 2.04 are deemed not to have been
authenticated and delivered hereunder);
(3) (A) whether Securities of the series are issuable as Registered
Securities, as Bearer Securities or alternatively as Bearer Securities and
Registered Securities, and whether the Bearer Securities are to be issuable
with coupons, without coupons or both; (B) 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); (C) whether any of the Securities of the series are to be
issuable in global form and, if so, (i) the identity of the depositary with
respect to any such global Security and (ii) whether beneficial owners of
interests in any such global Security may exchange such interests for
Securities of the same series and of like tenor and of any authorized form
and denomination, and, if so, the circumstances under which and the manner
in which any such exchanges may occur, if other than as specified in
Section 2.08; (D) if any of the Securities of the series are to be issuable
as Bearer Securities or in global form, the date as of which any such
Bearer Security or global Security shall be dated (if other than the date
of original issuance of the first of such Securities to be issued); and (E)
if Securities of the series are to be issuable in definitive form (whether
upon original issue, upon exchange of a temporary Security of such series,
or in exchange for a beneficial ownership interest in a permanent global
Security) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, or if Securities of the series are
initially issuable in temporary global form and if owners of beneficial
interests therein may exchange such interest for an interest in a permanent
global Security 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;
(4) (A) 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; (B) 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 (C) if
any Securities of the series are to be issuable as Bearer Securities, the
extent to which, or the manner in which, and the terms and conditions
(including certification requirements) upon which, any interest in respect
of any portion of a temporary Bearer Security in global form payable in
respect of an Interest Payment Date prior to the exchange of such temporary
global Security for a permanent global Security or for definitive
Securities of the series will be paid to any clearing organization with
respect to the portion of such temporary global Security held for its
account and, in such event, the terms and conditions (including
certification requirements) upon which any such interest payment received
by a clearing organization will be credited to the persons entitled to
interest payable on such Interest Payment Date, and any other requirements
in addition to or in lieu of those provided herein relating to the payment
of interest on or any Additional Amounts in respect of Bearer Securities;
(5) the date or dates (and whether fixed or extendible) on which the
principal of Securities of the series is payable;
(6) the rate or rates at which Securities of the series shall bear
interest, or the method of determining the same, if any, the date or dates
from which such interest shall accrue, or the method of determining the
same, if any, the Interest Payment Dates on which any such interest shall
be payable and the Regular Record Date for any interest payable on any
Registered Securities on any Interest Payment Date, whether and under what
circumstances Additional Amounts on Securities of the series or any of them
shall be payable, and the basis upon which interest will be calculated if
other than that of a 360-day year of twelve 30-day months;
(7) the place or places where, subject to Section 4.01, the principal of,
any interest on or any Additional Amounts payable in respect of Securities
of the series shall be payable, any Registered Securities
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<PAGE>
of the series may be surrendered for registration of transfer, any
Securities of the series may be surrendered for exchange and notices and
demands to or upon the Company in respect of the Securities of the series
and this Indenture may be served;
(8) any provisions relating to the issuance of Securities of such series
at an original issue discount (including, without limitation, the issue
price thereof, the rate or rates at which such original issue discount
shall accrue, if any, and the date or dates from or to which or period or
periods during which such original issue discount shall accrue at such rate
or rates);
(9) the price or prices at which, the period or periods within which and
the terms and conditions upon which Securities of the series may be
redeemed or otherwise purchased, in whole or in part, at the option of the
Company, pursuant to any sinking fund or otherwise (including, without
limitation, the form or method of payment thereof if other than in cash);
(10) the obligation, if any, of the Company to redeem, purchase or repay
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Securityholder thereof and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Securities of the series shall be redeemed, purchased
or repaid, in whole or in part, pursuant to such obligation (including,
without limitation, the form or method of payment thereof if other than in
cash);
(11) the currency or currencies, including composite currencies, in which
payment of the principal of, any interest on and any Additional Amounts
payable in respect of the Securities of the series shall be payable, or in
which the Securities of the series shall be denominated, if other than
Dollars;
(12) if the principal of, any interest on or any Additional Amounts
payable in respect of the Securities of the series is to be payable, at the
election of the Company or a Securityholder, in a currency or currencies,
including composite currencies, other than that in which the Securities of
such series are denominated or stated to be payable, the terms and
conditions upon which such election may be made and the method for
determining amounts payable;
(13) if the amount of payments of principal of or interest on the
Securities of the series may be determined with reference to an index,
formula or other method or methods (which index, formula, method or methods
may be based, without limitation, on one or more currencies, commodities,
equity indices or other indices), the terms and conditions upon which and
the manner in which such amounts shall be determined and paid or payable;
(14) the denominations in which any Registered Securities of the series
shall be issuable, if other than denominations of $1,000 and any integral
multiple thereof, and the denominations in which Bearer Securities of the
series shall be issuable if other than denomination of $5,000;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
acceleration of the maturity thereof pursuant to Section 6.02 or provable
in bankruptcy pursuant to Section 6.09, or, if applicable, which is
convertible in accordance with Article Ten;
(16) any Events of Default with respect to the Securities of a particular
series in lieu of or in addition to those set forth herein and the remedies
therefor;
(17) the obligation, if any, of the Company to permit the conversion of
Securities of such series into Company Stock and the terms and conditions
upon which such conversion shall be effected (including, without
limitation, the initial conversion price or rate, the conversion period and
any other provision in addition to or in lieu of those set forth in this
Indenture relative to such obligation);
(18) if any Securities of the series are to be issuable upon the exercise
of warrants, this shall be so established and (if established by resolution
of the Board of Directors) so set forth, as well as the time, manner and
place for such Securities to be authenticated and delivered;
(19) if there is more than one Trustee, the identity of the Trustee and,
if not the Trustee, the identity of each Registrar, Paying Agent or
Conversion Agent with respect to the Securities of the series; and
15
<PAGE>
(20) any other terms of a particular series (including, without
limitation, if applicable, any designation of Restricted Subsidiaries
pursuant to Section 4.03 and, if other than the period commencing with the
date on which the Securities of that series are first issued and ending
with the maturity thereof, the period during which Section 4.02 would apply
in the event of a Change of Control of the Company), including any terms
which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing or remarketing of
Securities of that series, and any other provisions expressing or referring
to the terms and conditions upon which the Securities of that series are to
be issued under this Indenture, which terms and provisions are not in
conflict with the provisions of this Indenture; provided, however, that the
addition to or subtraction from or variation of Articles Four, Five, Six,
Eight and Ten (and Sections 1.01 and 1.02, insofar as they relate to the
definition of certain terms as used in such Articles) with regard to the
Securities of a particular series shall not be deemed to constitute a
conflict with the provisions of those Articles.
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 resolution of the Board of Directors or in any
such indenture supplemental hereto. Not all Securities of any one series need
be issued at the same time, and, unless otherwise so provided, a series may be
reopened for issuances of additional Securities of such series.
If any of the terms of the Securities of a series are established by action
taken pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee with an Officers' Certificate setting forth the terms
or the manner of determining the terms of the Securities of such series. With
respect to Securities of a series which are not to be issued at one time, such
resolution of the Board of Directors or action may provide general terms or
parameters for Securities of such series and provide either that the specific
terms of particular Securities of such series shall be specified in a written
order of the Company or that such terms shall be determined by the Company or
its agents in accordance with a written order of the Company as contemplated
by the last sentence of the fourth paragraph of Section 2.04.
Section 2.03. Denominations.
Unless otherwise provided as contemplated by Section 2.02 with respect to
any series of Securities and except as provided in Section 2.10, any
Registered Securities of a series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Securities of a series denominated in Dollars shall be issuable in the
denomination of $5,000.
Section 2.04. Execution, Authentication, Delivery and Dating.
Two Officers shall sign the Securities for the Company. The Company's seal
shall be reproduced on the Securities. An Officer shall sign the coupons
attached to any Bearer Security for the Company. The signature of any Officer
on the Securities or any coupons appertaining thereto may be manual or
facsimile.
If an Officer whose signature is on a Security or a coupon no longer holds
that office at the time the Trustee authenticates such Security, the Security
and coupon shall be valid nevertheless.
A Security or coupon shall not be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose until the certificate of
authentication on the Security is manually signed by the Trustee or on its
behalf by an Authenticating Agent. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture. Notwithstanding
the foregoing, if any Security shall have been duly 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 2.12 together with a written statement (which need not comply with
Sections 11.04 and 11.05 and need not be accompanied by an Opinion of Counsel)
stating that such Security has not been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed not to have been
authenticated and delivered hereunder and shall not be entitled to the
benefits of this Indenture.
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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, and the Trustee shall, subject to the provisions hereof and of
such Securities, authenticate said Securities and deliver said Securities and
any coupons appertaining thereto to or upon the written order of the Company,
signed by two Officers or by an Officer and an Assistant Treasurer of the
Company, without any further action by the Company. Unless otherwise specified
as contemplated by Section 2.02, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States. Further, a Bearer
Security (including a permanent global Bearer Security) may be delivered only
if all applicable certification and other requirements specified as
contemplated by Section 2.02 with respect to the Securities of or within such
series have been satisfied with respect to such Bearer Security (or, if
applicable, a Predecessor Security). Except as permitted by Section 2.09, the
Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and
cancelled. If not all the Securities of a series are to be issued at one time
and if the resolution of the Board of Directors or indenture supplemental
hereto establishing such series as contemplated by Sections 2.01 and 2.02
shall so permit, the written order of the Company may set forth procedures
acceptable to the Trustee for the issuance of such Securities and for
determining the form of terms of particular Securities of such series
including, but not limited to, interest rate, maturity date, date of issuance
and date from which interest shall accrue.
If the form or forms or terms of Securities of the series and any related
coupons have been established in or pursuant to one or more resolutions of the
Board of Directors or indentures supplemental hereto as permitted by Sections
2.01 and 2.02, 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 Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form or forms of such Securities and any coupons have been
established by or pursuant to a resolution of the Board of Directors or
indenture supplemental hereto, that such form or forms have been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities and any coupons have been established
by or pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, that such terms have been established in conformity
with the provisions of this Indenture; and
(3) that such Securities together with any coupons appertaining thereto,
when authenticated and delivered by the Trustee and issued by the Company
in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors'
rights, to general equitable principles and to such other qualifications as
such counsel shall conclude do not materially affect the rights of Holders
of such Securities and any coupons;
provided, however, that, with respect to Securities of a series which are not
to be issued at one time, the Trustee shall be entitled to receive such
Opinion of Counsel only once at or prior to the time of the first
authentication of Securities of such series and that the opinions described in
clauses (2) and (3) above may state, respectively,
(a) that, when the terms of such Securities and any coupons shall have
been established pursuant to a written order of the Company or pursuant to
such procedures as may be specified from time to time by a written order of
the Company, all as contemplated by and in accordance with a resolution of
the Board of Directors or an Officers' Certificate pursuant to a resolution
of the Board of Directors or indenture supplemental hereto, as the case may
be, such terms will have been established in conformity with the provisions
of this Indenture; and
(b) that such Securities and any coupons appertaining thereto, when (i)
executed by the Company, (ii) completed, authenticated and delivered by the
Trustee in accordance with this Indenture, (iii) issued and
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delivered by the Company and (iv) paid for, all as contemplated by and in
accordance with the aforesaid written order of the Company or specified
procedures, as the case may be, and in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization and other laws of general applicability relating to or
affecting the enforcement of creditors' rights, to general equitable
principles and to such other qualifications as such counsel shall conclude
do not materially affect the rights of Holders of such Securities and any
coupons.
Notwithstanding the provisions of Sections 2.01, 2.02, 11.04 and this
Section, if all the Securities of a series are not to be originally issued at
one time, the resolution of the Board of Directors or indenture supplemental
hereto, the certified copy of the record of action taken pursuant to such
resolution or supplemental indenture, the Officers' Certificate, the written
order of the Company and any other documents otherwise required pursuant to
such Sections need not be delivered at or prior to the time of authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued, provided, however, that any subsequent request by the Company to
the Trustee to authenticate Securities of such series shall constitute a
representation and warranty by the Company that as of the date of such
request, the statements made in the Officers' Certificate delivered pursuant
to Section 11.04 at or prior to authentication of the first such Security
shall be true and correct on the date thereof as if made on and as of the date
thereof.
The Trustee shall have the right to decline to authenticate and make
available for delivery any Securities together with any coupons appertaining
thereto under this Section if the issuance of such Securities pursuant to this
Indenture will alter the Trustee's own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
With respect to Securities of a series which are not all issued at one time,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities and any coupons, the form and terms thereof and the
legality, validity, binding effect and enforceability thereof, upon the
Opinion of Counsel, Officers' Certificate and other documents delivered
pursuant to Sections 2.01, 2.02, 11.04 and this Section, as applicable, at or
prior to the time of the first authentication of Securities of such series
unless and until such opinion, certificate or other documents have been
superseded or revoked. In connection with the authentication and delivery of
Securities of a series and any coupons which are not all issued at one time,
the Trustee shall be entitled to assume that the Company's instructions to
authenticate and deliver such Securities do not violate any rules, regulations
or orders of any governmental agency or commission having jurisdiction over
the Company.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security (including any temporary Bearer Security in global form)
shall be dated as of the date specified as contemplated by Section 2.02.
Section 2.05. Registrar, Paying Agent, Conversion Agent and Authenticating
Agent.
The Company shall maintain an office or agency where Registered Securities
of each series may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities of each series may be
presented for payment ("Paying Agent") and an office or agency where
Securities of each series that is convertible may be presented for conversion
("Conversion Agent") and (but without duplication) such offices or agencies in
such locations and for such purposes as may be required as contemplated by
Section 4.01. The Registrar shall keep a register of the Registered Securities
of each series issued hereunder and of their transfer and exchange. The
Company may have one or more co-Registrars (provided that there shall be only
one register, which shall be maintained by the principal Registrar), one or
more additional paying agents and one or more additional conversion agents
with respect to any series. The term "Paying Agent" includes any additional
paying agent and the term "Conversion Agent" includes any additional
conversion agent.
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The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify
the Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act
as such.
The Company initially appoints the Trustee Registrar and Paying Agent for
each series and Conversion Agent for any series that is convertible.
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 original
issue or upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 2.09 and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
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
authority. If such Authenticating Agent publishes reports of condition at
least annually pursuant to law or to the requirements of said supervising or
examining authority, then, for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of such Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in the case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give written notice
of such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve in the manner and to the extent
provided in Section 11.02. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment of an Authenticating Agent 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 alternative certificate of authentication in the
following form:
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CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein and referred
to in the within-mentioned Indenture.
as Trustee
By: _________________________________
As Authenticating Agent
By: _________________________________
Authorized Signatory
Section 2.06. Paying Agent to Hold Money and Securities in Trust.
Prior to each due date of a principal payment in respect of any Security,
the Company shall deposit with the Paying Agent a sum of money or securities
sufficient to make such payment when so becoming due. Each Paying Agent shall
hold in trust for the benefit of Securityholders of the relevant series or the
Trustee all money and securities held by the Paying Agent for the payment of
any amount in respect of the Securities of such series, and shall notify the
Trustee of any default by the Company in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate such money
and securities and hold them as a separate trust fund. The Company at any time
may require a Paying Agent to pay all money and securities held by it to the
Trustee and account for any funds or securities disbursed. Upon doing so, the
Paying Agent shall have no further liability for the money or securities.
Section 2.07. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before either (1) April 1 and October 1 in each
year in the case of Original Issue Discount Securities of any series which by
their terms do not bear interest prior to maturity (other than upon a default
in any payment upon such a Security) or (2) the Interest Payment Date for
Securities of any other series, but in no event less frequently than semi-
annually, and at such other times as the Trustee may request in writing a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders included in the security register.
Section 2.08. Transfer and Exchange.
Upon presentation for registration of transfer of a Registered Security of
any series at the office or agency of the Company maintained for such purposes
in a place of payment for such 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. Notwithstanding any other provision of this
Section, unless and until it is exchanged in whole or in part for Securities
in definitive form, a global Security representing all or a portion of the
Securities of or within a series may not be transferred except as a whole by
the depositary for such series to a nominee of such depositary or by a nominee
of such depositary to such depositary or another nominee of such depositary or
by such depositary or any such nominee to a successor depositary for such
series or a nominee of such successor depositary.
At the option of the Holder, Registered Securities of any series (other than
a global Security, except as provided below or as otherwise specified as
contemplated by Section 2.02) may be exchanged for other
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Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and containing identical terms and
provisions, upon surrender of the Securities to be exchanged at any such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive. Unless
otherwise specified with respect to any series of Securities as contemplated
by Section 2.02, Bearer Securities may not be delivered by the Trustee in
exchange for Registered Securities.
If so provided pursuant to Section 2.02 with respect to the Securities of
any series, at the option of the Holder, Bearer Securities of such series
(other than a global Security, except as provided below or as otherwise
specified as contemplated by Section 2.02) may be exchanged for Registered
Securities of such series containing identical terms of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any office or agency maintained by the
Company for such purpose in a place of payment for such series, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any unmatured coupon or
coupons or matured coupon or coupons in default, such 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
4.01, 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 for such series in exchange
for a Registered Security of the same series and like tenor after the close of
business at such office or agency (i) on any Regular Record Date and before
the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) on any special record date and before the opening of
business at such office or agency on the related date for payment of defaulted
interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date of 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 of 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 in
accordance with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange pursuant to the
immediately preceding paragraph, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
Except as otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, a global Security may be exchanged only as
provided below in this Section.
If at any time the depositary with respect to a global Security representing
all or a portion of the Securities of or within a series notifies the Company
that it is unwilling, unable or ineligible to continue as such depositary, the
Company shall appoint a successor depositary with respect to such Securities.
Unless otherwise provided with respect to a series of Securities as
contemplated by Section 2.02, if a successor depositary is not so appointed by
the Company within 90 days after the Company receives such notice, the Company
will execute and the Trustee, upon receipt of a written order of the Company
as contemplated by Section 2.04 for the authentication and delivery of
definitive Securities of such series (or, if such written order has previously
been delivered, then upon receipt of written instructions from the person or
persons specified in such written order), will authenticate and deliver
Securities of such series in definitive form equal in aggregate principal
amount to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
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The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more global Securities
shall no longer be represented by such global Security or Securities. In such
event the Company will execute and the Trustee, upon receipt of a written
order of the Company as contemplated by Section 2.04 for the authentication
and delivery of definitive Securities of such series (or, if such written
order has previously been delivered, then upon receipt of written instructions
from the person or persons specified in such written order), will authenticate
and deliver Securities of such series in definitive form equal in aggregate
principal amount to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
If a global Security is otherwise exchangeable as specified by the Company
pursuant to Section 2.02(3) with respect to a series of Securities, the
depositary with respect to a global Security representing all or a portion of
the Securities of or within such series may surrender such global Security to
the Trustee, as the Company's agent for such purpose, to be exchanged in whole
or in part for Securities of such series in definitive form in the manner and
under the circumstances so specified and on such terms as are acceptable to
the Company and such depositary. In such event, the Company shall execute and
the Trustee shall authenticate and deliver or make available for delivery:
(i) to each person specified by such depositary a new Security or
Securities of the same series and of like tenor, of any authorized form and
denomination as requested by such person in aggregate principal amount
equal to and in exchange for such person's beneficial interest in the
global Security; and
(ii) unless endorsement of the surrendered global Security as
contemplated by Section 2.10 or another procedure is specified for the
Securities of such series as contemplated by Section 2.02, to such
depositary a new global Security in a denomination equal to the difference,
if any, between the principal amount of the surrendered global Security and
the aggregate principal amount of Securities delivered pursuant to clause
(i) above in exchange for beneficial interests in such surrendered global
Security.
In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities
(a) in definitive registered form in authorized denominations if the
Securities of such series are issuable as Registered Securities, (b) in
definitive bearer form in authorized denominations if the Securities of such
series are issuable as Bearer Securities or (c) as either Registered or Bearer
Securities, if the Securities of such series are issuable in either form;
provided, however, that no definitive Bearer Security shall be delivered in
exchange for a portion of a global Security except in compliance with the
conditions set forth in Section 2.04 or specified with respect to the
Securities of such series as contemplated by Section 2.02 (including
certification requirements and requirements with respect to delivery outside
the United States).
Upon the exchange of a global Security for Securities in definitive form,
such global Security shall be cancelled by the Trustee, unless endorsement of
the surrendered global Security as contemplated by Section 2.10 or another
procedure is specified for the Securities of such series as contemplated by
Section 2.02. Registered Securities issued in exchange for a global Security
pursuant to this Section shall be registered in such names and in such
authorized denominations as the depositary for such global Security, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Registered Securities to
the persons in whose names such Securities are so registered. Subject to the
proviso clause of the immediately preceding paragraph, the Trustee shall
deliver Bearer Securities issued in exchange for a global Security pursuant to
this Section to the persons, and in such authorized denominations, as the
depositary for such global Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee.
If a Registered Security is issued in exchange for any portion of a global
Security after the close of business at the office or agency where such
exchange occurs (i) on any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or
(ii) on any special record date and before the opening of business at such
office or agency on the related 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
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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 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 shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
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 relation
thereto.
The Company shall not be required to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on (A) if Securities of the
series are issuable only as Registered Securities, the date of the mailing of
the relevant notice of redemption and (B) if Securities of the series are
issuable as Bearer Securities, the date of the first publication of the
relevant notice of redemption or, if Securities of such series are also
issuable as Registered Securities and there is no publication, the date of the
mailing of the relevant notice of redemption. Further, the Company shall not
be required to register the transfer of or exchange any Security selected for
redemption or purchase (except, in the case of Securities to be redeemed or
purchased in part, the portion thereof not to be redeemed or purchased), and
the Company shall not be required to issue, register the transfer of or
exchange any Security in respect of which a notice requiring the purchase or
redemption thereof by the Company at the option of the Holder has been given
and not withdrawn by the Holder thereof in accordance with the terms of such
Securities (except, in the case of Securities to be so purchased or redeemed
in part, the potion thereof not to be so purchased or redeemed); provided,
however, that a Bearer Security so selected for redemption or purchase or in
respect of which a notice requiring the purchase or redemption thereof by the
Company at the option of the Holder has been given and not so withdrawn may,
if so provided with respect to the Securities of such series as contemplated
by Section 2.02, be exchanged for a Registered Security of that series and
like tenor, provided that such Registered Security shall simultaneously be
surrendered for redemption or purchase, as the case may be, with written
instructions for payment consistent with the provisions of this Indenture.
Section 2.09. Replacement Securities.
If (i) a mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or (ii) the Company and the
Trustee receive evidence to their satisfaction that a Security or coupon
appertaining thereto has been lost, destroyed or wrongfully taken, and there
is delivered to the Company and the Trustee such security or indemnity as may
be required by them to save each of them and any Agent 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, and if the Trustee's requirements
are met, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
Security with a mutilated coupon appertaining to it or to which a lost,
destroyed or wrongfully-taken coupon appertains (with all appurtenant coupons
not lost, destroyed or wrongfully taken) or in lieu of any such lost,
destroyed or wrongfully-taken Security, a new Security of the same series
containing identical terms and of like principal amount and bearing a number
not contemporaneously outstanding, with coupons corresponding to the coupons,
if any, appertaining to the surrendered Security or to the lost, destroyed or
wrongfully-taken Security or to the Security to which such lost, destroyed or
wrongfully-taken coupon appertains, as applicable, provided, however, that
delivery of a Bearer Security shall occur only outside the United States.
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In case any such mutilated, lost, destroyed or wrongfully-taken Security or
coupon has become or is about to become due and payable, or is about to be
purchased by the Company pursuant to any provision of the Securities of such
series providing for the purchase thereof at the option of the Holder or the
Company, the Company in its discretion may, instead of issuing a new Security,
pay or purchase such Security or pay such coupon, as applicable; provided,
however, that payment of principal of, any interest on or any Additional
Amounts with respect to any Bearer Securities shall, except as otherwise
provided in Section 4.01, be payable only at an office or agency for
Securities of such series located outside the United States and, unless
otherwise provided in or pursuant to this Indenture, any interest on Bearer
Securities and any Additional Amounts with respect to such interest 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, with any coupons appertaining thereto, issued pursuant
to this Section in lieu of any lost, destroyed or wrongfully-taken Security,
or in exchange for a Security to which a lost, destroyed or wrongfully-taken
coupon appertains, shall constitute a separate obligation of the Company,
whether or not the lost, destroyed or wrongfully-taken Security and coupons
appertaining thereto or the lost, destroyed or wrongfully-taken 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 such series and any coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to this
Indenture with respect to particular Securities or generally, shall be
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, lost,
destroyed or wrongfully-taken Securities or coupons.
Section 2.10. Securities in Global Form.
If the Company shall establish pursuant to Section 2.02 that the Securities
of or within a series are to be issued in whole or in part in global form,
then the Company shall execute, and the Trustee shall, in accordance with
Section 2.04 and the written order of the Company contemplated thereby,
authenticate and deliver one or more global Securities in temporary or
permanent form that (i) shall be registered, if in registered form, in the
name of the depositary for such global Security or Securities or the nominee
of such depositary, (ii) shall be delivered by the Trustee to such depositary
or pursuant to such depositary's instructions, and (iii) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive form, this Security may not be
transferred except as a whole by the depositary to a nominee of the depositary
or by a nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any such nominee to a successor depositary
or a nominee of such successor depositary." Each depositary designated
pursuant to Section 2.02 for a global Security in registered form must be, to
the extent required by applicable law or regulation, a clearing agency
registered under the Securities Exchange Act of 1934, as amended, and any
other applicable statute or regulation, at the time of its designation and at
all times that it serves as depositary. Notwithstanding clause (14) of Section
2.02 and the provisions of Section 2.03, any such global 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 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, or changes in the rights of Holders, of
outstanding Securities represented thereby shall be made in such manner and
upon instructions given by such person or persons as shall be specified
therein or in the written order of the Company to be delivered to the Trustee
pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if
applicable, Section 2.11, the Trustee
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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 written order of the Company. If a written order of the
Company pursuant to Section 2.04 has been, or simultaneously is, delivered,
any instructions with respect to a Security in global form shall be in writing
but need not comply with Sections 11.04 and 11.05 and need not be accompanied
by an Opinion of Counsel.
The provisions of the last sentence of the third paragraph of Section 2.04
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 Sections 11.04 and 11.05 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 the third paragraph of Section
2.04.
Section 2.11. Temporary Securities.
Pending the preparation of a permanent global Security or definitive
Securities of any series, the Company may execute and the Trustee, upon the
written order of the Company pursuant to Section 2.04, shall authenticate and
deliver temporary Securities. Temporary Securities of any series shall be in
authorized denominations and substantially of the tenor of the definitive
Securities of that series in lieu of which they are issued, in registered form
or, if authorized, in bearer form with one or more coupons or without coupons,
but may have variations that the Company considers appropriate for temporary
Securities. In the case of Securities of any series, such temporary Securities
may be in global form. If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. Except as otherwise specified as contemplated by Section
2.02 with respect to Securities of a series issuable as Bearer Securities, (a)
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 maintained for such purpose in a place of
payment for such series, without charge to the Holder, and (b) upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any unmatured coupons appertaining thereto) the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like aggregate principal amount of definitive Securities of authorized
denominations of the same series and containing identical terms and
provisions; provided, however, that, unless otherwise specified as
contemplated by Section 2.02, no definitive Bearer Security shall be delivered
in exchange for a temporary Registered Security and provided, further, that
neither a beneficial interest in a permanent global Security in bearer form
nor a definitive Bearer Security shall be delivered in exchange for a
temporary Security except in compliance with all applicable conditions set
forth in Section 2.04 or specified as contemplated by Section 2.02 (including
certification requirements and requirements with respect to delivery outside
the United States). Until so exchanged, the temporary Securities of any series
shall, except as otherwise specified as contemplated by Section 2.02
(including with respect to the payment of interest on temporary Securities),
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.
Section 2.12. Cancellation.
The Company at any time may deliver Securities and all coupons, if any,
appertaining thereto to the Trustee (or to an other person for delivery to the
Trustee) for cancellation, including Securities authenticated which the
Company has not issued and sold. The Company and each Agent shall forward to
the Trustee for cancellation any Securities and coupons surrendered to them
for transfer, exchange, payment, redemption, purchase by the Company pursuant
to any provision thereof providing for such purchase at the option of the
Holder, or conversion. The Trustee and no one else shall cancel all Securities
and coupons surrendered for transfer, exchange, payment, redemption, purchase,
conversion or cancellation, and may dispose of cancelled Securities and
coupons as the Company directs, provided, however, that the Trustee shall not
be required to destroy such cancelled Securities. Except as otherwise provided
in the resolution of the Board of Directors or indenture supplemental hereto
establishing such series as contemplated by Section 2.02, the Company may not
issue new Securities of a series to replace Securities of the same series that
it has paid or that have been delivered to the Trustee for cancellation.
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Section 2.13. Payment of Interest; Defaulted Interest.
Unless otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, interest (except defaulted interest) on any
Registered Security of any series which is payable on any Interest Payment
Date shall be paid to the Holder in whose name that Security (or one or more
Predecessor Securities) is registered on the security register at the close of
business on the Regular Record Date for such interest payment. At the option
of the Company, payment of interest on any Registered Security may be made (i)
by check mailed to the address of the person entitled thereto as such address
appears in the security register, or (ii) if so specified with respect to the
Securities of such series as contemplated by Section 2.02, by wire transfer to
an account designated by such person.
Unless otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, if the Company defaults in a payment of interest
on the Registered Securities of any series on any Interest Payment Date, it
shall pay the defaulted interest to the persons who are Securityholders of
such series at the close of business on a subsequent special record date. The
Company shall fix the record date and payment date. At least 15 days before
the record date, the Company shall mail to each Securityholder of such series
a notice that states the record date, the payment date and the amount of
defaulted interest to be paid. 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, and at the same
time the Company shall deposit with the Paying Agent an amount of money equal
to the aggregate amount proposed to be paid in respect of such defaulted
interest or shall make arrangements satisfactory to the Paying Agent for such
deposit prior to the date of the proposed payment. The Company may pay
defaulted interest in any other lawful manner.
Unless otherwise provided with respect to the Registered Securities of any
series as contemplated by Section 2.02, in the case of any Registered Security
of any series which is converted after any Regular Record Date and on or prior
to the next succeeding Interest Payment Date (other than any Registered
Security which is due and payable prior to such Interest Payment Date),
interest which is due and payable on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion, and
such interest shall be paid to the Holder in whose name that Registered
Security is registered at the close of business on such Regular Record Date.
If any Bearer Security of a series is surrendered in exchange for a
Registered Security of such series at an office or agency maintained by the
Company for such purpose in a place of payment for such series after the close
of business at such office or agency (i) on any Regular Record Date and before
the opening of business at such office or agency on the relevant Interest
Payment Date or (ii) on any special record date and before the opening of
business at such office or agency on the related date for payment of defaulted
interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date of 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 of 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. Unless otherwise
specified with respect to the Securities of any series pursuant to Section
2.02, any interest due on any Bearer Security on or before the maturity
thereof, and any Additional Amounts payable with respect to such interest,
shall be payable only upon presentation of the coupons appertaining thereto
for such interest as they severally mature. Unless otherwise specified with
respect to the Securities of any series pursuant to Section 2.02, at the
option of the Company, payment of interest on any Bearer Security may be made
by check (provided the same is not mailed to an address inside the United
States) or by wire transfer to an account located outside the United States
maintained by the payee.
Section 2.14. 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 Registered Security for the purpose of receiving payment of
principal of, and
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(subject to Sections 2.08 and 2.13) interest on and any Additional Amounts
with respect to, such Registered Security and for all other purposes
whatsoever, whether or not any payment with respect to such Registered
Security shall be overdue, and neither the Company, nor the Trustee or 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 bearer of any Bearer Security or the bearer of any
coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and all other purposes
whatsoever, whether or not any payment with respect to such Security or coupon
shall be overdue, and neither the Company, nor the Trustee or any agent of the
Company or the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such global Security, and such depositary (or its nominee, if such global
Security is in registered form and is registered in the name of a nominee) may
be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the owner of such global Security for all purposes whatsoever;
provided, however, that, if so specified as contemplated by Section 2.02, the
Company, the Trustee and any agent of the Company or the Trustee shall, to the
extent so specified, treat the clearing organization or organizations for
whose account a portion of a permanent global Security in bearer form is held
by the depositary thereof as the owner of the applicable portion of such
global Security. None of the Company, the Trustee, any Paying Agent or the
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
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.
ARTICLE THREE
Redemption
Section 3.01. Applicability of Article.
Securities of any series which are redeemable before their stated maturity
at the election of the Company or through the operation of any sinking fund
for the retirement of Securities of such series shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 2.02 for Securities of any series) in accordance with this Article.
Section 3.02. Notices to Trustee.
If the Company elects to redeem all or less than all the Securities of any
series, it shall notify the Trustee of the redemption date, the principal
amount of Securities to be redeemed, the specific provision of the Securities
pursuant to which the Securities being called for redemption are being
redeemed and the redemption price. 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. If the Company wants to make any permitted optional sinking
fund payment, it shall notify the Trustee of the principal amount of the
Securities to be redeemed.
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The Company (1) may deliver outstanding Securities of a 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) may apply as a credit Securities of a series which (i) have been redeemed
or otherwise purchased 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 or (ii) have
been converted pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment required to be
made pursuant to the terms of the Securities of such series as provided for by
the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the redemption price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. The Company shall
notify the Trustee of its intention to so reduce the amount of such sinking
fund payment, the amount of the reduction and the basis for it. The Company
shall deliver to the Trustee with such notice any Securities to be credited
for such purpose that it has not previously delivered to the Trustee for
cancellation.
The Company shall give each notice and Officers' Certificate provided for in
this Section at least 60 days before the redemption date (unless a shorter
notice shall be satisfactory to the Trustee or is otherwise specified as
contemplated by Section 2.02 for Securities of any series).
Section 3.03. Selection of Securities to be Redeemed.
Except as otherwise specified as contemplated by Section 2.02 for Securities
of any series, if less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed shall be selected from
Securities of the same series outstanding not previously called for redemption
by lot or by such method as the Trustee considers fair and appropriate (and in
such manner as complies with applicable requirements of any stock exchange on
which Securities of such series are listed) 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 that have denominations
larger than the minimum authorized denomination for Securities of that series.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption. If any Security
selected for partial redemption is converted in part after such selection but
before the termination of the conversion right with respect to the portion of
the Security so selected, the converted portion of such Security shall be
deemed (so far as may be practicable) to be the portion selected for
redemption.
Section 3.04. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date (unless
a shorter notice is specified as contemplated by Section 2.02 for the
Securities of any series), the Company shall provide a notice of redemption in
the manner provided in Section 11.02 to the Holders of Securities.
The notice shall identify the Securities (including CUSIP number, if any
and, in the case of partial redemption, the principal amount of the
Securities) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price and method of payment, if other than in cash;
(3) if applicable, the then current conversion price or rate;
(4) the name and address of the Paying Agent and, if applicable, the
Conversion Agent;
(5) if applicable, that the right of the Holder to convert Securities
called for redemption shall terminate at the close of business on the
fifteenth day prior to the redemption date (or such other day as may be
specified as contemplated by Section 2.02 for Securities of any series);
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(6) if applicable, that Holders who want to convert Securities called for
redemption must satisfy the requirements for conversion contained in such
Securities;
(7) that Securities called for redemption must be surrendered (together
in the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the redemption date) to the Paying Agent to collect the
redemption price;
(8) that interest, if any (or original issue discount, if Original Issue
Discount Securities) on Securities called for redemption ceases to accrue
on and after the redemption date, unless the Company defaults in making
such redemption payment; and
(9) that the redemption is for a sinking fund or at the election of the
Company, whichever is the case.
A notice of redemption published as contemplated by Section 11.02 need not
identify particularly Registered Securities to be redeemed.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense, provided that the Company
shall have furnished to the Trustee the Officers' Certificate and Opinion of
Counsel required pursuant to Section 11.04 at least 15 days prior to the date
that the Trustee is required to take any action in connection with a
redemption.
Section 3.05. Effect of Notice of Redemption.
Once notice of redemption is provided, Securities of the series called for
redemption become due and payable on the redemption date and at the redemption
price therein specified and on and after such date (unless the Company shall
default in the payment of the redemption price and accrued interest, if any)
such Securities shall cease to bear interest, if any (and original issue
discount, if such Securities are Original Issue Discount Securities, shall
cease to accrue) 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 the accrued interest 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 maintained by the Company in a place of payment located
outside the United States (except as otherwise provided in Section 4.01) and,
unless otherwise specified as contemplated by Section 2.02, only upon
presentation and surrender of the coupons for such interest, and, provided,
further, that unless otherwise specified as contemplated by Section 2.02,
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 Regular Record Date or special record date,
as the case may be, according to their terms and the provisions of Section
2.13.
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 4.01) and, unless otherwise specified as
contemplated by Section 2.02, 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 shall, until paid, bear interest from
the redemption date at the rate prescribed therefor in the Security.
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Section 3.06. Deposit of Redemption Price.
On or before 10 a.m., New York time, on the redemption date, the Company
shall deposit with the Paying Agent money in immediately available funds (or
securities if permitted by the terms of such Securities) sufficient to pay the
redemption price of, and (except if the redemption date is an Interest Payment
Date) accrued interest, if any, on all Securities to be redeemed on that date
other than Securities or portions thereof called for redemption on that date
which are delivered by the Company to the Trustee for cancellation. The Paying
Agent shall return to the Company any money (or securities) not required for
that purpose because of conversion of Securities.
Section 3.07. Securities Redeemed in Part.
Any Registered Security that is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company, the
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Registrar and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Registered Security or Registered Securities of the same series,
containing identical terms and provisions, 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 amount of the Security so
surrendered, and, otherwise specified as contemplated by Section 2.02, if a
global Security is so surrendered, the Company shall execute, and the Trustee
shall authenticate and deliver to the depositary for such global Security,
without service charge, a new global Security in a denomination equal to an in
exchange for the unredeemed portion of the principal amount of the global
Security so surrendered.
Section 3.08. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may arrange for
the purchase and conversion of any Securities called for redemption by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Trustee in trust for the Securityholders, on
or before the close of business on the redemption date, an amount in cash not
less than the redemption price, together with interest, if any, accrued to the
redemption date, of such Securities. Notwithstanding anything to the contrary
contained in this Article Three, the obligation of the Company to pay the
redemption price of such Securities, including all accrued interest, if any,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, any Securities
not duly surrendered for conversion by the Holders thereof may, at the option
of the Company, be deemed, to the fullest extent permitted by law, acquired by
such purchasers from such Holders and (notwithstanding anything to the
contrary contained in Article Ten) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the last
day on which Securities of such series called for redemption may be converted
in accordance with this Indenture and the terms of such Securities, subject to
payment of the above amount as aforesaid. The Trustee shall hold and pay to
the Holders whose Securities are selected for redemption any such amount paid
to it in the same manner as it would moneys deposited with it by the Company
for the redemption of Securities. Without the Trustee's prior written consent,
no arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
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ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities; Maintenance of Office or Agency.
The Company shall pay the principal of and any interest on the Securities of
each series in accordance with the terms of the Securities of such series, any
coupons appertaining thereto, and this Indenture.
To the extent enforceable under applicable law, the Company shall pay
interest on overdue principal at the rate borne by the Securities of such
series (unless a different rate is specified as contemplated by Section 2.02
for Securities of such series).
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each place of payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment, 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.
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, 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 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); provided, however, that if the Securities of that series are listed
on The International Stock Exchange of the United Kingdom and the Republic of
Ireland, 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
London, 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 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 and the
Holders of the location, and any change in the location, of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency in respect of any series of Securities or shall fail to
furnish the Trustee with the address thereof, such presentations and
surrenders of Securities of that series may be made and 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 shall be
presented and surrendered for payment (including payment of any additional
amounts payable on Bearer Securities of that series) at , and
the Company hereby appoints the same as its agency to receive such respective
presentations, surrenders, notices and demands.
No payment of principal of or interest on 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 denominated and payable in Dollars, payment of
principal of and interest on any Bearer Security (including any additional
amounts payable on Securities of such series) 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 of or
interest on or additional amounts, as the case may be, at all offices or
agencies outside the
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United States maintained for that purpose by the Company in accordance with
this Indenture is illegal or effectively precluded by exchange controls or
other similar restrictions.
The Company may also 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 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 and the Holders of any such designation or
rescission and of any change in the location of any such other office or
agency.
If any Securities of a series provide for the payment of Additional Amounts,
the Company will pay to the Holder of any such Security of such series or any
coupon appertaining thereto Additional Amounts as provided therein. Whenever
in this Indenture there is mentioned, in any context, the payment of the
principal of 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 for in the terms
of such Securities and this Section to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant
to such terms and this Section 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 provided with respect to the Securities of any series as
contemplated by Section 2.02, 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 the maturity thereof, the first
day on which a payment of principal is made), and at least 10 days prior to
each date of payment of principal 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 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 or interest on the Securities of that series
shall be made to Holders of Securities of that series or any related coupons
who are United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of that
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 or coupons and the
Company will pay to the Trustee or such Paying Agent the Additional Amounts
required by the terms of such Securities and this Section. 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 in reliance on any Officers'
Certificate furnished pursuant to this Section.
Section 4.02. Change of Control.
(a) With respect to the Securities of any series, in the event that (i) a
Change of Control shall occur at any time after the date on which the
Securities of such series are first issued under this Indenture and on or
prior to the maturity thereof (or during such other period as may be specified
as contemplated by Section 2.02 for Securities of such series) and (ii) on any
date which occurs during the period commencing 90 days before and ending 90
days after the date that a public filing has been made with the Commission or
other general public disclosure has been made indicating the occurrence of
such Change of Control, two or more National Rating Agencies shall downgrade
their respective ratings of the Securities of such series from the ratings in
effect at the beginning of such 180-day period (each a "Downgrading Agency")
(except that if a National Rating Agency shall have downgraded its rating of
the Securities of such series during the 90-day period prior to such public
disclosure, such National Rating Agency shall not be deemed a Downgrading
Agency if it upgrades its rating of
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the Securities of such series, by the close of business on the date of such
public disclosure, to at least the rating (the "Threshold Rating") it had
given to the Securities of such series as of the beginning of such 180-day
period, and shall not thereafter downgrade such rating to below the Threshold
Rating during such 180-day period) (the occurrence of the conditions specified
in both (i) and (ii) being a "Put Event"), then each Holder of Securities of
such series shall have the right, at such Holder's option and subject to the
conditions of this Section 4.02, to require the Company to purchase all or any
portion of such Holder's Securities of such series at a purchase price equal
to 100% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the Purchase Date (as hereinafter defined) (or if such Securities are
Original Issue Discount Securities, 100% of that portion of the principal
amount thereof that, as specified in the terms of the Securities of that
series, would be payable if the maturity thereof were accelerated pursuant to
Section 6.02 to the Purchase Date). The exercise by a Holder of its right to
require the Company to purchase all or a portion of such Holder's Securities
pursuant to this Section 4.02 shall be irrevocable unless waived by the
Company. Notwithstanding anything to the contrary in this Section 4.02, with
respect to the Securities of any series, (A) a Put Event shall not be deemed
to have occurred if, following a Change of Control within the period referred
to in clause (i) of the first sentence of this Section 4.02(a), there are at
least two National Rating Agencies that have ratings of the Securities of such
series in effect at the beginning of the 180-day period referred to in clause
(ii) of the first sentence of this Section 4.02(a), and such National Rating
Agencies are not Downgrading Agencies and (B) the Company shall not be
obligated to purchase Securities of such series or give notice to the Holders
thereof with respect to more than one Put Event.
(b) In case a Put Event shall have occurred, the Company shall in the manner
provided in Section 11.02 give notice of such Put Event to the Trustee and to
each Holder of Securities of such series within fifteen days following such
occurrence, which notice shall set forth details regarding the right of the
Holders to require the Company to purchase Securities of such series, the date
(the "Purchase Date") fixed for purchase by the Company of such Securities,
which date shall (subject to Section 11.08) be the 90th day following the date
on which such notice is mailed by the Company to the Holders of Registered
Securities (or, if Securities of the series are issuable as Bearer Securities
and such notice is published as provided in Section 11.02, then the 90th day
following the date of the first publication of such notice), and the name and
address of the Paying Agent to which such Securities (together in the case of
Bearer Securities with all coupons appertaining thereto, if any, maturing
after the Purchase Date) are to be presented and surrendered (which Paying
Agent, for purposes of this Section 4.02, shall, in the case of Registered
Securities, be the Trustee and, in the case of Bearer Securities, shall be the
office or agency maintained by the Company for such purpose in a place of
payment located outside the United States (except as otherwise provided in
Section 4.01)). If applicable, such notice shall also state that interest
accrued to the Purchase Date will be paid as specified in said notice and that
interest (or, in the case of Original Issue Discount Securities, original
issue discount) on Securities (or portions thereof) presented and surrendered
for purchase will cease to accrue on and after the Purchase Date (unless the
Company defaults in paying the purchase price and accrued interest, if any).
Any Holder intending to exercise its right to put its Securities to the
Company shall deliver written notice of such intention to the Paying Agent,
and shall concurrently present and surrender the Securities (together, in the
case of Bearer Securities, with all coupons appertaining thereto, if any,
maturing after the Purchase Date) to be purchased to the applicable Paying
Agent in proper form for purchase by the Company, by the close of business on
the fifteenth day preceding the Purchase Date. Any Registered Security so
surrendered for purchase in part shall (if the Company, the Registrar or the
Trustee so requires) be duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company, the Registrar
and/or the Trustee duly executed by the Holder thereof or his attorney duly
authorized in writing. Such notice by a Holder shall identify the Securities
so surrendered, their aggregate principal amount and, if less than the entire
principal amount thereof is to be purchased, the portion of such principal
amount to be purchased (in increments of the minimum authorized denomination
for Securities of such series) and the denomination or denominations (which
shall be an authorized denomination for Securities of such series) of the
Security or Securities to be issued to the Holder for the portion of the
principal amount of the surrendered Security not to be purchased, and shall
include such other information as may be specified for Securities of such
series as contemplated by Section 2.02 (including, to the extent applicable,
the name and address of the Holder and/or the person to whom payment of the
purchase price is to
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be made). No such notice shall be deemed to have been delivered, and no such
Securities shall be deemed to have been presented and surrendered, until such
notice and Securities are actually received by the Paying Agent. The right of
the Holders to require the Company to purchase Securities pursuant to this
Section 4.02 shall terminate as of the close of business on the fifteenth day
preceding the Purchase Date and the Company shall not be obligated to purchase
any Securities presented and surrendered thereafter.
(c) With respect to each Security which has been properly presented and
surrendered, together with all coupons, if any, appertaining thereto maturing
after the Purchase Date, and as to which notice has been given to the Paying
Agent of the Holder's intention to put the same (or any portion thereof) to
the Company in accordance with this Section 4.02, such Security (or portion
thereof) shall become due and payable on the Purchase Date, and on and after
the Purchase Date (unless, as to any such Security (or portion thereof), the
Company fails to make the deposit of the purchase price thereof and pay the
accrued interest, if any, thereon as provided below) interest (or, in the case
of Original Issue Discount Securities, original issue discount), if any, on
such Securities (or portions thereof) shall cease to accrue and the coupons
for such interest appertaining to any Bearer Securities so to be purchased,
except to the extent provided below, shall be void. On or before noon, New
York time, on the Purchase Date, the Company shall deposit with the applicable
Paying Agent money, in immediately available funds, sufficient to pay the
purchase price of, and (except if the Purchase Date is an Interest Payment
Date) accrued interest, if any, on, all Securities or portions thereof to be
purchased on the Purchase Date. Unless otherwise specified as contemplated by
Section 2.02, the Paying Agent shall promptly mail to the Holders of such
Securities payment in an amount equal to such purchase price and accrued
interest, if any; provided, however, that (i) no such payment with respect to
any Bearer Security shall be mailed to any address in the United States
(except as otherwise provided in Section 4.01); (ii) installments of interest
on Bearer Securities whose stated maturity is on or prior to the Purchase Date
shall be payable only at an office or agency maintained by the Company in a
place of payment located outside the United States (except as otherwise
provided in Section 4.01) and, unless otherwise specified as contemplated by
Section 2.02, only upon presentation and surrender of the coupons for such
interest, (iii) unless otherwise specified as contemplated by Section 2.02,
installments of interest on Registered Securities whose stated maturity is on
or prior to the Purchase 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 Regular Record Date or special record date,
as the case may be, according to their terms and the provisions of Section
2.13, and (iv) unless otherwise specified as contemplated by Section 2.02, if
the Purchase Date is after a record date for the payment of interest on
Registered Securities of the series and before the related interest payment
date, any accrued and unpaid interest to the Purchase Date will be payable on
the Purchase Date to the person who was the registered Holder of such Security
at the close of business on such record date.
If any Bearer Security surrendered for purchase shall not be accompanied by
all appurtenant coupons maturing after the Purchase Date, such Security may be
purchased after deducting from the purchase price therefor 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 purchase
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 4.01), and, unless otherwise specified as contemplated by
Section 2.02, only upon presentation and surrender of those coupons.
If any Registered Security is duly surrendered in accordance with this
Section 4.02 for purchase in part only, the Company shall execute, and the
Trustee shall promptly authenticate and deliver to the Holder of such
Security, without service charge, a new Registered Security or Registered
Securities of the same series, containing identical terms and provisions, of
any authorized denomination as requested by such Holder in its notice given
pursuant to Section 4.02(b) in aggregate principal amount equal to and in
exchange for the unpurchased portion of the principal amount of the Security
so surrendered, and, unless otherwise specified as contemplated by Section
2.02, if a global Security is so surrendered, the Company shall execute, and
the Trustee shall promptly authenticate and deliver to the depositary for such
global Security, without service charge, a new
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global Security in a denomination equal to and in exchange for the unpurchased
portion of the principal amount of the global Security so surrendered.
The Company shall comply with applicable Federal and state securities laws
in performing its obligations under this Section 4.02.
(d) The Company shall take all reasonable action necessary to enable each
National Rating Agency to provide ratings for the Securities.
(e) Notwithstanding anything to the contrary in this Indenture, if the
giving of the notice of a Put Event shall have been completed as provided in
this Section 4.02, or if provision satisfactory to the Trustee for the giving
of such notice shall have been made, and if the Company shall have deposited
with the applicable Paying Agent funds sufficient to purchase the Securities
or portions thereof to be purchased on the Purchase Date at the applicable
purchase price and to pay as provided above the accrued and unpaid interest
thereon, then all obligations of the Company in respect of such Securities or
portions thereof shall cease and be discharged and the Holders of such
Securities shall thereafter be restricted exclusively to such funds for any
and all claims of whatsoever nature on their part under this Indenture or in
respect of such Securities.
Section 4.03. Designation of Restricted Subsidiaries.
With respect to the Securities of any series, the Company may designate an
Unrestricted Subsidiary as a Restricted Subsidiary or designate a Restricted
Subsidiary as an Unrestricted Subsidiary at any time, provided that (1)
immediately after giving effect to such designation, the Leverage Ratio of the
Restricted Group is not greater than 8.0:1 and the Company and the Restricted
Subsidiaries are in compliance with Sections 4.04 and 4.05, and (2) an
Officers' Certificate with respect to such designation is delivered to the
Trustee within 75 days after the end of the fiscal quarter of the Company in
which such designation is made (or, in the case of a designation made during
the last fiscal quarter of any fiscal year of the Company, within 120 days
after the end of such fiscal year), which Officers' Certificate shall state
the effective date of such designation. The Company shall make the initial
designation of Restricted Subsidiaries with respect to the Securities of any
series, and deliver the required Officers' Certificate with respect thereto to
the Trustee, on or prior to the date of initial issuance of Securities of such
series.
Section 4.04. Limitation on Liens.
(a) As long as any Securities of a series entitled to the benefit of this
covenant are outstanding, the Company will not, and will not permit any
Restricted Subsidiary to, create, incur or assume any Lien on Restricted
Property to secure the payment of Funded Debt of the Company or any Restricted
Subsidiary if immediately after the creation, incurrence or assumption of said
Lien, the aggregate outstanding principal amount of all Funded Debt of the
Company and the Restricted Subsidiaries that is secured by Liens on Restricted
Property would exceed fifteen percent (15%) of the Maximum Funded Debt Amount,
unless in any such case the Company makes effective provision whereby the
Securities (together with, if the Company shall so determine, any other Funded
Debt ranking equally with the Securities, whether then existing or thereafter
created) are secured equally and ratably with (or prior to) such Funded Debt
(but only for so long as such Funded Debt is so secured). (For the purpose of
providing such equal and ratable security the principal amount of the
Securities means that principal amount or portion thereof that could be
declared to be due and payable pursuant to Section 6.02 on the date of the
creation, incurrence or assumption of the Lien and the extent of such equal
and ratable security will be adjusted as and when said principal amount or
portion thereof changes over time pursuant to Section 6.02 and any other
provision of this Indenture or such Securities.)
(b) The provisions of Section 4.04(a) shall not apply to the creation,
incurrence or assumption of the following Liens:
(1) Any Lien which arises out of a judgment or award against the Company
or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary at the time shall be prosecuting an appeal or
proceeding for review (or with respect to which the period within which
such appeal or proceeding for review may be initiated shall not have
expired) and with respect to which it shall have secured a stay of
execution pending such appeal or proceedings for review or with respect to
which the
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Company or such Restricted Subsidiary shall have posted a bond and
established adequate reserves (in accordance with generally accepted
accounting principles) for the payment of such judgment or award;
(2) Any Lien upon any real or personal property or interest therein of a
Restricted Subsidiary existing at the time of acquisition thereof or
securing the payment of Funded Debt incurred by such Restricted Subsidiary
to finance some or all of the purchase price of, or cost of construction of
or improvements on, any such property or interest therein, provided that
(i) the outstanding principal amount of the Funded Debt secured by such
Lien does not at any time exceed 100% of the greater of the purchase price
for or the fair value of such real or personal property or interest
therein, (ii) such Lien does not encumber or constitute a charge against
any other Restricted Property theretofore owned by the Restricted Group
(except that in the case of construction or improvement, the Lien may
extend to unimproved real property on which the property so constructed or
the improvement is located), and (iii) the Funded Debt secured by such Lien
would be permitted to be incurred under Section 4.05; and
(3) Any Lien representing the extension, renewal or replacement (or
successive extensions, renewals or replacements) of Liens referred to in
clause (2) above, provided that the principal of the Funded Debt secured
thereby does not exceed the principal of the Funded Debt secured thereby
immediately prior to such extension, renewal or replacement, plus any
accrued and unpaid interest or capitalized interest payable thereon, and
that such extension, renewal or replacement shall be limited to all or a
part of the property (or interest therein) subject to the Lien so extended,
renewed or replaced (plus improvements and construction on such property).
The outstanding principal amount of Funded Debt secured by a Lien permitted
by clause (2) or (3) of this Section 4.04(b) or, if less, the fair value of
the property or interest therein secured thereby, shall be included in the
calculation pursuant to Section 4.04(a) of the aggregate outstanding principal
amount of Funded Debt secured by Liens on Restricted Property for purposes of
determining whether a Lien (other than one referred to in this Section
4.04(b)) may be incurred in compliance with Section 4.04(a).
Section 4.05. Limitation on Restricted Subsidiary Funded Debt.
As long as any Securities of a series entitled to the benefit of this
covenant are outstanding the Company will not permit any Restricted Subsidiary
to incur or assume any Funded Debt if immediately after the incurrence or
assumption of such Funded Debt, the aggregate outstanding principal amount of
all Funded Debt of the Restricted Subsidiaries would exceed fifteen percent
(15%) of the Maximum Funded Debt Amount. Notwithstanding the foregoing, any
Restricted Subsidiary may incur Funded Debt to extend, renew or replace Funded
Debt of such Restricted Subsidiary, provided that the principal of the Funded
Debt so incurred does not exceed the principal of the Funded Debt extended,
renewed or replaced thereby immediately prior to such extension, renewal or
replacement, plus any accrued and unpaid interest or capitalized interest
payable thereon.
Section 4.06. SEC Reports.
The Company shall file with the Trustee within 15 days after it files them
with the SEC 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
SEC may by rules and regulations prescribe) which the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. The Company also shall comply with the other provisions of TIA
(S) 314(a).
Section 4.07. Compliance Certificate.
The Company shall, within 120 days after the end of each fiscal year of the
Company, commencing with the first fiscal year following the issuance of
Securities of any series under this Indenture, file with the Trustee a
certificate of the principal executive officer, principal financial officer or
principal accounting officer of the
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Company covering the period from the date of issuance of such Securities to
the end of the fiscal year in which such Securities were issued, in the case
of the first such certificate, and covering the preceding fiscal year in the
case of each subsequent certificate, and stating whether or not, to the
knowledge of the signer, the Company has complied with all conditions and
covenants on its part contained in this Indenture, and, if the signer has
obtained knowledge of any default by the Company in the performance,
observance or fulfillment of any such condition or covenant, specifying each
such default and the nature thereof. For the purpose of this Section 4.07,
compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture. The
certificate need not comply with Section 11.05.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company a written statement signed by the Company's
independent auditors stating (1) that their audit examination has included a
review of the terms of this Indenture and the Securities as they relate to
accounting matters, and (2) whether, in connection with their audit
examination, any Event of Default has come to their attention and if such an
Event of Default has come to their attention, specifying the nature and period
of existence thereof.
Section 4.08. Corporate Existence.
Subject to the provisions of Section 5.01 hereof, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
Section 4.09. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 4.02 to 4.05, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the outstanding
Securities of such series shall either waive such compliance in such instance
or generally waive compliance with such term, provision or condition, but no
such waiver shall extend to or affect such term, provision or condition except
to the extent 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.
Section 4.10. No Lien Created.
This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Company or any Subsidiary.
Section 4.11. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each calendar
year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on outstanding Securities
as of the end of such year.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into, or transfer its
properties and assets substantially as an entirety to, another corporation
unless (1) the successor corporation, which shall be a corporation organized
and existing under the laws of the United States or a State thereof, assumes
by supplemental indenture all the obligations of the Company under the
Securities and any coupons appertaining thereto and this Indenture; and (2)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing. Thereafter, unless otherwise
specified as contemplated by Section 2.02 for the Securities of any series and
any related coupons, all such obligations of the predecessor corporation shall
terminate.
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ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" with respect to Securities of any series means each
one of the events specified below in this Section 6.01, unless it is either
inapplicable to a particular series or is specifically deleted or modified as
contemplated by Section 2.02 for the Securities of such series, and any other
events as may be specified as contemplated by Section 2.02 for the Securities
of such series:
(1) the Company defaults in the payment of any interest on any Security
of that series when the same becomes due and payable and the default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of any Security
of that series when the same becomes due and payable at maturity, upon
redemption (including default in the making of any mandatory sinking fund
payment), upon purchase by the Company at the option of the Holder pursuant
to the terms of such Security or otherwise;
(3) the Company fails to comply with any of its other agreements in
Securities of that series or this Indenture (other than an agreement which
has expressly been included in this Indenture solely for the benefit of
Securities of any series other than that series or is expressly made
inapplicable to the Securities of such series as contemplated by Section
2.02) and the default continues for the period and after the notice
specified below;
(4) the happening of an event of default as defined in any mortgage,
indenture or instrument under which there may be issued or by which there
may be secured or evidenced any Debt of the Company (including an Event of
Default under this Indenture with respect to Securities of any series other
than that series), whether now existing or hereafter created, which event
of default shall have resulted in Debt of the Company becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable if the aggregate principal amount (or, if
applicable, with an issue price plus accrued original issue discount) of
such Debt is in excess of five percent (5%) of the aggregate principal
amount of the Company's Funded Debt then outstanding, unless, within the
period and after the notice specified below, such acceleration has been
rescinded or annulled, such Debt has been paid or the Company shall have
contested such acceleration in good faith and by appropriate proceedings
and have obtained and thereafter maintained a stay of all consequences
thereof that would have a material adverse effect on the Company; provided,
however, that if after the expiration of such period, such event of default
shall be remedied or cured by the Company or be waived by the holders of
such Debt in any manner authorized by such mortgage, indenture or
instrument or shall otherwise cease to exist, then the Event of Default
hereunder by reason thereof shall, without further action by the Company,
the Trustee or any Holder, be deemed cured and not continuing;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or consents to the commencement of a
case against it,
(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;
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
adjudicates the Company insolvent or bankrupt,
(B) appoints a Custodian of the Company or for all or substantially
all of its property, or
(C) orders the winding up or liquidation of the Company, and the
order or decree remains unstayed and in effect for 90 days; or
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(7) any other Event of Default provided with respect to Securities of
that series occurs.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (3) or clause (4) is not an Event of Default until
the Trustee notifies the Company or the Holders of at least 25% in aggregate
principal amount of the outstanding Securities of that series notify the
Company and the Trustee of the Default and the Company does not cure the
Default within 30 days after receipt of the notice. The notice must specify
the Default, demand that it be remedied and state that the notice is a "Notice
of Default."
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.01(5) or (6)) occurs and is continuing with respect to Securities of any
series at the time outstanding, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities of that series by notice to the Company and the Trustee, may
declare to be due and payable immediately (1) the principal amount (or, if
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of Securities of that
series) of all of the Securities of that series then outstanding and
(2) interest, if any, accrued to the date of acceleration. Upon such
declaration, such principal amount (or specified amount) and interest, if any,
shall be due and payable immediately. If an Event of Default specified in
Section 6.01(5) or (6) occurs and is continuing, (1) the principal amount (or,
if the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of the
Securities of that series) of all of the Securities of that series then
outstanding and (2) interest, if any, accrued to the date of such
acceleration, shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or Securityholders. The
Holders of a majority in aggregate principal amount of the outstanding
Securities of the series with respect to which an acceleration applies by
notice to the Trustee may rescind an acceleration and its consequences with
respect to such series if all existing Events of Default (other than the non-
payment of the principal of and accrued interest, if any, on Securities that
have become due solely by such acceleration) with respect to Securities of
that series have been cured or waived and if the rescission would not conflict
with any judgment or decree. In the event of a declaration of acceleration
under this Indenture with respect to Securities of any series because an Event
of Default set forth in Section 6.01(4) has occurred and is continuing, such
declaration of acceleration shall be automatically annulled if (a) as a result
of the contest by the Company in appropriate proceedings of the acceleration
of the Debt which is the subject of such Event of Default the acceleration of
such indebtedness is declared void ab initio, or (b) within 90 days of such
declaration of acceleration under this Indenture the declaration of
acceleration of the Debt which is the subject of such Event of Default has
been rescinded or annulled in any manner authorized by the mortgage, indenture
or instrument evidencing or creating such Debt and, in the case of this clause
(b), the annulment of the declaration of acceleration under this Indenture
would not conflict with any judgment or decree, and, in either case, all other
existing Events of Default (other than the non-payment of the principal of and
accrued interest, if any, on Securities that have become due solely by such
acceleration) with respect to Securities of that series have been cured or
waived. No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of the whole amount which then shall
have become due and remain unpaid for principal or interest, if any, on the
Securities of that series and any related coupons or to enforce the
performance of any provision of the Securities of that series or this
Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of the
Securities of that series or any related coupons or does not produce any of
them in the proceeding. A delay or omission by the Trustee or any Holder of
Securities or related coupons, if any, in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in aggregate principal
amount of the outstanding Securities of any series by notice to the Trustee
may waive on behalf of the Holders of all the Securities of such series and
any related coupons an existing Default or Event of Default and its
consequences. When a Default or Event of Default is waived, it is cured and
stops continuing.
Section 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may 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 it, with respect to the Securities of such series. The
Trustee, however, may refuse to follow any direction that conflicts with law
or this Indenture, that is unduly prejudicial to the rights of another
Securityholder or that would involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall have
the right to pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default with respect to the Securities of that series;
(2) the Holders of at least 25% in aggregate principal amount of the
outstanding Securities of that series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer and provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; 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
aggregate principal amount of the outstanding Securities of such series.
A Securityholder of any series may not use this Indenture to prejudice the
rights of another Securityholder of such series or to obtain a preference or
priority over another Securityholder of such series, except in the manner
herein provided and for the equal and ratable benefit of all Securityholders
of such series.
Section 6.07. Rights of Holders to Receive Payment and to Convert.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security or a coupon to receive payment of principal of and
(subject to Sections 2.08 and 2.13) interest, if any, on the Security or
payment on such coupon, on or after the respective due dates with respect to
such payments expressed in such Security or coupon, and, if applicable, to
convert such Security on the terms and subject to the conditions applicable to
Securities of such series, or to bring suit for the enforcement of any such
payment on or after such respective dates or of such right to convert, if any,
shall not be impaired or affected without the consent of the Holder.
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Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing with respect to the Securities of any series, the Trustee may
recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount which then shall have become due and remain
unpaid for principal and interest, if any, on the Securities of such series
and any related coupons.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and
the Securityholders (including the Holders of any coupons) allowed in any
judicial proceedings relative to the Company, its creditors or its property
and to collect and receive money, property or securities payable or
deliverable on any such claims and to distribute the same.
Section 6.10. Priorities.
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 the
case of the distribution of such money on account of principal or interest,
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 Trustee for amounts due under Section 7.07;
Second: to the payment of amounts due and unpaid for principal and
interest, if any, on the Securities and coupons in respect of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts which then shall have become due and payable
on such Securities and coupons for principal and interest, respectively;
and
Third: to the Company.
Section 6.11. Undertaking for Costs.
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, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate principal amount of the outstanding Securities of any series.
ARTICLE SEVEN
Trustee
All the provisions of this Article Seven apply to the Trustee acting in all
its appointed capacities pursuant to this Indenture unless any provision
specifically applies to the Trustee only in its capacity as Trustee.
Section 7.01. Duties of Trustee.
(a) If an Event of Default with respect to Securities of any series has
occurred and is continuing, the Trustee shall with respect to such series
exercise such of the rights and powers vested in it by this Indenture with
respect to such series and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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(b) With respect to Securities of any series, except during the continuance
of an Event of Default with respect to Securities of such series:
(1) The Trustee need perform only those duties that are specifically set
forth in this Indenture or the TIA and no others.
(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. The Trustee, however,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel or require an Officers' Certificate, an Opinion of Counsel and/or an
accountant's certificate. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Certificate, Opinion,
or accountant's certificate.
(c) The Trustee may act through agents and counsel and shall not be
responsible for the misconduct or negligence of any agent or counsel appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and coupons and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
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Section 7.04. Trustee's and Authenticating Agent's Disclaimer.
Neither the Trustee nor any Authenticating Agent makes any representation as
to the validity or adequacy of this Indenture or the Securities or the
coupons, if any, appertaining thereto; neither shall be accountable for the
Company's use of the proceeds from the Securities; and neither shall be
responsible for any statement in the Indenture or the Securities or any
coupons other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default occurs and is continuing with respect to Securities of any
series and if it is known to a Trust Officer of the Trustee, the Trustee shall
transmit by mail to the Holders of Securities of such series in the manner and
to the extent provided in TIA (S) 313(c) notice of the Default within 90 days
after it occurs or as soon as reasonably practicable thereafter. Except in the
case of a default in payment of principal of or interest on any Security of
such series or any related coupons (including default in the making of any
mandatory sinking fund or mandatory repurchase payment), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of
Securityholders of such series.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date on which Securities are originally issued under this Indenture, the
Trustee shall transmit by mail to the Holders of Securities, in the manner and
to the extent provided in TIA (S) 313(c), a brief report dated as of such May
15 that complies with TIA (S) 313(a). The Trustee also shall comply with TIA
(S) 313(b).
A copy of each report at the time of its mailing to Securityholders shall be
filed by the Company with the SEC and each stock exchange on which the
Securities are listed.
The Company will promptly notify the Trustee if and when the Securities are
listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee such compensation as shall have been
agreed upon in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out- of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it arising out of or in connection with the acceptance or
administration of this trust and its duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. Failure of the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
have the right to elect to defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by
the Trustee through the Trustee's negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
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Section 7.08. Replacement of Trustee.
The Trustee may resign at any time with respect to the Securities of one or
more series by so notifying the Company. The Holders of a majority in
aggregate principal amount of the outstanding Securities of any series may
remove the Trustee with respect to the Securities of such series by so
notifying the removed Trustee and may appoint a successor Trustee with the
Company's consent. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint a successor Trustee or Trustees (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).
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the lien, if any, provided for in Section 7.07), the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall give notice in the manner
provided in Section 11.02 of its succession to each Securityholder.
If a successor Trustee with respect to the Securities of any series does not
take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
principal amount of the outstanding Securities of such series may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation or
national banking association, the successor corporation or national banking
association without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements of
TIA (S) 310(a). The Trustee shall always have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual
report of condition. With respect to the Securities of each series, the
Trustee shall comply with TIA (S) 310(b). In determining whether the Trustee
has a conflicting interest as defined in TIA (S) 310(b) with respect to the
Securities of any series, there shall be excluded this Indenture with respect
to Securities of any particular series of Securities other than that series.
Nothing herein shall prevent the Trustee from filing with the SEC the
application referred to in the second to last paragraph of TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
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ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Termination of Company's Obligations.
The Company may terminate all of its obligations under the Securities of any
series and all coupons, if any, appertaining thereto, and this Indenture with
respect to the Securities of such series if either (1) all Securities of such
series and all coupons, if any, appertaining thereto, previously authenticated
and delivered (other than (i) destroyed, lost or wrongfully-taken Securities
or coupons which have been replaced or paid as provided in Section 2.09, (ii)
Securities or coupons for whose payment money (or, if permitted by the terms
of such Securities, securities) has theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.03, (iii) 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 2.08, (iv) coupons appertaining to
Bearer Securities called for redemption and maturing after the relevant
redemption date, whose surrender has been waived as provided in Section 3.09,
and (v) coupons appertaining to Bearer Securities surrendered for purchase and
maturing after the Purchase Date, whose surrender has been waived as provided
in Section 4.02(c)) have been delivered to the Trustee for cancellation; or
(2) the Company irrevocably deposits in trust with the Trustee money or
Government Obligations sufficient to pay the principal of and interest, if
any, on all Securities of such series and all coupons, if any, appertaining
thereto previously authenticated and delivered, and not theretofore cancelled
or delivered to the Trustee for cancellation (other than any such Security or
coupon referenced in subclauses (i), (ii), (iii), (iv) or (v) of clause (1)
above), to maturity or redemption, as the case may be.
The Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01,
7.07, 7.08, 8.01, 8.03 and Article Ten of this Indenture, however, shall
survive until the Securities of such series are no longer outstanding.
Thereafter the Company's obligations in Sections 7.07 and 8.03 shall survive.
Notwithstanding the satisfaction and discharge of this Indenture with respect
to the Securities of any series, if money or Government Obligations shall have
been deposited with the Trustee pursuant to clause (2) of this Section, the
obligations of the Trustee under Section 8.02 and the second sentence of
Section 8.03 shall survive.
After a deposit and if all other conditions thereto are met, the Trustee for
the Securities of such series and the coupons, if any, appertaining thereto,
shall be required to execute an instrument acknowledging satisfaction and
discharge of this Indenture with respect to such Securities, except for those
surviving obligations specified above; provided, however, that the Trustee
shall not be required to execute such instrument until the expiration of
ninety days after the date of a deposit.
In order to have money available on a payment date to pay the principal of
or interest, if any, on the Securities, the Government Obligations shall be
payable as to principal or interest on or before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
Section 8.02. Application of Trust Fund.
The Trustee shall hold in trust money and Government Obligations deposited
with it pursuant to Section 8.01. It shall apply the deposited money and the
money from the Government Obligations through the Paying Agent and in
accordance with the provisions of the Securities, the coupons and this
Indenture to the payment of principal of and interest, if any, on the
Securities and related coupons, if any, for the payment of which such money or
Government Obligations has been deposited with the Trustee.
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 8.01 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 outstanding Securities.
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Section 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon written request any
money or securities held by them for the payment of principal or interest, if
any, that remains unclaimed for two years; provided, however, that the Trustee
and the Paying Agent, before being required to make any such payment may at
the expense of the Company cause to be published once, in an Authorized
Newspaper in each place of payment, notice that such money remains unclaimed
and that, after a date specified therein, which date shall not be less than 30
days from such date of such publication, any unclaimed balance of such money
then remaining will be paid to the Company. After that, Holders entitled to
the money or securities must look to the Company for payment unless an
applicable abandoned property law designates another person.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to or consent of any Holder of
Securities or coupons or the Holder of any coupons:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Sections 5.01 and 10.16;
(3) to secure the Securities pursuant to the requirements of Section
4.04, including to provide for the receipt and holding of any security to
which the Holders are entitled under Section 4.04, and to release such
security and the Lien of the Holders in accordance with the provisions of
Section 4.04;
(4) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.01 and 2.02;
(5) to add to the covenants of the Company for the 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;
(6) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series of Securities, stating
that such Events of Default are expressly being included solely to be
applicable to such series);
(7) to change or eliminate any of the provisions of this Indenture,
provided that, except as otherwise contemplated by Section 2.02(20), any
such change or elimination shall become effective only when there is no
Security outstanding of any series created prior thereto which is entitled
to the benefit of such provision;
(8) 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
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, or to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized denominations
or to facilitate or permit the issuance of Securities in uncertificated
form (so long as any "registration-required obligation" within the meaning
of Section 163(f)(2) of the Internal Revenue Code of 1986, as amended (the
"Code") is in registered form for purposes of the Code) provided, that any
such action shall not adversely affect the interests of Holders of
Securities of any series or any related coupons in any material respect;
(9) to make any change that, in the opinion of the Board of Directors,
does not materially adversely affect the rights of any Securityholder or
the Holder of any coupon; or
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(10) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to any Holder of Securities or coupons
but with the consent of the Holders of a majority in aggregate principal
amount of the outstanding Securities of each series affected by such amendment
or supplement, by Act of said Holders delivered to the Trustee. The Holders of
a majority in aggregate principal amount of the outstanding Securities of any
series, by Act of said Holders delivered to the Trustee, may on behalf of the
Holders of all Securities of such series and any related coupons waive
compliance by the Company with any provision of this Indenture or of
Securities of such series without any notice to any Holder of Securities or
coupons. Without the consent of the Holder of each outstanding Security
affected thereby, however, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of any series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on any
Security (or, in the case of an Original Issue Discount Security, reduce
the rate of accrual of original issue discount);
(3) reduce the principal of (or any premium payable upon the redemption
of) or extend the fixed maturity of any Security (or, in the case of an
Original Issue Discount Security, reduce the portion of the principal
amount that would be due and payable upon acceleration of the maturity
thereof pursuant to Section 6.02);
(4) change the amount or time of any payment required by any sinking fund
provisions of the Securities of any series;
(5) make any change that materially adversely affects the right of a
Holder to require the Company to purchase a Security in accordance with the
terms thereof and this Indenture;
(6) waive a default in the payment of principal of or interest, if any,
on any Security;
(7) make any Security payable in money or securities other than that
stated in the Security;
(8) make any change that materially adversely affects the right to
convert any Security or that increases the conversion price or reduces the
conversion rate of any Security; or
(9) change any obligation of the Company to maintain an office or agency
in the places and for the purposes specified in Section 4.01.
It shall not be necessary for the Act of the Holders under this Section to
approve the particular form of any proposed supplement or amendment, but it
shall be sufficient if such Act approves the substance thereof.
An amendment to or supplement of this 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 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
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Section 9.04. Effect of Amendments and Supplements.
Upon the execution of any amendment or supplement authorized pursuant to
this Article, this Indenture shall be modified in accordance therewith, and
such amendment or supplement 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 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the
changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article if the amendment, supplement or waiver does not
adversely affect the rights, duties, immunities or liabilities of the Trustee.
If it does, the Trustee may but need not sign it. The Company may not sign an
amendment or supplement until the Board of Directors approves it.
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 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.
ARTICLE TEN
Conversion
Section 10.01. Applicability of Article.
Securities of any series which are convertible into Company Stock at the
option of the Holder shall be convertible in accordance with their terms and
(except as otherwise specified as contemplated by Section 2.02 for Securities
of any series) in accordance with this Article. Each reference in this Article
to "a Security" or "the Securities" refers to the Securities of the particular
series that is convertible into Company Stock. If more than one series of
Securities with conversion privileges are outstanding at any time, the
provisions of this Article shall be applied separately to each such series.
Section 10.02. Conversion Privilege.
A Holder of a Security of any authorized denomination of any series may
convert it into Company Stock, at any time during the period specified on the
Securities of that series, at the conversion price or conversion rate in
effect on the conversion date, except that, with respect to any Security (or
portion thereof) called for redemption, such right shall (except as otherwise
provided in Section 3.08) terminate at the close of business on the fifteenth
day prior to the date fixed for redemption of such Security (or portion
thereof) (or such other day as may be specified as contemplated by Section
2.02 for Securities of such series), unless the Company shall default in
payment of the amount due upon redemption thereof.
The initial conversion price or conversion rate in respect of a series of
Securities shall be as specified on the Securities of that series. The
conversion price or conversion rate will be subject to adjustment on the terms
set forth in Sections 10.07 through 10.13 or such other or different terms, if
any, as may be specified as contemplated by Section 2.02 for Securities of
such series.
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A Holder may convert any Security in full and may convert a portion of a
Security if the portion to be converted and the remaining portion of such
Security are in denominations issuable for that series of Securities.
Provisions of this Indenture that apply to conversion of all of a Security
also apply to conversion of a portion of it.
Section 10.03. Conversion Procedure.
To convert a Security of any series, a Holder must satisfy the requirements
for conversion contained on the Securities of that series. The date on which
the Holder satisfies all those requirements is the conversion date. As soon as
practicable after the conversion date, the Company shall deliver to the Holder
through the Conversion Agent a certificate for the number of shares of Company
Stock deliverable upon the conversion and cash or its check in lieu of any
fractional share. The person in whose name the certificate is registered
becomes a stockholder of record on the conversion date and the rights of the
Holder of the Securities so converted as a Holder thereof cease as of such
date.
If the Holder converts more than one Security of any series at the same
time, the number of full shares issuable upon the conversion shall be based on
the total principal amount of the Securities of such series so converted.
Upon surrender of a Security of any series that is converted in part, the
Trustee shall authenticate for the Holder a new Security of that series equal
in principal amount to the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in a
place where a Conversion Agent is located, the Security may be surrendered to
that Conversion Agent on the next succeeding day that is not a Legal Holiday.
The Company will not be required to deliver certificates for shares of
Company Stock upon conversion while the Company's stock transfer books are
closed for a meeting of stockholders or for the payment of dividends or for
any other purpose, but certificates for shares of Company Stock shall be
delivered as soon as the stock transfer books shall again be opened.
Registered Securities of any series surrendered for conversion during the
period from the close of business on any Regular Record Date next preceding
any Interest Payment Date for such series to the opening of business on such
Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a redemption date within such
period) be accompanied by payment in funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of Registered Securities being surrendered for conversion;
provided, that no such payment need be made if there shall exist, at the time
of conversion, a default in the payment of interest on the Securities of such
series. The funds so delivered to the Conversion Agent shall be paid to the
Company on or after such Interest Payment Date unless the Company shall
default on the payment of the interest due on such Interest Payment Date, in
which event such funds shall be paid to the Holder who delivered the same.
Except as provided in the preceding sentence and subject to the penultimate
paragraph of Section 2.13, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Registered Securities
surrendered for conversion or on account of any dividends on the Company Stock
issued upon conversion. If Bearer Securities of a series are convertible into
Company Stock, then such Securities, to be converted, shall be surrendered,
together with all unmatured coupons and all matured coupons in default
appertaining thereto, at the place and in the manner specified for Bearer
Securities of said series as contemplated by Section 2.02.
Section 10.04. Fractional Shares.
The Company will not issue a fractional share of Company Stock upon
conversion of a Security. Instead, the Company will deliver cash or its check
for the current market value of a fractional share. The current market value
of a fractional share is determined as follows: Multiply the current market
price of a full share on the last
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full trading day prior to the conversion date by the fraction (rounded to the
nearest 1/100 of a share) and round the result to the nearest whole cent.
Section 10.05. Taxes on Conversion.
If a Holder of a Security converts it, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the delivery of
shares of Company Stock upon the conversion. The Holder, however, shall pay
any such tax which is due because the shares are issued in a name other than
the Holder's name.
Section 10.06. Company to Provide Stock.
The Company shall from time to time as may be necessary reserve out of its
authorized but unissued Company Stock or Company Stock held in treasury enough
shares of Company Stock to permit the conversion of all outstanding
Securities.
All shares of Company Stock which may be delivered upon conversion of the
Securities shall be validly issued, fully paid and non-assessable and shall be
free from any preemptive rights.
In order that the Company may deliver shares of Company Stock upon
conversion of the Securities, the Company will endeavor to comply with all
applicable Federal and State securities laws and will endeavor to cause such
shares to be listed on each national securities exchange or other stock market
on which other shares of the Company Stock is listed.
Section 10.07. Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on the Company Stock in
shares of Company Stock;
(2) subdivides the outstanding shares of Company Stock into a greater
number of shares;
(3) combines the outstanding shares of Company Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on Company Stock in shares of
its capital stock other than Company Stock; or
(5) issues by reclassification of its shares of Company Stock any shares
of its capital stock,
then the conversion privilege and the conversion price or conversion rate in
effect immediately prior to the opening of business on the record date for
such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the Holder of any
Security thereafter converted may receive the number of shares of capital
stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to
such time. Such adjustment shall be made successively whenever any event
listed above shall occur.
For a dividend or distribution, the adjustment shall become effective
immediately after the record date for the dividend or distribution. For a
subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision, combination
or reclassification.
If after an adjustment a Holder of a Security upon conversion of it may
receive shares of two or more classes of capital stock of the Company, the
conversion prices of the classes of capital stock (after giving effect to such
allocation of the adjusted conversion price between or among the classes of
capital stock as the Board of Directors shall determine to be appropriate) or
the conversion rate, as the case may be, shall thereafter be subject to
adjustment on terms comparable to those applicable to Company Stock in this
Indenture.
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Any shares of Company Stock issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the time of the record date
for such dividend for purposes of calculating the number of outstanding shares
of Company Stock under Sections 10.08 and 10.09 below.
Section 10.08. Adjustment for Rights Issue.
If the Company issues any rights or warrants to all holders of shares of
Company Stock entitling them for a period expiring within 45 days after the
record date mentioned below to purchase shares of Company Stock (or
Convertible Securities) at a price per share (or having a conversion price per
share, after adding thereto an allocable portion of the exercise price of the
right or warrant to purchase such Convertible Securities, computed on the
basis of the maximum number of shares of Company Stock issuable upon
conversion of such Convertible Securities) less than the Average Market Price
on the Determination Date, the conversion price or rate shall be adjusted so
that it shall equal the price or rate determined by multiplying the conversion
price or dividing the conversion rate, as the case may be, in effect
immediately prior to the opening of business on that record date by a
fraction, of which the numerator shall be the number of shares of Company
Stock outstanding on such record date plus the number of shares of Company
Stock which the aggregate offering price of the total number of shares of
Company Stock so offered (or the aggregate conversion price of the Convertible
Securities to be so offered, after adding thereto the aggregate exercise price
of the rights or warrants to purchase such Convertible Securities) would
purchase at such Average Market Price and of which the denominator shall be
the number of shares of Company Stock outstanding on such record date plus the
number of additional shares of Company Stock offered for subscription or
purchase (or into which the Convertible Securities so offered are
convertible). Shares of Company Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
adjustment.
For purposes of this Section 10.08, the number of shares of Company Stock
outstanding on any record date shall be deemed to include (i) the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible Securities
outstanding on such record date which are then exercisable, exchangeable or
convertible at a price equal to or less than the Average Market Price per
share of Company Stock, if all of such Convertible Securities were deemed to
have been exercised, exchanged or converted immediately prior to the opening
of business on such record date and (ii) if the Series B Stock is convertible
into Company Stock, the maximum number of shares of Company Stock the issuance
of which would be necessary to effect the full conversion of all shares of
Series B Stock outstanding on such record date, if all of such shares of
Series B Stock were deemed to have been converted immediately prior to the
opening of business on such record date.
The adjustment shall be made successively whenever any such rights or
warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights or
warrants. If all of the shares of Company Stock (or all of the Convertible
Securities) subject to such rights or warrants have not been issued when such
rights or warrants expire (or, in the case of rights or warrants to purchase
Convertible Securities which have been exercised, all of the shares of Company
Stock issuable upon conversion of such Convertible Securities have not been
issued prior to the expiration of the conversion right thereof), then the
conversion price or conversion rate shall promptly be readjusted to the
conversion price or conversion rate which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the basis
of the actual number of shares of Company Stock (or Convertible Securities)
issued upon the exercise of such rights or warrants (or the conversion of such
Convertible Securities).
No adjustment shall be made under this Section 10.08 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be, in
effect prior to such adjustment.
Section 10.09. Adjustments for Other Distributions.
If the Company distributes to all holders of shares of Company Stock any
assets or debt securities or any rights or warrants to purchase securities,
the conversion price or conversion rate shall be adjusted by multiplying
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the conversion price or dividing the conversion rate, as the case may be, in
effect immediately prior to the opening of business on the record date
mentioned below by a fraction, of which the numerator shall be the total
number of shares of Company Stock outstanding on such record date multiplied
by the Average Market Price on the Determination Date, less the fair market
value (as determined by the Board of Directors) on such record date of said
assets or debt securities or rights or warrants so distributed, and of which
the denominator shall be the total number of shares of Company Stock
outstanding on such record date multiplied by such Average Market Price.
For purposes of this Section 10.09, the number of shares of Company Stock
outstanding on any record date shall be deemed to include (i) the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible Securities
outstanding on such record date which are then exercisable, exchangeable or
convertible at a price equal to or less than the Average Market Price, if all
of such Convertible Securities were deemed to have been exercised, exchanged
or converted immediately prior to the opening of business on such record date
and (ii) if the Series B Stock is convertible into Company Stock, the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full conversion of all shares of Series B Stock outstanding on such
record date, if all of such shares of Series B Stock were deemed to have been
converted immediately prior to the opening of business on such record date.
The adjustment shall be made successively whenever any such distribution is
made, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution. Shares of
Company Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such adjustment.
No adjustment shall be made under this Section 10.09 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be, in
effect prior to such adjustment.
This Section does not apply to cash dividends or distributions. Also, this
Section does not apply to dividends or distributions referred to in Section
10.07 or to rights or warrants referred to in Section 10.08.
Section 10.10. Voluntary Adjustment.
The Company at any time may reduce the conversion price or increase the
conversion rate, temporarily or otherwise, by any amount but in no event shall
such adjusted conversion price or conversion rate result in shares of Company
Stock being issuable upon conversion of the Securities if converted at the
time of such adjustment at an effective conversion price per share less than
the par value of the Company Stock at the time such adjustment is made.
A voluntary adjustment of the conversion price or conversion rate pursuant
to this Section 10.10 does not change or adjust the conversion price or
conversion rate otherwise in effect for purposes of Section 10.07, 10.08 or
10.09. If an event requiring an adjustment to the conversion price or
conversion rate pursuant to Section 10.07, 10.08 or 10.09 occurs at any time
that a voluntary adjustment to the conversion price or conversion rate is in
effect pursuant to this Section 10.10, then the adjustment required by the
applicable of Section 10.07, 10.08 or 10.09 shall be made to the conversion
price or conversion rate that would otherwise have been in effect as of the
relevant date specified in such Section had no voluntary adjustment pursuant
to this Section 10.10 been made, and for purposes of applying such Section,
any such voluntary adjustment shall be disregarded. If such adjustment would
result in a lower conversion price or a higher conversion rate, as the case
may be, than the conversion price or conversion rate as voluntarily adjusted
by the Company, then such lower conversion price or higher conversion rate
shall be the conversion price or conversion rate, as the case may be.
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Section 10.11. Certain Definitions.
For the purposes of this Article, the following terms have the following
meanings:
"Average Market Price" of a share of Company Stock on the Determination
Date for any issuance of rights or warrants or any distribution in respect
of which the Average Market Price is being calculated means the average of
the daily current market prices of the Company Stock for the shortest of:
(i) the period of 30 consecutive trading days commencing 45 trading
days before such Determination Date,
(ii) the period commencing on the date next succeeding the first
public announcement of the issuance of rights or warrants or the
distribution in respect of which the Average Market Price is being
calculated and ending on the last full trading day before such
Determination Date, and
(iii) the period, if any, commencing on the date next succeeding the
Ex-Dividend Date with respect to the next preceding issuance of rights
or warrants or distribution for which an adjustment is required by the
provisions of Section 10.07(4), 10.08 or 10.09, and ending on the last
full trading day before such Determination Date.
If the record date for an issuance of rights or warrants or a
distribution for which an adjustment is required by the provisions of
Section 10.07(4), 10.08 or 10.09 (the "preceding adjustment event")
precedes the record date for the issuance or distribution in respect of
which the Average Market Price is being calculated and the Ex-Dividend Date
for such preceding adjustment event is on or after the Determination Date
for the issuance or distribution in respect of which the Average Market
Price is being calculated, then the Average Market Price shall be adjusted
by deducting therefrom the fair market value (on the record date for the
issuance or distribution in respect of which the Average Market Price is
being calculated), as determined by the Board of Directors, of the capital
stock, rights, warrants, assets or debt securities issued or distributed in
respect of each share of Company Stock in such preceding adjustment event.
Further, in the event that the Ex-Dividend Date (or in the case of a
subdivision, combination or reclassification, the effective date with
respect thereto) with respect to a dividend, subdivision, combination or
reclassification to which Section 10.07(1), (2), (3) or (5) applies occurs
during the period applicable for calculating the Average Market Price, then
the Average Market Price shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such
dividend, subdivision, combination or reclassification on the current
market price of the Company Stock during such period.
"current market price" of a share of Company Stock on any day means the
last reported sale price (or, if no sale price is reported, the average of
the high and low bid prices) on such day on the Nasdaq Stock Market or as
quoted by the National Quotation Bureau Incorporated, or if the Company
Stock is listed on an exchange, on the principal exchange on which the
Company Stock is listed. In the event that no such quotation is available
for any day, the Board of Directors shall be entitled to determine the
current market price on the basis of such quotations as it considers
appropriate.
"Determination Date" for any issuance of rights or warrants or any
distribution to which Section 10.08 or 10.09 applies means the earlier of
(i) the record date for the determination of stockholders entitled to
receive the rights or warrants or the distribution to which such Section
applies and (ii) the Ex-Dividend Date for such rights, warrants or
distribution.
"Ex-Dividend Date" means the date on which "ex-dividend" trading
commences for a dividend, an issuance of rights or warrants or a
distribution to which any of Sections 10.07, 10.08 and 10.09 applies in the
over-the-counter market or on the principal exchange on which the Company
Stock is then quoted or listed.
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Section 10.12. When Adjustment May Be Deferred.
In any case in which this Article shall require that an adjustment shall
become effective immediately after a record date for an event, the Company may
defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such record date and before the occurrence of such
event the additional shares of Company Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the shares of
Company Stock issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such Holder cash or its check in lieu of any
fractional interest to which he is entitled pursuant to Section 10.04;
provided, however, that the Company shall deliver to such Holder a due bill or
other appropriate instrument evidencing such Holder's rights to receive such
additional shares of Company Stock, and such cash, upon the occurrence of the
event requiring such adjustment.
Section 10.13. When Adjustment Is Not Required.
No adjustments in the conversion price or conversion rate need be made
unless the adjustment would require an increase or decrease of at least one
percent (1%) in the initial conversion price or conversion rate. Any
adjustment which is not made shall be carried forward and taken into account
in any subsequent adjustment.
All calculations under this Article shall be made to the nearest cent or to
the nearest 1/100th of a share, as the case may be.
No adjustment in the conversion price or conversion rate shall be made
because the Company issues, in exchange for cash, property or services, shares
of Company Stock, or any securities convertible into or exchangeable for
shares of Company Stock, or securities carrying the right to purchase shares
of Company Stock or such convertible or exchangeable securities.
No adjustment in the conversion price or conversion rate need be made under
this Article for sales of shares of Company Stock pursuant to a Company plan
providing for reinvestment of dividends or interest or in the event the par
value of the Company Stock is changed.
No adjustment in the conversion price or conversion rate need be made for a
transaction referred to in Section 10.07, 10.08 or 10.09 if Securityholders
are to participate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in light of the basis
and notice on which holders of Company Stock participate in the transaction;
provided that the basis on which the Securityholders are to participate in the
transaction shall not be deemed to be fair if it would require the conversion
of Securities at any time prior to the expiration of the conversion period
specified for such Securities.
To the extent the Securities become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
Section 10.14. Notice of Adjustment.
Whenever the conversion price or conversion rate is adjusted, the Company
shall promptly give notice of the adjustment to Securityholders in accordance
with Section 11.02 hereof and file with the Trustee an Officers' Certificate
briefly stating the new conversion price or conversion rate, the date it
becomes effective, the facts requiring the adjustment and the manner of
computing it. The certificate shall be conclusive evidence that the adjustment
is correct.
Section 10.15. Notice of Certain Transactions.
If:
(1) the Company takes any action which would require an adjustment in the
conversion price or conversion rate;
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(2) the Company consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation, and stockholders
of the Company must approve the transaction; or
(3) there is a dissolution or liquidation of the Company,
a Holder of a Security may want to convert it into shares of Company Stock
prior to the record date for, or the effective date of, the transaction so
that he may receive the rights, warrants, securities or assets which a holder
of shares of Company Stock on that date may receive. Therefore, the Company
shall give to the Securityholders and the Trustee in accordance with Section
11.02 a notice stating the proposed record or effective date, as the case may
be. Failure to give the notice or any defect in it shall not affect the
validity of any transaction referred to in clause (1), (2) or (3) of this
Section.
Section 10.16. Consolidation, Merger or Sale of the Company.
If the Company is a party to a transaction described in Section 5.01 or a
merger which reclassifies or changes its outstanding Company Stock, the
Company shall enter into a supplemental indenture. The supplemental indenture
shall provide that the Holder of a Security may convert it into the kind and
amount of securities or cash or other assets which he would have owned
immediately after the consolidation, merger or transfer if he had converted
the Security immediately before the effective date of such transaction,
assuming (to the extent applicable) that such Holder failed to exercise any
rights of election with respect thereto and received per share of Company
Stock the kind and amount of securities, cash or assets received per share by
a plurality of the non- electing shares. The supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Article. The Company shall
give to each Securityholder in accordance with Section 11.02 a notice
describing the supplemental indenture.
If this Section applies, Sections 10.07, 10.08 and 10.09 shall not apply.
Section 10.17. Company Determination Final.
Any determination which the Board of Directors must make pursuant to Section
10.07, 10.09, 10.11, 10.13 or 10.16 is conclusive and binding on the Holders.
Section 10.18. Trustee's and Conversion Agent's Disclaimer.
Neither the Trustee nor any Conversion Agent has any duty to determine when
an adjustment under this Article should be made, how it should be made or what
it should be. Neither the Trustee nor any Conversion Agent has any duty to
determine whether any provisions of a supplemental indenture under Section
10.16 are correct. Neither the Trustee nor any Conversion Agent makes any
representation as to the validity or value of any securities or assets issued
upon conversion of Securities. Neither the Trustee nor any Conversion Agent
shall be responsible for the Company's failure to comply with this Article.
Section 10.19. Simultaneous Adjustments.
In the event that this Article Ten requires adjustments to the conversion
price or conversion rate under more than one of Sections 10.07(4), 10.08 or
10.09, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made
by applying, first, the provisions of Section 10.07, second, the provisions of
Section 10.09 and, third, the provisions of Section 10.08.
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ARTICLE ELEVEN
Miscellaneous
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of TIA (S)(S) 310 to 317, inclusive, through operation
of TIA (S) 318(c), such imposed duties shall control.
Section 11.02. Notices.
Any notice or communication (including any Act of Holders) shall be
sufficiently given if in writing and delivered in person or mailed by first-
class mail addressed as follows:
If to the Company:
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
If to the Trustee:
Attention:
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Except as otherwise expressly provided herein or otherwise specified with
respect to any series of Securities issuable as Bearer Securities pursuant to
Section 2.02, where this Indenture provides for notice to Holders of
Securities of any event:
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security 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; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities if published in an Authorized Newspaper in the City of New York
and in such other city or cities as may be specified in such Securities on
a Business Day at least twice, the first such publication to be not earlier
than the earliest date, and not later than the latest date, prescribed for
the giving of such notice (except that, for purposes of Section 2.05,
notice of the appointment of a successor Authenticating Agent shall be
sufficiently given to Holders of Bearer Securities if published as provided
herein at least once.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice to Holders of
Registered Securities by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for
every purpose hereunder. 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 of a Registered
Security 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.
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In case 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 Holders of Bearer Securities as provided above,
nor any defect in any notice so published, shall affect the sufficiency of any
notice to Holders of Registered Securities given as provided herein.
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 equivalent of such notice.
Waivers of notice by Holders of Securities 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.
Except for a notice to the Trustee, which is deemed given only when
received, if a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it. Any notice or
communication published in the manner provided above shall be deemed to have
been given on the date of publication or, if published more than once, on the
date of the first such publication.
Any notice or communication required or permitted under this Indenture shall
be in the English language, except that any published notice may be in the
official language of the country of publication.
Section 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent (including any covenants compliance with which
constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent (including any covenants compliance with
which constitutes a condition precedent) have been complied with.
Section 11.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture other than
certificates provided pursuant to Section 4.07 shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(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 such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
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Section 11.06. When Treasury Securities Disregarded.
In determining whether the Holders of the required aggregate principal
amount of outstanding Securities of any series have given any request, demand,
authorization, direction, notice, consent or waiver or taken any other action
hereunder, Securities of such series owned by the Company or by any Affiliate
of the Company shall be disregarded and deemed not to be outstanding, except
that for the purpose of determining whether the Trustee shall be protected in
relying on such request, demand, authorization, direction, notice, consent,
waiver or action, only Securities of such series which the Trustee actually
knows are so owned shall be so disregarded. Securities so owned that have been
pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right to so act
with respect to such Securities and that the pledgee is not the Company or any
Affiliate of the Company.
Section 11.07. Rules by Trustee and Agents.
Subject to Section 11.15 and Article Twelve, the Trustee may make reasonable
rules for action by or a meeting of Securityholders of all series or any
series. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules for its functions.
Section 11.08. Legal Holidays.
A "Legal Holiday" with respect to any place of payment or conversion or
other location is a Saturday, a Sunday or a day on which banking institutions
or trust companies in that place of payment, conversion or other location are
not authorized or required to be open. If a payment date or the last day to
convert a Security is a Legal Holiday at a place of payment or conversion,
payment or conversion may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest or original issue discount, as
the case may be, shall accrue for the intervening period.
Section 11.09. Governing Law.
The internal laws of the State of New York shall govern this Indenture, the
Securities and coupons.
Section 11.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 11.11. No Recourse Against Others.
No past, present or future director, officer, employee or stockholder, as
such, of the Company or the Trustee or any successor of either thereof shall
have any liability for any obligations of the Company or the Trustee under the
Securities or any coupons appertaining thereto or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation and all such liability is hereby waived and released. Such waiver and
release are part of the consideration for the issue of the Securities.
Section 11.12. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 11.13. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
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Section 11.14. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 11.15. 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 may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent 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 Article Twelve, 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 and 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 (subject to Section
7.01) 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. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 12.06.
(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. 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 manner which the
Trustee deems sufficient.
(c) The ownership, principal amount and serial numbers of outstanding
Registered Securities held by any person, and the date of holding the same,
shall be proved by the security register.
(d) The ownership, principal amount and serial numbers of outstanding Bearer
Securities held by any person, and the date of holding the same, 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 to it, 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 Securities 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, principal amount and serial numbers of outstanding
Bearer Securities held by any person, and the date of holding the same, may
also be proved in any other manner which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated to),
by or pursuant to a resolution of the Board of Directors, fix in advance a
record date for the determination of
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Holders of Registered Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act.
Notwithstanding TIA (S) 316(c), such record date shall be the record date
specified in or pursuant to such resolution of the Board of Directors, which
shall be a date not earlier than 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 Registered
Securities of record at the close of business on such record date shall be
deemed to be Holders for the purpose 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 of Registered Securities 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.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind such Holder and 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 Agent or the Company in reliance thereon, whether or not notation
of such action is made upon such Security.
ARTICLE TWELVE
Meetings of Holders of Securities
Section 12.01. Purposes for which Meetings may be Called.
If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
Section 12.02. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 12.01, to be held at such time
and at such place in the Borough of Manhattan, the City of New York, or in
London as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 11.02, not less than 21 nor more than
180 days prior to the date for the meeting.
(b) In case at any time the Company pursuant to a resolution of the Board of
Directors or the Holders of at least 10% of the aggregate principal amount of
outstanding Securities of any series shall have requested the Trustee to call
a meeting of the Holders of Securities of such series for any purpose
specified in Section 12.01, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall
not have made the first publication of the notice of such meeting within 21
days after receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, the Company or the Holders of
Securities of such series in the amount above specified, as the case may be,
may determine the time and the place in the Borough of Manhattan, the City of
New York, or in London for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a) of this
Section.
Section 12.03. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a person shall be (1) a Holder of one or more outstanding Securities
of such series, or (2) a person appointed by an instrument in writing as
60
<PAGE>
proxy for a Holder or Holders of one or more outstanding Securities of such
series by such Holder or Holders. The only persons who shall be entitled to be
present or to speak at any meeting of Holder of Securities of any series shall
be the persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 12.04. Quorum; Action.
The persons entitled to vote a majority of the aggregate principal amount of
the outstanding Securities of a series shall constitute a quorum for a meeting
of Holders of Securities of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than
10 days as determined by the chairman of the meeting prior to the adjournment
of such meeting. In the absence of a quorum at any such adjourned meeting,
such adjourned meeting may be further adjourned for a period of not less than
10 days as determined by the chairman of the meeting prior to the adjournment
of such adjourned meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 12.02(a), except that such notice shall
be given only once not less than five days prior to the date on which the
meeting is scheduled to be reconvened.
Except as limited by the third sentence of Section 9.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in aggregate principal amount of the outstanding Securities of
that series; provided, however, that, except as limited by the third sentence
and of Section 9.02, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which this
Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in aggregate principal
amount of the outstanding Securities of a series, may be adopted at a meeting
or an adjourned meeting duly reconvened at which a quorum is present as
aforesaid, by the affirmative vote of the Holders of such specified percentage
in aggregate principal amount of the outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related
coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 12.04, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage in aggregate principal
amount of all outstanding Securities affected thereby, or of the Holders of
such series and one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting; and
(ii) the principal amount of the outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
Section 12.05. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 11.15 and the appointment of any proxy shall be proved in the
manner specified in
61
<PAGE>
Section 11.15 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 11.15 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof specified in Section
11.15 or other proof.
(b) The Trustee shall by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 12.02(b), in which
case the Company or the Holders of Securities of the series calling the
meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall
be elected by vote of the persons entitled to vote a majority of the aggregate
principal amount of the outstanding Securities of such series represented at
the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of the outstanding
Securities of such series held or represented by him, provided, however, that
no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 12.02 at which a quorum is present may be adjourned from time to
time by persons entitled to vote a majority of the aggregate principal amount
of the outstanding Securities of such series represented at the meeting and
the meeting may be held as so adjourned without further notice.
Section 12.06. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amount and serial numbers of
the outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record, at
least in duplicate, of the proceedings of each meeting of Holders of
Securities of any series shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was given as provided in
Section 12.02 and, if applicable, Section 12.04. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company, and another to
the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
62
<PAGE>
Signatures
Dated:
Tele-Communications, Inc
By __________________________________
(Seal)
Attest:
Dated:
By __________________________________
(Seal)
Attest:
63
<PAGE>
EXHIBIT 4.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELE-COMMUNICATIONS, INC.
AND
,
TRUSTEE
----------------
INDENTURE
DATED AS OF ,
----------------
SENIOR SUBORDINATED DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
<C> <S> <C>
310 (a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.
(a)(4).............................................. N.A.
(a)(5).............................................. 7.10
(b)................................................. 7.08; 7.10; 12.02
(c)................................................. N.A.
311 (a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312 (a)................................................. 2.07
(b)................................................. 12.03
(c)................................................. 12.03
313 (a)................................................. 7.06
(b)(1).............................................. N.A.
(b)(2).............................................. 7.06
(c)................................................. 12.02
(d)................................................. 7.06
314 (a)................................................. 4.02; 4.03; 12.02
(b)................................................. N.A.
(c)(1).............................................. 12.04
(c)(2).............................................. 12.04
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 12.05
(f)................................................. N.A.
315 (a)................................................. 7.01(b)
(b)................................................. 7.05; 12.02
(c)................................................. 7.01(a)
(d)................................................. 7.01(c)
(e)................................................. 6.11
316 (a)(last sentence).................................. 12.06
(a)(1)(A)........................................... 6.05
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
317 (a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.06
318 (a)................................................. 12.01
</TABLE>
- --------
N.A. means Not Applicable.
2
<PAGE>
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE ONE
Definitions and Incorporation by Reference
1.01. Definitions...................................................... 7
1.02. Other Definitions................................................ 9
1.03. Incorporation by Reference of Trust Indenture Act................ 9
1.04. Rules of Construction............................................ 9
ARTICLE TWO
The Securities
2.01. Forms Generally and Dating....................................... 9
2.02. Amount Unlimited; Issuable in Series............................. 10
2.03. Denominations.................................................... 12
2.04. Execution and Authentication..................................... 12
2.05. Registrar, Paying Agent and Conversion Agent..................... 14
2.06. Paying Agent to Hold Money and Securities in Trust............... 14
2.07. Securityholder Lists............................................. 14
2.08. Transfer and Exchange............................................ 14
2.09. Replacement Securities........................................... 16
2.10. Outstanding Securities........................................... 16
2.11. Temporary Securities............................................. 17
2.12. Cancellation..................................................... 17
2.13. Payment of Interest; Defaulted Interest.......................... 17
2.14. Persons Deemed Owners............................................ 18
2.15. Securities in Global Form........................................ 18
ARTICLE THREE
Redemption
3.01. Applicability of Article......................................... 19
3.02. Notices to Trustee............................................... 19
3.03. Selection of Securities to be Redeemed........................... 19
3.04. Notice of Redemption............................................. 20
3.05. Effect of Notice of Redemption................................... 20
3.06. Deposit of Redemption Price...................................... 20
3.07. Securities Redeemed in Part...................................... 21
3.08. Conversion Arrangement on Call For Redemption.................... 21
ARTICLE FOUR
Covenants
4.01. Payment of Securities............................................ 21
4.02. SEC Reports...................................................... 21
4.03. Compliance Certificate........................................... 22
4.04. Corporate Existence.............................................. 22
4.05. Securities Senior to Junior Subordinated Debt.................... 22
4.06. Limitation on Subordinated Debt Senior to the Securities......... 23
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE FIVE
Successor Corporation
5.01. When Company May Merge, etc...................................... 23
ARTICLE SIX
Defaults and Remedies
6.01. Events of Default................................................ 23
6.02. Acceleration..................................................... 24
6.03. Other Remedies................................................... 24
6.04. Waiver of Existing Defaults...................................... 25
6.05. Control by Majority.............................................. 25
6.06. Limitation on Suits.............................................. 25
6.07. Rights of Holders to Receive Payment and to Convert.............. 25
6.08. Collection Suit by Trustee....................................... 26
6.09. Trustee May File Proofs of Claim................................. 26
6.10. Priorities....................................................... 26
6.11. Undertaking for Costs............................................ 26
ARTICLE SEVEN
Trustee
7.01. Duties of Trustee................................................ 26
7.02. Rights of Trustee................................................ 27
7.03. Individual Rights of Trustee..................................... 27
7.04. Trustee's Disclaimer............................................. 27
7.05. Notice of Defaults............................................... 28
7.06. Reports by Trustee to Holders.................................... 28
7.07. Compensation and Indemnity....................................... 28
7.08. Replacement of Trustee........................................... 28
7.09. Successor Trustee by Merger, etc................................. 29
7.10. Eligibility; Disqualification.................................... 29
7.11. Preferential Collection of Claims Against Company................ 29
ARTICLE EIGHT
Discharge of Indenture
8.01. Termination of Company's Obligations............................. 29
8.02. Application of Trust Fund........................................ 30
8.03. Repayment to Company............................................. 30
ARTICLE NINE
Amendments, Supplements and Waivers
9.01. Without Consent of Holders....................................... 30
9.02. With Consent of Holders.......................................... 31
9.03. Compliance with Trust Indenture Act.............................. 32
9.04. Revocation and Effect of Consents................................ 32
9.05. Notation on or Exchange of Securities............................ 32
9.06. Trustee to Sign Amendments, etc. ................................ 32
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE TEN
Subordination
10.01. Securities Subordinated to Senior Debt........................... 32
Company Not to Make Payments with Respect to Securities in
10.02. Certain Circumstances............................................ 33
10.03. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation or Reorganization of Company........... 33
Securityholders to be Subrogated to Right of Holders of Senior
10.04. Debt............................................................. 34
10.05. Obligation of the Company Unconditional.......................... 34
Trustee Entitled to Assume Payments Not Prohibited in Absence of
10.06. Notice........................................................... 35
Application by Trustee of Monies or U.S. Government Obligations
10.07. Deposited with It................................................ 35
10.08. Subordination Rights Not Impaired by Acts or Omissions of Company
or Holders of Senior Debt....................................... 36
Securityholders Authorize Trustee to Effectuate Subordination of
10.09. Securities....................................................... 36
10.10. Right of Trustee to Hold Senior Debt............................. 36
10.11. Article Ten Not to Prevent Events of Default..................... 36
ARTICLE ELEVEN
Conversion
11.01. Applicability of Article......................................... 36
11.02. Conversion Privilege............................................. 37
11.03. Conversion Procedure............................................. 37
11.04. Fractional Shares................................................ 38
11.05. Taxes on Conversion.............................................. 38
11.06. Company to Provide Stock......................................... 38
11.07. Adjustment for Change in Capital Stock........................... 38
11.08. Adjustment for Rights Issue...................................... 39
11.09. Adjustments for Other Distributions.............................. 40
11.10. Voluntary Adjustment............................................. 40
11.11. Certain Definitions.............................................. 41
11.12. When Adjustment May Be Deferred.................................. 42
11.13. When Adjustment Is Not Required.................................. 42
11.14. Notice of Adjustment............................................. 42
11.15. Notice of Certain Transactions................................... 43
11.16. Consolidation, Merger or Sale of the Company..................... 43
11.17. Company Determination Final...................................... 43
11.18. Trustee's Disclaimer............................................. 43
11.19. Simultaneous Adjustments......................................... 43
ARTICLE TWELVE
Miscellaneous
12.01. Trust Indenture Act Controls..................................... 44
12.02. Notices.......................................................... 44
12.03. Communication by Holders with Other Holders...................... 44
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
12.04. Certificate and Opinion as to Conditions Precedent............... 44
12.05. Statements Required in Certificate or Opinion.................... 45
12.06. When Treasury Securities Disregarded............................. 45
12.07. Rules by Trustee and Agents...................................... 45
12.08. Legal Holidays................................................... 45
12.09. Governing Law.................................................... 45
12.10. No Adverse Interpretation of Other Agreements.................... 45
12.11. No Recourse Against Others....................................... 45
12.12. Successors....................................................... 46
12.13. Duplicate Originals.............................................. 46
12.14. Table of Contents, Headings, etc. ............................... 46
Signatures................................................................ 47
</TABLE>
6
<PAGE>
INDENTURE dated as of , , between TELE-COMMUNICATIONS, INC., a
Delaware corporation ("Company"), and ("Trustee").
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured senior
subordinated debentures, notes, bonds or other evidences of subordinated
indebtedness ("Securities"), to be issued in one or more series as provided in
this Indenture.
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the respective Holders from time to time of
Securities or of series thereof:
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
Affiliate of any person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person.
Agent means any Registrar, Paying Agent, co-Registrar or Conversion Agent.
See Section 2.05.
Board of Directors means the Board of Directors of the Company or any
authorized committee thereof.
Business Day means any day which is not a Legal Holiday.
Company means Tele-Communications, Inc., a Delaware corporation, until a
successor replaces it pursuant to the applicable provisions of this Indenture
and thereafter means the successor.
Company Stock means the Tele-Communications, Inc. Series A TCI Group Common
Stock, $1.00 par value, as it exists on the date of this Indenture and any
other capital stock into which such Series A TCI Group Common Stock may
thereafter have been changed.
Convertible Securities means any or all options, warrants, securities and
rights, except the Series B Stock and the Securities, which are convertible
into or exercisable or exchangeable for Company Stock or which otherwise
entitle the holder thereof to subscribe for, purchase or otherwise acquire
Company Stock.
Default means any event which is, or after notice or passage of time or both
would be, an Event of Default.
Holder or Securityholder means the person in whose name a Security is
registered on the Registrar's books.
Indenture means this Indenture as amended or supplemented from time to time
and, unless the context indicates otherwise, shall include the form and terms
of a particular series of Securities established as contemplated hereunder.
interest, when used with respect to an Original Issue Discount Security
which by its terms bears interest only after maturity or upon default in any
other payment due on such Security, means interest payable after maturity or
upon such a default, as the case may be.
Interest Payment Date means the date, if any, specified in the Securities of
any series as the fixed date on which any installment of interest on the
Securities of that series is due and payable.
Officer means the Chairman of the Board, the President, any Vice President,
the Treasurer or the Secretary of the Company.
Officers' Certificate means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company
and delivered to the Trustee. See Sections 12.04 and 12.05.
7
<PAGE>
Opinion of Counsel means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 12.04 and 12.05.
original issue discount of any debt security, including any Original Issue
Discount Security, means the difference between the principal amount of such
debt security and the initial issue price of such debt security (as set forth,
in the case of an Original Issue Discount Security, on the face of such
Security).
Original Issue Discount Security means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon
acceleration of the maturity thereof pursuant to Section 6.02.
principal of a debt security, including any Security, means the amount
(including, without limitation, if and to the extent applicable, any premium
and, in the case of an Original Issue Discount Security, any accrued original
issue discount, but excluding interest) that is payable with respect to such
debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Company, upon any purchase or exchange at the option of the
Company or the holder of such debt security and upon any acceleration of the
maturity of such debt security).
principal amount of a debt security, including any Security, means the
principal amount as set forth on the face of such debt security.
Regular Record Date means the date, if any, specified in the Securities of
any series as the record date for the determination of Securityholders to whom
interest is payable on the next succeeding Interest Payment Date.
SEC means the Securities and Exchange Commission.
Securities means the Securities that are issued from time to time in one or
more series under this Indenture as such Securities are amended or
supplemented from time to time.
Series B Stock means the Tele-Communications, Inc. Series B TCI Group Common
Stock, $1.00 par value, of the Company as it exists on the date of this
Indenture and stock of any other class into which such Series B TCI Group
Common Stock may thereafter have been changed.
Subsidiary means a corporation a majority of whose voting stock is owned by
the Company and/or one or more Subsidiaries. Voting stock is capital stock
having voting power under ordinary circumstances to elect directors.
TIA means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-77bbbb)
as in effect on the date of this Indenture, except as provided in Section
9.03.
Trustee means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor and if at any time there is
more than one such party, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
Trust Officer means an officer or assistant officer in the Corporate Trust
Administration department of the Trustee assigned by the Trustee to administer
its corporate trust matters.
United States means the United States of America.
U.S. Government Obligations means direct obligations of, or obligations
entitled to the full faith and credit of, the United States of America.
8
<PAGE>
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
Average Market Price.......................................... 11.11
Bankruptcy Law................................................ 6.01
Code.......................................................... 9.01
Conversion Agent.............................................. 2.05
current market price.......................................... 11.11
Custodian..................................................... 6.01
Debt.......................................................... 10.01
Determination Date............................................ 11.11
Event of Default.............................................. 6.01
Ex-Dividend Date.............................................. 11.11
Junior Subordinated Debt...................................... 4.05
Legal Holiday................................................. 12.08
Paying Agent.................................................. 2.05
Registrar..................................................... 2.05
Senior Debt................................................... 10.01
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
Commission means the SEC.
indenture securities means the Securities.
indenture security holder means a Securityholder.
indenture to be qualified means this Indenture.
indenture trustee or institutional trustee means the Trustee.
obligor on the indenture securities means the Company and any other
obligor thereon.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires;
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles in effect on
the date of this Indenture;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the plural include
the singular.
ARTICLE TWO
The Securities
Section 2.01. Forms Generally and Dating.
The Securities of each series may be issued in whole or in part in the form
of one or more global Securities as shall be specified as contemplated by
Section 2.02. The Securities of each series (including any temporary
9
<PAGE>
global Securities) shall be in one of the forms established from time to time
by or pursuant to a resolution of the Board of Directors or in or pursuant to
one or more indentures supplemental hereto, which shall set forth the
information required by Section 2.02. The Securities shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or by a resolution of the Board of
Directors and may have such notations, legends or endorsements as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required by law, stock exchange rule or usage. The
Company shall approve the form or forms of the Securities and any notation,
legend or endorsement on them. If the form or forms of Securities of any
series is established by action taken pursuant to a resolution of the Board of
Directors or indenture supplemental hereto, a copy of an appropriate record of
such action 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
written order of the Company contemplated by Section 2.04 for the
authentication and delivery of such Securities.
Each Security shall be dated the date of its authentication. The form of the
Trustee's certificate of authentication to be borne by the Securities shall be
substantially as follows:
CERTIFICATE OF AUTHENTICATION
The undersigned certifies that this is one of the Securities of the series
designated herein referred to in the within-mentioned Indenture.
,
as Trustee
By___________________________________
Authorized Officer
Section 2.02. 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 or pursuant to a resolution of the Board of Directors or
established in or pursuant to one or more indentures supplemental hereto,
prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish
Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of Securities of the
series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.08, 2.09, 2.11, 3.07, or 9.05 and except for
any Securities which pursuant to Section 2.04 are deemed not to have been
authenticated and delivered hereunder);
(3) (A) whether any of the Securities of the series are to be issuable in
global form and, if so, (i) the identity of the depositary with respect to
any such global Security and (ii) whether beneficial owners of interests in
any such global Security may exchange such interests for Securities of the
same series and of like tenor and of any authorized form and denomination,
and, if so, the circumstances under which and the manner in which any such
exchanges may occur, if other than as specified in Section 2.08; (B) if any
of the Securities of the series are to be issuable in global form, the date
as of which any global Security shall be
10
<PAGE>
dated (if other than the date of original issuance of the first of such
Securities to be issued); and (C) if Securities of the series are to be
issuable in definitive form (whether upon original issue, upon exchange of
a temporary Security of such series, or in exchange for a beneficial
ownership interest in a permanent global Security) only upon receipt of
certain certificates or other documents or satisfaction of other
conditions, or if Securities of the series are initially issuable in
temporary global form and if owners of beneficial interests therein may
exchange such interest for an interest in a permanent global Security 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;
(4) the date or dates (and whether fixed or extendible) on which the
principal of Securities of the series is payable;
(5) the rate or rates at which Securities of the series shall bear
interest, or the method of determining the same, if any, the date or dates
from which such interest shall accrue, the Interest Payment Dates and the
Regular Record Dates;
(6) the place or places where the principal of and any interest on
Securities of the series shall be payable;
(7) any provisions relating to the issuance of Securities of such series
at an original issue discount (including, without limitation, the issue
price thereof, the rate or rates at which such original issue discount
shall accrue, if any, and the date or dates from or to which or period or
periods during which such original issue discount shall accrue at such rate
or rates);
(8) the price or prices at which, the period or periods within which and
the terms and conditions upon which Securities of the series may be
redeemed or otherwise purchased, in whole or in part, at the option of the
Company, pursuant to any sinking fund or otherwise (including, without
limitation, the form or method or payment thereof if other than in cash);
(9) the obligation, if any, of the Company to redeem, purchase or repay
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Securityholder thereof and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Securities of the series shall be redeemed, purchased
or repaid, in whole or in part, pursuant to such obligation (including,
without limitation, the form or method of payment thereof if other than in
cash);
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(11) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section
6.02 or provable in bankruptcy pursuant to Section 6.09, or, if applicable,
which is convertible in accordance with Article Eleven;
(12) any Events of Default with respect to the Securities of a particular
series in lieu of or in addition to those set forth herein and the remedies
therefor;
(13) the obligation, if any, of the Company to permit the conversion of
Securities of such series into Company Stock and the terms and conditions
upon which such conversion shall be effected (including, without
limitation, the initial conversion price or rate, the conversion period and
any other provision in addition to or in lieu of those set forth in this
Indenture relative to such obligation); and
(14) any other terms of a particular series and any other provisions
expressing or referring to the terms and conditions upon which the
Securities of that series are to be issued under the Indenture, which terms
and provisions are not in conflict with the provisions of this Indenture;
provided, however, that the addition to or subtraction from or variation of
Articles Four, Five, Six, Eight and Eleven (and Sections 1.01 and 1.02,
insofar as they relate to the definition of certain terms as used in such
Articles) with regard to the Securities of a particular series shall not be
deemed to constitute a conflict with the provisions of those Articles.
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All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to such
resolution of the Board of Directors or in any such indenture supplemental
hereto. Not all Securities of any one series need be issued at the same time,
and, unless otherwise so provided, a series may be reopened for issuances of
additional Securities of such series.
If any of the terms of the Securities of a series are established by action
taken pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee with an Officers' Certificate setting forth the terms
or the manner of determining the terms of the Securities of such series. With
respect to Securities of a series which are not to be issued at one time, such
resolution of the Board of Directors or action may provide general terms or
parameters for Securities of such series and provide either that the specific
terms of particular Securities of such series shall be specified in a written
order of the Company or that such terms shall be determined by the Company or
its agents in accordance with a written order of the Company as contemplated
by the proviso clause of the fourth paragraph of Section 2.04.
Section 2.03. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
2.02. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
Section 2.04. Execution and Authentication.
Two Officers shall sign the Securities for the Company by facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds the office at
the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be entitled to any benefit under this Indenture or be
valid for any purpose until the Trustee manually signs the certificate of
authentication on the Security. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture. Notwithstanding
the foregoing, if any Security shall have been duly 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 2.12 together with a written statement (which need not comply with
Section 12.04 and 12.05 and need not be accompanied by an Opinion of Counsel)
stating that such Security has not been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed not to have been
authenticated and delivered hereunder and shall not be entitled to the
benefits of this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, and the Trustee shall authenticate
and deliver said Securities to or upon the written order of the Company,
signed by two Officers or by an Officer and an Assistant Treasurer of the
Company, without any further action by the Company. Such written order shall
specify the date on which said Securities shall be authenticated; provided,
however, that if not all the Securities of a series are to be issued at one
time and if the resolution of the Board of Directors or indenture supplemental
hereto establishing such series as contemplated by Sections 2.01 and 2.02
shall so permit, such written order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and for determining the form or
terms of particular Securities of such series including, but not limited to,
interest rate, maturity date, date of issuance and date from which interest
shall accrue.
If the form or forms or terms of the Securities of the series have been
established in or pursuant to one or more resolutions of the Board of
Directors or indentures supplemental hereto as permitted by Sections 2.01 and
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2.02, 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 Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating:
(1) if the form or forms of such Securities has been established by or
pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, that such form or forms has been established in
conformity with the provisions of the Indenture;
(2) if the terms of such Securities have been established by or pursuant
to a resolution of the Board of Directors or indenture supplemental hereto,
that such terms have been established in conformity with the provisions of
the Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization and other laws of general applicability relating to or
affecting the enforcement of creditors' rights and to general equitable
principles;
provided, however, that, with respect to Securities of a series which are not
to be issued at one time, the Trustee shall be entitled to receive such
Opinion of Counsel only once at or prior to the time of the first
authentication of Securities of such series and that the opinions described in
clauses (2) and (3) above may state, respectively,
(a) that, when the terms of such Securities shall have been established
pursuant to a written order of the Company or pursuant to such procedures
as may be specified from time to time by a written order of the Company,
all as contemplated by and in accordance with a resolution of the Board of
Directors or an Officers' Certificate pursuant to a resolution of the Board
of Directors or indenture supplemental hereto, as the case may be, such
terms will have been established in conformity with the provisions of this
Indenture; and
(b) that such Securities, when (i) executed by the Company, (ii)
completed, authenticated and delivered by the Trustee in accordance with
this Indenture, (iii) issued and delivered by the Company and (iv) paid
for, all as contemplated by and in accordance with the aforesaid written
order of the Company or specified procedures, as the case may be, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors' rights
and general equitable principles.
Notwithstanding the provisions of Sections 2.01, 2.02, 12.04 and this
Section, if all the Securities of a series are not to be originally issued at
one time, the resolution of the Board of Directors or indenture supplemental
hereto, the certified copy of the record of action taken pursuant to such
resolution or supplemental indenture, the Officers' Certificate, the written
order of the Company and any other documents otherwise required pursuant to
such Sections need not be delivered to or prior to the time of authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued; provided, however, that any subsequent request by the Company to
the Trustee to authenticate Securities of such series shall constitute a
representation and warranty by the Company that as of the date of such
request, the statements, made in the Officers' Certificate delivered pursuant
to Section 12.04 at or prior to authentication of the first such Security
shall be true and correct on the date thereof.
The Trustee shall have the right to decline to authenticate and make
available for delivery any Securities under this Section if the issuance of
such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
With respect to Securities of a series which are not all issued at one time,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel,
Officers' Certificate
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and other documents delivered pursuant to Sections 2.01, 2.02, 12.04 and this
Section, as applicable, at or prior to the time of the first authentication of
Securities of such series unless and until such opinion, certificate or other
documents have been superseded or revoked. In connection with the
authentication and delivery of Securities of a series which are not all issued
at one time, the Trustee shall be entitled to assume that the Company's
instructions to authenticate and deliver such Securities do not violate any
rules, regulations or orders of any governmental agency or commission having
jurisdiction over the Company.
Section 2.05. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain an office or agency where Securities of each
series may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities of each series may be
presented for payment ("Paying Agent") and an office or agency where
Securities of each series that is convertible may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities of
each series issued hereunder and of their transfer and exchange. The Company
may have one or more co-Registrars (provided that there shall be only one
register, which shall be maintained by the principal Registrar), one or more
additional paying agents and one or more additional conversion agents with
respect to any series. The term "Paying Agent" includes any additional paying
agent and the term "Conversion Agent" includes any additional conversion
agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify
the Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act
as such.
The Company initially appoints the Trustee as Registrar and Paying Agent for
each series and a Conversion Agent for any series that is convertible.
Section 2.06. Paying Agent to Hold Money and Securities in Trust.
Subject to Section 10.07, each Paying Agent shall hold in trust for the
benefit of Securityholders of the relevant series or the Trustee all money and
securities held by the Paying Agent for the payment of any amount in respect
of the Securities of such series, and shall notify the Trustee of any default
by the Company in making any such payment. If the Company or a Subsidiary acts
as Paying Agent, it shall segregate such money and securities and hold them as
a separate trust fund. The Company at any time may require a Paying Agent to
pay all money and securities held by it to the Trustee and account for any
fund or securities disbursed. Upon doing so the Paying Agent shall have no
further liability for the money or securities.
Section 2.07. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before either (1) April 1 and October 1 in each
year in the case of Original Issue Discount Securities of any series which by
their terms do not bear interest prior to maturity (other than upon a default
in any payment upon such a Security) or (2) the Interest Payment Date for the
Securities of any other series, but in no event less frequently than semi-
annually, and at such other times as the Trustee may request in writing a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders.
Section 2.08. Transfer and Exchange.
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if its requirements for such transfer are met. Where Securities are
presented in the Registrar or a co-Registrar with a request to exchange them
for an equal aggregate principal amount of Securities of the same series of
other authorized denominations, the Registrar shall make the exchange
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as requested if its requirements for such exchange are met. The Registrar
shall require, among other things, that any Security presented or surrendered
for transfer or exchange be duly endorsed, or be accompanied by appropriate
transfer documents duly executed, by the Holder thereof or his attorney duly
authorized in writing. To permit transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. Any exchange or transfer
shall be without charge, except that the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto.
The Registrar need not transfer or exchange any Security selected for
redemption or purchase (except, in the case of Securities to be redeemed or
purchased in part, the portion thereof not to be redeemed or purchased) or any
Security in respect of which a notice requiring the purchase or redemption
thereof by the Company at the option of the Holder has been given and not
withdrawn by the Holder thereof in accordance with the terms of such
Securities (except, in the case of Securities to be so purchased or redeemed
in part, the portion thereof not to be so purchased or redeemed), or transfer
or exchange Securities of any particular series during a period of 15 days
before a selection of Securities of such series to be redeemed.
Except as otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, a global Security may be exchanged only as
provided below in this Section.
If at any time the depositary with respect to a global Security representing
all or a portion of the Securities of or within a series notifies the Company
that it is unwilling, unable or ineligible to continue as such depositary, the
Company shall appoint a successor depositary with respect to such Securities.
Unless otherwise provided with respect to a series of Securities as
contemplated by Section 2.02, if a successor depositary is not so appointed by
the Company within 90 days after the Company receives such notice, the Company
will execute and the Trustee, upon receipt of a written order of the Company
as contemplated by Section 2.04 for the authentication and delivery of
definitive Securities of such series (or, if such written order has previously
been delivered, then upon receipt of written instructions from the person or
persons specified in such written order), will authenticate and deliver
Securities of such series in definitive form equal in aggregate principal
amount to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more global Securities
shall no longer be represented by such global Security or Securities. In such
event the Company will execute and the Trustee, upon receipt of a written
order of the Company as contemplated by Section 2.04 for the authentication
and delivery of definitive Securities of such series (or, if such written
order has previously been delivered, then upon receipt of written instructions
from the person or persons specified in such written order), will authenticate
and deliver Securities of such series in definitive form equal in aggregate
principal amount to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
If a global Security is otherwise exchangeable as specified by the Company
pursuant to Section 2.02(3) with respect to a series of Securities, the
depositary with respect to a global Security representing all or a portion of
the Securities of or within such series may surrender such global Security to
the Trustee, as the Company's agent for such purpose, to be exchanged in whole
or in part for Securities of such series in definitive form in the manner and
under the circumstances so specified and on such terms as are acceptable to
the Company and such depositary. In such event, the Company shall execute and
the Trustee shall authenticate and deliver or make available for delivery:
(i) to each Person specified by such depositary a new Security or
Securities of the same series and of like tenor, of any authorized form and
denomination as requested by such Person in aggregate principal amount
equal to and in exchange for such Person's beneficial interest in the
global Security; and
(ii) unless endorsement of the surrendered global Security as
contemplated by Section 2.15 or another procedure is specified for the
Securities of such series as contemplated by Section 2.02, to such
depositary a new global Security in a denomination equal to the difference,
if any, between the principal amount of the
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surrendered global Security and the aggregate principal amount of
Securities delivered pursuant to clause (i) above in exchange for
beneficial interests in such surrendered global Security.
In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities
in definitive registered form in authorized denominations.
Upon the exchange of a global Security for Securities in definitive form,
such global Security shall be cancelled by the Trustee, unless endorsement of
the surrendered global Security as contemplated by Section 2.15 or another
procedure is specified for the Securities of such series as contemplated by
Section 2.02. Securities issued in exchange for a global Security pursuant to
this Section shall be registered in such names and in such authorized
denominations as the depositary for such global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the persons
in whose names such Securities are so registered.
If a Security is issued in exchange for any portion of a global Security
after the close of business at the office or agency where such exchange occurs
(i) on any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) on any special
record date and before the opening of business at such office or agency on the
related 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
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 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.
Section 2.09. Replacement Securities
If a mutilated Security is surrendered to the Registrar or if the Holder of
a Security claims that the Security has been lost, destroyed or wrongfully
taken, then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall issue
and the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer
if a Security is replaced. The Company may charge for its expenses in
replacing a Security. Every replacement Security is an additional obligation
of the Company.
In case any such lost, destroyed or wrongfully-taken Security has become or
is about to become due and payable, or is about to be purchased by the Company
pursuant to any provision of the Securities of such series providing for the
purchase thereof at the option of the Holder or the Company, the Company in
its discretion may, instead of issuing a new Security, pay or purchase such
Security.
Section 2.10. Outstanding Securities
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section as not being outstanding. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
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If the Paying Agent holds on a redemption date or maturity date or on the
Business Day following a date on which Securities of such series are to be
purchased by the Company pursuant to any provision thereof providing for such
purchase at the option of the Holder or the Company, money (or securities if
permitted by the terms of such Securities) in trust or, if the Company, acting
as its own Paying Agent, sets aside and segregates money (or securities if
permitted by the terms of such Securities) in trust, sufficient to pay
Securities payable on that date, then on and after that date such Securities
cease to be outstanding and interest, if any (and original issue discount, if
Original Issue Discount Securities) on them ceases to accrue, unless the
Trustee or the Paying Agent is restricted under Article Ten in applying such
money.
Section 2.11 Temporary Securities.
Until a permanent global Security or definitive Securities are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities of any series shall be substantially in the
form of definitive Securities of such series, but may have variations that the
Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities of the same series. Until so
exchanged the temporary Securities of any series shall in all respect be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 2.12. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation, including Securities authenticated which the Company has not
issued and sold. The Company, Paying Agent and Conversion Agent shall forward
to the Trustee any Securities surrendered to them for transfer, exchange,
payment, redemption, purchase by the Company pursuant to any provision thereof
providing for such purchase at the option of the Holder, or conversion. The
Trustee and no one else shall cancel all Securities surrendered for transfer,
exchange, payment, redemption, purchase, conversion or cancellation, and may
dispose of cancelled Securities as the Company directs. Except as otherwise
provided in the resolution of the Board of Directors or indenture supplemental
hereto establishing such series as contemplated by Section 2.02, the Company
may not issue new Securities of a series to replace Securities of the same
series that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.13. Payment of Interest; Defaulted Interest.
Interest (except defaulted interest) on the Securities of any series which
is payable on any Interest Payment Date shall be paid to the persons who are
Holders of such series at the close of business on the Regular Record Date for
such interest payment. At the option of the Company, payment of interest on
any Security may be made by check mailed to the Holder's registered address.
If the Company defaults in a payment of interest on the Securities of any
series on any Interest Payment Date, it shall pay the defaulted interest to
the persons who are Securityholders of such series at the close of business on
a subsequent special record date. The Company shall fix the record date and
payment date. At least 15 days before the record date, the Company shall mail
to each Securityholder of such series a notice that states the record date,
the payment date and the amount of defaulted interest to be paid. The Company
shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Paying Agent an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Paying Agent for such deposit prior to the date of the
proposed payment. The Company may pay defaulted interest in any other lawful
manner.
Unless otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, in the case of any Security of any series which
is converted after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Security which is due and
payable prior to such Interest
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Payment Date), interest which is due and payable on such Interest Payment Date
shall be payable on such Interest Payment Date notwithstanding such
conversion, and such interest shall be paid to the Holder in whose name that
Security is registered at the close of business on such Regular Record Date.
Section 2.14. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any Agent may treat the person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 2.13) interest on
such Security and for all other purposes whatsoever, and neither the Company,
the Trustee nor any Agent shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such global Security, and such depositary (or its nominee, if such global
Security is registered in the name of a nominee) may be treated by the
Company, the Trustee, and any Agent as the owner of such global Security for
all purposes whatsoever. None of the Company, the Trustee, or any Agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of a global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security, nothing
herein shall prevent the Company, the Trustee, or any Agent 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 2.15. Securities in Global Form.
If the Company shall establish pursuant to Section 2.02 that the Securities
of or within a series are to be issued in whole or in part in global form,
then the Company shall execute, and the Trustee shall, in accordance with
Section 2.04 and the written order of the Company contemplated thereby,
authenticate and deliver one or more global Securities in temporary or
permanent form that (i) shall be registered in the name of the depositary for
such global Security or Securities or the nominee of such depositary, (ii)
shall be delivered by the Trustee to such depositary or pursuant to such
depositary's instructions, and (iii) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive form, this Security may not be transferred except as
a whole by the depositary to a nominee of the depositary or another nominee of
the depositary or by the depositary or any such nominee to a successor
depositary or a nominee of such successor depositary." Each depositary
designated pursuant to Section 2.02 for a global Security in registered form
must be, to the extent required by applicable law or regulation, a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and
any other applicable statute or regulation, at the time of its designation and
at all times that it serves as depositary. Notwithstanding clause (14) of
Section 2.02 and the provisions of Section 2.03, any such global 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 represented thereby
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of a Security in a global form to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
outstanding Securities represented thereby shall be made in such manner and
upon instructions given by such Person or Persons as shall be specified
therein or in the written order of the Company to be delivered to the Trustee
pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if
applicable, Section 2.11, 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 written order of the
Company. If a written order of the Company pursuant to Section 2.04 has been,
or simultaneously is, delivered, any instructions with respect to a Security
in global form shall be in writing but need not comply with Sections 12.04 and
12.05 and need not be accompanied by an Opinion of Counsel.
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The provisions of the last sentence of the third paragraph of Section 2.04
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 Sections 12.04 and 12.05 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 the third paragraph of Section
2.04.
ARTICLE THREE
Redemption
Section 3.01. Applicability of Article.
Securities of any series which are redeemable before their stated maturity
at the election of the Company or through the operation of any sinking fund
for the requirement of Securities of such series shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 2.02 for Securities of any series) in accordance with this Article.
Section 3.02. Notices to Trustee.
If the Company elects to redeem all or less than all the Securities of any
series, it shall notify the Trustee of the redemption date, the principal
amount of Securities to be redeemed, the specific provision of the Securities
pursuant to which the Securities being called for redemption are being
redeemed and the redemption price. 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. If the Company wants to make any permitted optional sinking
fund payment, it shall notify the Trustee of the principal amount of the
Securities to be redeemed.
The Company (1) may deliver outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which (i) have been redeemed or otherwise purchased 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 or (ii) have been converted pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any
sinking fund payment required to be made pursuant to the terms of the
Securities of such series as provided for by the terms of such series;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the redemption price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly. The Company shall notify the Trustee of its
intention to so reduce the amount of such sinking fund payment, the amount of
the reduction and the basis for it. The Company shall deliver to the Trustee
with such notice any Securities to be credited for such purpose that it has
not previously delivered to the Trustee for cancellation.
The Company shall give each notice and Officers' Certificate provided for in
this Section at least 60 days before the redemption date (unless a shorter
notice shall be satisfactory to the Trustee or is otherwise specified as
contemplated by Section 2.02 for Securities of any series).
Section 3.03. Selection of Securities to be Redeemed.
Except as otherwise specified as contemplated by Section 2.02 for Securities
of any series, if less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed shall be selected from
Securities of the same series outstanding not previously called for redemption
by lot or by such method as the Trustee considers fair and appropriate (and in
such manner as complies with applicable requirements of any stock
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exchange on which Securities of such series are listed) 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 that have denominations
larger than the minimum authorized denomination for Securities of that series.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption. If any Security
selected for partial redemption is converted in part after such selection but
before the termination of the conversion right with respect to the portion of
the Security so selected, the converted portion of such Security shall be
deemed (so far as may be practicable) to be the portion selected for
redemption.
Section 3.04. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date (unless
a shorter notice is specified as contemplated by Section 2.02 for Securities
of any series), the Company shall mail a notice of redemption by first-class
mail to each Holder of Securities of the series to be redeemed.
The notice shall identify the Securities (and, in the case of partial
redemption, the principal amounts of the Securities) to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price and method of payment, if other than in cash;
(3) if applicable, the current conversion price or rate;
(4) the name and address of the Paying Agent and, if applicable, the
Conversion Agent;
(5) if applicable, that the right of the Holder to convert Securities
called for redemption shall terminate at the close of business on the
fifteenth day prior to the redemption date (or such other day as may be
specified as contemplated by Section 2.02 for Securities of any series);
(6) if applicable, that Holders who want to convert Securities called for
redemption must satisfy the requirements for conversion contained in such
Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(8) that interest, if any (or original issue discount, if Original Issue
Discount Securities), on Securities called for redemption ceases to accrue
on and after the redemption date unless the Company defaults in making such
redemption payment; and
(9) that the redemption is for a sinking fund or at the election of the
Company, whichever is the case.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense.
Section 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities of the series called for
redemption become due and payable on the redemption date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price, plus, if applicable, accrued interest, if any, to the
redemption date; provided, however, that installments of interest the Interest
Payment Date for which is on or prior to the redemption date shall be payable
to the persons who are Holders of such Securities on the relevant record dates
for such interest according to their terms and Section 2.13.
Section 3.06. Deposit of Redemption Price.
On or before noon, New York time, on the redemption date, the Company shall
deposit with the Paying Agent money in immediately available funds (or
securities if permitted by the terms of such Securities) sufficient to pay the
redemption price of, and (except if the redemption date is an Interest Payment
Date) accrued interest,
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if any, on, all Securities to be redeemed on that date other than Securities
or portions thereof called for redemption on that date which are delivered by
the Company to the Trustee for cancellation. The Paying Agent shall return to
the Company any money (or securities) not required for that purpose because of
conversion of Securities.
Section 3.07. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee shall
authenticate for the Holder a new Security of the same series, of any
authorized denomination requested by such Holder, equal in principal amount to
the unredeemed portion of the Security surrendered.
Section 3.08. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may arrange for
the purchase and conversion of any Securities called for redemption by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Trustee in trust for the Securityholders, on
or before the close of business on the redemption date, an amount in cash not
less than the redemption price, together with interest, if any, accrued to the
redemption date, of such Securities. Notwithstanding anything to the contrary
contained in this Article Three, the obligation of the Company to pay the
redemption price of such Securities, including all accrued interest, if any,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, any Securities
not duly surrendered for conversion by the Holders thereof may, at the option
of the Company, be deemed, to the fullest extent permitted by law, acquired by
such purchasers from such Holders and (notwithstanding anything to the
contrary contained in Article Eleven) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the last
day on which Securities of such series called for redemption may be converted
in accordance with this Indenture and the terms of such Securities, subject to
payment of the above amount as aforesaid. The Trustee shall hold and pay to
the Holders whose Securities are selected for redemption any such amount paid
to it in the same manner as it would moneys deposited with it by the Company
for the redemption of Securities. Without the Trustee's prior written consent,
no arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and any interest on the Securities of
each series in accordance with the terms of the Securities of such series and
this Indenture.
To the extent enforceable under applicable law, the Company shall pay
interest on overdue principal at the rate borne by the Securities of such
series (unless a different rate is specified as contemplated by Section 2.02
for Securities of such series).
Section 4.02. SEC Reports.
The Company shall file with the Trustee within 15 days after it files them
with the SEC copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing
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as the SEC may by rules and regulations prescribe) which the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. The Company also shall comply with the other
provisions of TIA (S)314(a).
Section 4.03. Compliance Certificate.
The Company will, within 120 days after the close of each fiscal year of the
Company, commencing with the first fiscal year following the issuance of
financial Securities of any series under this Indenture, file with the Trustee
a certificate of the principal executive officer, the principal officer or the
principal accounting officer of the Company, covering the period from the date
of issuance of such Securities to the end of the fiscal year in which such
Securities were issued, in the case of the first such certificate, and
covering the preceding fiscal year in the case of each subsequent certificate,
and stating whether or not, to the knowledge of the signer, the Company has
complied with all conditions and covenants on its part contained in this
Indenture, and, if the signer has obtained knowledge of any default by the
Company in the performance, observance or fulfillment of any such condition or
covenant, specifying each such default and the nature thereof. For the purpose
of this Section 4.03, compliance shall be determined without regard to any
grace period or requirement of notice provided pursuant to the terms of this
Indenture. The certificate need not comply with Section 12.05.
Section 4.04. Corporate Existence.
Subject to the provisions of Section 5.01 hereof, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
Section 4.05. Securities Senior to Junior Subordinated Debt.
(a) The Company covenants that the Securities shall be superior in right of
payment as provided in this Section to all Junior Subordinated Debt. Junior
Subordinated Debt means the principal of and interest on Debt of the Company
hereafter created or incurred which by its terms is subordinate in right of
payment to the Securities. "Debt" has the meaning specified in Section 10.01.
(b) Upon the happening of any default in the payment of the principal of or
interest on the Securities of any series when the same becomes due and
payable, then, unless and until such default shall have been cured or waived
or shall have ceased to exist, no payment shall be made by the Company with
respect to the principal of or interest on any Junior Subordinated Debt or to
acquire any instruments evidencing any issue of Junior Subordinated Debt or on
account of any sinking fund provisions of any Junior Subordinated Debt (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in instruments evidencing Junior Subordinated Debt of the same
issue acquired before such default and notice thereof, and payments made
through the exchange of other debt obligations of the Company for such Junior
Subordinated Debt in accordance with the terms of such Junior Subordinated
Debt provided that such debt obligations are subordinated to the Securities at
least to the extent that the Junior Subordinated Debt for which they are
exchanged is so subordinated in accordance with this Section 4.05).
(c) Upon the maturity of the Securities of any series by lapse of time,
acceleration or otherwise, all principal thereof and interest thereon shall
first be paid in full, or such payment duly provided for in a manner
satisfactory to the Trustee of the Securities of that series, before any
payment is made on account of the principal of or interest on any Junior
Subordinated Debt or to acquire any instruments evidencing any issue of Junior
Subordinated Debt or on account of any sinking fund provisions of any Junior
Subordinated Debt (except payments made in capital stock of the Company or in
warrants, rights or options to purchase or acquire capital stock of the
Company, sinking fund payments made in instruments evidencing Junior
Subordinated Debt of the same issue acquired before the maturity of the
Securities of such series, and payments made through the exchange of other
debt obligations of the Company for such Junior Subordinated Debt in
accordance with the
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terms of such Junior Subordinated Debt provided that such debt obligations are
subordinated to the Securities at least to the extent that the Junior
Subordinated Debt for which they are exchanged is so subordinated in
accordance with this Section 4.05).
(d) Upon any distribution of assets of the Company in any dissolution,
winding up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise), the Holders of the Securities shall be
entitled to receive payment in full of the principal thereof and interest due
thereon before the holders of any Junior Subordinated Debt are entitled to
receive any payment on account of the principal of or interest on such Junior
Subordinated Debt.
Section 4.06. Limitation on Subordinated Debt Senior to the Securities.
The Company will not create or incur any Debt which is subordinate or junior
in right of payment to any Senior Debt, as defined in Section 10.01, if such
Debt is superior in right of payment to the Securities.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into, or transfer its
properties and assets substantially as an entirety to, another corporation
unless (1) the successor corporation, which shall be a corporation organized
and existing under the laws of the United States or a State thereof, assumes
by supplemental indenture all the obligations of the Company under the
Securities and this Indenture; and (2) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing. Thereafter, unless otherwise specified as contemplated by Section
2.02 for the Securities of any series, all such obligations of the predecessor
corporation shall terminate.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" with respect to Securities of any series means each
one of the events specified below in this Section 6.01, unless it is either
inapplicable to a particular series or is specifically deleted or modified as
contemplated by Section 2.02 for the Securities of such series, and any other
events as may be specified as contemplated by Section 2.02 for the Securities
of such series:
(1) the Company defaults in the payment of any interest on any Security
of that series when the same becomes due and payable and the default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of any Security
of that series when the same becomes due and payable at maturity, upon
redemption (including default in the making of any mandatory sinking fund
payment), upon purchase by the Company at the option of the Holder pursuant
to the terms of such Security or otherwise;
(3) the Company fails to comply with any of its other agreements in
Securities of that series or this Indenture (other than an agreement which
has expressly been included in this Indenture solely for the benefit of
Securities of any series other than that series or is expressly made
inapplicable to the Securities of such series as contemplated by Section
2.02) and the default continues for the period and after the notice
specified below;
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(4) the Company pursuant to or within the meaning of any Bankruptcy Law;
(A) commences a voluntary case or consents to the commencement of a
case against it,
(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;
(5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
adjudicates the Company insolvent or bankrupt,
(B) appoints a Custodian of the Company or for all or substantially
all of its property, or
(C) orders the winding up or liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 days; or
(6) any other Event of Default provided with respect to Securities of
that series occurs.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the Trustee
notifies the Company or the Holders of at least 25% in aggregate principal
amount of the outstanding Securities of that series notify the Company and the
Trustee of the Default and the Company does not cure the Default within 30
days after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default."
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.01(4) or (5)) occurs and is continuing with respect to Securities of any
series at the time outstanding, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities of that series by notice to the Company and the Trustee, may
declare to be due and payable immediately (1) the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of the Securities of
that series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of acceleration. Upon such declaration,
such principal amount (or specified amount) and interest, if any, shall be due
and payable immediately. If an Event of Default specified in Section 6.01(4)
or (5) occurs and is continuing, (1) the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of the Securities of
that series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of such acceleration shall become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or Securityholders. The Holders of a majority in aggregate
principal amount of the outstanding Securities of the series with respect to
which an acceleration applies by notice to the Trustee may rescind an
acceleration and its consequences with respect to such series if all existing
Events of Default (other than the non-payment of the principal of and accrued
interest if any, on Securities that have become due solely by such
acceleration) with respect to Securities of that series have been cured or
waived and if the rescission would not conflict with any judgment or decree.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of the whole amount which then shall
have become due and remain unpaid for principal or interest, if any, on the
Securities of that series or to enforce the performance of any provision of
the Securities of that series or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of the
Securities of that series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are
cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in aggregate principal
amount of the outstanding Securities of any series by notice to the Trustee
may waive on behalf of the Holders of all the Securities of such series an
existing Default or Event of Default and its consequences. When a Default or
Event of Default is waived, it is cured and stops continuing.
Section 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may 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 it, with respect to the Securities of such series. The
Trustee, however, may refuse to follow any direction that conflicts with law
or this Indenture, that is unduly prejudicial to the rights of another
Securityholder or that would involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
No holder of any Security of any series shall have the right to pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default with respect to the Securities of that series;
(2) the Holders of at least 25% in aggregate principal amount of the
outstanding Securities of that series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer and provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; 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
aggregate principal amount of the outstanding Securities of such series.
A Securityholder of any series may not use this Indenture to prejudice the
rights of another Securityholder of such series or to obtain a preference or
priority over another Securityholder of such series, except in the manner
herein provided and for the equal and ratable benefit of all Securityholders
of such series.
Section 6.07. Rights of Holders to Receive Payment and to Convert.
Subject to Article Ten and notwithstanding any other provision of this
Indenture, the right of any Holder of a Security to receive payment of
principal of and (subject to Section 2.13) interest, if any, on the Security,
on or after the respective due dates with respect to such payments expressed
in such Security, and, if applicable, to convert such Security on the terms
and subject to the conditions applicable to Securities of such series, or to
bring suit for the enforcement of any such payment on or after such respective
dates or of such right to convert, if any, shall not be impaired or affected
without the consent of the Holder.
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Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing with respect to the Securities of any series, the Trustee may
recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount which then shall have become due and remain
unpaid for principal and interest, if any, on the Securities of such series.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and
the Securityholders allowed in any judicial proceeding relative to the
Company, its creditors or its property and to collect and receive money,
property or securities payable or deliverable on any such claims and to
distribute the same.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay out
the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Debt to the extent required by Article Ten;
Third: to the payment of amounts due and unpaid for principal and
interest, if any, on the Securities in respect of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts which then shall have become due and payable on such
Securities for principal and interest, respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section, notice of which shall be mailed to
each Securityholder by the Company at least 15 days before such record date.
Section 6.11. Undertaking for Costs.
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, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate principal amount of the outstanding Securities of any series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
(a) If an Event of Default with respect to Securities of any series has
occurred and is continuing, the Trustee shall with respect to such series
exercise such of the rights and powers vested in it by this Indenture with
respect to such series and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) With respect to Securities of any series, except during the continuance
of an Event of Default with respect to Securities of such series:
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(1) The Trustee need perform only those duties that are specifically set
forth in this Indenture or the TIA and no others.
(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. The Trustee, however,
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel or require an Officers' Certificate, an Opinion of Counsel, and/or an
accountant's certificate. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Certificate, Opinion
or accountant's certificate.
(c) The Trustee may act through agents and counsel and shall not be
responsible for the misconduct or negligence of any agent or counsel appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities; it shall not be accountable for the Company's use
of the proceeds from the Securities; and it shall not be responsible for any
statement in the Indenture or the Securities other than its certificate of
authentication.
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Section 7.05. Notice of Defaults.
If a Default occurs and is continuing with respect to Securities of any
series and if it is known to a Trust Officer of the Trustee, the Trustee shall
mail to each Securityholder of such series notice of the Default within 90
days after it occurs or as soon as reasonably practicable thereafter. Except
in the case of a default in payment of principal of or interest on any
Security of such series (including default in the making of any mandatory
sinking fund or mandatory repurchase payment), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders
of such series.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date on which Securities are originally issued after this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May
15 that complies with TIA (S)313(a) if required by said Section. The Trustee
also shall comply with TIA (S)313(b).
A copy of each report at the time of its mailing to Securityholders shall be
filed by the Company with the SEC and each stock exchange on which the
Securities are listed.
The Company will notify the Trustee if and when the Securities are listed on
any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it arising out of or in connection with the acceptance or
administration of this trust and its duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. Failure of the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
have the right to elect to defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by
the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
The Trustee may resign at any time with respect to Securities of one or more
series by so notifying the Company. The Holders of a majority in aggregate
principal amount of the outstanding Securities of any series may remove the
Trustee with respect to the Securities of such series by so notifying the
Company. The Holders of a majority in aggregate principal amount of the
outstanding Securities of any series may remove the Trustee with respect to
the Securities of such series by so notifying the removed Trustee and may
appoint a successor Trustee with the Company's consent. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
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(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint a successor Trustee or Trustees (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).
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to its lien, if any, provided for in Section 7.07), the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Securityholder.
If a successor Trustee with respect to Securities of any series does not
take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
principal amount of the outstanding Securities of such series may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation or
national banking association, the successor corporation or national banking
association without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements of
TIA (S)310(a). The Trustee shall always have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report
of condition. With respect to the Securities of each series, the Trustee shall
comply with TIA (S)310(b) and in determining whether the Trustee has a
conflicting interest as defined in TIA (S)310(b) with respect to the
Securities of any series, there shall be excluded this Indenture with respect
to the Securities of any series other than such series. Nothing herein shall
prevent the Trustee from filing with the SEC the application referred to in
the second to last paragraph of TIA (S)310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Termination of Company's Obligations.
The Company may terminate all of its obligations under the Securities of any
series and this Indenture with respect to the Securities of such series if
either (1) all Securities of such series previously authenticated and
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delivered (other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment money (or, if permitted by
the terms of such Securities, securities) has theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 8.03) have been
delivered to the Trustee for cancellation; or (2) the Company irrevocably
deposits in trust with the Trustee money or U.S. Government Obligations
sufficient to pay the principal of and interest, if any, on all Securities of
such series not theretofore cancelled or delivered to the Trustee for
cancellation (other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment money (or, if permitted by
the terms of such Securities, securities) has theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 8.03) to maturity
or redemption, as the case may be.
The Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 20.9, 4.01,
7.07, 7.08, 8.01, 8.03 and Article Eleven of this Indenture, however, shall
survive until the Securities of such series are no longer outstanding.
Thereafter the Company's obligations in Sections 7.07 and 8.03 shall survive.
Notwithstanding the satisfaction and discharge of this Indenture with respect
to the Securities of any series, if money or U.S. Government Obligations shall
have been deposited with the Trustee pursuant to clause (2) of this Section,
the obligations of the Trustee under Section 8.02 and the second sentence of
Section 8.03 shall survive.
After a deposit and if all other conditions thereto are met, the Trustee for
the Securities of such series shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture with respect to
such Securities, except for those surviving obligations specified above;
provided, however, that the Trustee shall not be required to execute such
instrument until the expiration of ninety days after the date of a deposit and
that such instrument may be made subject to the condition that such deposit
had been made prior to the happening of any event specified in Section 10.02.
In order to have money available on a payment date to pay the principal of
or interest, if any, on the Securities, the U.S. Government Obligations shall
be payable as to principal or interest on or before such payment date in such
amounts as well provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
Section 8.02. Application of Trust Fund.
The Trustee shall hold in trust money and U.S. Government Obligations
deposited with it pursuant to Section 8.01. Subject to Section 10.07, it shall
apply the deposited money and the money from the U.S. Government Obligations
through the Paying Agent and in accordance with the provisions of the
Securities and this Indenture to the payment of principal of and interest, if
any, on the Securities for the payment of which such money or U.S. Government
Obligations has been deposited with the Trustee.
Section 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon written request any
money or securities held by them for the payment of principal or interest, if
any, that remains unclaimed for two years. After that, Holders entitled to the
money or securities must look to the Company for payment unless an applicable
abandoned property law designates another person.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
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(2) to comply with Section 5.01 and 11.16;
(3) to establish the form or terms of Securities of any series as
permitted by Sections 2.01 and 2.02;
(4) to add to the covenants of the Company for the 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;
(5) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series of Securities, stating
that such Events of Default are expressly being included solely to be
applicable to such series);
(6) to change or eliminate any of the provisions of this Indenture,
provided that, except as otherwise contemplated by Section 2.02(13), any
such change or elimination shall become effective only when there is no
Security outstanding of any series created prior thereto which is entitled
to the benefit of such provision;
(7) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to provide for uncertificated
Securities in addition to certificated Securities (so long as any
"registration-required obligation" within the meaning of Section 163(f)(2)
of the Internal Revenue Code of 1986, as amended (the "Code") is in
registered form for purposes of the Code);
(8) to make any change that, in the opinion of the Board of Directors,
does not materially adversely affect the rights of any Securityholder; or
(9) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to any Securityholder but with the
written consent of the Holders of a majority in aggregate principal amount of
the outstanding Securities of each series affected by such amendment or
supplement. The Holders of a majority in aggregate principal amount of the
outstanding Securities of any series may on behalf of the Holders of all
Securities of such series waive compliance by the Company with any provision
of this Indenture or of Securities of such series without notice to any
Securityholder. Without the consent of each Securityholder affected, however,
an amendment, supplement or waiver, including a waiver pursuant to Section
6.04, may not:
(1) reduce the amount of Securities of any series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on any
Security (or, in the case of an Original Issue Discount Security, reduce
the rate of accrual of original issue discount);
(3) reduce the principal of (or any premium payable upon the redemption
of) or extend the fixed maturity of any Security (or, in the case of an
Original Issue Discount Security, reduce the portion of the principal
amount that would be due and payable upon acceleration of the maturity
thereof pursuant to Section 6.02);
(4) change the amount or time of any payment required by any sinking fund
provisions of the Securities of any series;
(5) make any change that materially adversely affects the rights of a
Holder to require the Company to purchase a Security in accordance with the
terms thereof and this Indenture;
(6) waive a default in the payment of the principal of or interest, if
any, on any Security;
(7) make any Security payable in money or securities other than that
stated in the Security; or
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(8) make any change that materially adversely affects the right to
convert any Security or that increases the conversion price or reduces the
conversion rate of any Security.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed supplement, but it shall be
sufficient if such consent approves the substance thereof.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement, waiver or other action by a Holder of
a Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. Any
such Holder or subsequent Holder, however, may revoke the consent as to his
Security or portion of a Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement, waiver or other action becomes effective. An amendment,
supplement, waiver or other action shall become effective on receipt by the
Trustee of written consents from the Holders of the requisite percentage in
aggregate principal amount of the outstanding Securities of the relevant
series. After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder of each series of Securities so affected.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the
changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article if the amendment, supplement or waiver does not
adversely affect the rights, duties, immunities or liabilities of the Trustee.
If it does, the Trustee may but need not sign it. The Company may not sign an
amendment or supplement until the Board of Directors approves it.
ARTICLE TEN
Subordination
Section 10.01. Securities Subordinated to Senior Debt.
The Company agrees, and each holder of the Securities by his acceptance
thereof likewise agrees, that the payment of the principal of and interest, if
any, on the Securities is subordinated, to the extent and in the manner
provided in this Article, to the prior payment in full of all Senior Debt.
Senior Debt means the principal of and interest on Debt of the Company
outstanding at any time other than (i) the Securities, (ii) the Company's
outstanding 11 1/8% senior subordinated debentures due October 1, 2003, which
shall rank pari passu with the Securities, and (iii) Debt which by its terms
is not superior in right of payment to the Securities. "Debt" of any person
means:
(1) any indebtedness of such person (i) for borrowed money or (ii)
evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any property
or assets, including securities;
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(2) any guarantee by such person of any indebtedness of others described
in the preceding clause (1); and
(3) any amendment, renewal, extension or refunding of any such
indebtedness or guarantee.
This Article shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Debt, and such provisions are made for the benefit of the holders of Senior
Debt, and such holders are made obligees hereunder and they and/or each of
them may enforce such provisions.
Section 10.02. Company Not to Make Payments with Respect to Securities in
Certain Circumstances.
(a) Upon the maturity of any Senior Debt by lapse of time, acceleration or
otherwise, all principal thereof and interest thereon shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior Debt, before any payment is made on account of the
principal of or
interest on the Securities or to acquire any of the Securities or on account
of any sinking fund provisions of the Securities (except payments made in
capital stock of the Company or in warrants, rights or options to purchase or
acquire capital stock of the Company, sinking fund payments made in Securities
acquired by the Company before the maturity of such Senior Debt, and payments
made through the exchange of other debt obligations of the Company for such
Securities in accordance with the terms of such Securities, provided that such
debt obligations are subordinated to Senior Debt at least to the extent that
the Securities for which they are exchanged are so subordinated pursuant to
this Article Ten).
(b) Upon the happening of any default in payment of the principal of or
interest on any Senior Debt when the same becomes due and payable, then,
unless and until such default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Company with respect to the
principal of or interest on the Securities or to acquire any of the Securities
or on account of any sinking fund provisions of the Securities (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in Securities acquired by the Company before such default and
notice thereof, and payments made through the exchange of other debt
obligations of the Company for such Securities in accordance with the terms of
such Securities, provided that such debt obligations are subordinated to
Senior Debt at least to the extent that the Securities for which they are
exchanged are so subordinated pursuant to this Article Ten).
(c) In the event that notwithstanding the provisions of this Section 10.02
the Company shall make any payment to the Trustee on account of the principal
of or interest on the Securities, or on account of any sinking fund provisions
of the Securities, after the maturity of any Senior Debt as described in
Section 10.02(a) above or after the happening of a default in payment of the
principal of or interest on any Senior Debt as described in Section 10.02(b)
above, then, unless and until all Senior Debt which shall have matured, and
all interest thereon, shall have been paid in full (or the declaration of
acceleration thereof shall have been rescinded or annulled), or such default
shall have been cured or waived or shall have ceased to exist, such payment
(subject to the provisions of Sections 10.06 and 10.07) shall be held by the
Trustee, in trust for the benefit of, and shall be paid forthwith over and
delivered to, the holders of such Senior Debt (pro rata as to each of such
holders on the basis of the respective amounts of Senior Debt held by them) or
their representative or the trustee under the indenture or other agreement (if
any) pursuant to which such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all such
Senior Debt remaining unpaid to the extent necessary to pay the same in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt. The Company shall give
prompt written notice to the Trustee of any default in the payment of
principal of or interest on any Senior Debt.
Section 10.03. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation or Reorganization of Company.
Upon any distribution of assets of the Company in any dissolution, winding
up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise):
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(a) the holders of all Senior Debt shall first be entitled to receive
payments in full of the principal thereof and interest due thereon before
the Holders of the Securities are entitled to receive any payment on
account of the principal of or interest on the Securities;
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than securities
of the Company as reorganized or readjusted or securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article Ten with respect to the Securities, to the payment
in full without diminution or modification by such plan of all Senior
Debt), to which the Holders of the Securities or the Trustee on behalf of
the Holders of the Securities would be entitled except for the provisions
of this Article Ten, shall be paid by the liquidating trustee or agent or
other person making such payment or distribution directly to the holders of
Senior Debt or their representative, or to the trustee under any indenture
under which Senior Debt may have been issued (pro rata as to each such
holder, representative or trustee on the basis of the respective amounts of
unpaid Senior Debt held or represented by each), to the extent necessary to
make payment in full of all Senior Debt remaining unpaid, after giving
effect to any concurrent payment or distribution or provision therefor to
the holders of such Senior Debt; and
(c) in the event that notwithstanding the foregoing provisions of this
Section 10.03, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinate, at least to the extent
provided in this Article Ten with respect to the Securities, to the payment
in full without diminution or modification by such plan of all Senior
Debt), shall be received by the Trustee or the Holders of the Securities on
account of principal of or interest on the Securities before all Senior
Debt is paid in full, or effective provision made for its payment, such
payment or distribution (subject to the provisions of Sections 10.06 and
10.07) shall be received and held in trust for and shall be paid over to
the holders of the Senior Debt remaining unpaid or unprovided for or their
representative, or to the trustee under any indenture under which such
Senior Debt may have been issued (pro rata as provided in subsection (b)
above), for application to the payment of such Senior Debt until all such
Senior Debt shall have been paid in full, after giving effect to any
concurrent payment or distribution or provision therefor to the holders of
such Senior Debt.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 10.04. Securityholders to be Subrogated to Right of Holders of Senior
Debt.
Subject to the payment in full of all Senior Debt, the Holders of the
Securities shall be subrogated equally and ratably to the rights of the
holders of Senior Debt to receive payments or distributions of assets of the
Company applicable to the Senior Debt until all amounts owing on the
Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Debt by or on behalf of
the Company or by or on behalf of the Holders of the Securities by virtue of
this Article Ten which otherwise would have been made to the Holders of the
Securities shall, as between the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, be deemed to be payment by the
Company to or on account of the Senior Debt, it being understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one
hand, and the holders of the Senior Debt, on the other hand.
Section 10.05. Obligation of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture or in
any Security is intended to or shall impair, as between the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
the obligation of the Company, which is absolute and unconditional, to pay to
the holders of the
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Securities the principal of and interest on the Securities as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the
Securities and creditors of the Company other than the holders of the Senior
Debt, nor shall anything herein or therein prevent the Trustee or the Holder
of any Security from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article Ten of the holders of Senior Debt in respect of cash, property or
securities of the Company received upon the exercise of any such remedy. Upon
any payment or distribution of assets of the Company referred to in this
Article Ten, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction
in which such dissolution, winding up, liquidation or reorganization
proceedings are pending, or, subject to the provisions of Sections 7.01 and
7.02, a certificate of the receiver, trustee in bankruptcy, liquidating
trustee or agent or other person making such payment or distribution to the
Trustee or the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the
Senior Debt and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Ten.
Nothing contained in this Article Ten or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except as provided in subsections (a) and (b) of Section
10.02, payments at any time of the principal of or interest on the Securities.
Section 10.06. Trustee Entitled to Assume Payments Not Prohibited in Absence
of Notice.
The Trustee shall not at any time be charged with knowledge of the existence
of any facts which would prohibit the making of any payment to or by the
Trustee, unless at least one Business Day prior to the making of any such
payment, the Trustee shall have received written notice thereof from the
Company or from one or more holders of Senior Debt or from any representative
thereof or from any trustee therefor, together with proof satisfactory to the
Trustee of such holding of Senior Debt or of the authority of such
representative or trustee; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Sections 7.01 and 7.02,
shall be entitled to assume conclusively that no such facts exist. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a
person representing himself to be a holder of Senior Debt (or a representative
or trustee on behalf of such holder) to establish that such notice has been
given by a holder of Senior Debt or a representative of or trustee on behalf
of any such holder. In the event that the Trustee determines, in good faith,
that further evidence is required with respect to the right of any person as a
holder of Senior Debt to participate in any payments or distribution pursuant
to this Article Ten, the Trustee may request such person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of Senior Debt
held by such person, as to the extent to which such person is entitled to
participate in such payment or distribution, and as to other facts pertinent
to the rights of such person under this Article Ten, and if such evidence is
not furnished, the Trustee may defer any payment to such person pending
judicial determination as to the right of such person to receive such payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and nothing in this Article Ten shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.07.
Section 10.07. Application by Trustee of Monies or U.S. Government Obligations
Deposited with It.
Money or U.S. Government Obligations deposited in trust with the Trustee
pursuant to and in accordance with Section 8.01 shall be for the sole benefit
of Securityholders and, to the extent allocated for the payment of Securities,
shall not be subject to the subordination provisions of this Article Ten, if
the same are deposited in trust prior to the happening of any event specified
in Section 10.02. Otherwise, any deposit of monies or U.S. Government
Obligations by the Company with the Trustee or any Paying Agent (whether or
not in trust) for the payment of the principal of or interest on any
Securities shall be subject to the provisions of Sections 10.01, 10.02 and
10.03 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of the principal of or the interest, if
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any, on any Security) the Trustee shall not have received with respect to such
monies the notice provided for in Section 10.06, then the Trustee or the
Paying Agent shall have full power and authority to receive such monies and
U.S. Government Obligations and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such date. This Section 10.07 shall be
construed solely for the benefit of the Trustee and Paying Agent and, as to
the first sentence hereof, the Securityholder, and shall not otherwise affect
the rights of holders of Senior Debt.
Section 10.08. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
Section 10.09. Securityholders Authorize Trustee to Effectuate Subordination
of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Ten and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of his
Securities in the form required in said proceedings and causing said claim to
be approved. If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding prior to 30 days before the expiration of
the time to file such claim or claims, then the holders of Senior Debt have
the right to file and are hereby authorized to file an appropriate claim for
and on behalf of the Holders of said Securities.
Section 10.10. Right of Trustee to Hold Senior Debt.
The Trustee shall be entitled to all of the rights set forth in this Article
Ten in respect of any Senior Debt at any time held by it to the same extent as
any other holder of Senior Debt, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.
Section 10.11. Article Ten Not to Prevent Events of Default.
The failure to make a payment on account of principal or interest by reason
of any provision in this Article Ten shall not be construed as preventing the
occurrence of an Event of Default under Section 6.01.
ARTICLE ELEVEN
Conversion
Section 11.01. Applicability of Article.
Securities of any series which are convertible into Company Stock at the
option of the Holder shall be convertible in accordance with their terms and
(except as otherwise specified as contemplated by Section 2.02 for Securities
of any series) in accordance with this Article. Each reference in this Article
to "a Security" or "the Securities" refers to the Securities of the particular
series that is convertible into Company Stock. If more than one series of
Securities with conversion privileges are outstanding at any time, the
provisions of this Article shall be applied separately to each such series.
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Section 11.02. Conversion Privilege.
A Holder of a Security of any authorized denomination of any series may
convert it into Company Stock, at any time during the period specified on the
Securities of that series, at the conversion price or conversion rate in
effect on the conversion date, except that, with respect to any Security (or
portion thereof) called for redemption, such right shall (except as otherwise
provided in Section 3.08) terminate at the close of business on the fifteenth
day prior to the date fixed for redemption of such Security (or portion
thereof) (or such other day as may be specified as contemplated by Section
2.02 for Securities of such series), unless the Company shall default in
payment of the amount due upon redemption thereof.
The initial conversion price or conversion rate in respect of a series of
Securities shall be as specified on the Securities of that series. The
conversion price or conversion rate will be subject to adjustment on the terms
set forth in Sections 11.07 through 11.13 or such other or different terms, if
any, as may be specified as contemplated by Section 2.02 for Securities of
such series.
A Holder may convert any Security in full and may convert a portion of a
Security if the portion to be converted and the remaining portion of such
Security are in denominations issuable for that series of Securities.
Provisions of this Indenture that apply to conversion of all of a Security
also apply to conversion of a portion of it.
Section 11.03. Conversion Procedure.
To convert a Security of any series, a Holder must satisfy the requirements
for conversion contained on the Securities of that series. The date on which
the Holder satisfies all those requirements is the conversion date. As soon as
practicable after the conversion date, the Company shall deliver to the Holder
through the Conversion Agent a certificate for the number of shares of Company
Stock deliverable upon the conversion and cash or its check in lieu of any
fractional share. The person in whose name the certificate is registered
becomes a stockholder of record on the conversion date and the rights of the
Holder of the Securities so converted as a Holder thereof cease as of such
date.
If the Holder converts more than one Security of any series at the same
time, the number of full shares issuable upon the conversion shall be based on
the total principal amount of the Securities of such series so converted.
Upon surrender of a Security of any series that is converted in part, the
Trustee shall authenticate for the Holder a new Security of that series equal
in principal amount to the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in a
place where a Conversion Agent is located, the Security may be surrendered to
that Conversion Agent on the next succeeding day that is not a Legal Holiday.
The Company will not be required to deliver certificates for shares of
Company Stock upon conversion while the Company's stock transfer books are
closed for a meeting of stockholders or for the payment of dividends or for
any other purpose, but certificates for shares of Company Stock shall be
delivered as soon as the stock transfer books shall again be opened.
Securities of any series surrendered for conversion during the period from
the close of business on any Regular Record Date next preceding any Interest
Payment Date for such series to the opening of business on such Interest
Payment Date shall (except in the case of Securities or portions thereof which
have been called for redemption on a redemption date within such period) be
accompanied by payment in funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount
of Securities being surrendered for conversion; provided, that no such payment
need be made if there shall exist, at the time of conversion, a default in the
payment of interest on the Securities of such series. The funds so delivered
to the Conversion Agent shall be paid to the Company on or after such Interest
Payment Date unless
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the Company shall default on the payment of the interest due on such Interest
Payment Date, in which event such funds shall be paid to the Holder who
delivered the same. Except as provided in the preceding sentence and subject
to the last paragraph of Section 2.13, no payment or adjustment shall be made
upon any conversion on account of any interest accrued on the Securities
surrendered for conversion or on account of any dividends on the Company Stock
issued upon conversion.
Section 11.04. Fractional Shares.
The Company will not deliver a fractional share of Company Stock upon
conversion of a Security. Instead, the Company will deliver cash or its check
for the current market value of a fractional share. The current market value
of a fractional share is determined as follows: Multiply the current market
price of a full share on the last full trading day prior to the conversion
date by the fraction (rounded to the nearest 1/100 of a share) and round the
result to the nearest whole cent.
Section 11.05. Taxes on Conversion.
If a Holder of a Security converts it, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the delivery of
shares of Company Stock upon the conversion. The Holder, however, shall pay
any such tax which is due because the shares are issued in a name other than
the Holder's name.
Section 11.06. Company to Provide Stock.
The Company shall from time to time as may be necessary reserve out of its
authorized but unissued Company Stock or Company Stock held in treasury enough
shares of Company Stock to permit the conversion of all outstanding
Securities.
All shares of Company Stock which may be delivered upon conversion of the
Securities shall be validly issued, fully paid and non-assessable and shall be
free from any preemptive rights.
In order that the Company may deliver shares of Company Stock upon
conversion of the Securities, the Company will endeavor to comply with all
applicable Federal and State securities laws and will endeavor to cause such
shares to be listed on each national securities exchange or other stock market
on which other shares of the Company Stock is listed.
If the taking of any action would cause an adjustment to the then prevailing
conversion price or conversion rate which would result in shares of Company
Stock being issued upon conversion of the Securities at an effective
conversion price below the then par value, if any, of the Company Stock, or
would raise the par value above the effective conversion price then in effect,
the Company will, take such corporate action as may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue,
and the Company may deliver, fully paid and non-assessable shares of Company
Stock at such adjusted conversion price or conversion rate or the conversion
price or conversion rate then in effect, as the case may be.
Section 11.07. Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution in shares of Company Stock;
(2) subdivides the outstanding shares of Company Stock into a greater
number of shares;
(3) combines the outstanding shares of Company Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on the Company Stock in
shares of its capital stock other than Company Stock; or
(5) issues by reclassification of its shares of Company Stock any shares
of its capital stock,
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then the conversion privilege and the conversion price or conversion rate in
effect immediately prior to the opening of business on the record date for
such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the Holder of any
Security thereafter converted may receive the number of shares of capital
stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to
such time. Such adjustment shall be made successively whenever any event
listed above shall occur.
For a dividend or distribution, the adjustment shall become effective
immediately after the record date for the dividend or distribution. For a
subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision, combination
or reclassification.
If after an adjustment a Holder of a Security upon conversion of it may
receive shares of two or more classes of capital stock of the Company, the
conversion prices of the classes of capital stock (after giving effect to such
allocation of the adjusted conversion price between or among the classes of
capital stock as the Board of Directors shall determine to be appropriate) or
the conversion rate, as the case may be, shall thereafter be subject to
adjustment on terms comparable to those applicable to Company Stock in this
Indenture.
Any shares of Company Stock issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the time of the record date
for such dividend for purposes of calculating the number of outstanding shares
of Company Stock under Sections 11.08 and 11.09 below.
Section 11.08. Adjustment for Rights Issue.
If the Company issues any rights or warrants to all holders of shares of its
Company Stock entitling them for a period expiring within 45 days after the
record date mentioned below to purchase shares of Company Stock (or
Convertible Securities) at a price per share (or having a conversion price per
share, after adding thereto an allocable portion of the exercise price of the
right or warrant to purchase such Convertible Securities, computed on the
basis of the maximum number of shares of Company Stock issuable upon
conversion of such Convertible Securities) less than the Average Market Price
on the Determination Date, the conversion price or rate shall be adjusted so
that it shall equal the price or rate determined by multiplying the conversion
price or dividing the conversion rate, as the case may be, in effect
immediately prior to the opening of business on that record date by a
fraction, of which the numerator shall be the number of shares of Company
Stock outstanding on such record date plus the number of shares of Company
Stock which the aggregate offering price of the total number of shares of
Company Stock so offered (or the aggregate conversion price of the Convertible
Securities to be so offered, after adding thereto the aggregate exercise price
of the rights or warrants to purchase such Convertible Securities) would
purchase at such Average Market Price and of which the denominator shall be
the number of shares of Company Stock outstanding on such record date plus the
number of additional shares of Company Stock offered for subscription or
purchase (or into which the Convertible Securities so offered are
convertible). Shares of Company Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
adjustment.
For purposes of this Section 11.08, the number of shares of Company Stock
outstanding on any record date shall be deemed to include (i) the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible Securities
outstanding on such record date which are then exercisable, exchangeable or
convertible at a price equal to or less than the Average Market Price per
share of Company Stock, if all of such Convertible Securities were deemed to
have been exercised, exchanged or converted immediately prior to the opening
of business of such record date and (ii) if the Series B Stock is convertible
into Company Stock, the maximum number of shares of Company Stock the issuance
of which would be necessary to effect the full conversion of all shares of
Series B Stock outstanding on such record date, if all of such shares of
Series B Stock were deemed to have been converted immediately prior to the
opening of business on such record date.
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The adjustment shall be made successively whenever any such rights or
warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights or
warrants. If all of the shares of Company Stock (or all of the Convertible
Securities) subject to such rights or warrants have not been issued when such
rights or warrants expire (or, in the case of rights or warrants to purchase
Convertible Securities which have been exercised, all of the shares of Company
Stock issuable upon conversion of such Convertible Securities have not been
issued prior to the expiration of the conversion right thereof), then the
conversion price or conversion rate shall promptly be readjusted to the
conversion price or conversion rate which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the basis
of the actual number of shares of Company Stock (or Convertible Securities)
issued upon the exercise of such rights or warrants (or the conversion of such
Convertible Securities).
No adjustment shall be made under this Section 11.08 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be, in
effect prior to such adjustment.
Section 11.09. Adjustments for Other Distributions.
If the Company distributes to all holders of shares of Company Stock any
assets or debt securities or any rights or warrants to purchase securities,
the conversion price or conversion rate shall be adjusted by multiplying the
conversion price or dividing the conversion rate, as the case may be, in
effect immediately prior to the opening of business on the record date
mentioned below by a fraction of which the numerator shall be the total number
of shares of Company Stock outstanding on such record date multiplied by the
Average Market Price on the Determination Date, less the fair market value (as
determined by the Board of Directors) on such record date of said assets or
debt securities or rights or warrants so distributed, and of which the
denominator shall be the total number of shares of Company Stock outstanding
on such record date multiplied by such Average Market Price.
For purposes of this Section 11.09, the number of shares of Company Stock
outstanding on any record date shall be deemed to include (i) the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible Securities
outstanding on such record date which are then exercisable, exchangeable or
convertible at a price equal to or less than the Average Market Price, if all
of such Convertible Securities were deemed to have been exercised, exchanged
or converted immediately prior to the opening of business on such record date
and (ii) if the Series B Stock is convertible into Company Stock, the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full conversion of all shares of Series B Stock outstanding on such
record date, if all of such shares of Series B Stock were deemed to have been
converted immediately prior to the opening of business on such record date.
The adjustment shall be made successively whenever any such distribution is
made, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution. Shares of
Company Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such adjustment.
No adjustment shall be made under this Section 11.09 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be, in
effect prior to such adjustment.
This Section does not apply to cash dividends or distributions. Also, this
Section does not apply to dividends or distributions referred to in Section
11.07 or to rights or warrants referred to in Section 11.08.
Section 11.10. Voluntary Adjustment.
The Company at any time may reduce the conversion price or increase the
conversion rate, temporarily or otherwise, by any amount but in no event shall
such adjusted conversion price or conversion rate result in shares of Company
Stock being issuable upon conversion of the Securities if converted at the
time of such adjustment at an effective conversion price per share less than
the par value of the Company Stock at the time such adjustment is made.
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A voluntary adjustment of the conversion price or conversion rate pursuant
to this Section 11.10 does not change or adjust the conversion price or
conversion rate otherwise in effect for purposes of Section 11.07, 11.08 or
11.09. If an event requiring an adjustment to the conversion price or
conversion rate pursuant to Section 11.07, 11.08 or 11.09 occurs at any time
that a voluntary adjustment to the conversion price or conversion rate is in
effect pursuant to this Section 11.10, then the adjustment required by Section
11.07, 11.08 or 11.09, whichever is applicable, shall be made to the
conversion price or conversion rate that would otherwise have been in effect
as of the relevant date specified in such Section had no voluntary adjustment
pursuant to this Section 11.10 been made, and for purposes of applying such
Section, any such voluntary adjustment shall be disregarded. If such
adjustment would result in a lower conversion price or a higher conversion
rate, as the case may be, than the conversion price or conversion rate as
voluntarily adjusted by the Company, then such lower conversion price or
higher conversion rate shall be the conversion price or conversion rate, as
the case may be.
Section 11.11. Certain Definitions.
For the purposes of this Article, the following terms have the following
meanings:
"Average Market Price" of a share of Company Stock on the Determination
Date for any issuance of rights or warrants or any distribution in respect
of which the Average Market Price is being calculated means the average of
the daily current market prices of the Company Stock for the shortest of:
(i) the period of 30 consecutive trading days commencing 45 trading
days before such Determination Date,
(ii) the period commencing on the date next succeeding the first
public announcement of the issuance of rights or warrants or the
distribution in respect of which the Average Market Price is being
calculated and ending on the last full trading day before such
Determination Date, and
(iii) the period, if any, commencing on the date next succeeding the
Ex-Dividend Date with respect to the next preceding issuance of rights
or warrants or distribution for which an adjustment is required by the
provisions of Section 11.07(4), 11.08 or 11.09, and ending on the last
full trading day before such Determination Date.
If the record date for an issuance of rights or warrants or a
distribution for which an adjustment is required by the provisions of
Section 11.07(4), 11.08 or 11.09 (the "preceding adjustment event")
precedes the record date for the issuance or distribution in respect of
which the Average Market Price is being calculated and the Ex-Dividend Date
for such preceding adjustment event is on or after the Determination Date
for the issuance or distribution in respect of which the Average Market
Price is being calculated, then the Average Market Price shall be adjusted
by deducting therefrom the fair market value (on the record date for the
issuance or distribution in respect of which the Average Market Price is
being calculated), as determined by the Board of Directors, of the capital
stock, rights, warrants, assets or debt securities issued or distributed in
respect of each share of Company Stock in such preceding adjustment event.
Further, in the event that the Ex-Dividend Date (or in the case of a
subdivision, combination or reclassification, the effective date with
respect thereto) with respect to a dividend, subdivision, combination or
reclassification to which Section 11.07(1), (2), (3) or (5) applies occurs
during the period applicable for calculating the Average Market Price, then
the Average Market Price shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such
dividend, subdivision, combination or reclassification on the current
market price of the Company Stock during such period.
"current market price" of a share of Company Stock on any day means the
last reported sale price (or, if no sale price is reported, the average of
the high and low bid prices) on such day on the NASDAQ Stock Market or as
quoted by the National Quotation Bureau Incorporated, or if the Company
Stock is listed on an exchange, on the principal exchange on which the
Company Stock is listed. In the event that no such quotation is available
for any day, the Board of Directors shall be entitled to determine the
current market price on the basis of such quotations as it considers
appropriate.
"Determination Date" for any issuance of rights or warrants or any
distribution to which Section 11.08 or 11.09 applies means the earlier of
(i) the record date for the determination of stockholders entitled
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to receive the rights or warrants or the distribution to which such Section
applies and (ii) the Ex-Dividend Date for such rights, warrants or
distribution.
"Ex-Dividend Date" means the date on which "ex-dividend" trading
commences for a dividend, an issuance of rights or warrants or a
distribution to which any of Sections 11.07, 11.08 and 11.09 applies in the
over-the-counter market or on the principal exchange on which the Company
Stock is then quoted or listed.
Section 11.12. When Adjustment May Be Deferred.
In any case in which this Article shall require that an adjustment shall
become effective immediately after a record date for an event, the Company may
defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such record date and before the occurrence of such
event the additional shares of Company Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the shares of
Company Stock issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such Holder cash or its check in lieu of any
fractional interest to which he is entitled pursuant to Section 11.04;
provided, however, that the Company shall deliver to such Holder a due bill or
other appropriate instrument evidencing such Holder's rights to receive such
additional shares of Company Stock, and such cash, upon the occurrence of the
event requiring such adjustment.
Section 11.13. When Adjustment Is Not Required.
No adjustments in the conversion price or conversion rate need be made
unless the adjustment would require an increase or decrease of at least one
percent (1%) in the initial conversion price or conversion rate. Any
adjustment which is not made shall be carried forward and taken into account
in any subsequent adjustment.
All calculations under this Article shall be made to the nearest cent or to
the nearest 1/100th of a share, as the case may be.
No adjustment in the conversion price or conversion rate shall be made
because the Parent issues, in exchange for cash, property or services, shares
of Company Stock, or any securities convertible into or exchangeable for
shares of Company Stock, or securities carrying the right to purchase shares
of Company Stock or such convertible or exchangeable securities.
No adjustment in the conversion price or conversion rate need be made under
this Article for sales of shares of Company Stock pursuant to a Company plan
providing for reinvestment of dividends or interest or in the event the par
value of the Company Stock is changed.
No adjustment in the conversion price or conversion rate need be made for a
transaction referred to in Section 11.07, 11.08 or 11.09 if Securityholders
are to participate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in light of the basis
and notice on which holders of Company Stock participate in the transaction;
provided that the basis on which the Securityholders are to participate in the
transaction shall not be deemed to be fair if it would require the conversion
of Securities at any time prior to the expiration of the conversion period
specified for such Securities.
To the extent the Securities become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
Section 11.14. Notice of Adjustment.
Whenever the conversion price or conversion rate is adjusted, the Company
shall promptly mail to Securityholders a notice of the adjustment and file
with the Trustee an Officers' Certificate briefly stating the new conversion
price or conversion rate, the date it becomes effective, the facts requiring
the adjustment and the manner of computing it. The certificate shall be
conclusive evidence that the adjustment is correct.
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Section 11.15. Notice of Certain Transactions.
If:
(1) the Company takes any action which would require an adjustment in the
conversion price or conversion rate;
(2) the Company consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation, and stockholders
of the Company must approve the transaction; or
(3) there is a dissolution or liquidation of the Company,
a Holder of a Security may want to convert it into shares of Company Stock
prior to the record date for, or the effective date of, the transaction so
that he may receive the rights, warrants, securities or assets which a holder
of shares of Company Stock on that date may receive. Therefore, the Company
shall mail to the Securityholders and the Trustee a notice stating the
proposed record or effective date, as the case may be. Failure to mail the
notice or any defect in it shall not affect the validity of any transaction
referred to in clause (1), (2) or (3) of this Section.
Section 11.16. Consolidation, Merger or Sale of the Company.
If the Company is a party to a transaction described in Section 5.01 or a
merger which reclassifies or changes its outstanding Company Stock, the
Company shall enter into a supplemental indenture. The supplemental indenture
shall provide that the Holder of a Security may convert it into the kind and
amount of securities or cash or other assets which he would have owned
immediately after the consolidation, merger or transfer if he had converted
the Security immediately before the effective date of such transaction,
assuming (to the extent applicable) that such Holder failed to exercise any
rights of election with respect thereto and received per share of Company
Stock the kind and amount of securities, cash or as received per share by a
plurality of the non-electing shares. The supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Article. The Company shall mail to each
Securityholder a notice describing the supplemental indenture.
If this Section applies, Sections 11.07, 11.08 and 11.09 shall not apply.
Section 11.17. Company Determination Final.
Any determination which the Board of Directors must make pursuant to
Sections 11.07, 11.09, 11.11, 11.13 or 11.16 is conclusive and binding on the
Holders.
Section 11.18. Trustee's Disclaimer.
Neither the Trustee nor any Conversion Agent has any duty to determine when
an adjustment under this Article should be made, how it should be made or what
it would be. Neither the Trustee nor any Conversion Agent has any duty to
determine whether any provisions of a supplemental indenture under Section
11.16 are correct. Neither the Trustee nor any Conversion Agent makes any
representation as to the validity or value of any securities or assets issued
upon conversion of Securities. Neither the Trustee nor any Conversion Agent
shall be responsible for the Company's failure to comply with this Article.
Section 11.19. Simultaneous Adjustments.
In the event that this Article Eleven requires adjustments to the conversion
price or conversion rate under more than one of Sections 11.07(4), 11.08 or
11.09, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made
by applying, first, the provisions of Section 11.07, second, the provisions of
Section 11.09 and, third, the provisions of Section 11.08.
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ARTICLE TWELVE
Miscellaneous
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of TIA (S)(S)310 to 317, inclusive, through operation of
TIA (S)318(c), such imposed duties shall control.
Section 12.02. Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by first-class mail addressed as follows:
If to the Company:
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Chief Financial Officer
If to the Trustee:
Attention:
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
Except for a notice to the Trustee, which is deemed given only when received,
if a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
Section 12.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA (S)312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S)312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent (including any covenants compliance with which
constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent (including any covenants compliance with
which constitutes a condition precedent) have been complied with.
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Section 12.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture (other than
certificates provided pursuant to Section 4.03) shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(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 such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Section 12.06. When Treasury Securities Disregarded.
In determining whether the Holders of the required aggregate principal
amount of Securities of any series have concurred in any direction, waiver or
consent, Securities of such series owned by the Company or by any Affiliate of
the Company shall be disregarded and treated as not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities of such
series which the Trustee knows are so owned shall be so disregarded.
Section 12.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of the
Securityholders of all series or any series. The Registrar, Paying Agent or
Conversion Agent may make reasonable rules for its functions.
Section 12.08. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York, New York are not required to be open. If
a specified date (including a date for giving notice) or the last day to
convert a Security is a Legal Holiday, any action to be taken on such date
pursuant to this Indenture or the Securities (including such conversion) may
be taken on the next succeeding day that is not a Legal Holiday, and to the
extent applicable, no interest, or original issue discount, as the case may
be, shall accrue for the intervening period.
Section 12.09. Governing Law.
The internal laws of the State of New York shall govern this Indenture and
the Securities.
Section 12.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.11. No Recourse Against Others.
No past, present or future director, officer, employee or stockholder, as
such, of the Company or any successor thereof shall have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation and all such liability is hereby waived and released. Such waiver and
release are part of the consideration for the issue of the Securities.
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Section 12.12. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 12.13. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.14. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
46
<PAGE>
Signatures
Dated: , 199
Tele-Communications, Inc.
By __________________________________
(Seal)
Attest: _____________________________
Secretary
Dated: , 199
By __________________________________
(Seal)
47
<PAGE>
EXHIBIT 4.3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELE-COMMUNICATIONS, INC.
AND
TRUSTEE
----------------
INDENTURE
DATED AS OF ,
----------------
SUBORDINATED DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
<C> <S> <C>
310 (a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.
(a)(4).............................................. N.A.
(a)(5).............................................. 7.10
(b)................................................. 7.08; 7.10; 12.02
(c)................................................. N.A.
311 (a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312 (a)................................................. 2.07
(b)................................................. 12.03
(c)................................................. 12.03
313 (a)................................................. 7.06
(b)(1).............................................. N.A.
(b)(2).............................................. 7.06
(c)................................................. 12.02
(d)................................................. 7.06
314 (a)................................................. 4.02; 4.03; 12.02
(b)................................................. N.A.
(c)(1).............................................. 12.04
(c)(2).............................................. 12.04
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 12.05
(f)................................................. N.A.
315 (a)................................................. 7.01(b)
(b)................................................. 7.05; 12.02
(c)................................................. 7.01(a)
(d)................................................. 7.01(c)
(e)................................................. 6.11
316 (a)(last sentence).................................. 12.06
(a)(1)(A)........................................... 6.05
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
317 (a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.06
318 (a)................................................. 12.01
</TABLE>
- --------
N.A. means Not Applicable.
2
<PAGE>
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE ONE
Definitions and Incorporation by Reference
1.01. Definitions...................................................... 7
1.02. Other Definitions................................................ 9
1.03. Incorporation by Reference of Trust Indenture Act................ 9
1.04. Rules of Construction............................................ 9
ARTICLE TWO
The Securities
2.01. Forms Generally and Dating....................................... 10
2.02. Amount Unlimited; Issuable in Series............................. 10
2.03. Denominations.................................................... 12
2.04. Execution and Authentication..................................... 12
2.05. Registrar, Paying Agent and Conversion Agent..................... 14
2.06. Paying Agent to Hold Money and Securities in Trust............... 14
2.07. Securityholder Lists............................................. 14
2.08. Transfer and Exchange............................................ 14
2.09. Replacement Securities........................................... 16
2.10. Outstanding Securities........................................... 16
2.11. Temporary Securities............................................. 17
2.12. Cancellation..................................................... 17
2.13. Payment of Interest; Defaulted Interest.......................... 17
2.14. Persons Deemed Owners............................................ 18
2.15. Securities in Global Form........................................ 18
ARTICLE THREE
Redemption
3.01. Applicability of Article......................................... 19
3.02. Notices to Trustee............................................... 19
3.03. Selection of Securities to be Redeemed........................... 19
3.04. Notice of Redemption............................................. 20
3.05. Effect of Notice of Redemption................................... 20
3.06. Deposit of Redemption Price...................................... 20
3.07. Securities Redeemed in Part...................................... 21
3.08. Conversion Arrangement on Call for Redemption.................... 21
ARTICLE FOUR
Covenants
4.01. Payment of Securities............................................ 21
4.02. SEC Reports...................................................... 21
4.03. Compliance Certificate........................................... 21
4.04. Corporate Existence.............................................. 22
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE FIVE
Successor Corporation
5.01. When Company May Merge, etc...................................... 22
ARTICLE SIX
Defaults and Remedies
6.01. Events of Default................................................ 22
6.02. Acceleration..................................................... 23
6.03. Other Remedies................................................... 23
6.04. Waiver of Existing Defaults...................................... 24
6.05. Control by Majority.............................................. 24
6.06. Limitation on Suits.............................................. 24
6.07. Rights of Holders to Receive Payment and to Convert.............. 24
6.08. Collection Suit by Trustee....................................... 24
6.09. Trustee May File Proofs of Claim................................. 25
6.10. Priorities....................................................... 25
6.11. Undertaking for Costs............................................ 25
ARTICLE SEVEN
Trustee
7.01. Duties of Trustee................................................ 25
7.02. Rights of Trustee................................................ 26
7.03. Individual Rights of Trustee..................................... 26
7.04. Trustee's Disclaimer............................................. 26
7.05. Notice of Defaults............................................... 26
7.06. Reports by Trustee to Holders.................................... 27
7.07. Compensation and Indemnity....................................... 27
7.08. Replacement of Trustee........................................... 27
7.09. Successor Trustee by Merger, etc................................. 28
7.10. Eligibility; Disqualification.................................... 28
7.11. Preferential Collection of Claims Against Company................ 28
ARTICLE EIGHT
Discharge of Indenture
8.01. Termination of Company's Obligations............................. 28
8.02. Application of Trust Fund........................................ 29
8.03. Repayment to Company............................................. 29
ARTICLE NINE
Amendments, Supplements and Waivers
9.01. Without Consent of Holders....................................... 29
9.02. With Consent of Holders.......................................... 30
9.03. Compliance with Trust Indenture Act.............................. 31
9.04. Revocation and Effect of Consents................................ 31
9.05. Notation on or Exchange of Securities............................ 31
9.06. Trustee to Sign Amendments, etc.................................. 31
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE TEN
Subordination
10.01. Securities Subordinated to Senior Debt........................... 31
Company Not to Make Payments with Respect to Securities in
10.02. Certain Circumstances........................................... 32
10.03. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation or Reorganization of Company........... 32
10.04. Securityholders to be Subrogated to Right of Holders of Senior
Debt............................................................. 33
10.05. Obligation of the Company Unconditional.......................... 33
Trustee Entitled to Assume Payments Not Prohibited in Absence of
10.06. Notice........................................................... 34
Application by Trustee of Monies or U.S. Government Obligations
10.07. Deposited with It................................................ 34
10.08. Subordination Rights Not Impaired by Acts or Omissions of Company
or Holders of Senior Debt....................................... 35
Securityholders Authorize Trustee to Effective Subordination of
10.09. Securities....................................................... 35
10.10. Right of Trustee to Hold Senior Debt............................. 35
10.11. Article Ten Not to Prevent Events of Default..................... 35
ARTICLE ELEVEN
Conversion
11.01. Applicability of Article......................................... 35
11.02. Conversion Privilege............................................. 35
11.03. Conversion Procedures............................................ 36
11.04. Fractional Shares................................................ 37
11.05. Taxes on Conversion.............................................. 37
11.06. Company to Provide Stock......................................... 37
11.07. Adjustment for Change in Capital Stock........................... 37
11.08. Adjustment for Rights Issue...................................... 38
11.09. Adjustments for Other Distributions.............................. 39
11.10. Voluntary Adjustment............................................. 39
11.11. Certain Definitions.............................................. 40
11.12. When Adjustment May be Deferred.................................. 41
11.13. When Adjustment Is Not Required.................................. 41
11.14. Notice of Adjustment............................................. 41
11.15. Notice of Certain Transactions................................... 41
11.16. Consolidation, Merger or Sale of the Company..................... 42
11.17. Company Determination Final...................................... 42
11.18. Trustee's Disclaimer............................................. 42
11.19. Simultaneous Adjustments......................................... 42
ARTICLE TWELVE
Miscellaneous
12.01. Trust Indenture Act Controls..................................... 42
12.02. Notices.......................................................... 43
12.03. Communication by Holders with Other Holders...................... 43
12.04. Certificate and Opinion as to Conditions Precedent............... 43
12.05. Statements Required in Certificate or Opinion.................... 43
12.06. When Treasury Securities Disregarded............................. 44
12.07. Rules by Trustee and Agents...................................... 44
12.08. Legal Holidays................................................... 44
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
12.09. Governing Law.................................................... 44
12.10. No Adverse Interpretation of Other Agreements.................... 44
12.11. No Recourse Against Others....................................... 44
12.12. Successors....................................................... 44
12.13. Duplicate Originals.............................................. 45
12.14. Table of Contents, Headings, Etc................................. 45
Signatures................................................................ 46
</TABLE>
6
<PAGE>
INDENTURE dated as of , between TELE-COMMUNICATIONS, INC., a Delaware
corporation ("Company"), and ("Trustee").
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured subordinated
debentures, notes, bonds or other evidences of subordinated indebtedness
("Securities"), to be issued in one or more series as provided in this
Indenture.
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the respective Holders from time to time of
Securities or of series thereof:
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
Affiliate of any person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person.
Agent means any Registrar, Paying Agent, co-Registrar or Conversion Agent.
See Section 2.05.
Board of Directors means the Board of Directors of the Company or any
authorized committee thereof.
Business Day means any day which is not a Legal Holiday.
Company means the Tele-Communications, Inc., a Delaware corporation, until a
successor replaces it pursuant to the applicable provisions of this Indenture
and thereafter means the successor.
Company Stock means the Tele-Communications, Inc. Series A TCI Group Common
Stock, $1.00 par value, as it exists on the date of this Indenture and any
other capital stock into which such Series A TCI Group Common Stock may
thereafter have been changed.
Convertible Securities means any or all options, warrants, securities and
rights, except the Series B Stock and the Securities, which are convertible
into or exercisable or exchangeable for Company Stock or which otherwise
entitle the holder thereof to subscribe for, purchase or otherwise acquire
Company Stock.
Default means any event which is, or after notice or passage of time or both
would be, an Event of Default.
Holder or Securityholder means the person in whose name a Security is
registered on the Registrar's books.
Indenture means this Indenture as amended or supplemented from time to time
and, unless the context indicates otherwise, shall include the form and terms
of a particular series of Securities established as contemplated hereunder.
interest, when used with respect to an Original Issue Discount Security
which by its terms bears interest only after maturity or upon default in any
other payment due on such Security, means interest payable after maturity or
upon such default, as the case may be.
Interest Payment Date means the date, if any, specified in the Securities of
any series as the fixed date on which any installment of interest on the
Securities of that series is due and payable.
7
<PAGE>
Officer means the Chairman of the Board, the President, any Vice President,
the Treasurer or the Secretary of the Company.
Officers' Certificate means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company
and delivered to the Trustee. See Sections 12.04 and 12.05.
Opinion of Counsel means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 12.04 and 12.05.
original issue discount of any debt security, including any Original Issue
Discount Security, means the difference between the principal amount of such
debt security and the initial issue price of such debt security (as set forth,
in the case of an Original Issue Discount Security, on the face of such
Security).
Original Issue Discount Security means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon
acceleration of the maturity thereof pursuant to Section 6.02.
principal of a debt security, including any Security, means the amount
(including, without limitation, if and to the extent applicable, any premium
and, in the case of an Original Issue Discount Security, any accrued original
issue discount, but excluding interest) that is payable with respect to such
debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Company, upon any purchase or exchange at the option of the
Company or the holder of such debt security and upon any acceleration of the
maturity of such debt security).
principal amount of a debt security, including any Security, means the
principal amount as set forth on the face of such debt security.
Regular Record Date means the date, if any, specified in the Securities of
any series as the record date for the determination of Securityholders to whom
interest is payable on the next succeeding Interest Payment Date.
SEC means the Securities and Exchange Commission.
Securities means the Securities that are issued from time to time in one or
more series under this Indenture as such Securities are amended or
supplemented from time to time.
Series B Stock means the Tele-Communications, Inc. Series B TCI Group Common
Stock, $1.00 par value, of the Company as it exists on the date of this
Indenture and stock of any other class into which such Series B TCI Group
Common Stock may thereafter have been changed.
Subsidiary means a corporation a majority of whose voting stock is owned by
the Company and/or one or more Subsidiaries. Voting stock is capital stock
having voting power under ordinary circumstances to elect directors.
TIA means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb)
as in effect on the date of this Indenture, except as provided in Section
9.03.
Trustee means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor and if at any time there is
more than one such party, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
Trust Officer, when used with respect to the Trustee, shall mean the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice-president, the
treasurer, any assistant treasurer, the secretary, any assistant secretary,
any trust officer, any second or assistant vice-president, or any officer or
assistant officer of the Trustee other than those specifically above-mentioned
customarily performing functions
8
<PAGE>
similar to those performed by such above-mentioned officers and also means
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and familiarity with the
particular subject.
United States means the United States of America.
U.S. Government Obligations means direct obligations of, or obligations
entitled to the full faith and credit of, the United States of America.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
TERM DEFINED IN SECTION
<S> <C>
Average Market Price.................................. 11.11
Bankruptcy Law........................................ 6.01
Code.................................................. 9.01
Conversion Agent...................................... 2.05
current market price.................................. 11.11
Custodian............................................. 6.01
Debt.................................................. 10.01
Determination Date.................................... 11.11
Event of Default...................................... 6.01
Ex-Dividend Date...................................... 11.11
Legal Holiday......................................... 12.08
Paying Agent.......................................... 2.05
Registrar............................................. 2.05
Senior Debt........................................... 10.01
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
Commission means the SEC.
indenture securities means the Securities.
indenture security holder means a Securityholder.
indenture to be qualified means this Indenture.
indenture trustee or institutional trustee means the Trustee.
obligor on the indenture securities means the Company and any other
obligor thereon.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles in effect on
the date of this Indenture;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the plural include
the singular.
9
<PAGE>
ARTICLE TWO
The Securities
Section 2.01. Forms Generally and Dating.
The Securities of each series may be issued in whole or in part in the form
of one or more global Securities as shall be specified as contemplated by
Section 2.02. The Securities of each series (including any temporary global
Securities) shall be in one of the forms established from time to time by or
pursuant to a resolution of the Board of Directors or in or pursuant to one or
more indentures supplemental hereto, which shall set forth the information
required by Section 2.02. The Securities shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or by a resolution of the Board of Directors and
may have such notations, legends or endorsements as the Company may deem
appropriate and as are not inconsistent with the provisions of this Indenture,
or as may be required by law, stock exchange rule or usage. The Company shall
approve the form or forms of the Securities and any notation, legend or
endorsement on them. If the form or forms of Securities of any series is
established by action taken pursuant to a resolution of the Board of Directors
or indenture supplemental hereto, a copy of an appropriate record of such
action 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
written order of the Company contemplated by Section 2.04 for the
authentication and delivery of such Securities.
Each Security shall be dated the date of its authentication. The form of the
Trustee's certificate of authentication to be borne by the Securities shall be
substantially as follows:
CERTIFICATE OF AUTHENTICATION
The undersigned certifies that this is one of the Securities of the series
designated herein referred to in the within-mentioned Indenture.
,
as Trustee
By___________________________________
Authorized Officer
Section 2.02. 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 or pursuant to a resolution of the Board of Directors or
established in or pursuant to one or more indentures supplemental hereto,
prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish
Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of Securities of the
series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.08, 2.09, 2.11, 3.07, or 9.05 and except for
any Securities which pursuant to Section 2.04 are deemed not to have been
authenticated and delivered hereunder);
(3) (A) whether any of the Securities of the series are to be issuable in
global form and, if so, (i) the identity of the depositary with respect to
any such global Security and (ii) whether beneficial owners of
10
<PAGE>
interests in any such global Security may exchange such interests for
Securities of the same series and of like tenor and of any authorized form
and denomination, and, if so, the circumstances under which and the manner
in which any such exchanges may occur, if other than as specified in
Section 2.08; (B) if any of the Securities of the series are to be issuable
in global form, the date as of which any global Security shall be dated (if
other than the date of original issuance of the first of such Securities to
be issued); and (C) if Securities of the series are to be issuable in
definitive form (whether upon original issue, upon exchange of a temporary
Security of such series, or in exchange for a beneficial ownership interest
in a permanent global Security) only upon receipt of certain certificates
or other documents or satisfaction of other conditions, or if Securities of
the series are initially issuable in temporary global form and if owners of
beneficial interests therein may exchange such interest for an interest in
a permanent global Security 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;
(4) the date or dates (and whether fixed or extendible) on which the
principal of Securities of the series is payable;
(5) the rate or rates at which Securities of the series shall bear
interest, or the method of determining the same, if any, the date or dates
from which such interest shall accrue, the Interest Payment Dates and the
Regular Record Dates;
(6) the place or places where the principal of any interest on Securities
of the series shall be payable;
(7) any provisions relating to the issuance of Securities of such series
at an original discount (including, without limitation, the issue price
thereof, the rate or rates at which such original issue discount shall
accrue, if any, and the date or dates from or to which or period or periods
during which such original issue discount shall accrue at such rate or
rates):
(8) the price or prices at which, the period or periods within which and
the terms and conditions upon which Securities of the series may be
redeemed or otherwise purchased, in whole or in part, at the option of the
Company, pursuant to any sinking fund or otherwise (including, without
limitation the form or method of payment thereof if other than in cash);
(9) the obligation, if any, of the Company to redeem, purchase or repay
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Securityholder thereof and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Securities of the series shall be redeemed, purchased
or repaid, in whole or in part, pursuant to such obligation (including
without limitation, the form or method of payment thereof if other than in
cash);
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(11) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
acceleration of the maturity thereof pursuant to Section 6.02 or provable
in bankruptcy pursuant to Section 6.09, or, if applicable, which is
convertible in accordance with Article Eleven;
(12) any Events of Default with respect to the Securities of a particular
series in lieu of or in addition to those set forth herein and the remedies
therefor;
(13) the obligation, if any, of the Company to permit the conversion of
Securities of such series into Company Stock and the terms and conditions
upon which such conversion shall be effected (including, without
limitation, the initial conversion price or rate, the conversion period and
any other provision in addition to or in lieu of those set forth in this
Indenture relative to such obligation); and
(14) any other terms of a particular series and any other provisions
expressing or referring to the terms and conditions upon which the
Securities of that series are to be issued under the Indenture, which terms
and provisions are not in conflict with the provisions of this Indenture;
provided, however, the addition to or subtraction from or variation of
Articles Four, Five, Six, Eight and Eleven (and Sections 1.01 and 1.02,
insofar as they relate to the definition of certain terms as used in such
Articles) with regard to the Securities of a particular series shall not be
deemed to constitute a conflict with the provisions of those Articles.
11
<PAGE>
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to such
resolution of the Board of Directors or in any such indenture supplemental
hereto. Not all Securities of any one series need be issued at the same time,
and, unless otherwise so provided, a series may be reopened for issuances of
additional Securities of such series.
If any of the terms of the Securities of a series are established by action
taken pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee with an Officers' Certificate setting forth the terms
or the manner of determining the terms of the Securities of such series. With
respect to Securities of a series which are not to be issued at one time, such
resolution of the Board of Directors or action may provide general terms or
parameters for Securities of such series and provide either that the specific
terms of particular Securities of such series shall be specified in a written
order of the Company or that such terms shall be determined by the Company or
its agents in accordance with a written order of the Company as contemplated
by the proviso clause of the fourth paragraph of Section 2.04.
Section 2.03. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
2.02. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
Section 2.04 Execution and Authentication.
Two Officers shall sign the Securities for the Company by facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture or be
valid for any purpose until the Trustee manually signs the certificate of
authentication on the Security. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture. Notwithstanding
the foregoing, if any Security shall have been duly 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 2.12 together with a written statement (which need not comply with
Section 12.04 and 12.05 and need not be accompanied by an Opinion of Counsel)
stating that such Security has not been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed not to have been
authenticated and delivered hereunder and shall not be entitled to the
benefits of this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, and the Trustee shall authenticate
and deliver said Securities to or upon the written order of the Company,
signed by two Officers or by an Officer and an Assistant Treasurer of the
Company, without any further action by the Company. Such written order shall
specify the date on which said Securities shall be authenticated; provided,
however, that if not all the Securities of a series are to be issued at one
time and if the resolution of the Board of Directors or indenture supplemental
hereto establishing such series as contemplated by Sections 2.01 and 2.02
shall so permit, such written order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and for determining the form or
terms of particular Securities of such series including, but not limited to,
interest rate, maturity date, date of issuance and date from which interest
shall accrue.
If the form or forms or terms of the Securities of the series have been
established in or pursuant to one or more resolutions of the Board of
Directors or indentures supplemental hereto as permitted by Sections 2.01 and
12
<PAGE>
2.02, 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 Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating:
(1) if the form or forms of such Securities has been established by or
pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, that such form or forms has been established in
conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant
to a resolution of the Board of Directors or indenture supplemental hereto,
that such terms have been established in conformity with the provisions of
this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been duly issued and will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors' rights
and to general equitable principles;
provided, however, that, with respect to Securities of a series which are not
to be issued at one time, the Trustee shall be entitled to receive such
Opinion of Counsel only once at or prior to the time of the first
authentication of Securities of such series and that the opinions described in
clauses (2) and (3) above may state, respectively,
(a) that, when the terms of such Securities shall have been established
pursuant to a written order of the Company or pursuant to such procedures
as may be specified from time to time by a written order of the Company,
all as contemplated by and in accordance with a resolution of the Board of
Directors or an Officers' Certificate pursuant to a resolution of the Board
of Directors or indenture supplemental hereto, as the case may be, such
terms will have been established in conformity with the provisions of this
Indenture; and
(b) that such Securities, when (i) executed by the Company, (ii)
completed, authenticated and delivered by the Trustee in accordance with
this Indenture, (iii) issued and delivered by the Company and (iv) paid
for, all as contemplated by and in accordance with the aforesaid written
order of the Company or specified procedures, as the case may be, will have
been duly issued and will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equitable principles.
Notwithstanding the provisions of Sections 2.01, 2.02, 12.04 and this
Section, if all the Securities of a series are not to be originally issued at
one time, the resolution of the Board of Directors or indenture supplemental
hereto, the certified copy of the record of action taken pursuant to such
resolution or supplemental indenture, the Officers' Certificate, the written
resolution or supplemental indenture, the written order of the Company and any
other documents otherwise required pursuant to such Sections need not be
delivered at or prior to the time of authentication of each Security of such
series if such documents are delivered at or prior to the authentication upon
original issuance of the first Security of such series to be issued; provided,
however, that any subsequent request by the Company to the Trustee to
authenticate Securities of such series shall constitute a representation and
warranty by the Company that as of the date of such request, the statements
made in the Officers' Certificate delivered pursuant to Section 12.04 at or
prior to authentication of the first such Security shall be true and correct
on the date thereof as if made on and as of the date thereof.
The Trustee shall have the right to decline to authenticate and make
available for delivery any Securities under this Section if the issuance of
such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
With respect to Securities of a series which are not all issued at one time,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the
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legality, validity, binding effect and enforceability thereof, upon the
Opinion of Counsel, Officers' Certificate and other documents delivered
pursuant to Sections 2.01, 2.02, 12.04 and this Section, as applicable, at or
prior to the time of the first authentication of Securities of such series
unless and until such opinion, certificate or other documents have been
superseded or revoked. In connection with the authentication and delivery of
Securities of a series which are not all issued at one time, the Trustee shall
be entitled to assume that the Company's instructions to authenticate and
deliver such Securities do not violate any rules, regulations or orders of any
governmental agency or commission having jurisdiction over the Company.
Section 2.05. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain an office or agency where Securities of each
series may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities of each series may be
presented for payment ("Paying Agent") and an office or agency where
Securities of each series that is convertible may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities of
each series issued hereunder and of their transfer and exchange. The Company
may have one or more co-Registrars (provided that there shall be only one
register, which shall be maintained by the principal Registrar), one or more
additional paying agents and one or more conversion agents with respect to any
series. The term "Paying Agent" includes any additional paying agent and the
term "Conversion Agent" includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify
the Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act
as such.
The Company initially appoints the Trustee Registrar and Paying Agent for
each series and the Conversion Agent for any series that is convertible.
Section 2.06. Paying Agent to Hold Money and Securities in Trust.
Subject to Section 10.07, each Paying Agent shall hold in trust for the
benefit of Securityholders of the relevant series or the Trustee all money and
securities held by the Paying Agent for the payment of any amount in respect
of the Securities of such series, and shall notify the Trustee of any default
by the Company in making any such payment. If the Company or a Subsidiary acts
as Paying Agent, it shall segregate such money and securities and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money and securities held by it to the Trustee and account for any funds
or securities disbursed. Upon doing so the Paying Agent shall have no further
liability for the money or securities.
Section 2.07. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before either (1) April 1 and October 1 in each
year in the case of Original Issue Discount Securities of any series which by
their terms do not bear interest prior to maturity (other than upon a default
in any payment upon such a Security) or (2) the Interest Payment Date for the
Securities of any other series, but in no event less frequently than semi-
annually, and at such other times as the Trustee may request in writing a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders.
Section 2.08. Transfer and Exchange.
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if its requirements for such transfer are met. Where Securities are
presented to the Registrar or a co-Registrar with a request to exchange them
for an equal aggregate principal amount of Securities of the same series of
other authorized denominations, the Registrar shall make the exchange
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as requested if its requirements for such exchange are met. The Registrar
shall require, among other things, that any Security presented or surrendered
for transfer or exchange be duly endorsed, or be accompanied by appropriate
transfer documents duly executed, by the Holder thereof or his attorney duly
authorized in writing. To permit transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. Any exchange or transfer
shall be without charge, except that the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto.
The Registrar need not transfer or exchange any Security selected for
redemption, or purchase (except, in the case of Securities to be redeemed or
purchased in part, the portion thereof not to be redeemed or purchased) or any
Security in respect of which a notice requiring the purchase or redemption
thereof by the Company at the option of the Holder has been given and not
withdrawn by the Holder thereof in accordance with the terms of such
Securities (except, in the case of Securities to be so purchased or redeemed
in part, the portion thereof not to be so purchased or redeemed) or transfer
or exchange Securities of any particular series during a period of 15 days
before a selection of Securities of such series to be redeemed.
Except as otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, a global Security may be exchanged only as
provided below in this Section.
If at any time the depositary with respect to a global Security representing
all or a portion of the Securities of or within a series notifies the Company
that it is unwilling, unable or ineligible to continue as such depositary, the
Company shall appoint a successor depositary with respect to such Securities.
Unless otherwise provided with respect to a series of Securities as
contemplated by Section 2.02, if a successor depositary is not so appointed by
the Company within 90 days after the Company receives such notice, the Company
will execute and the Trustee, upon receipt of a written order of the Company
as contemplated by Section 2.04 for the authentication and delivery of
definitive Securities of such series (or, if such written order has previously
been delivered, then upon receipt of written instructions from the person or
persons specified in such written order), will authenticate and deliver
Securities of such series in definitive form equal in aggregate principal
amount to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more global Securities
shall no longer be represented by such global Security or Securities. In such
event the Company will execute and the Trustee, upon receipt of a written
order of the Company as contemplated by Section 2.04 for the authentication
and delivery of definitive Securities of such series (or, if such written
order has previously been delivered, then upon receipt of written instructions
from the person or persons specified in such written order), will authenticate
and deliver Securities of such series in definitive form equal in aggregate
principal amount to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
If a global Security is otherwise exchangeable as specified by the Company
pursuant to Section 2.02(3) with respect to a series of Securities, the
depositary with respect to a global Security representing all or a portion of
the Securities of or within such series may surrender such global Security to
the Trustee, as the Company's agent for such purpose, to be exchanged in whole
or in part for Securities of such series in definitive form in the manner and
under the circumstances so specified and on such terms as are acceptable to
the Company and such depositary. In such event, the Company shall execute and
the Trustee shall authenticate and deliver or make available for delivery:
(i) to each Person specified by such depositary a new Security or
Securities of the same series and of like tenor, of any authorized form and
denomination as requested by such Person in aggregate principal amount
equal to and in exchange for such Person's beneficial interest in the
global Security; and
(ii) unless endorsement of the surrendered global Security as
contemplated by Section 2.15 or another procedure is specified for the
Securities of such series as contemplated by Section 2.02, to such
depositary a new global Security in a denomination equal to the difference,
if any, between the principal amount of the surrendered global Security and
the aggregate principal amount of Securities delivered pursuant to clause
(i) above in exchange for beneficial interests in such surrendered global
Security.
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In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities
in definitive registered form in authorized denominations.
Upon the exchange of a global Security for Securities in definitive form,
such global Security shall be cancelled by the Trustee, unless endorsement of
the surrendered global Security as contemplated by Section 2.15 or another
procedure is specified for the Securities of such series as contemplated by
Section 2.02. Securities issued in exchange for a global Security pursuant to
this Section shall be registered in such names and in such authorized
denominations as the depositary for such global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the persons
in whose names such Securities are so registered.
If a Security is issued in exchange for any portion of a global Security
after the close of business at the office or agency where such exchange occurs
(i) on any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) on any special
record date and before the opening of business at such office or agency on the
related 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
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 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.
Section 2.09. Replacement Securities.
If a mutilated Security is surrendered to the Registrar or if the Holder of
a Security claims that the Security has been lost, destroyed or wrongfully
taken, then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall issue
and the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer
if a Security is replaced. The Company may charge for its expenses in
replacing a Security. Every replacement Security is an additional obligation
of the Company.
In case any such lost, destroyed or wrongfully-taken Security has become or
is about to become due and payable, or is about to be purchased by the Company
pursuant to any provision of the Securities of such series providing for the
purchase thereof at the option of the Holder or the Company, the Company in
its discretion may, instead of issuing a new Security, pay or purchase such
Security.
Section 2.10. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section as not being outstanding. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date or on the
Business Day following a date on which Securities of such series are to be
purchased by the Company pursuant to any provision thereof providing for such
purchase at the option of the Holder or the Company, money (or securities if
permitted by the terms of such Securities) in trust or, if the Company, acting
as its own Paying Agent, sets aside and segregates
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money (or securities if permitted by the terms of such Securities) in trust,
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest, if any (and original
issue discount, if Original Issue Discount Securities) on them ceases to
accrue, unless the Trustee or the Paying Agent is restricted under Article Ten
in applying such money.
Section 2.11. Temporary Securities.
Until a permanent global Security or definitive Securities are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities of any series shall be substantially in the
form of definitive Securities of such series, but may have variations that the
Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities of the same series. Until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 2.12. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation, including Securities authenticated which the Company has not
issued and sold. The Company, Registrar, Paying Agent and Conversion Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange, payment, redemption, purchase by the Company pursuant to any
provision thereof providing for such purchase at the option of the Holder, or
conversion. The Trustee and no one else shall cancel all Securities
surrendered for transfer, exchange, payment, redemption, purchase, conversion
or cancellation, and may dispose of cancelled Securities as the Company
directs. Except as otherwise provided in the resolution of the Board of
Directors or indenture supplemental hereto establishing such series as
contemplated by Section 2.02, the Company may not issue new Securities of a
series to replace Securities of the same series that it has paid or that have
been delivered to the Trustee for cancellation.
Section 2.13. Payment of Interest; Defaulted Interest.
Interest (except defaulted interest) on the Securities of any series which
is payable on any Interest Payment Date shall be paid to the persons who are
Holders of such series at the close of business on the Regular Record Date for
such interest payment. At the option of the Company, payment of interest on
any Security may be made by check mailed to the Holder's registered address.
If the Company defaults in a payment of interest on the Securities of any
series on any Interest Payment Date, it shall pay the defaulted interest to
the persons who are Securityholders of such series at the close of business on
a subsequent special record date. The Company shall fix the record date and
payment date. At least 15 days before the record date, the Company shall mail
to each Securityholder of such series a notice that states the record date,
the payment date and the amount of defaulted interest to be paid. The Company
shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Paying Agent an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Paying Agent for such deposit prior to the date of the
proposed payment. The Company may pay defaulted interest in any other lawful
manner.
Unless otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, in the case of any Security of any series which
is converted after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Security which is due and
payable prior to such Interest Payment Date), interest which is due and
payable on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest shall be paid
to the Holder in whose name that Security is registered at the close of
business on such Regular Record Date.
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Section 2.14. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any Agent may treat the person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 2.13) interest on
such Security and for all other purposes whatsoever, and neither the Company,
the Trustee nor any Agent shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such global Security, and such depositary (or its nominee, if such global
Security is registered in the name of a nominee) may be treated by the
Company, the Trustee, and any Agent as the owner of such global Security for
all purposes whatsoever. None of the Company, the Trustee, or any Agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of a global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security, nothing
herein shall prevent the Company, the Trustee, or any Agent 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 2.15. Securities in Global Form.
If the Company shall establish pursuant to Section 2.02 that the Securities
of or within a series are to be issued in whole or in part in global form,
then the Company shall execute, and the Trustee shall, in accordance with
Section 2.04 and the written order of the Company contemplated thereby,
authenticate and deliver one or more global Securities in temporary or
permanent form that (i) shall be registered in the name of the depositary for
such global Security or Securities or the nominee of such depositary, (ii)
shall be delivered by the Trustee to such depositary or pursuant to such
depositary's instructions, and (iii) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive form, this Security may not be transferred except as
a whole by the depositary to a nominee of the depositary or another nominee of
the depositary or by the depositary or any such nominee to a successor
depositary or a nominee of such successor depositary." Each depositary
designated pursuant to Section 2.02 for a global Security in registered form
must be, to the extent required by applicable law or regulation, a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and
any other applicable statute or regulation, at the time of its designation and
at all times that it serves as depositary. Notwithstanding clause (14) of
Section 2.02 and the provisions of Section 2.03, any such global 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 represented thereby
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of a Security in a global form to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
outstanding Securities represented thereby shall be made in such manner and
upon instructions given by such Person or Persons as shall be specified
therein or in the written order of the Company to be delivered to the Trustee
pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if
applicable, Section 2.11, 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 written order of the
Company. If a written order of the Company pursuant to Section 2.04 has been,
or simultaneously is, delivered, any instructions with respect to a Security
in global form shall be in writing but need not comply with Sections 12.04 and
12.05 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of the third paragraph of Section 2.04
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
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Company delivers to the Trustee the Security in global form together with
written instructions (which need not comply with Sections 12.04 and 12.05 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 the third paragraph of
Section 2.04.
ARTICLE THREE
Redemption
Section 3.01. Applicability of Article.
Securities of any series which are redeemable before their stated maturity
at the election of the Company or through the operation of any sinking fund
for the retirement of Securities of such series shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 2.02 for Securities of any series) in accordance with this Article.
Section 3.02. Notices to Trustee.
If the Company elects to redeem all or less than all the Securities of any
series, it shall notify the Trustee of the redemption date, the principal
amount of Securities to be redeemed, the specific provison of the Securities
pursuant to which the Securities being called for redemption are being
redeemed and the redemption price. 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. If the Company wants to make any permitted optional sinking
fund payment it shall notify the Trustee of the principal amount of the
Securities to be redeemed.
The Company (1) may deliver outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which (i) have been redeemed or otherwise purchased 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 or (ii) have been converted pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any
sinking fund payment required to be made pursuant to the terms of the
Securities of such series as provided for by the terms of such series;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the redemption price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly. The Company shall notify the Trustee of its
intention to so reduce the amount of such sinking fund payment, the amount of
the reduction and the basis for it. The Company shall deliver to the Trustee
with such notice any Securities to be credited for such purpose that it has
not previously delivered to the Trustee for cancellation.
The Company shall give each notice and Officers' Certificate provided for in
this Section at least 60 days before the redemption date (unless a shorter
notice shall be satisfactory to the Trustee or is otherwise specified as
contemplated by Section 2.02 for Securities of any series).
Section 3.03. Selection of Securities to be Redeemed.
Except as otherwise specified as contemplated by Section 2.02 for Securities
of any series, if less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed shall be selected from
Securities of the same series outstanding not previously called for redemption
by such method as the Trustee considers 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 that have
denominations larger than the minimum authorized denomination for Securities
of that series. Provisions of this Indenture that apply to Securities called
for redemption also apply
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to portions of Securities called for redemption. If any Security selected for
partial redemption is converted in part after such selection but before the
termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed
(so far as may be practicable) to be the portion selected for redemption.
Section 3.04. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date (unless
a shorter notice is specified as contemplated by Section 2.02 for Securities
of any series), the Company shall mail a notice of redemption by first-class
mail to each Holder of Securities of the series to be redeemed.
The notice shall identify the Securities (and, in the case of partial
redemption, the principal amount of the Securities) to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price and method of payment, if other than in cash;
(3) if applicable, the current conversion price or rate;
(4) the name and address of the Paying Agent and, if applicable, the
Conversion Agent;
(5) if applicable, that the right of the Holder to convert Securities
called for redemption shall terminate at the close of business on the
fifteenth day prior to the redemption date (or such other day as may be
specified as contemplated by Section 2.02 for Securities of any series);
(6) if applicable, that Holders who want to convert Securities called for
redemption must satisfy the requirements for conversion contained in such
Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(8) that interest, if any (or original issue discount, if Original Issue
Discount Securities), on Securities called for redemption ceases to accrue
on and after the redemption date, unless the Company defaults in making
such redemption payment; and
(9) that the redemption is for a sinking fund or at the election of the
Company, whichever is the case.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense.
Section 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed. Securities of the series called for
redemption become due and payable on the redemption date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price, plus, if applicable, accrued interest, if any, to the
redemption date; provided, however, that installments of interest the Interest
Payment Date for which is on or prior to the redemption date shall be payable
to the persons who are Holders of such Securities on the relevant record dates
for such interest according to their terms and Section 2.13.
Section 3.06 Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the Paying
Agent money (or securities if permitted by the terms of such Securities)
sufficient to pay the redemption price of, and (except if the redemption date
is an Interest Payment Date) accrued interest, if any, on, all Securities to
be redeemed on that date other than Securities or portions thereof called for
redemption on that date which are delivered by the Company to the Trustee for
cancellation. The Paying Agent shall return to the Company any money (or
securities) not required for that purpose because of conversion of Securities.
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Section 3.07 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee shall
authenticate for the Holder a new Security of the same series, of any
authorized denomination requested by such Holder, equal in principal amount to
the unredeemed portion of the Security surrendered.
Section 3.08 Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may arrange for
the purchase and conversion of any Securities called for redemption by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Trustee in trust for the Securityholders, on
or before the close of business on the redemption date, an amount in cash not
less than the redemption price, together with interest, if any, accrued to the
redemption date, of such Securities. Notwithstanding anything to the contrary
contained in this Article Three, the obligation of the Company to pay the
redemption price of such Securities, including all accrued interest, if any,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, any Securities
not duly surrendered for conversion by the Holders thereof may, at the option
of the Company, be deemed, to the fullest extent permitted by law, acquired by
such purchasers from such Holders and (notwithstanding anything to the
contrary contained in Article Eleven) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the last
day on which Securities of such series called for redemption may be converted
in accordance with this Indenture and the terms of such Securities, subject to
payment of the above amount as aforesaid. The Trustee shall hold and pay to
the Holders whose Securities are selected for redemption any such amount paid
to it in the same manner as it would moneys deposited with it by the Company
for the redemption of Securities. Without the Trustee's prior written consent,
no arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and any interest on the Securities of
each series in accordance with the terms of the Securities of such series and
this Indenture.
To the extent enforceable under applicable law, the Company shall pay
interest on overdue principal at the rate borne by the Securities of such
series (unless a different rate is specified as contemplated by Section 2.02
for Securities of such series).
Section 4.02. SEC Reports.
The Company shall file with the Trustee within 15 days after it files them
with the SEC 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
SEC may by rules and regulations prescribe) which the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. The Company also shall comply with the other provisions of TIA
(S) 314(a).
Section 4.03. Compliance Certificate.
The Company will, within 120 days after the close of each fiscal year of the
Company, commencing with the first fiscal year following the issuance of
Securities of any series under this Indenture, file with the Trustee a
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certificate of the principal executive officer, the principal financial
officer or the principal accounting officer of the Company, covering the
period from the date of issuance of such Securities to the end of the fiscal
year in which such Securities were issued, in the case of the first such
certificate, and covering the preceding fiscal year in the case of each
subsequent certificate, and stating whether or not, to the knowledge of the
signer, the Company has complied with all conditions and covenants on its part
contained in this Indenture, and, if the signer has obtained knowledge of any
default by the Company in the performance, observance or fulfillment of any
such condition or covenant specifying each such default and the nature
thereof. For the purpose of this Section 4.03, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant
to the terms of this Indenture. The certificate need not comply with Section
12.05.
Section 4.04. Corporate Existence.
Subject to the provisions of Section 5.01 hereof, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into, or transfer its
properties and assets substantially as an entirety to, another corporation
unless (1) the successor corporation, which shall be a corporation organized
and existing under the laws of the United States or a State thereof, assumes
by supplemental indenture all the obligations of the Company under the
Securities and this Indenture; and (2) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing. Thereafter, unless otherwise specified as contemplated by Section
2.02 for the Securities of any series, all such obligations of the predecessor
corporation shall terminate.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" with respect to Securities of any series means each of
the events specified below in this Section 6.01, unless it is either
inapplicable to a particular series or is specifically deleted or modified as
contemplated by Section 2.02 for the Securities of such series, and any other
events as may be specified as contemplated by Section 2.02 for the Securities
of such series.
(1) the Company defaults in the payment of any interest on any Security
of that series when the same becomes due and payable and the default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of any Security
of that series when the same becomes due and payable at maturity, upon
redemption (including default in the making of any mandatory sinking fund
payment), upon purchase by the Company at the option of the Holder pursuant
to the terms of such Security or otherwise;
(3) the Company fails to comply with any of its other agreements in
Securities of that series or this Indenture (other than an agreement which
has expressly been included in this Indenture solely for the benefit of
Securities of any series other than that series or is expressly made
inapplicable to the Securities of such series as contemplated by Section
2.02) and the default continues for the period and after the notice
specified below;
(4) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case, or consents to the commencement of a
case against it,
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(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;
(5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
adjudicates the Company insolvent or bankrupt,
(B) appoints a Custodian of the Company for all or substantially all
of its property, or
(C) orders the winding up or liquidation of the Company, and the
order or decree remains unstayed and in effect for 90 days; or
(6) any other Event of Default provided with respect to Securities of
that series occurs.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the Trustee
notifies the Company or the Holders of at least 25% in aggregate principal
amount of the outstanding Securities of that series notify the Company and the
Trustee of the Default and the Company does not cure the Default within 30
days after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default."
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.01(4) or (5)) occurs and is continuing with respect to Securities of any
series at the time outstanding, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities of that series by notice to the Company and the Trustee, may
declare to be due and payable immediately (1) the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of the Securities of
that series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of acceleration. Upon such declaration,
such principal amount (or specified amount) and interest, if any, shall be due
and payable immediately. If an Event of Default specified in Section 6.01(4)
or (5) occurs and is continuing, (1) the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of the Securities of
that series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of such acceleration shall become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or Securityholders. The Holders of a majority in aggregate
principal amount of the outstanding Securities of the series with respect to
which an acceleration applies by notice to the Trustee may rescind an
acceleration and its consequences with respect to such series if all existing
Events of Default (other than the non-payment of the principal of and accrued
interest, if any, on Securities that have become due solely by such
acceleration) with respect to Securities of that series have been cured or
waived and if the rescission would not conflict with any judgment or decree.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of the whole amount which then shall
have become due and remain unpaid for principal or interest, if any, on the
Securities of that series or to enforce the performance of any provision of
the Securities of that series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the
Securities of that series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in
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exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in aggregate principal
amount of the outstanding securities of any series by notice to the Trustee
may waive on behalf of the Holders of all the Securities of such series an
existing Default or Event of Default and its consequences. When a Default or
Event of Default is waived, it is cured and stops continuing.
Section 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may 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 it, with respect to the Securities of such series. The
Trustee, however, may refuse to follow any direction that conflicts with law
or this Indenture, that is unduly prejudicial to the rights of another
Securityholder or that would involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
No holder of any Security of any series shall have the right to pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default with respect to the Securities of that series;
(2) the Holders of at least 25% in aggregate principal amount of the
outstanding Securities of that series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer and provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; 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
aggregate principal amount of the outstanding Securities of such series.
A Securityholder of any series may not use this Indenture to prejudice the
rights of another Securityholder of such series or to obtain a preference or
priority over another Securityholder of such series, except in the manner
herein provided and for the equal and ratable benefit of all Securityholders
of such series.
Section 6.07. Rights of Holders to Receive Payment and to Convert.
Subject to Article Ten and notwithstanding any other provision of this
Indenture, the right of any Holder of a Security to receive payment of
principal of and (subject to Section 2.13) interest, if any, on the Security,
on or after the respective due dates with respect to such payments expressed
in such Security, and, if applicable, to convert such Security on the terms
and subject to the conditions applicable to Securities of such series, or to
bring suit for the enforcement of any such payment on or after such respective
dates or of such right to convert, if any, shall not be impaired or affected
without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing with respect to the Securities of any series, the Trustee may
recover judgment in its own name and as trustee of an express trust
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against the Company for the whole amount which then shall have become due and
remain unpaid for principal and interest, if any, on the Securities of such
series.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and
the Securityholders allowed in any judicial proceedings relative to the
Company, its creditors or its property and to collect and receive money,
property or securities payable or deliverable on any such claims and
distribute the same.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay out
the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Debt to the extent required by Article Ten;
Third: to the payment of amounts due and unpaid for principal and
interest, if any, on the Securities in respect of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts which then shall have become due and payable on such
Securities for principal and interest, respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section, notice of which shall be mailed to
each Securityholder by the Company at least 15 days before such record date.
Section 6.11. Undertaking for Costs.
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, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate principal amount of the outstanding Securities of any series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
(a) If an Event of Default with respect to Securities of any series has
occurred and is continuing, the Trustee shall with respect to such series
exercise such of the rights and powers vested in it by this Indenture with
respect to such series and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) With respect to Securities of any series, except during the continuance
of an Event of Default with respect to Securities of such series:
(1) The Trustee need perform only those duties that are specifically set
forth in this Indenture or the TIA and no others.
(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
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the Trustee and conforming to the requirements of this Indenture. The
Trustee, however, shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel or require an Officers' Certificate, an Opinion of Counsel, and/or an
accountant's certificate. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Certificate, Opinion
or accountant's certificate.
(c) The Trustee may act through agents and counsel and shall not be
responsible for the misconduct or negligence of any agent or counsel appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representations as to the validity or adequacy of this
Indenture or the Securities; it shall not be accountable for the Company's use
of the proceeds from the Securities; and it shall not be responsible for any
statement in the Indenture or the Securities other than its certificate of
authentication.
Section 7.05. Notice of Defaults.
If a Default occurs and is continuing with respect to Securities of any
series and if it is known to a Trust Officer of the Trustee, the Trustee shall
mail to each Securityholder of such series notice of the Default within 90
days after it occurs or as soon as reasonably practicable thereafter. Except
in the case of a default in payment
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of principal of or interest on any Security of such series (including default
in the making of any mandatory sinking fund or mandatory repurchase payment),
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of such series.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each April 15 beginning with the April 15 following the
date on which Securities are originally issued under this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such
April 15 that complies with TIA (S) 313(a), if required by said Section. The
Trustee also shall comply with TIA (S) 313(b).
A copy of each report at the time of its mailing to Securityholders shall be
filed by the Company with the SEC and each stock exchange on which the
Securities are listed.
The Company will notify the Trustee if and when the Securities are listed on
any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it arising out of or in connection with the acceptance or
administration of this trust and its duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. Failure of the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
have the right to elect to defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its written consent, which consent shall not be
unreasonably withheld. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through negligence or
bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
The Trustee may resign at any time with respect to Securities of one or more
series by so notifying the Company. The Holders of a majority in aggregate
principal amount of the outstanding Securities of any series may remove the
Trustee with respect to the Securities of such series by so notifying the
removed Trustee and may appoint a successor Trustee with the Company's
consent. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint a successor Trustee or Trustees (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).
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to its lien, if any, provided for in Section 7.07), the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Securityholder.
If a successor Trustee with respect to Securities of any series does not
take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
principal amount of the outstanding Securities of such series may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation or
national banking association, the successor corporation or national banking
association without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements of
TIA (S) 310(a). The Trustee shall always have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual
report of condition. With respect to the Securities of each series, the
Trustee shall comply with TIA (S) 310(b) and in determining whether the
Trustee has a conflicting interest as defined in TIA (S) 310(b) with respect
to the Securities of any series, there shall be excluded this Indenture with
respect to the Securities of any series other than such series. Nothing herein
shall prevent the Trustee from filing with the SEC the application referred to
in the second to last paragraph of TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Termination of Company's Obligations.
The Company may terminate all of its obligations under the Securities of any
series and this Indenture with respect to the Securities of such series if
either (1) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment money (or, if permitted by
the terms of such Securities, securities) has theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 8.03) have been
delivered to the Trustee for cancellation; or (2) the Company irrevocably
deposits in trust with the Trustee money or U.S. Government
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Obligations sufficient to pay the principal of and interest, if any, on all
Securities of such series not theretofore cancelled or delivered to the
Trustee for cancellation (other than destroyed, lost or stolen Securities
which have been replaced or paid or Securities for whose payment money (or, if
permitted by the terms of such Securities, securities) has theretofore been
held in trust and thereafter repaid to the Company, as provided in Section
8.03) to maturity or redemption, as the case may be.
The Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01,
7.07, 7.08, 8.01, 8.03 and Article Eleven of this Indenture, however, shall
survive until the Securities of such series are no longer outstanding.
Thereafter the Company's obligations in Sections 7.07 and 8.03 shall survive.
Notwithstanding the satisfaction and discharge of this Indenture with respect
to the Securities of any series, if money or U.S. Government Obligations shall
have been deposited with the Trustee pursuant to clause (2) of this Section,
the obligations of the Trustee under Section 8.02 and the second sentence of
Section 8.03 shall survive.
After a deposit and if all other conditions thereto are met, the Trustee for
the Securities of such series shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture with respect to
such Securities, except for those surviving obligations specified above;
provided, however, that the Trustee shall not be required to execute such
instrument until the expiration of ninety days after the date of a deposit and
that such instrument may be made subject to the condition that such deposit
had been made prior to the happening of any event specified in Section 10.02.
In order to have money available on a payment date to pay the principal of
or interest, if any, on the Securities, the U.S. Government Obligations shall
be payable as to principal or interest on or before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
Section 8.02. Application of Trust Fund.
The Trustee shall hold in trust money and U.S. Government Obligations
deposited with it pursuant to Section 8.01. Subject to Section 10.07, it shall
apply the deposited money and the money from the U.S. Government Obligations
through the Paying Agent and in accordance with the provisions of the
Securities and this Indenture to the payment of principal of and interest, if
any, on the Securities for the payment of which such money or U.S. Government
Obligations has been deposited with the Trustee.
Section 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon written request any
money or securities held by them for the payment of principal or interest, if
any, that remains unclaimed for two years. After that, Holders entitled to the
money or securities must look to the Company for payment unless an applicable
abandoned property law designates another person.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Sections 5.01 and 11.16;
(3) to establish the form or terms of Securities of any series as
permitted by Sections 2.01 and 2.02;
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(4) to add to the covenants of the Company for the 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;
(5) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series of Securities, stating
that such Events of Default are expressly being included solely to be
applicable to such series);
(6) to change or eliminate any of the provisions of this Indenture,
provided that, except as otherwise contemplated by Section 2.02(13), any
such change or elimination shall become effective only when there is no
Security outstanding of any series created prior thereto which is entitled
to the benefit of such provision;
(7) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to provide for uncertificated
Securities in addition to certificated Securities (so long as any
"registration-required obligation" within the meaning of Section 163(f)(2)
of the Internal Revenue Code of 1986, as amended (the "Code") is in
registered form for purposes of the Code):
(8) to make any change that in the opinion of the Board of Directors,
does not materially adversely affect the rights of any Securityholder; or
(9) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to any Securityholder but with the
written consent of the Holders of a majority in aggregate principal amount of
the outstanding Securities of each series affected by such amendment or
supplement. The Holders of a majority in aggregate principal amount of the
outstanding Securities of any series may on behalf of the Holders of all
Securities of such series waive compliance by the Company with any provision
of this Indenture or of Securities of such series without notice to any
Securityholder. Without the consent of each Securityholder affected, however,
an amendment, supplement or waiver, including a waiver pursuant to Section
6.04. may not:
(1) reduce the amount of Securities of any series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on any
Security (or, in the case of an Original Issue Discount Security, reduce
the rate of accrual of original issue discount);
(3) reduce the principal of (or any premium payable upon the redemption
of) or extend the fixed maturity of any Security (or, in the case of an
Original Issue Discount Security, reduce the portion of the principal
amount that would be due and payable upon acceleration of the maturity
thereof pursuant to Section 6.02);
(4) change the amount or time of any payment required by any sinking fund
provisions of the Securities of any series;
(5) make any change that materially adversely affects the rights of a
Holder to require the Company to purchase a Security in accordance with the
terms thereof and this Indenture;
(6) waive a default in the payment of the principal of or interest, if
any, on any Security;
(7) make any Security payable in money or securities other than that
stated in the Security; or
(8) make any change that materially adversely affects the right to
convert any Security or that increases the conversion price or reduces the
conversion rate of any Security.
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It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed supplement, but it shall be
sufficient if such consent approves the substance thereof.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement, waiver or other action by a Holder of
a Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. Any
such Holder or subsequent Holder, however, may revoke the consent as to his
Security or portion of a Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement, waiver or other action becomes effective. An amendment,
supplement, waiver or other action shall become effective on receipt by the
Trustee of written consents from the Holders of the requisite percentage in
aggregate principal amount of the outstanding Securities of the relevant
series. After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder of each series of Securities so affected.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the
changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article if the amendment, supplement or waiver does not
adversely affect the rights, duties, immunities or liabilities of the Trustee.
If it does, the Trustee may but need not sign it. The Company may not sign an
amendment or supplement until the Board of Directors approves it.
ARTICLE TEN
Subordination
Section 10.01. Securities Subordinated to Senior Debt.
The Company agrees, and each holder of the Securities by his acceptance
thereof likewise agrees, that the payment of the principal of and interest, if
any, on the Securities is subordinated, to the extent and in the manner
provided in this Article, to the prior payment in full of all Senior Debt.
Senior Debt means the principal of and interest on Debt of the Company
outstanding at any time other than (i) the Securities, and (ii) Debt which by
its terms is not superior in right of payment to the Securities. "Debt" of any
person means:
(1) any indebtedness of such person (i) for borrowed money or (ii)
evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any property
or assets, including securities;
(2) any guarantee by such person of any indebtedness of others described
in the preceding clause (1); and
(3) any amendment, renewal, extension or refunding of any such
indebtedness or guarantee.
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This Article shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Debt, and such provisions are made for the benefit of the holders of Senior
Debt, and such holders are made obligees hereunder and they and/or each of
them may enforce such provisions.
Section 10.02. Company Not to Make Payments with Respect to Securities in
Certain Circumstances.
(a) Upon the maturity of any Senior Debt by lapse of time, acceleration or
otherwise, all principal thereof and interest thereon shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior Debt, before any payment is made on account of the
principal of or interest on the Securities or to acquire any of the Securities
or on account of any sinking fund provisions of the Securities (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in Securities acquired by the Company before the maturity of
such Senior Debt, and payments made through the exchange of other debt
obligations of the Company for such Securities in accordance with the terms of
such Securities, provided that such debt obligations are subordinated to
Senior Debt at least to the extent that the Securities for which they are
exchanged are so subordinated pursuant to this Article Ten).
(b) Upon the happening of any default in payment of the principal of or
interest on any Senior Debt when the same becomes due and payable, then,
unless and until such default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Company with respect to the
principal of or interest on the Securities or to acquire any of the Securities
or on account of any sinking fund provisions of the Securities (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in Securities acquired by the Company before such default and
notice thereof, and payments made through the exchange of other debt
obligations of the Company for such Securities in accordance with the terms of
such Securities, provided that such debt obligations are subordinated to
Senior Debt at least to the extent that the Securities for which they are
exchanged are so subordinated pursuant to this Article Ten).
(c) In the event that notwithstanding the provisions of this Section 10.02
the Company shall make any payment to the Trustee on account of the principal
of or interest on the Securities, or on account of any sinking fund provisions
of the Securities, after the maturity of any Senior Debt as described in
Section 10.02(a) above or after the happening of a default in payment of the
principal of or interest on any Senior Debt as described in Section 10.02(b)
above, then, unless and until all Senior Debt which shall have matured, and
all interest thereon, shall have been paid in full (or the declaration of
acceleration thereof shall have been rescinded or annulled), or such default
shall have been cured or waived or shall have ceased to exist, such payment
(subject to the provisions of Sections 10.06 and 10.07) shall be held by the
Trustee, in trust for the benefit of, and shall be paid forthwith over and
delivered to, the holders of such Senior Debt (pro rata as to each of such
holders on the basis of the respective amounts of Senior Debt held by them) or
their representative or the trustee under the indenture or other agreement (if
any) pursuant to which such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all such
Senior Debt remaining unpaid to the extent necessary to pay the same in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt. The Company shall give
prompt written notice to the Trustee of any default in the payment of
principal of or interest on any Senior Debt.
Section 10.03. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation or Reorganization of Company.
Upon any distribution of assets of the Company in any dissolution, winding
up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise):
(a) the holders of all Senior Debt shall first be entitled to receive
payments in full of the principal thereof and interest due thereon before
the Holders of the Securities are entitled to receive any payment on
account of the principal of or interest on the Securities;
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(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than securities
of the Company as reorganized or readjusted or securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article Ten with respect to the Securities, to the payment
in full without diminution or modification by such plan of all Senior
Debt), to which the Holders of the Securities or the Trustee on behalf of
the Holders of the Securities would be entitled except for the provisions
of this Article Ten, shall be paid by the liquidating trustee or agent or
other person making such payment or distribution directly to the holders of
Senior Debt or their representative, or to the trustee under any indenture
under which Senior Debt may have been issued (pro rata as to each such
holder, representative or trustee on the basis of the respective amounts of
unpaid Senior Debt held or represented by each), to the extent necessary to
make payment in full of all Senior Debt remaining unpaid, after giving
effect to any concurrent payment or distribution or provision therefor to
the holders of such Senior Debt; and
(c) in the event that notwithstanding the foregoing provisions of this
Section 10.03, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinate, at least to the extent
provided in this Article Ten with respect to the Securities, to the payment
in full without diminution or modification by such plan of all Senior
Debt), shall be received by the Trustee or the Holders of the Securities on
account of principal of or interest on the Securities before all Senior
Debt is paid in full, or effective provision made for its payment, such
payment or distribution (subject to the provisions of Sections 10.06 and
10.07) shall be received and held in trust for and shall be paid over to
the holders of the Senior Debt remaining unpaid or unprovided for or their
representative, or to the trustee under any indenture under which such
Senior Debt may have been issued (pro rata as provided in subsection (b)
above), for application to the payment of such Senior Debt until all such
Senior Debt shall have been paid in full, after giving effect to any
concurrent payment or distribution or provision therefor to the holders of
such Senior Debt.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 10.04. Securityholders to be Subrogated to Right of Holders of Senior
Debt.
Subject to the payment in full of all Senior Debt, the Holders of the
Securities shall be subrogated equally and ratably to the rights of the
holders of Senior Debt to receive payments or distributions of assets of the
Company applicable to the Senior Debt until all amounts owing on the
Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Debt by or on behalf of
the Company or by or on behalf of the Holders of the Securities by virtue of
this Article Ten which otherwise would have been made to the Holders of the
Securities shall, as between the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, be deemed to be payment by the
Company to or on account of the Senior Debt, it being understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one
hand, and the holders of the Senior Debt, on the other hand.
Section 10.05. Obligation of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture or in
any Security is intended to or shall impair, as between the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
the obligation of the Company, which is absolute and unconditional, to pay to
the holders of the Securities the principal of and interest on the Securities
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders of
the Securities and creditors of the Company other than the holders of the
Senior Debt, nor shall anything herein or therein
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prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article Ten of the holders of Senior
Debt in respect of cash, property or securities of the Company received upon
the exercise of any such remedy. Upon any payment or distribution of assets of
the Company referred to in this Article Ten, the Trustee and the Holders of
the Securities shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or, subject to the
provisions of Sections 7.01 and 7.02, a certificate of the receiver, trustee
in bankruptcy, liquidating trustee or agent or other person making such
payment or distribution to the Trustee or the Holders of the Securities, for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Ten.
Nothing contained in this Article Ten or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except as provided in subsections (a) and (b) of Section
10.02, payments at any time of the principal of or interest on the Securities.
Section 10.06. Trustee Entitled to Assume Payments Not Prohibited in Absence
of Notice.
The Trustee shall not at any time be charged with knowledge of the existence
of any facts which would prohibit the making of any payment to or by the
Trustee, unless at least two Business Days prior to the making of any such
payment, the Trustee shall have received written notice thereof from the
Company or from one or more holders of Senior Debt or from any representative
thereof or from any trustee therefor, together with proof satisfactory to the
Trustee of such holding of Senior Debt or of the authority of such
representative or trustee; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Sections 7.01 and 7.02 shall
be entitled to assume conclusively that no such facts exist. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Debt (or a representative or
trustee on behalf of such holder) to establish that such notice has been given
by a holder of Senior Debt or a representative of or trustee on behalf of any
such holder. In the event that the Trustee determines, in good faith, that
further evidence is required with respect to the right of any person as a
holder of Senior Debt to participate in any payments or distribution pursuant
to this Article Ten, the Trustee may request such person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of Senior Debt
held by such person, as to the extent to which such person is entitled to
participate in such payment or distribution, and as to other facts pertinent
to the rights of such person under this Article Ten, and if such evidence is
not furnished, the Trustee may defer any payment to such person pending
judicial determination as to the right of such person to receive such payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and nothing in this Article Ten shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.07.
Section 10.07. Application by Trustee of Monies or U.S. Government Obligations
Deposited with It.
Money or U.S. Government Obligations deposited in trust with the Trustee
pursuant to and in accordance with Section 8.01 shall be for the sole benefit
of Securityholders and, to the extent allocated for the payment of Securities,
shall not be subject to the subordination provisions of this Article Ten, if
the same are deposited in trust prior to the happening of any event specified
in Section 10.02. Otherwise, any deposit of monies or U.S. Government
Obligations by the Company with the Trustee or any Paying Agent (whether or
not in trust) for the payment of the principal of or interest on any
Securities shall be subject to the provisions of Sections 10.01, 10.02 and
10.03 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of the principal of or the interest, if any,
on any Security) the Trustee shall not have received with respect to such
monies the notice provided for in Section 10.06, then the Trustee or the
Paying Agent shall have full power and authority to receive such monies and
U.S. Government Obligations and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such date. This Section
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10.07 shall be construed solely for the benefit of the Trustee and Paying
Agent and, as to the first sentence hereof, the Securityholders, and shall not
otherwise affect the rights of holders of Senior Debt.
Section 10.08. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
Section 10.09. Securityholders Authorize Trustee to Effectuate Subordination
of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Ten and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of his
Securities in the form required in said proceedings and causing said claim to
be approved. If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding prior to 30 days before the expiration of
the time to file such claim or claims, then the holders of Senior Debt have
the right to file and are hereby authorized to file an appropriate claim for
and on behalf of the Holders of said Securities.
Section 10.10. Right of Trustee to Hold Senior Debt.
The Trustee shall be entitled to all of the rights set forth in this Article
Ten in respect of any Senior Debt at any time held by it to the same extent as
any other holder of Senior Debt, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.
Section 10.11. Article Ten Not to Prevent Events of Default.
The failure to make a payment on account of principal or interest by reason
of any provision in this Article Ten shall not be construed as preventing the
occurrence of an Event of Default under Section 6.01.
ARTICLE ELEVEN
Conversion
Section 11.01. Applicability of Article.
Securities of any series which are convertible into Company Stock at the
option of the Holder shall be convertible in accordance with their terms and
(except as otherwise specified as contemplated by Section 2.02 for Securities
of any series) in accordance with this Article. Each reference in this Article
to "a Security" or "the Securities" refers to the Securities of the particular
series that is convertible into Company Stock. If more than one series of
Securities with conversion privileges are outstanding at any time, the
provisions of this Article shall be applied separately to each such series.
Section 11.02. Conversion Privilege.
A Holder of a Security of any authorized denomination of any series may
convert it into Company Stock, at any time during the period specified on the
Securities of that series, at the conversion price or conversion rate in
effect on the conversion date, except that, with respect to any to any
Security (or portion thereof) called for
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redemption, such right shall (except as otherwise provided in Section 3.08)
terminate at the close of business on the fifteenth day prior to the date
fixed for redemption of such Security (or portion thereof) (or such other day
as may be specified as contemplated by Section 2.02 for Securities of such
series), unless the Company shall default in payment of the amount due upon
redemption thereof.
The initial conversion price or conversion or rate in respect of a series of
Securities shall be as specified on the Securities of that series. The
conversion price or conversion rate will be subject to adjustment on the terms
set forth in Sections 11.07 through 11.13 or such other or different terms, if
any, as may be specified as contemplated by Section 2.02 for Securities of
such series.
A Holder may convert any Security in full and may convert a portion of a
Security if the portion to be converted and the remaining portion of such
Security are in denominations issuable for that series of Securities.
Provisions of this Indenture that apply to conversion of all of a Security
also apply to conversion of a portion of it.
Section 11.03. Conversion Procedure.
To convert a Security of any series, a Holder must satisfy the requirements
for conversion contained on the Securities of that series. The date on which
the Holder satisfies all those requirements is the conversion date. As soon as
practicable after the conversion date, the Company shall deliver to the Holder
through the Conversion Agent a certificate for the number of shares of Company
Stock deliverable upon the conversion and cash or its check in lieu of any
fractional share. The person in whose name the certificate is registered
becomes a stockholder of record on the conversion date and the rights of the
Holder of the Securities so converted as a Holder thereof cease as of such
date.
If the Holder converts more than one Security of any series at the same
time, the number of full shares issuable upon the conversion shall be based on
the total principal amount of the Securities of such series so converted.
Upon surrender of a Security of any series that is converted in part, the
Trustee shall authenticate for the Holder a new Security of that series equal
in principal amount to the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in a
place where a Conversion Agent is located, the Security may be surrendered to
that Conversion Agent on the next succeeding day that is not a Legal Holiday.
The Company will not be required to deliver certificates for shares of
Company Stock upon conversion while the Company's stock transfer books are
closed for a meeting of stockholders or for the payment of dividends or for
any other purpose, but certificates for shares of Company Stock shall be
delivered as soon as the stock transfer books shall again be opened.
Securities of any series surrendered for conversion during the period from
the close of business of any Regular Record Date next preceding any Interest
Payment Date for such series to the opening of business on such Interest
Payment Date shall (except in the case of Securities or portions thereof which
have been called for redemption on a redemption date within such period) be
accompanied by payment in funds acceptable to the Company of an amount equal
to the interest payable in such Interest Payment Date on the principal amount
of Securities being surrendered for conversion; provided, that no such payment
need be made if there shall exist, at the time of conversion, a default in the
payment of interest on the Securities of such series. The funds so delivered
to the Conversion Agent shall be paid to the Company on or after such Interest
Payment Date unless the Company shall default on the payment of the interest
due on such Interest Payment Date, in which event such funds shall be paid to
the Holder who delivered the same. Except as provided in the preceding
sentence and subject to the last paragraph of Section 2.13, no payment or
adjustment shall be made upon any conversion on account of any interest
accrued on the Securities surrendered for conversion or on account of any
dividends on the Company Stock issued upon conversion.
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Section 11.04. Fractional Shares.
The Company will not issue a fractional share of Company Stock upon
conversion of a Security. Instead, the Company will deliver cash or its check
for the current market value of a fractional share. The current market value
of a fractional share is determined as follows: Multiply the current market
price of a full share on the last full trading day prior to the conversion
date by the fraction (rounded to the nearest 1/100 of a share) and round the
result to the nearest whole cent.
Section 11.05. Taxes on Conversion.
If a Holder of a Security converts it, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the delivery of
shares of Company Stock upon the conversion. The Holder, however, shall pay
any such tax which is due because the shares are issued in a name other than
the Holder's name.
Section 11.06. Company to Provide Stock.
The Company shall from time to time as may be necessary reserve out of its
authorized but unissued Company Stock or Company Stock held in treasury enough
shares of the Company Stock to permit the conversion of all outstanding
Securities.
All shares of Company Stock which may be delivered upon conversion of the
Securities shall be validly issued, fully paid and non-assessable and shall be
free from any preemptive rights.
In order that the Company may deliver shares of the Company Stock upon
conversion of the Securities, the Company will endeavor to comply with all
applicable Federal and State securities laws and will endeavor to cause such
shares to be listed on each national securities exchange or other stock market
on which other shares of the Company Stock is listed.
If the taking of any action would cause an adjustment to the then prevailing
conversion price or conversion rate which would result in shares of Company
Stock being issued upon conversion of the Securities at an effective
conversion price below the then par value, if any, of the Company Stock, or
would raise the par value above the effective conversion price then in effect,
the Company will, and will cause Parent to, take such corporate action as may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue, and the Company may deliver, fully paid and non-
assessable shares of Company Stock at such adjusted conversion price or
conversion rate or the conversion price or conversion rate then in effect, as
the case may be.
Section 11.07. Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution in shares of Company Stock;
(2) subdivides the outstanding shares of Company Stock into a greater
number of shares;
(3) combines the outstanding shares of Company Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on the Company Stock in
shares of its capital stock other than Company Stock; or
(5) issues by reclassification of its shares of Company Stock any shares
of its capital stock,
then the conversion privilege and the conversion price or conversion rate in
effect immediately prior to the opening of business on the record date for
such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the Holder of any
Security thereafter converted may receive the number of shares of capital
stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to
such time. Such adjustment shall be made successively whenever any event
listed above shall occur.
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For a dividend or distribution, the adjustment shall become effective
immediately after the record date for the dividend or distribution. For a
subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision, combination
or reclassification.
If after an adjustment a Holder of a Security upon conversion of it may
receive shares of two or more classes of capital stock of the Company, the
conversion prices of the classes of capital stock (after giving effect to such
allocation of the adjusted conversion price between or among the classes of
capital stock as the Board of Directors shall determine to be appropriate) or
the conversion rate, as the case may be, shall thereafter be subject to
adjustment on terms comparable to those applicable to Company Stock in this
Indenture.
Any shares of Company Stock issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the time of the record date
for such dividend for purposes of calculating the number of outstanding shares
of Company Stock under Sections 11.08 and 11.09 below.
Section 11.08. Adjustment for Rights Issue.
If the Company issues any rights or warrants to all holders of shares of
Company Stock entitling them for a period expiring within 45 days after the
record date mentioned below to purchase shares of Company Stock (or
Convertible Securities) at a price per share (or having a conversion price per
share, after adding thereto an allocable portion of the exercise price of the
right or warrant to purchase such Convertible Securities, computed on the
basis of the maximum number of shares of Company Stock issuable upon
conversion of such Convertible Securities) less than the Average Market Price
on the Determination Date, the conversion price or rate shall be adjusted so
that it shall equal the price or rate determined by multiplying the conversion
price or dividing the conversion rate, as the case may be, in effect
immediately prior to the opening of business on that record date by a
fraction, of which the numerator shall be the number of shares of Company
Stock outstanding on such record date plus the number of shares of Company
Stock which the aggregate offering price of the total number of shares of
Company Stock so offered (or the aggregate conversion price of the Convertible
Securities to be so offered, after adding thereto the aggregate exercise price
of the rights or warrants to purchase such Convertible Securities) would
purchase at such Average Market Price and of which the denominator shall be
the number of shares of Company Stock outstanding on such record date plus the
number of additional shares of Company Stock offered for subscription or
purchase (or into which the Convertible Securities so offered are
convertible). Shares of Company Stock owned by or held for the account of the
Parent shall not be deemed outstanding for the purpose of any such adjustment.
For purposes of this Section 11.08, the number of shares of Company Stock
outstanding on any record date shall be deemed to include (i) the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible Securities
outstanding on such record date which are then exercisable, exchangeable or
convertible at a price equal to or less than the Average Market Price per
share of Company Stock, if all of such Convertible Securities were deemed to
have been exercised, exchanged or converted immediately prior to the opening
of business on such record date and (ii) if the Series B Stock is convertible
into Company Stock, the maximum number of shares of Company Stock the issuance
of which would be necessary to effect the full conversion of all shares of
Series B Stock outstanding on such record date, if all of such shares of
Series B Stock were deemed to have been converted immediately prior to the
opening of business on such record date.
The adjustment shall be made successively whenever any such rights or
warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights or
warrants. If all of the shares of Company Stock (or all of the Convertible
Securities) subject to such rights or warrants have not been issued when such
rights or warrants expire (or, in the case of rights or warrants to purchase
Convertible Securities which have been exercised, all of the shares of Company
Stock issuable upon conversion of such Convertible Securities have not been
issued prior to the expiration of the conversion right thereof), then the
conversion price or conversion rate shall promptly be readjusted to the
conversion price or conversion rate which would then be in effect had the
adjustment upon the issuance of such rights or warrants
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been made on the basis of the actual number of shares of Company Stock (or
Convertible Securities) issued upon the exercise of such rights or warrants
(or the conversion of such Convertible Securities).
No adjustment shall be made under this Section 11.08 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be, in
effect prior to such adjustment.
Section 11.09. Adjustments for Other Distributions.
If the Company distributes to all holders of shares of its Company Stock any
assets of debt securities or any rights or warrants to purchase securities,
the conversion price or conversion rate shall be adjusted by multiplying the
conversion price or dividing the conversion rate, as the case may be, in
effect immediately prior to the opening of business on the record date
mentioned below by a fraction, of which the numerator shall be the total
number of shares of Company Stock outstanding on such record date multiplied
by the Average Market Price on the Determination Date, less the fair market
value (as determined by the Board of Directors) on such record date of said
assets or debt securities or rights or warrants so distributed, and of which
the denomination shall be the total number of shares of Company Stock
outstanding on such record date multiplied by such Average Market Price.
For purposes of this Section 11.09, the number of shares of Company Stock
outstanding on any record date shall be deemed to include (i) the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible Securities
outstanding on such record date which are then exercisable, exchangeable or
convertible at a price equal to or less than the Average Market Price, if all
of such Convertible Securities were deemed to have been exercised, exchanged
or converted immediately prior to the opening of business on such record date
and (ii) if the Series B Stock is convertible into Company Stock, the maximum
number of shares of Company Stock the issuance of which would be necessary to
effect the full conversion of all shares of Series B Stock outstanding on such
record date, if all of such shares of Series B Stock were deemed to have been
converted immediately prior to the opening of business on such record date.
The adjustment shall be made successively whenever any such distribution is
made, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution. Shares of
Company Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such adjustment.
No adjustment shall be made under this Section 11.09 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be, in
effect prior to such adjustment.
This Section does not apply to cash dividends or distributions. Also, this
Section does not apply to dividends or distributions referred to in Section
11.07 or to rights or warrants referred to in Section 11.08.
Section 11.10. Voluntary Adjustment.
The Company at any time may reduce the conversion price or increase the
conversion rate, temporarily or otherwise, by any amount but in no event shall
such adjusted conversion price or conversion rate result in shares of Company
Stock being issuable upon conversion of the Securities if converted at the
time of such adjustment at an effective conversion price per share less than
the par value of the Company Stock at the time such adjustment is made.
A voluntary adjustment of the conversion price or conversion rate pursuant
to this Section 11.10 does not change or adjust the conversion price or
conversion rate otherwise in effect for purposes of Section 11.07, 11.08 or
11.09. If an event requiring an adjustment to the conversion price or
conversion rate pursuant to Section 11.07, 11.08 or 11.09 occurs at any time
that a voluntary adjustment to the conversion price or conversion rate is in
effect pursuant to this Section 11.10, then the adjustment required by Section
11.07, 11.08 or 11.09, whichever
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is applicable, shall be made to the conversion price or conversion rate that
would otherwise have been in effect as of the relevant date specified in such
Section had no voluntary adjustment pursuant to this Section 11.10 been made,
and for purposes of applying such Section, any such voluntary adjustment shall
be disregarded. If such adjustment would result in a lower conversion price or
a higher conversion rate, as the case may be, than the conversion price or
conversion rate as voluntarily adjusted by the Company, then such lower
conversion price or higher conversion rate shall be the conversion price or
conversion rate, as the case may be.
Section 11.11. Certain Definitions.
For the purposes of this Article, the following terms have the following
meanings:
"Average Market Price" of a share of Company Stock on the Determination
Date for any issuance of rights or warrants or any distribution in respect
of which the Average Market Price is being calculated means the average of
the daily current market prices of the Company Stock for the shortest of:
(i) the period of 30 consecutive trading days commencing 45 trading
days before such Determination Date.
(ii) the period commencing on the date next succeeding the first
public announcement of the issuance of rights or warrants or the
distribution in respect of which the Average Market Price is being
calculated and ending on the last full trading day before such
Determination Date, and
(iii) the period, if any, commencing on the date next succeeding the
Ex-Dividend Date with respect to the next preceding issuance of rights
or warrants or distribution for which an adjustment is required by the
provisions of Section 11.07(4), 11.08 or 11.09, and ending on the last
full trading day before such Determination Date.
If the record date for an issuance of rights or warrants or a
distribution for which an adjustment is required by the provisions of
Section 11.07(4), 11.08 or 11.09 (the "preceding adjustment event")
precedes the record date for the issuance or distribution in respect of
which the Average Market price is being calculated and the Ex-Dividend Date
for such preceding adjustment event is on or after the Determination Date
for the issuance or distribution in respect of which the Average Market
Price is being calculated, then the Average Market Price shall be adjusted
by deducting therefrom the fair market value (on the record date for the
issuance or distributions in respect of which the Average Market Price is
being calculated), as determined by the Board of Directors, of the capital
stock, rights, warrants, assets or debt securities issued or distributed in
respect of each share of Company Stock in such preceding adjustment event.
Further, in the event that the Ex-Dividend Date (or in the case of a
subdivision, combination or reclassification, the effective date with
respect thereto) with respect to a dividend, subdivision, combination or
reclassification to which Section 11.07(1), (2), (3) or (5) applies occurs
during the period applicable for calculating the Average Market Price, then
the Average Market Price shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such
dividend, subdivision, combination or reclassification on the current
market price of the Company Stock during such period.
"current market price" of a share of Company Stock on any day means the
last reported sale price (or, if no sale price is reported, the average of
the high and low bid prices) on such day on the NASDAQ Stock Market or as
quoted by the National Quotation Bureau Incorporated, or if the Company
Stock is listed on an exchange, on the principal exchange on which the
Company Stock is listed. In the event that no such quotation is available
for any day, the Board of Directors shall be entitled to determine the
current market price on the basis of such quotations as it considers
appropriate.
"Determination Date" for any issuance of rights of warrants or any
distribution to which Section 11.08 or 11.09 applies means the earlier of
(i) the record date for the determination of stockholders entitled to
receive the rights or warrants or the distribution to which such Section
applies and (ii) the Ex-Dividend Date for such rights, warrants or
distribution.
"Ex-Dividend Date" means the date on which "ex-dividend" trading
commences for a dividend, an issuance of rights or warrants or a
distribution to which any of Sections 11.07, 11.08 and 11.09 applies in the
over-the-counter market or on the principal exchange on which the Company
Stock is then quoted or listed.
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Section 11.12. When Adjustment May Be Deferred.
In any case in which this Article shall require that an adjustment shall
become effective immediately after a record date for an event, the Company may
defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such record date and before the occurrence of such
event the additional shares of Company Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the shares of
Company Stock issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such Holder cash or its check in lieu of any
fractional interest to which he is entitled pursuant to Section 11.04;
provided, however, that the Company shall deliver to such Holder a due bill or
other appropriate instrument evidencing such Holder's rights to receive such
additional shares of Company Stock, and such cash, upon the occurrence of the
event requiring such adjustment.
Section 11.13 When Adjustment Is Not Required.
No adjustments in the conversion rate need be made unless the adjustment
would require an increase or decrease of at least one percent (1%) in the
initial conversion or conversion rate. Any adjustment which is not made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Article shall be made to the nearest cent or to
the nearest 1/100 of a share, as the case may be.
No adjustment in the conversion price or the conversion rate shall be made
because the Company issues, in exchange for cash, property or services, shares
of Company Stock, or any securities convertible into or exchangeable for
shares of Company Stock or securities carrying the right to purchase shares of
Company Stock or such convertible exchangeable securities.
No adjustment in the conversion price or conversion rate need be made under
this Article for sales of shares of Company Stock pursuant to a Company plan
providing for reinvestment of dividends or interest or in the event the par
value of the Company Stock is changed.
No adjustment in the conversion price or conversion rate need be made for a
transaction referred to in Section 11.07, 11.08 or 11.09 if Securityholders
are to participate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in light of the basis
and notice on which holders of Company Stock participate in the transaction;
provided that the basis on which the Securityholders are to participate in the
transaction shall not be deemed to be fair if it would require the conversion
of Securities at any time prior to the expiration of the conversion period
specified for such Securities.
To the extent the Securities become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
Section 11.14. Notice of Adjustment.
Whenever the conversion price or conversion rate is adjusted, the Company
shall promptly mail to Securityholders a notice of the adjustment and file
with the Trustee an Officers' Certificate briefly stating the new conversion
price or conversion rate, the date it becomes effective, the facts requiring
the adjustment and the manner of computing it. The certificate shall be
conclusive evidence that the adjustment is correct.
Section 11.15. Notice of Certain Transactions.
If:
(a) the Company takes any action which would require an adjustment in the
conversion price or conversion rate;
(2) the Company consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation, and stockholders
of the Company must approve the transaction; or
(3) there is a dissolution or liquidation of the Company,
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a Holder of a Security may want to convert it into shares of Company Stock
prior to the record date for, or the effective date of, the transaction so
that he may receive the rights, warrants, securities or assets which a holder
of shares of Company Stock on that date may receive. Therefore, the Company
shall mail to the Securityholders and the Trustee a notice stating the
proposed record or effective date, as the case may be. Failure to mail the
notice or any defect in it shall not affect the validity of any transaction
referred to in clause (1), (2) or (3) of this Section.
Section 11.16. Consolidation, Merger or Sale of the Parent.
If the Company is a party to a transaction described in Section 5.01 or a
merger which reclassifies or changes its outstanding Company Stock, the
Company shall enter into a supplemental indenture. The supplemental indenture
shall provide that the Holder of a Security may convert it into the kind and
amount of securities or cash or other assets which he would have owned
immediately after the consolidation, merger or transfer if he had converted
the Security immediately before the effective date of such transaction,
assuming (to the extent applicable) that such Holder failed to exercise any
rights of election with respect thereto and received per share of Company
Stock the kind and amount of securities, cash or assets received per share by
a plurality of the non-electing shares. The supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Article. The Company shall
mail to each Securityholder a notice describing the supplemental indenture.
If this Section applies, Sections 11.07, 11.08 and 11.09 shall not apply.
Section 11.17. Company Determination Final.
Any determination which the Board of Directors must make pursuant to
Sections 11.07, 11.09, 11.11, 11.13 or 11.16 is conclusive and binding on the
Holders.
Section 11.18. Trustee's Disclaimer.
Neither the Trustee nor any Conversion Agent has any duty to determine when
an adjustment under this Article should be made, how it should be made or what
it should be. Neither the Trustee nor any Conversion Agent has any duty to
determine whether any provisions of a supplemental indenture under Section
11.16 are correct. Neither the Trustee nor any Conversion Agent makes any
representation as to the validity or value of any securities or assets issued
upon conversion of Securities. Neither the Trustee nor any Conversion Agent
shall be responsible for the Company's failure to comply with this Article.
Section 11.19. Simultaneous Adjustments.
In the event that this Article Eleven requires adjustments to the conversion
price or conversion rate under more than one of Sections 11.07(4), 11.08 or
11.09, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made
by applying, first, the provisions of Section 11.07, second, the provisions of
Section 11.09 and, third, the provisions of Section 11.08.
ARTICLE TWELVE
Miscellaneous
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of TIA (S)(S) 310 to 317, inclusive, through operation
of TIA (S) 318(e), such imposed duties shall control.
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Section 12.02. Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by first-class mail addressed as follows:
If to the Company:
Tele-Communications, Inc.
Suite 600
4643 South Ulster Street
Denver, Colorado 80237
Attention: Chief Financial Officer
If to the Trustee:
Attention:
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
Except for a notice to the Trustee, which is deemed given only when received,
if a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
Section 12.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent (including any covenants compliance with which
constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent (including any covenants compliance with
which constitutes a condition precedent) have been complied with.
Section 12.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture (other than
certificates provided pursuant to Section 4.03) shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
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(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 such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Section 12.06. When Treasury Securities Disregarded.
In determining whether the Holders of the required aggregate principal
amount of Securities of any series have concurred in any direction, waiver or
consent, Securities of such series owned by the Company or by any Affiliate of
the Company shall be disregarded and treated as not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities of such
series which the Trustee knows are so owned shall be so disregarded.
Section 12.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of the
Securityholders of all series or any series. The Registrar, Paying Agent or
Conversion Agent may make reasonable rules for its functions.
Section 12.08. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banking
institutions in the City of New York, New York, are not required to be open.
If a specified date (including a date for giving notice) or the last day to
convert a Security is a Legal Holiday, any action to be taken on such date
pursuant to this Indenture or the Securities (including such conversion) may
be taken on the next succeeding day that is not a Legal Holiday, and, to the
extent applicable, no interest, or original issue discount, as the case may
be, shall accrue for the intervening period.
Section 12.09. Governing Law.
The internal laws of the State of New York shall govern this indenture and
the Securities.
Section 12.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.11. No Recourse Against Others.
No past, present or future director, officer, employee or stockholder, as
such, of the Company or any successor thereof shall have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation and all such liability is hereby waived and released. Such waiver and
release are part of the consideration for the issue of the Securities.
Section 12.12. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
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Section 12.13. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.14. Table of Contents, Headings, Etc.
The table of contents and the titles and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
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Signatures
Dated: , 199
Tele-Communications, Inc
By __________________________________
(Seal)
Attest: _____________________________
Secretary
Dated: , 199
By __________________________________
(Seal)
Attest:
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT 4.4
DEPOSIT AGREEMENT
AMONG
TELE-COMMUNICATIONS, INC.
AND
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
DATED AS OF , 199
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE I
DEFINITIONS............................................................. 4
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK, EXECUTION AND DELIVERY,
TRANSFER AND SURRENDER OF RECEIPTS...................................... 5
2.1. Form and Transferability of Receipts........................... 5
2.2. Deposit of Preferred Stock, Execution and Delivery of Receipts
in Respect Thereof............................................. 6
2.3. Redemption of Preferred Stock.................................. 7
2.4. Transfer of Receipts........................................... 8
2.5. Combination and Split-ups of Receipts.......................... 8
2.6. Surrender of Receipts and Withdrawal of Preferred Stock........ 8
2.7. Limitations on Execution and Delivery, Transfer, Split-up,
Combination, Surrender and Exchange of Receipts................ 9
2.8. Lost Receipts, etc............................................. 9
2.9. Cancellation and Destruction of Surrendered Receipts........... 9
2.10. Conversion of Preferred Stock into Series A Stock.............. 9
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY.............. 11
3.1. Filing Proofs, Certificates and Other Information.............. 11
3.2. Payment of Taxes or Other Governmental Charges................. 11
3.3. Representations and Warranties as to Preferred Stock........... 11
ARTICLE IV
THE PREFERRED STOCK, NOTICES............................................ 12
4.1. Cash Distributions............................................. 12
4.2. Distributions Other Than Cash.................................. 12
4.3. Subscription Rights, Preferences or Privileges................. 12
4.4. Notice of Dividends; Fixing of Record Date for Holders of
Receipts....................................................... 13
4.5. Voting Rights.................................................. 13
4.6. Changes Affecting Preferred Stock and Reclassifications,
Recapitalizations, etc......................................... 13
4.7. Inspection of Reports.......................................... 14
4.8. List of Receipt Holders........................................ 14
ARTICLE V
THE DEPOSITARY AND THE COMPANY.......................................... 14
5.1. Maintenance of Offices, Agencies, Transfer Books by the
Depositary, the Registrar...................................... 14
5.2. Prevention of or Delay in Performance by the Depositary, the
Depositary's Agents or the Company............................. 14
5.3. Obligations of the Depositary, the Depositary's Agents, and the
Company........................................................ 15
5.4. Resignation and Removal of the Depositary; Appointment of
Successor Depositary........................................... 16
5.5. Corporate Notices and Reports.................................. 16
5.6. Deposit of Preferred Stock by the Company...................... 16
5.7. Indemnification by the Company................................. 16
5.8. Fees, Charges and Expenses..................................... 17
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
ARTICLE VI
AMENDMENT AND TERMINATION................................................. 17
6.1. Amendment........................................................ 17
6.2. Termination...................................................... 17
ARTICLE VII
MISCELLANEOUS............................................................. 18
7.1. Counterparts..................................................... 18
7.2. Exclusive Benefits of Parties.................................... 18
7.3. Invalidity of Provisions......................................... 18
7.4. Notices.......................................................... 18
7.5. Depositary's Agents.............................................. 19
7.6. Holders of Receipts Are Parties.................................. 19
7.7. Governing Law.................................................... 19
7.8. Headings......................................................... 19
</TABLE>
3
<PAGE>
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of , 199 , among TELE-COMMUNICATIONS, INC., a
Delaware corporation, (the "Company"), , as Depositary (including any
successor, the "Depositary"), and all holders from time to time of Depositary
Receipts executed and delivered hereunder.
WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit
Agreement, for the deposit of up to shares of [title of preferred stock]
(the "Preferred Stock"), of the Company with the Depositary, as agent for the
beneficial owners of the Preferred Stock, for the purposes set forth in this
Deposit Agreement and for the execution and delivery hereunder of the Receipts
(as defined below) evidencing Depositary Shares (as defined below) in respect
of the Preferred Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form of the Depositary
Receipt annexed as Exhibit A, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Agreement and the
Depositary Receipts:
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in The City of New York, New York or Hartford,
Connecticut are authorized or obligated by law or executive order to close.
"Certificate of Designations" shall mean the Certificate of Designations,
Preferences, Rights and Limitations of the [title of preferred stock] par
value $0.01 per share, as filed with the Secretary of State of the State of
Delaware, establishing and setting forth the designations, rights, powers,
qualifications, limitations and restrictions of the Preferred Stock.
"Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation, as amended from time to time, of the Company.
"Company" shall mean Tele-Communications, Inc., a Delaware corporation, and
its successors.
"Deposit Agreement" shall mean this agreement, as the same may be amended,
modified or supplemented from time to time.
"Depositary" shall mean , as Depositary hereunder, and any successor
as Depositary hereunder.
"Depositary's Office" shall mean the office of the Depositary in the city of
, Connecticut, at which at any particular time its business in respect of
matters governed by this Deposit Agreement shall be administered, which at the
date of this Deposit Agreement is located at , , .
"Depositary Share" shall mean an interest in of a share of the
Preferred Stock deposited with the Depositary hereunder, as evidenced by the
Receipts executed and delivered hereunder, and the same
4
<PAGE>
proportional interest in any and all other property received by the Depositary
in respect of such share of Preferred Stock and held under this Deposit
Agreement. Subject to the terms of this Deposit Agreement, each owner of a
Depositary Share is entitled, proportionately, to all the rights, preferences
and privileges of the Preferred Stock represented by such Depositary Share,
including the dividend, voting and liquidation rights contained in the
Certificate of Designations, and to the benefits of all obligations of the
Company under the Certificate of Designations.
"Depositary's Agent" shall mean an agent appointed by the Depositary as
provided, and for the purposes specified, in Section 7.5.
"Preferred Stock" shall mean [title of preferred stock] par value $0.01 per
share, of the Company.
"Receipt" or "Depositary Receipt" shall mean a Depositary Receipt executed
and delivered hereunder to evidence one or more Depositary Shares, whether in
definitive or temporary form.
"Record holder" as applied to a Receipt shall mean the person in whose name
a Receipt is registered on the books maintained by the Depositary for such
purpose.
"Registrar" shall mean any bank or trust company appointed to register
Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Stock" shall mean the Tele-Communications, Inc. Series A TCI Group
Common Stock, par value $1.00 per share, of the Company.
ARTICLE II
Form of Receipts, Deposit of Preferred Stock,
Execution and Delivery, Transfer and Surrender of Receipts
Section 2.1. Form and Transferability of Receipts. Definitive Receipts shall
be engraved or printed or lithographed with steel-engraved borders and shall
be substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Pending preparation of definitive Receipts, the
Depositary, upon the written order of the Company or any holder of Preferred
Stock, as the case may be, delivered for deposit in compliance with Section
2.2, shall execute and deliver temporary Receipts which are printed,
lithographed, typewritten, mimeographed or otherwise substantially of the
tenor of the definitive Receipts in lieu of which they are executed and
delivered and with such appropriate insertions, omissions, substitutions and
other variations as the persons executing such Receipts may determine, as
evidenced by their execution of such Receipts. If temporary Receipts are
executed and delivered, the Company and the Depositary will cause definitive
Receipts to be prepared without unreasonable delay. After the preparation of
definitive Receipts, the temporary Receipts shall be exchangeable for
definitive Receipts upon surrender of the temporary Receipts at an office
described in the second to last paragraph of Section 2.2, without charge to
the holder. Upon surrender for cancellation of any one or more temporary
Receipts, the Depositary shall execute and deliver in exchange therefor
definitive Receipts representing the same number of Depositary Shares as
represented by the surrendered temporary Receipt or Receipts. Such exchange
shall be made at the Company's expense and without any charge therefor. Until
so exchanged, the temporary Receipts shall in all respects be entitled to the
same benefits under this Agreement, and with respect to the Preferred Stock
deposited hereunder, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of a
duly authorized signatory of the Depositary; provided, however, that such
signature may be a facsimile if a Registrar (other than the Depositary)
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<PAGE>
shall have countersigned the Receipts by the manual signature of a duly
authorized signatory of the Registrar. No Receipt shall be entitled to any
benefits under this Deposit Agreement or be valid or obligatory for any
purpose unless it shall have been executed as provided in the preceding
sentence. The Depositary shall record on its books each Receipt executed as
provided above and delivered as hereinafter provided.
Except as the Depositary may otherwise determine, Receipts shall be in
denominations of any number of whole Depositary Shares. All receipts shall be
dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Preferred Stock or the Depositary Shares
may be listed to conform with any usage with respect thereto, or to indicate
any special limitations or restrictions to which any particular receipts are
subject by reason of the date of issuance of the Preferred Stock or otherwise.
Ownership of any Receipt (and of the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement, or other instrument satisfactory to the
Depositary, shall be transferable by delivery; provided, however, that until a
Receipt shall be transferred on the books of the Depositary as provided in
Section 2.4, the Depositary and the Company may, notwithstanding any notice to
the contrary, treat the record holder thereof at such time as the absolute
owner thereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in this Deposit Agreement and for all other purposes.
Section 2.2. Deposit of Preferred Stock, Execution and Delivery of Receipts
in Respect Thereof. Subject to the terms and conditions of this Deposit
Agreement, the Company or any holder of Preferred Stock may deposit shares of
Preferred Stock under this Deposit Agreement by delivery to the Depositary of
a certificate or certificates for the shares of Preferred Stock to be
deposited, properly endorsed or accompanied by a properly executed instrument
of transfer or endorsement in form satisfactory to the Depositary, together
with (i) all such certifications as may be required by the Depositary in
accordance with the provisions of this Deposit Agreement and (ii) a written
order directing the Depositary to execute and deliver to or upon the written
order of the person or persons stated in such order a Receipt or Receipts for
the number of Depositary Shares representing such deposited Preferred Stock.
If required by the Depositary, Preferred Stock presented for deposit at any
time, whether or not the register of holders of Receipts is closed, shall also
be accompanied by an agreement or assignment, or other instrument satisfactory
to the Depositary, that will provide for the prompt transfer to the Depositary
or its nominee of any dividend or right to subscribe for additional Preferred
Stock or to receive other property that any person in whose name the Preferred
Stock is or has been registered may thereafter receive upon or in respect of
such deposited Preferred Stock, or in lieu thereof such agreement of indemnity
or other agreement as shall be satisfactory to the Depositary.
Upon receipt by the Depositary of a certificate or certificates for the
shares of Preferred Stock to be deposited hereunder, together with the other
documents specified above, the Depositary shall, as soon as transfer and
registration can be accomplished, present such certificates to the registrar
and transfer agent of the Preferred Stock for transfer and registration in the
name of the Depositary or its nominee of the shares of Preferred Stock being
deposited. Deposited Preferred Stock shall be held by the Depositary in an
account to be established by the Depositary at the Depositary's Office.
Upon receipt by the Depositary of a certificate or certificates for
Preferred Stock to be deposited hereunder, together with the other documents
specified above, the Depositary, subject to the terms and conditions of this
Deposit Agreement, shall execute and deliver to or upon the order of the
person or persons named in the written order delivered to the Depositary
referred to in the first paragraph of this Section 2.2 a Receipt or Receipts
for the number of whole Depositary Shares representing the Preferred Stock so
deposited and registered in such
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name or names as may be requested by such person or persons. The Depositary
shall execute and deliver such Receipt or Receipts at the Depositary's Office,
except that, at the request, risk and expense of any person requesting such
delivery, such delivery may be made at such other place as may be designated
by such person. In each case, delivery will be made only upon payment by such
person to the Depositary of all taxes and other governmental charges and any
fees payable in connection with such deposit and the transfer of the deposited
Preferred Stock.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary
to perform its obligations under this Deposit Agreement.
Section 2.3. Redemption of Preferred Stock. Whenever the Company shall elect
to redeem shares of Preferred Stock in accordance with the Certificate of
Designations it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary notice of the date of such
proposed redemption of the Preferred Stock, which notice shall (i) be given
not less than Business Days prior to the date the Depositary is to mail
notice of the redemption to the record holders of Receipts, in the case of a
redemption of all outstanding Depositary Shares, and not less than calendar
days prior to the date the Depositary is to mail notice of the redemption to
the record holders of Receipts evidencing the Depositary Shares to be
redeemed, in the case of a partial redemption of outstanding Depositary
Shares, and (ii) be accompanied by a certificate from the Company stating that
such redemption of the Preferred Stock is in accordance with the provisions of
the Certificate of Designations. Such notice shall be in addition to the
notice required for redemption pursuant to the Certificate of Designations. On
the date of any such redemption of Preferred Stock, provided that the Company
shall then have deposited with the Depositary the redemption price of the
Preferred Stock to be redeemed, plus an amount sufficient to pay any accrued
and unpaid dividends thereon, the Depositary shall redeem the number of
Depositary Shares representing such redeemed Preferred Stock. Subject to the
penultimate sentence of this Paragraph, the Depositary, at the expense of the
Company, shall mail, first class postage prepaid, notice of the redemption of
Preferred Stock and the proposed simultaneous redemption of the Depositary
Shares representing the Preferred Stock held by the Depositary to be redeemed,
not less than and not more than days prior to the date fixed for
redemption of such Preferred Stock and Depositary Shares (the "Redemption
Date"), to the record holders of the Receipts evidencing the Depositary Shares
to be so redeemed, at the addresses of such holders as they appear on the
records of the Depositary; but neither failure to mail any such notice to one
or more such holders nor any defect in any notice to one or more such holders
shall affect the sufficiency of the proceedings for redemption as to other
holders. Each such notice shall state: (i) the Redemption Date; (ii) the
number of Depositary Shares to be redeemed and, if less than all the
Depositary Shares held by any such holder are to be redeemed, the number of
such Depositary Shares held by such holder to be so redeemed; (iii) the
redemption price, (iv) the place or places where Receipts evidencing
Depositary Shares are to be surrendered for payment of the redemption price
and (v) that dividends in respect of the shares of Preferred Stock represented
by the Depositary Shares to be redeemed will cease to accumulate from and
after such Redemption Date. Any such notices shall be mailed in the same
manner as notices of redemption of the Preferred Stock are required to be
mailed pursuant to section of the Certificate of Designations and published
in the same manner as notices of redemption of the Preferred Stock are
required to be published pursuant to said section, if so required. In case
fewer than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed shall be selected by lot or pro rata (as
nearly as may be) or by any other equitable method determined by the
Depositary to be consistent with the method determined by the Board of
Directors of the Company with respect to the Preferred Stock.
Notice having been mailed and published, at the expense of the Company, by
the Depositary as aforesaid, from and after the Redemption Date (unless the
Company shall have failed to redeem the shares of Preferred Stock to be
redeemed by it, as set forth in the Company's notice provided for in the
preceding paragraph), the Depositary Shares called for redemption shall be
deemed no longer to be outstanding and all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the redemption
price) shall, to the extent of such Depositary Shares, cease and terminate.
Upon surrender in accordance with said notice of the Receipts evidencing such
Depositary Shares (properly endorsed or assigned for transfer, if the
Depositary shall
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so require), such Depositary Shares shall be redeemed at a redemption price
per Depositary Share equal to one- of the redemption price paid for a
share of Preferred Stock pursuant to the Certificate of Designations. The
foregoing shall be subject further to the terms and conditions of the
Certificate of Designations.
If fewer than all of the Depositary Shares evidenced by a Receipt are called
for redemption, the Depositary will deliver to the holder of such Receipt upon
its surrender to the Depositary, together with the redemption price for the
Depositary Shares called for redemption, a new Receipt evidencing the
Depositary Shares evidenced by such prior Receipt and not called for
redemption.
The Depositary shall not be required (a) to execute and deliver, transfer or
exchange any receipts for a period beginning at the opening of business 15
days next preceding any selection of Depositary Shares and Preferred Stock to
be redeemed and ending at the close of business on the day of the mailing of
notice of redemption of Depositary Shares or (b) to transfer or exchange for
another Receipt any Receipt evidencing Depositary Shares called or being
called for redemption in whole or in part, except as provided in the third
paragraph of this Section 2.3.
Section 2.4. Transfer of Receipts. Subject to the terms and conditions of
this Deposit Agreement, the Depositary shall make transfers on its books from
time to time of Receipts upon any surrender thereof at the Depositary's Office
or such other office as the Depositary may designate for such purpose, by the
holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement, or
other instrument satisfactory to the Depositary, together with evidence of the
payment of any transfer taxes as may be required by law. Upon such surrender,
the Depositary shall execute a new Receipt or Receipts and deliver the same to
or upon the order of the person or persons entitled thereto evidencing the
same aggregate number of Depositary Shares evidenced by the Receipt or
Receipts surrendered.
Section 2.5. Combination and Split-ups of Receipts. Upon surrender of a
Receipt or Receipts at the Depositary's Office or such other office as the
Depositary may designate for the purposes of effecting a split-up or
combination of Receipts, subject to the terms and conditions of this Deposit
Agreement, the Depositary shall execute and deliver a new Receipt or Receipts
in the authorized denominations requested evidencing the same aggregate number
of Depositary Shares evidenced by the Receipt or Receipts surrendered;
provided, however, that the Depositary shall not execute and deliver any
Receipt evidencing a fractional Depositary Share.
[Section 2.6. Surrender of Receipts and Withdrawal of Preferred Stock. Any
holder of a Receipt or Receipts may withdraw any or all of the Preferred Stock
(but only in whole shares of Preferred Stock) represented by the Depositary
Shares evidenced by such Receipts and all money and other property, if any,
represented by such Depositary Shares by surrendering such Receipt or
Receipts, properly endorsed or accompanied by a properly executed instrument
of transfer or endorsement, or other instrument satisfactory to the
Depositary, at the Depositary's Office or such other office as the Depositary
may designate for such withdrawals. After such surrender, without unreasonable
delay, the Depositary shall deliver to such holder, or to the person or
persons designated by such holder as hereinafter provided, the whole number of
shares of Preferred Stock and other property, if any, represented by the
Depositary Shares evidenced by the Receipt or Receipts so surrendered for
withdrawal. If the Receipt or Receipts delivered by the holder to the
Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of whole Depositary Shares
representing the whole number of shares of Preferred Stock to be withdrawn,
the Depositary shall at the same time, in addition to such whole number of
shares of Preferred Stock and such money and other property, if any, to be
withdrawn, deliver to such holder, or (subject to Section 2.4) upon his order,
a new Receipt or Receipts evidencing such excess number of whole Depositary
Shares. Delivery of the Preferred Stock and such money and other property
being withdrawn may be made by the delivery of such certificates, documents of
title, and other instruments as the Depositary may deem appropriate, which, if
required by the Depositary, shall be properly endorsed or accompanied by
proper instruments of transfer.
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If the Preferred Stock and the money and other property being withdrawn are
to be delivered to a person or persons other than the record holder of the
Receipt or Receipts being surrendered for withdrawal of Preferred Stock, such
holder shall execute and deliver to the Depositary a written order so
directing the Depositary and the Depositary may require that the Receipt or
Receipts surrendered by such holder for withdrawal of such shares of Preferred
Stock be properly endorsed in blank or accompanied by a properly executed
instrument of transfer or endorsement in blank.
The Depositary shall deliver the Preferred Stock and the money and other
property, if any, represented by the Depositary Shares evidenced by Receipts
surrendered for withdrawal at the Depositary's Office, except that, at the
request, risk and expense of the holder surrendering such Receipt or Receipts
and for the account of the holder thereof, such delivery may be made at such
other place as may be designated by such holder.]
Section 2.7. Limitations on Execution and Delivery, Transfer, Split-up,
Combination, Surrender and Exchange of Receipts. As a condition precedent to
the execution and delivery, transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, the Depositary's Agent or the Company
may require any or all of the following: (i) payment to it of a sum sufficient
for the payment (or, in the event that the Depositary or the Company shall
have made such payment, the reimbursement to it) of any tax or earlier
governmental charge with respect thereto (including any such tax or charge
with respect to the Preferred Stock being deposited or withdrawn or with
respect to [the Series A Stock or] other securities or property of the Company
being issued upon [conversion or] redemption); (ii) the production of proof
satisfactory to it as to the identity and genuineness of any signature; and
(iii) compliance with such regulations, if any, as the Depositary or the
Company may establish not inconsistent with the provisions of the Deposit
Agreement.
The deposit of Preferred Stock may be refused, the delivery of Receipts
against Preferred Stock may be suspended, the transfer of Receipts may be
refused, and the transfer, split-up, combination, surrender or exchange of
outstanding Receipts may be suspended (i) during any period when the register
of holders of Receipts is closed, (ii) if any such action is deemed necessary
or advisable by the Depositary, any of the Depositary's Agents or the Company
at any time or from time to time because of any requirement of law or of any
government or governmental body or commission, or under any provision of this
Deposit Agreement, or (iii) except for the transfer of Receipts, with the
approval of the Company, for any other reason.
Section 2.8. Lost Receipts, etc. In case any Receipt shall be mutilated or
destroyed or lost or stolen, the Depositary in its discretion may execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt or in lieu of and in substitution for such destroyed, lost
or stolen Receipt; provided, however, that the holder thereof provides the
Depositary with (i) evidence satisfactory to the Depositary of such
destruction, loss or theft of such Receipt, of the authenticity thereof and of
his ownership thereof, (ii) reasonable indemnification satisfactory to the
Depositary and (iii) payment of any expense (including fees, charges and
expenses of the Depositary) in connection with such execution and delivery.
Section 2.9. Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so
cancelled.
Section 2.10. Conversion of Preferred Stock into Series a Stock. Receipts
may be surrendered with written instructions to the Depositary to instruct the
Company to cause the conversion of any specified number of shares, or
fractions of shares, of Preferred Stock represented by whole Depositary Shares
evidenced by such Receipts into whole shares of Series A Stock and cash for
any fractional share of Series A Stock at the conversion price then in effect
for the Preferred Stock pursuant to the Certificate of Designations as such
conversion price may be adjusted by the Company from time to time as provided
in the Certificate of Designations. Subject to the terms and conditions of
this Deposit Agreement and the Certificate of Designations, a holder of a
Receipt or Receipts evidencing Depositary Shares representing whole or
fractional shares of Preferred Stock may surrender such Receipt or Receipts at
the Depositary's Office or at such office or to such Depositary's Agent, as
the Depositary may designate for such purpose, together with a notice of
conversion duly
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completed and executed, thereby directing the Depositary to instruct the
Company to cause the conversion of the number of shares, or fractions of
shares, of underlying Preferred Stock specified in such notice of conversion
into shares of Series A Stock, and an assignment of such Receipt or Receipts
to the Company or in blank, duly completed and executed. To the extent that a
holder delivers to the Depositary for conversion a Receipt or Receipts which
in the aggregate are convertible into less than one whole share of Series A
Stock, the holder shall receive payment in cash in lieu of such fractional
share of Series A Stock otherwise issuable, if more than one Receipt shall be
delivered for conversion at one time by the same holder, the number of whole
shares of Series A Stock issuable upon conversion thereof shall be computed on
the basis of the aggregate number of Depositary Shares represented by the
Receipts so delivered.
Upon receipt by the Depositary of a Receipt or Receipts, together with
notice of conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of shares
of Preferred Stock, and an assignment of such Receipt or Receipts to the
Company or in blank, duly completed and executed, the Depositary shall
instruct the Company (i) to cause the conversion of the number of shares, or
fractions of shares, of Preferred Stock represented by the Depositary Shares
evidenced by the Receipts so surrendered for conversion as specified in the
written notice to the Depositary and (ii) to cause the delivery to the holders
of such Receipts of a certificate or certificates evidencing the number of
whole shares of Series A Stock and the amount of money, if any, to be
delivered to the holders of Receipts surrendered for conversion in lieu of
fractional shares of Series A Stock otherwise issuable. The Company shall as
promptly as practicable after receipt thereof cause the delivery of (i) a
certificate or certificates evidencing the number of whole shares of Series A
Stock into which the Preferred Stock represented by the Depositary Shares
evidenced by such Receipt or Receipts has been converted, and (ii) any money
or other property to which the holder is entitled by reason of such
conversion. Upon such conversion, the Depositary (i) shall deliver to the
holder a Receipt evidencing the number of Depositary Shares, if any, that
equals that excess of the number of Depositary Shares evidenced by the
surrendered Receipt over the number of Depositary Shares evidenced by such
Receipt that has been so converted, (ii) shall cancel the Depositary Shares
evidenced by Receipts surrendered for conversion and (iii) shall deliver to
the Company or its transfer agent for the Preferred Stock for cancellation the
shares of Preferred Stock represented by the Depositary Shares evidenced by
the Receipts so surrendered and so converted. Upon the delivery of the shares
of Preferred Stock to be cancelled due to such conversion by the Depositary to
the Company, the Company shall deliver to the Depositary a certificate or
certificates evidencing the number of shares, or fractions of shares, of
Preferred Stock, if any, that equals the excess of the number of shares of
Preferred Stock evidenced by the surrendered certificate over the number of
shares of Preferred Stock evidenced by that certificate that has been so
converted.
If Preferred Stock shall be called by the Company for redemption, the
Depositary Shares representing such Stock may be converted into Series A Stock
as provided in this Deposit Agreement until, but not after, the close of
business on the Redemption Date unless the Company shall fail to deposit with
the Depositary the amounts required to redeem the Preferred Stock held by the
Depositary, in which case the Depositary Shares representing such Preferred
Stock may continue to be converted into Series A Stock until, but not after,
the close of business on the date on which the Company deposits with the
Depositary such amounts as are required by the Certificate of Designations to
make full payment of the amounts payable upon such redemption. Upon receipt by
the Depositary of a Receipt or Receipts, together with a properly completed
and executed notice of conversion, representing any Preferred Stock called for
redemption, the shares of Preferred Stock held by the Depositary represented
by such Depositary Shares for which conversion is requested shall be deemed to
have been received by the Company for conversion as of immediately prior to
the close of business on the date of such receipt by the Depositary.
Upon the conversion of any share of Preferred Stock for which a request for
conversion has been made by the holder of Depositary Shares representing such
share, all dividends in respect of such Depositary Shares shall cease to
accrue, such Depositary Shares shall be deemed no longer outstanding, all
rights of the holder of the Receipt with respect to such Depositary Shares
(except the right to receive the Series A Stock, any cash payable with respect
to any fractional shares of Series A Stock as provided herein and any cash
payable on account of
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accrued dividends as provided herein and any Receipts evidencing Depositary
Shares not so converted) shall terminate, and the Receipt evidencing such
Depositary Shares shall be cancelled in accordance with Section 2.9 hereof.
No fractional shares of Series A Stock shall be issuable upon conversion of
Preferred Stock underlying the Depositary Shares. If any holder of Receipts
surrendered with instructions to the Depositary for conversion of the
underlying Preferred Stock would be entitled to a fractional share of Series A
Stock upon such conversion, the Company shall cause to be delivered to such
holder an amount in cash for such fractional share as provided in the
Certificate of Designations.]
ARTICLE III
Certain Obligations of Holders of Receipts and the Company
Section 3.1. Filing Proofs, Certificates and Other Information. Any person
presenting Preferred Stock for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company, as the case may be, may withhold or
delay the delivery of any Receipt, the transfer, redemption, conversion, or
exchange of any Receipt, the withdrawal of the Preferred Stock or money or
other property, if any, represented by the Depositary Shares evidenced by any
Receipt or the distribution of any dividend or other distribution until such
proof or other information is filed, such certificates are executed or such
representations and warranties are made.
Section 3.2. Payment of Taxes or Other Governmental Charges. If any tax or
other governmental charge shall become payable by or on behalf of the
Depositary with respect to any Receipt, the Depositary Shares evidenced by
such Receipt, the Preferred Stock (or fractional interest therein) represented
by such Depositary Shares or any transaction referred to in Section 4.6, such
tax (including transfer, issuance or acquisition taxes, if any) or
governmental charge shall be payable by the holder of such Receipt. Until such
payment is made, transfer, redemption, conversion, or exchange of any Receipt
or any withdrawal of the Preferred Stock or money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused,
any dividend or other distribution with respect to such Receipt or the
Preferred Stock represented by the Depositary Shares evidenced by such receipt
may be withheld and any part or all of the Preferred Stock or other property
represented by the Depositary Shares evidenced by such Receipt may be sold for
the account of the holder thereof (after attempting by reasonable means to
notify such holder prior to such sale). Any dividend or other distribution so
withheld and the proceeds of any such sale may be applied to any payment of
such tax or other governmental charge, the holder of such Receipt remaining
liable for any deficiency. The Depositary shall act as the withholding agent
for any payments, distributions, and exchanges made with respect to the
Depositary Shares and Receipts, and the Preferred Stock[, Series A Stock] or
other securities or assets represented thereby (collectively, the
"Securities"). The Depositary shall be responsible with respect to the
Securities for the timely (i) collection and deposit of any required
withholding or backup withholding tax, and (ii) filing of any information
returns or other documents with federal (and other applicable) taxing
authorities. In the event the Depositary is required to pay any such amounts,
the Company shall reimburse the Depositary for payment thereof upon the
request of the Depositary and the Depositary shall, upon the Company's request
and as instructed by the Company, pursue its rights against such holder at the
Company's expense.
Section 3.3. Representations and Warranties as to Preferred Stock. Each
person depositing Preferred Stock under this Deposit Agreement shall be deemed
thereby to represent and warrant that such Preferred Stock and each
certificate therefor are valid and that the person making such deposit is duly
authorized to do so. Such representations and warranties shall survive the
deposit of the Preferred Stock and the execution and delivery of Receipts.
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ARTICLE IV
The Preferred Stock, Notices
Section 4.1. Cash Distributions. Whenever the Depositary shall receive any
cash dividend or other cash distribution on the Preferred Stock, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such portions of
such sum as are, as nearly as practicable, proportionate to the respective
numbers of Depositary Shares evidenced by the Receipts held by such holders;
provided, however, that in case the Company or the Depositary shall be
required to withhold from any cash dividend or other cash distribution in
respect of the Preferred Stock an amount on account of taxes or as otherwise
required by law, regulation or court order, the amount made available for
distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for
distribution, as the case may be, only such amount, however, as can be
distributed without attributing to any owner of Depositary Shares a fraction
of one cent and any balance not so distributable shall be held by the
Depositary (without liability for interest thereon) and shall be added to and
be treated as part of the next sum received by the Depositary for distribution
to record holders of Receipts then outstanding.
Section 4.2. Distributions Other Than Cash. Whenever the Depositary shall
receive any distribution other than cash on the Preferred Stock, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such portions of the
securities or property received by it as are, as nearly as practicable,
proportionate to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders, in any manner that the Depositary and the
Company may deem equitable and practicable for accomplishing such
distribution. If, in the opinion of the Company after consultation with the
Depositary, such distribution cannot be made proportionately among such record
holders, or if for any other reason (including any requirement that the
Company or the Depositary withhold an amount on account of taxes or as
otherwise required by law, regulation or court order) the Depositary deems,
after consultation with the Company, such distribution not to be feasible, the
Depositary may, with the approval of the Company and subject to applicable
provisions of law, adopt such method as it deems equitable and practicable for
the purpose of effecting such distribution, including the sale (at public or
private sale) of the securities or property thus received, or any part
thereof, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall, subject to Section 3.2, be
distributed or made available for distribution, as the case may be, by the
Depositary to record holders of Receipts as provided by Section 4.1 in the
case of a distribution received in cash.
Section 4.3. Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose names
Preferred Stock is registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or
any rights, preferences or privileges of any other nature, such rights,
preferences or privileges shall in each such instance be made available by the
Depositary to the record holders of Receipts if the Company so directs in such
manner as the Company shall instruct (including by the execution and delivery
to such record holders of warrants representing such rights, preferences or
privileges); provided, however, that (a) if at the time of issue or offer of
any such rights, preferences or privileges the Company determines that it is
not lawful or feasible to make such rights, preferences or privileges
available to some or all holders of Receipts (by the execution and delivery of
warrants or otherwise) or (b) if and to the extent instructed by holders of
Receipts who do not desire to exercise such rights, preferences or privileges,
the Depositary shall then, if so instructed by the Company, and if applicable
laws and the terms of such rights, preferences or privileges so permit, sell
such rights, preferences or privileges of such holders at public or private
sale, at such place or places and upon such terms as it may deem proper, the
net proceeds of any such sale shall, subject to Section 3.2, be distributed by
the Depositary to the record holders of Receipts entitled thereto in
accordance with the withholding and fractional amount provisions of Section
4.1.
If registration under the Securities Act of the securities to which any
rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold such securities, the Company shall promptly
file a registration statement pursuant to the Securities Act with respect to
such securities and use its best efforts and
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take all steps available to it to cause such registration statement to become
effective sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges. In no event shall the Depositary make available to
the holders of Receipts any right, preference or privilege to subscribe for or
to purchase any securities unless and until notified by the Company in writing
that such registration statement has become effective or that the offering and
sale of such securities to such holders are exempt from registration under the
provisions of the Securities Act.
If any other action under the law of any jurisdiction or any governmental or
administrative authorization, consent or permit is required in order for such
rights, preferences or privileges to be made available to holders of Receipts,
the Company agrees with the Depositary that the Company will use its best
efforts to take such action or obtain such authorization, consent or permit
sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
Section 4.4. Notice of Dividends; Fixing of Record Date for Holders of
Receipts. Whenever any cash dividend or other cash distribution shall become
payable, or any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
Preferred Stock, or whenever the Depositary shall receive notice of (i) any
meeting at which holders of Preferred Stock are entitled to vote or of which
holders of Preferred Stock are entitled to notice or (ii) any election on the
part of the Company to call for redemption any shares of Preferred Stock, the
Depositary shall in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with respect to the
Preferred Stock) for the determination of the holders of Receipts (i) who
shall be entitled to receive such dividend, distribution, rights, preferences
or privileges or the net proceeds of the sale thereof, or to give instructions
for the exercise of voting rights at any such meeting or to receive notice of
such meeting or (ii) whose Depositary Shares are to be so redeemed.
Section 4.5. Voting Rights. Upon issuance of notice of any meeting at which
the holders of Preferred Stock are entitled to vote, the Company shall direct
the Depositary, as soon as practicable thereafter, to mail to the record
holders of Receipts a notice, which shall be provided by the Company and which
shall contain (i) such information as is contained in such notice of meeting
(and, if applicable, such information as is provided together with such notice
of meeting), (ii) a statement that the holders of Receipts at the close of
business on a specified record date fixed pursuant to Section 4.4 will be
entitled, subject to any applicable provision of law, the Certificate of
Incorporation or the Certificate of Designations, to instruct the Depositary
as to the exercise of the voting rights pertaining to the amount of Preferred
Stock represented by their respective Depositary Shares and (iii) a brief
statement as to the manner in which such instructions may be given. Upon the
written request of a holder of a Receipt on such record date, the Depositary
shall endeavor insofar as practicable to vote or cause to be voted the amount
of Preferred Stock represented by the Depositary Shares evidenced by such
Receipt in accordance with the instructions set forth in such request. The
Company hereby agrees to take all reasonable action that may be deemed
necessary by the Depositary in order to enable the Depositary to vote such
Preferred Stock or cause such Preferred Stock to be voted. In the absence of
specific instructions from the holder of a Receipt, the Depositary will
abstain from voting to the extent of the Preferred Stock represented by the
Depositary Shares evidenced by such Receipt. After aggregating all voting
Depositary Shares, the Depositary will disregard for voting purposes any
fractional share of Preferred Stock remaining.
Section 4.6. Changes Affecting Preferred Stock and Reclassifications,
Recapitalizations, etc. Upon any split-up, consolidation or any other
reclassification of Preferred Stock, or upon any recapitalization,
reorganization, merger, amalgamation or consolidation affecting the Company or
to which it is a party or sale of all or substantially all of the Company's
assets, the Depositary shall, upon the instructions of the Company, treat any
shares of stock or other securities or property (including cash) that shall be
received by the Depositary in exchange for or upon conversion of or in respect
of the Preferred Stock as new deposited property under this Deposit Agreement,
and Receipts then outstanding shall thenceforth represent the proportionate
interests of holders thereof in the new deposited shares of stock, other
securities or other property so received in exchange
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for or upon conversion or in respect of such Preferred Stock. In any such case
the Depositary may, in its discretion, with the approval of the Company,
execute and deliver additional Receipts, or may call for the surrender of all
outstanding Receipts to be exchanged for new Receipts specifically describing
such new deposited shares, other securities or other property.
Section 4.7. Inspection of Reports. The Depositary shall make available for
inspection by holders of Receipts at the Depositary's Office and at such other
places as it may from time to time deem advisable during normal business hours
any reports and communications received from the Company that are both
received by the Depositary as the holder of Preferred Stock and made generally
available to the holders of Preferred Stock by the Company.
Section 4.8. List of Receipt Holders. Promptly upon request from time to
time by the Company and at the Company's expense, the Depositary shall furnish
to it a list, as of a recent date, of the names, addresses and holdings of
Depositary Shares of all persons in whose names Receipts are registered on the
books of the Depositary.
ARTICLE V
The Depositary and the Company
Section 5.1. Maintenance of Offices, Agencies, Transfer Books by the
Depositary, the Registrar. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain (i) at the
Depositary's Office, facilities for the execution and delivery, transfer,
surrender and exchange, split-up and combination of Receipts and deposit and
withdrawal of Preferred Stock and (ii) at the offices of the Depositary's
Agents, if any, facilities for the delivery, transfer, surrender and exchange,
split-up, combination and redemption of Receipts and deposit and withdrawal of
Preferred Stock, all in accordance with the provisions of this Deposit
Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and transfer of Receipts, which books during normal business
hours shall be open for inspection by the record holders of Receipts, as
provided by applicable law, and by the Company. The Depositary shall consult
with the Company upon receipt of any request for inspection. The Depositary
may close such books, at any time or from time to time, when deemed expedient
by it in connection with the performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the Preferred
Stock represented by such Depositary Shares shall be listed on the Nasdaq
National Market, the Depositary may, with the approval of the Company, appoint
a Registrar for registry of such Receipts or Depositary Shares in accordance
with the requirements of the Nasdaq National Market. Such Registrar (which may
be the Depositary if so permitted by the requirements of the Nasdaq National
Market) may be removed and a substitute registrar appointed by the Depositary
upon the request or with the approval of the Company. If the Receipts, such
Depositary Shares or such Preferred Stock are listed on one or more other
stock exchanges, the Company will, with the assistance or the Depositary,
arrange such facilities for the delivery, transfer, surrender and exchange of
such Receipts, such Depositary Shares or Preferred Stock as may be required by
law or applicable stock exchange regulations.
Section 5.2. Prevention of or Delay in Performance by the Depositary, the
Depositary's Agents or the Company. Neither the Depositary nor any
Depositary's Agent nor the Company shall incur any liability to any holder of
any Receipt if, by reason of any provision of any present or future law or
regulation thereunder of the United States of America or of any other
governmental authority or, in the case of the Depositary or any Depositary's
Agent, by reason of any provision, present or future, of the Certificate of
Incorporation or the Certificate of Designations or, in the case of the
Company, the Depositary or any Depositary's Agent, by reason of any act of God
or war or other circumstance beyond the control of the relevant party, the
Depositary, any Depositary's Agent or the Company shall be prevented or
forbidden from doing or performing any act or thing
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that the terms of this Deposit Agreement provide shall be done or performed;
nor shall the Depositary, any Depositary's Agent or the Company incur any
liability to any holder of a Receipt by reason of any nonperformance or delay,
caused as aforesaid, in the performance of any act or thing that the terms of
this Deposit Agreement provide shall or may be done or performed or by reason
of any exercise of, or failure to exercise, any discretion provided for in
this Deposit Agreement.
Section 5.3. Obligations of the Depositary, the Depositary's Agents, and the
Company. Neither the Depositary nor any Depositary's Agent nor the Company
assumes any obligation or shall be subject to any liability under this Deposit
Agreement or any Receipt to holders of Receipts other than that each of them
agrees to use good faith in the performance of such duties as are specifically
set forth in this Deposit Agreement.
Neither the Depositary nor any Depositary's Agent nor the Company shall be
under any obligation to appear in, prosecute or defend any action, suit or
other proceeding with respect to the Preferred Stock, Depositary Shares,
Receipts [or Series A Stock] that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Company shall be
liable for any action or any failure to act by it in reliance upon the advice
of, or information from, legal counsel, accountants, any person presenting
Preferred Stock for deposit, any holder of a Receipt or any other person
believed by it in good faith to be competent to give such advice or
information. The Depositary, any Depositary's Agent and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been
signed or presented by the proper party or parties.
The Depositary, its parent, affiliates, subsidiaries, officers, directors or
employees and any Depositary's Agent may own, buy, sell or deal in any class
of securities of the Company and its affiliates and Receipts or Depositary
Shares, or become pecuniarily interested in any transaction in which the
Company or its officers may be interested, or contract with or lend money to
the Company or any of its affiliates or officers, or otherwise act fully or as
freely as if it were not the Depositary or the Depositary's Agent hereunder.
The Depositary may also act as transfer agent or registrar of any of the
securities of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent shall
be deemed to be an "issuer" of securities under the federal securities laws or
applicable state securities laws, it being expressly understood and agreed
that the Depositary and any Depositary's Agent are acting only in a
ministerial capacity as Depositary for the Preferred Stock; provided, however,
that the Depositary agrees to comply with all information reporting and
withholding requirements applicable to it under law or this Deposit Agreement
in its capacity as Depositary.
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Preferred Stock at any time deposited with the Depositary
hereunder or of the Depositary Shares, as to the validity or sufficiency of
this Deposit Agreement, as to the value of the Depositary Shares, or as to any
right, title or interest of the record holders of Receipts in and to the
Depositary Shares, except that the Depositary hereby represents and warrants
as follows: (i) the Depositary has been duly organized and is validly existing
and in good standing under the laws of the United States with full power,
authority and legal right under such laws to execute, deliver and carry out
the terms of this Deposit Agreement; (ii) this Deposit Agreement has been duly
authorized, executed and delivered by the Depositary; and (iii) this Deposit
Agreement constitutes a valid and binding obligation of the Depositary,
enforceable against the Depositary in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting enforcement of creditors rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law). The Depositary shall not be accountable for the use or application by
the Company of the Depositary Shares or the Receipts or the proceeds of the
sale thereof.
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Section 5.4. Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by notice of its election to do so delivered to the Company, such
resignation to take effect upon the appointment of a successor depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of such
removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor depositary and its acceptance of such appointment
as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 45 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company having its principal office in the United States of America and having
a combined capital and surplus of at least $50,000,000. If a successor
depositary shall not have been appointed in 45 days, the resigning Depositary
may petition a court of competent jurisdiction to appoint a successor
depositary. Every successor depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall promptly
execute and deliver an instrument transferring to such successor all rights
and powers of such predecessor hereunder, shall duly assign, transfer and
deliver all rights, title and interest in the Preferred Stock and any moneys
or property held hereunder to such successor and shall deliver to such
successor a list of the record holders of all outstanding Receipts and such
other records respecting the Receipts, the Depositary Shares and the Preferred
Stock as the successor shall require in order to perform its duties. Any
successor depositary shall promptly mail notice of its appointment to the
record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted, or to which the Depositary transfers all or
substantially all of its corporate trust business, shall be the successor of
such Depositary without the execution or filing of any document or any further
act. Such successor depositary may execute the Receipts either in the name of
the predecessor depositary or in the name of the successor depositary.
Section 5.5. Corporate Notices and Reports. The Company agrees that it will
deliver to the Depositary, and the Depositary will, promptly after receipt
thereof, and as directed by the Company transmit to the record holders of
Receipts, in each case at the most recent address recorded in the Depositary's
books, copies of all notices and reports (including financial statements)
required by law, by the rules of any national securities exchange or national
market system upon which the Preferred Stock, the Depositary Shares or the
Receipts are listed, or by the Certificate of Incorporation and the
Certificate of Designations to be furnished by the Company to holders of
Preferred Stock. Such transmission will be at the Company's expense and the
Company will provide the Depositary with such number of copies of such
documents as the Depositary may reasonably request. In addition, the
Depositary will transmit to the record holders of Receipts at the Company's
expense such other documents as may be requested by the Company.
Section 5.6. Deposit of Preferred Stock by the Company. Neither the Company
nor any company controlled by the Company will at any time deposit any
Preferred Stock if such Preferred Stock is required to be registered under the
provisions of the Securities Act and no registration statement is at such time
in effect as to such Preferred Stock.
Section 5.7. Indemnification by the Company. The Company shall indemnify
Depositary, any Depositary's Agent and any Registrar for, and hold each of
them harmless against, any loss, liability or expense (including reasonable
attorneys' fees) incurred without gross negligence or intentional misconduct
on the part of any such person, arising out of or in connection with this
Deposit Agreement and the Receipts, including the costs and expenses of any of
its duties under this Deposit Agreement or the Receipts. Anything in this
Agreement to the contrary notwithstanding, in no event shall Depositary, any
Depositary's Agent or Registrar be liable for
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special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits) even if Depositary, any
Depositary's Agent or Registrar has been advised of the likelihood of such
loss or damage and regardless of the form of the action. The obligations of
the Company to Depositary, any Depositary's Agent or Registrar shall survive
the termination of this Agreement.
Section 5.8. Fees, Charges and Expenses. No fees, charges and expenses of
the Depositary or any Depositary's Agent hereunder or of any Registrar shall
be payable by any person other than the Company, except for any taxes and
other governmental charges and except as provided in this Deposit Agreement.
If the Depositary incurs fees, charges or expenses for which it is not
otherwise liable hereunder at the election of a holder of a Receipt or other
person, such holder or other person will be liable for such fees, charges and
expenses. All other fees, charges and expenses of the Depositary and any
Depositary's Agent hereunder and of any Registrar (including, in each case,
reasonable fees and expenses of counsel) incident to the performance of their
respective obligations hereunder will be paid from time to time upon
consultation and agreement between the Depositary and the Company as to the
amount and nature of such fees, charges and expenses.
ARTICLE VI
Amendment and Termination
Section 6.1. Amendment. The form of the Receipts and any provisions of this
Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable. Any amendment that shall impose any fees, taxes
or charges payable by holders of Receipts (other than taxes and other
governmental charges, fees and other expenses provided for herein or in the
Receipts), or that shall otherwise prejudice any substantial existing right of
holders of Receipts, shall not become effective as to outstanding Receipts
until the expiration of 90 days after notice of such amendment shall have been
given to the record holders of outstanding Receipts. Every holder of an
outstanding Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold such Receipt, to consent and agree to such
amendment and to be bound by this Deposit Agreement as amended thereby. In no
event shall any amendment impair the right, subject to the provisions of
Sections 2.3, 2.6, 2.7 and 2.10 and Article III, of any owner of any
Depositary Shares to surrender the Receipt evidencing such Depositary Shares
with instructions to the Depositary to deliver to the holder the Preferred
Stock and all money and other property, if any, represented thereby, or to
cause the conversion of the underlying Preferred Stock into Series A Stock and
cash for any fractional share amount, except in order to comply with mandatory
provisions of applicable law. The Depositary shall sign any amendment
authorized pursuant to this Section 6.1 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Depositary. If it
does, the Depositary may but need not sign it. In signing such amendment the
Depositary shall be entitled to receive indemnity reasonably satisfactory to
it and to receive, and shall be fully protected in relying upon, an opinion of
counsel stating that such amendment is permitted by this Agreement, that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed amendment have been complied with, and that such amendment complies
with all applicable laws.
Section 6.2. Termination. Whenever so directed by the Company upon at least
five Business Days' prior notice, the Depositary will terminate this Deposit
Agreement, provided, that notice of such termination has been given by mailing
notice of such termination to the record holders of all Receipts then
outstanding at least 30 days prior to the date fixed in such notice for such
termination. The Depositary may likewise terminate this Deposit Agreement if
at any time 45 days shall have expired after the Depositary shall have
delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its
appointment as provided in Section 5.4.
If any Receipts shall remain outstanding after the date of termination of
this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the
holders thereof and shall not give any further notices (other than notice of
such termination) or perform any
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further acts under this Deposit Agreement, except as hereinafter provided in
this paragraph and except that the Depositary shall continue to collect
dividends and other distributions pertaining to Preferred Stock and shall
continue to deliver the Preferred Stock and any money and other property
represented by Receipts, without liability for interest thereon, upon
surrender thereof by the holders thereof. At any time after the expiration of
two years from the date of termination, the Depositary may, subject to
applicable provisions of law, sell Preferred Stock then held hereunder at
public or private sale, at such place or places and upon such terms as it
deems proper and may thereafter hold the net proceeds of any such sale,
together with any money and other property held by it hereunder, without
liability for interest, for the benefit, pro rata in accordance with their
holdings, of the holders of Receipts that have not theretofore been
surrendered. After making such sale, the Depositary shall be discharged from
all obligations under this Deposit Agreement except to account for such net
proceeds and money and other property. Upon the termination of this Deposit
Agreement, the Company shall be discharged from all obligations under this
Deposit Agreement except for its obligations to the Depositary, any Depositary
Agent and any Registrar under Sections 5.7 and 5.8. In the event this Deposit
Agreement is terminated and a sufficient number of shares of Preferred Stock
remain outstanding, the Company hereby agrees to use its best efforts to cause
the shares of Preferred Stock to be split to 1 (so that each Depositary
Share then represents one share of Preferred Stock) and to have the Preferred
Stock included for quotation on the Nasdaq National Market (unless the holders
of a majority of the outstanding shares of Preferred Stock shall consent to
the Company not effecting such listing).
ARTICLE VII
Miscellaneous
Section 7.1. Counterparts. This Deposit Agreement may be executed by the
Company and the Depositary in separate counterparts, each of which
counterpart, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by facsimile transmission shall be effective as delivery of
a manually executed counterpart of this Deposit Agreement. Copies of this
Deposit Agreement shall be filed with the Depositary and each Depositary's
Agent, if any, and shall be open to inspection during business hours at the
Depositary's Office and the respective offices of the Depositary's Agents, if
any, by any holder of a Receipt.
Section 7.2. Exclusive Benefits of Parties. This Deposit Agreement is for
the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right,
remedy or claim to any other person whatsoever.
Section 7.3. Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal, or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
Section 7.4. Notices. Any notices to be given to the Company hereunder or
under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by first class mail, postage prepaid or
by facsimile transmission confirmed by letter, addressed to the Company at
Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000, Attention:
General Counsel, or at any other place to which the Company may have
transferred its principal executive office.
Any notices to be given to the Depositary hereunder or under the Receipts
shall be in writing and shall be deemed to have been duly given if personally
delivered or sent by first class mail, postage prepaid, or by telegram or
telex or telecopier confirmed by letter, addressed to the Depositary at the
Depositary's Office.
Any notices given to any record holder of a Receipt hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by first class mail, postage prepaid, or
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by telegram or telex or telecopier confirmed by letter, addressed to such
record holder at the most recent address of such record holder as it appears
on the books of the Depositary or, if such holder shall have timely filed with
the Depositary a written request that notices intended for such holder be
mailed to some other address, at the address designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or telecopier,
shall be deemed to be effected at the time when a duly addressed letter
containing the same (or a duly addressed letter confirming an earlier notice
in the case of a facsimile transmission, telegram or telex) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any facsimile transmission received by it from the
other or from any holder of a Receipt, notwithstanding that such facsimile
transmission shall not subsequently be confirmed by letter as aforesaid.
Delivery of a notice delivered personally shall be deemed to be effected on
the date of delivery (or the date delivery is refused by the addressee upon
presentation).
Section 7.5. Depositary's Agents. The Depositary may from time to time
appoint Depositary's Agents to act in any respect for the Depositary for the
purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will promptly notify the Company of any such action.
Section 7.6. Holders of Receipts Are Parties. Notwithstanding that holders
of Receipts have not executed and delivered this Deposit Agreement or any
counterpart thereof, the holders of Receipts from time to time shall be deemed
to be parties to this Deposit Agreement and shall be bound by all of the terms
and conditions hereof and of the Receipts by acceptance of delivery of
Receipts.
Section 7.7. Governing Law. This Deposit Agreement and the Receipts and all
rights hereunder and thereunder and provisions hereof and thereof shall be
governed by, and construed in accordance with, the law of the State of New
York without giving effect to principles of conflict of laws.
Section 7.8. Headings. The headings of articles and sections in this Deposit
Agreement and in the form of the Receipt set forth in Exhibit A hereto have
been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or the Receipts or to have any bearing upon the meaning
or interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, Tele-Communications, Inc. and have duly executed
this agreement as of the day and year first above set forth and all holders of
Receipts shall become parties hereto by and upon acceptance by them of
delivery of Receipts executed and delivered in accordance with the terms
hereof.
Tele-Communications, Inc.
By: _________________________________
Name:
Title:
_____________________________________
as Depositary,
By: _________________________________
Name:
Title:
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EXHIBIT A
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES, EACH REPRESENTING OF A SHARE OF
[TITLE OF UNDERLYING PREFERRED STOCK] PAR VALUE $0.01 PER SHARE
OF
TELE-COMMUNICATIONS, INC.
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
No.
DEPOSITARY SHARES
CUSIP
, as Depositary (the "Depositary"), hereby certifies that is
the registered owner of Depositary Shares (the "Depositary Shares"),
each Depositary Share representing one-hundredth of a share of [title of
underlying preferred stock], par value $0.01 per share (the "Preferred
Stock"), of Tele-Communications, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), and the same
proportionate interest in any and all other property received by the
Depositary in respect of such shares of Preferred Stock and held by the
Depositary under the Deposit Agreement (as defined below). Subject to the
terms of the Deposit Agreement, each owner of a Depositary Share is entitled,
proportionately, to all the rights, preferences and privileges of the
Preferred Stock represented thereby, including the dividend, voting,
[conversion,] liquidation and other rights contained in the Certificate of
Designations, establishing the rights, preferences, privileges and limitations
of the Preferred Stock (the "Certificate of Designations"), copies of which
are on file at the office of the Depositary at which at any particular time
its business in respect of matters governed by the Deposit Agreement shall be
administered, which at the time of the execution of the Deposit Agreement is
located at , , (the "Depositary's Office").
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK.
THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF
THE COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS
EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO
WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY
OF ANY STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT
AGREEMENT OR OF THE DEPOSITARY SHARES OR RECEIPTS (EXCEPT FOR ITS
COUNTERSIGNATURES THEREON), AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT
AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE
OR INTEREST OF THE RECORD HOLDERS OF THE RECEIPTS IN AND TO THE DEPOSITARY
SHARES.
The Company will furnish to any holder of a Receipt without charge, upon
request addressed to its executive office or the office of its transfer agent,
a statement or summary of the powers, designations, preferences and relative,
participating, optional or other special rights of each authorized class of
capital stock of the Company, and of each class and series of preferred stock
of the Company authorized to be issued, so far as the same may have been
fixed, and of the qualifications, limitations or restrictions of such
preferences and/or rights.
A-1
<PAGE>
This Depositary Receipt (the "Receipt") is continued on the reverse hereof
and the additional provisions therein set forth for all purposes have the same
effect as if set forth at this place.
Dated:
_____________________________________
Depositary and Registrar
By: _________________________________
Authorized Signatory
A-2
<PAGE>
[FORM OF REVERSE
OF DEPOSITARY RECEIPT]
1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of which this
Receipt is one, are made available upon the terms and conditions set forth in
the Deposit Agreement, dated as of , 199 (the "Deposit Agreement") among
the Company, the Depositary and all holders from time to time of Receipts. The
Deposit Agreement (copies of which are on file at the Depositary's Office and
at the office of any Depositary's Agent) sets forth the rights of holders of
Receipts and the rights and duties of the Depositary. The statements made on
the face and the reverse of this Receipt are summaries of certain provisions of
the Deposit Agreement and are subject to the detailed provisions thereof, to
which reference is hereby made. In the event of any conflict between the
provisions of this Receipt and the provisions of the Deposit Agreement, the
provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all defined terms
used herein shall have the meanings ascribed thereto in the Deposit Agreement.
3. Redemption of Preferred Stock. Whenever the Company shall elect to redeem
shares of Preferred Stock in accordance with the Certificate of Designations,
it shall (unless otherwise agreed in writing with the Depositary) give the
Depositary in its capacity as Depositary the notice required by the Deposit
Agreement. The Depositary shall mail, first class postage prepaid, notice of
such redemption and the proposed simultaneous redemption of the number of
Depositary Shares representing the Preferred Stock held by the Depositary to be
redeemed, not less than and not more than days prior to the date fixed for
redemption of such Preferred Stock and Depositary Shares (the "Redemption
Date"), to the record holders of the Receipts evidencing the Depositary Shares
to be so redeemed, at the addresses of such holders as they appear on the
records of the Depositary; but neither failure to mail any such notice to one
or more such holders nor any defect in any notice to one or more such holders
shall affect the sufficiency of the proceedings for redemption as to other
holders. Each such notice shall state: (i) the Redemption Date; (ii) the number
of Depositary Shares to be redeemed and, if less than all the Depositary Shares
held by any such holder are to be redeemed, the number of such Depositary
Shares held by such holder to be so redeemed; (iii) the redemption price; (iv)
the place or places where Receipts evidencing Depositary Shares are to be
surrendered for payment of the redemption price; and (v) that dividends in
respect of the shares of Preferred Stock represented by the Depositary Shares
to be redeemed will cease to accumulate from and after such Redemption Date.
Any such notices shall be mailed in the same manner as notices of redemption of
the Preferred Stock are required to be mailed pursuant to Section of the
Certificate of Designations and published in the same manner as notices of
redemption of the Preferred Stock are required to be published pursuant to said
section, if so required. In case fewer than all the outstanding Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed shall be
selected by lot or pro rata (as nearly as may be) or by any other equitable
method determined by the Depositary to be consistent with the method determined
by the Board of Directors of the Company with respect to the Preferred Stock.
Notice having been mailed and published by the Depositary as aforesaid, from
and after the Redemption Date (unless the Company shall have failed to redeem
the shares of Preferred Stock to be redeemed by it, as set forth in the
Company's notice provided for above), the Depositary Shares called for
redemption shall be deemed no longer to be outstanding and all rights of the
holders of Receipts evidencing such Depositary Shares (except the right to
receive the redemption price) shall, to the extent of such Depositary Shares,
cease and terminate. Upon surrender in accordance with said notice of the
Receipts evidencing such Depositary Shares (properly endorsed or assigned for
transfer, if the Depositary shall so require), such Depositary Shares shall be
redeemed for a redemption price at a rate per Depositary Share equal to one-
of the redemption price delivered upon redemption of a share of Preferred Stock
pursuant to the Certificate of Designations. The foregoing shall be subject
further to the terms and conditions of the Certificate of Designations and the
Deposit Agreement.
If fewer than all of the Depositary Shares evidenced by this Receipt are
called for redemption, the Depositary will deliver to the holder of this
Receipt upon its surrender to the Depositary, together with the
A-3
<PAGE>
redemption price for the Depositary Shares called for redemption, a new
receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.
[4. Surrender of Receipts and Withdrawal of Preferred Stock. Upon surrender
of this Receipt to the Depositary at the Depositary's Office or such other
offices as the Depositary may designate, and subject to the provisions of the
Deposit Agreement, the holder hereof is entitled to withdraw, and to obtain
delivery of, to or upon the order of such holder, any or all of the Preferred
Stock (but only in whole shares of Preferred Stock) and any or all money and
other property, if any, at the time represented by the Depositary Shares
evidenced by this Receipt; provided, however, that, in the event this Receipt
shall evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the whole number of shares of Preferred Stock
to be withdrawn, the Depositary shall, in addition to such whole number of
shares of Preferred Stock and such money and other property, if any, to be
withdrawn, deliver, to or upon the order of such holder, a new Receipt or
Receipts evidencing such excess number of whole Depositary Shares.]
[5. Conversion of Preferred Stock into Common Stock. Subject to the terms
and conditions of the Deposit Agreement and the Certificate of Designations,
this Receipt may be surrendered with written instructions to the Depositary to
instruct the Company to cause the conversion of any specified number of whole
shares of Preferred Stock represented by whole Depositary Shares evidenced
hereby into whole shares of Series A Stock, par value $1.00 per share ("Common
Stock"), and cash for any fractional share of Common Stock at the conversion
price then in effect for the Preferred Stock pursuant to the Certificate of
Designations as such conversion price may be adjusted by the Company from time
to time as provided in the Certificate of Designations. Subject to the terms
and conditions of the Deposit Agreement and the Certificate of Designations, a
holder of a Receipt or Receipts evidencing Depositary Shares representing
whole or fractional shares of Preferred Stock may surrender such Receipt or
Receipts at the Depositary's Office or at such office or to such Depositary's
Agents as the Depositary may designate for such purpose, together with a
notice of conversion duly completed and executed, thereby directing the
Depositary to instruct the Company to cause the conversion of the number of
shares, or fractions of shares, of underlying Preferred Stock specified in
such notice of conversion into shares of Common Stock, and an assignment of
such Receipt or Receipts to the Company or in blank, duly completed and
executed. To the extent that a holder delivers to the Depositary for
conversion a Receipt or Receipts which in the aggregate are convertible into
less than one whole share of Common Stock, the holder shall receive payment in
cash in lieu of such fractional share of Common Stock otherwise issuable. If
more than one Receipt shall be delivered for conversion at one time by the
same holder, the number of whole shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
Depositary Shares represented by the Receipts so delivered.
If Preferred Stock shall be called by the Company for redemption, the
Depositary Shares representing such Preferred Stock may be converted into
Common Stock as provided in the Deposit Agreement until, but not after, the
close of business on the Redemption Date unless the Company shall fail to
deposit with the Depositary the amounts required to redeem the Preferred Stock
held by the Depositary, in which case the Depositary Shares representing such
Preferred Stock may continue to be converted into Common Stock until, but not
after, the close of business on the date on which the Company deposits with
the Depositary such amounts as are required by the Certificate of Designations
to make full payment of the amounts payable upon such redemption. Upon receipt
by the Depositary of a Receipt or Receipts, together with a properly completed
and executed notice of conversion, representing any Preferred Stock called for
redemption, the shares of Preferred Stock held by the Depositary represented
by such Depositary Shares for which conversion is requested shall be deemed to
have been received by the Company for conversion as of immediately prior to
the close of business on the date of such receipt by the Depositary.]
6. Transfers, Split-ups, Combinations. Subject to Paragraphs 7, 8 and 9
below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Depositary's Office or such
other offices as the Depositary may designate, properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement, and
upon such surrender the Depositary shall execute and deliver a Receipt to or
upon the order of the person entitled thereto, all as provided in and subject
to the Deposit
A-4
<PAGE>
Agreement. This Receipt may be split into other Receipts or combined with
other Receipts into one Receipt evidencing the same aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
however, that the Depositary shall not execute and deliver any Receipt
evidencing a fractional Depositary Share.
7. Conditions to Signing and Delivery, Transfer, etc., of Receipts. Prior to
the execution and delivery, transfer, split-up, combination, surrender or
exchange of this Receipt, the Depositary, any of the Depositary's Agents or
the Company may require any or all of the following: (i) payment to it of a
sum sufficient for the payment (or, in the event that the Depositary or the
Company shall have made such payment, the reimbursement to it) of any tax or
other governmental charge with respect thereto (including any such tax or
charge with respect to Preferred Stock being deposited or withdrawn or with
respect to [Common Stock or] other securities or property of the Company being
issued upon [conversion or] redemption); (ii) the production of proof
satisfactory to it as to the identity and genuineness of any signature; and
(iii) compliance with such regulations, if any, as the Depositary or the
Company may establish not inconsistent with the Deposit Agreement. Any person
presenting Preferred Stock for deposit, or any holder of this Receipt, may be
required to file such proof of information, to execute such certificates and
to make such representations and warranties as the Depositary or the Company
may reasonably deem necessary or proper. The Depositary or the Company may
withhold or delay the delivery of any Receipt, the transfer, redemption[,
conversion] or exchange of any Receipt, the withdrawal of [the Preferred Stock
or] money or other property, if any, represented by the Depositary Shares
evidenced by this Receipt or the distribution of any dividend or other
distribution until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.
8. Suspension of Delivery, Transfer, etc. The deposit of Preferred Stock may
be refused, the delivery of Receipts against Preferred Stock may be suspended,
the transfer of Receipts may be refused and the transfer, split-up,
combination, surrender or exchange of this Receipt may be suspended (i) during
any period when the register of holders of Receipts is closed; (ii) if any
such action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or
commission, or under any provision of the Deposit Agreement; or (iii) except
for the transfer of Receipts, with the approval of the Company, for any other
reason. [Except with respect to a conversion of Depositary Shares which may
occur pursuant to Section of the Certificate of Designations,] the
Depositary shall not be required (a) to execute and deliver, transfer or
exchange any Receipts for a period beginning at the opening of business 15
days next preceding any selection of Depositary Shares and Preferred Stock to
be redeemed and ending at the close of business on the day of the mailing of
notice of redemption of Depositary Shares or (b) to transfer or exchange for
another Receipt any Receipt evidencing Depositary Shares called or being
called for redemption in whole or in part, except as provided in the second to
last paragraph of Paragraph 3 above.
9. Payment of Taxes or other Governmental Charges. If any tax or other
governmental charge shall become payable by or on behalf of the Depositary
with respect to this Receipt, the Depositary Shares evidenced by this Receipt,
the Preferred Stock (or any fractional interest therein) represented by such
Depositary Shares or any transaction referred to in Section 4.6 of the Deposit
Agreement, such tax (including transfer, issuance or acquisition taxes, if
any) or governmental charge shall be payable by the holder hereof. Until such
payment is made, transfer, redemption, [conversion] or exchange of this
Receipt or any withdrawal of the Preferred Stock or money and other property,
if any, represented by the Depositary Shares evidenced by this Receipt may be
refused, any dividend or other distribution may be withheld and any part or
all of the Preferred Stock or other property represented by the Depositary
Shares evidenced by this Receipt may be sold for the account of the holder
hereof (after attempting by reasonable means to notify such holder prior to
such sale). Any dividend or other distribution so withheld and the proceeds of
any such sale may be applied to any payment of such tax or other governmental
charge, the holder of this Receipt remaining liable for any deficiency.
10. Amendment. The form of the Receipts and any provision of the Deposit
Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect that they may deem
necessary or desirable. Any amendment that shall impose any fees, taxes or
charges payable by
A-5
<PAGE>
holders of Receipts (other than taxes and other governmental charges, fees and
other expenses provided for herein or in the Deposit Agreement), or that shall
otherwise prejudice any substantial existing right of holders of Receipts,
shall not become effective as to outstanding Receipts until the expiration of
90 days after notice of such amendment shall have been given to the record
holders of outstanding Receipts. The holder of this Receipt at the time any
such amendment becomes effective shall be deemed, by continuing to hold this
Receipt, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. In no event shall any amendment impair the
right, subject to the provisions of Paragraphs 3, 4, 5, 6, 8, 9 and 10 hereof
and of Sections 2.3, 2.6, 2.7 and 2.10 and Article III of the Deposit
Agreement, of the owner of the Depositary Shares evidenced by this Receipt to
surrender this Receipt with instructions to the Depositary to deliver to the
holder the Preferred Stock and all money and other property, if any,
represented hereby, [or to cause the conversion of the underlying Preferred
Stock into Common Stock and cash for any fractional share amount], except in
order to comply with mandatory provisions of applicable law.
11. Fees, Charges and Expenses. The Company will pay all fees, charges and
expenses of the Depositary, except for taxes (including transfer taxes, if
any) and other governmental charges and such charges as are expressly provided
in the Deposit Agreement to be at the expense of persons depositing Preferred
Stock, holders of Receipts or other persons.
12. Ownership of Receipts. It is a condition of this Receipt, and every
successive holder hereof by accepting or holding the same consents and agrees,
that ownership of this Receipt (and of the Depositary Shares evidenced hereby)
when properly endorsed or accompanied by a properly executed instrument of
transfer or endorsement, is transferable by delivery; provided, however, that
until this Receipt shall be transferred on the books of the Depositary as
provided in Section 2.4 of the Deposit Agreement, the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the absolute owner hereof for the purpose of determining the
person entitled to distribution of dividends or other distributions or to any
notice provided for in the Deposit Agreement and for all other purposes.
13. Dividends and Distributions. Whenever the Depositary receives any cash
dividend or other cash distribution on the Preferred Stock, the Depositary
will, subject to the provisions of the Deposit Agreement, distribute such
portions of such sum to record holders of Receipts as are, as nearly as
practicable, proportionate to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in
case the Company or the Depositary shall be required to withhold and does
withhold from any cash dividend or other cash distribution in respect of the
Preferred Stock an amount on account of taxes or as otherwise required by law,
regulation or court order, the amount made available for distribution or
distributed in respect of Depositary Shares shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case
may be, only such amount, however, as can be distributed without attributing
to any owner of Depositary Shares a fraction of one cent and any balance not
so distributable shall be held by the Depositary (without liability for
interest thereon) and shall be added to and be treated as part of the next sum
received by the Depositary for distribution to record holders of Receipts then
outstanding.
14. Subscription Rights, Preferences or Privileges. If the Company shall at
any time offer or cause to be offered to the persons in whose names Preferred
Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the
Deposit Agreement, be made available by the Depositary to the record holders
of receipts if the Company so directs in such manner as the Company shall
instruct.
15. Notice of Dividends; Fixing of Record Date. Whenever any cash dividend
or other cash distribution shall become payable, any distribution other than
cash shall be made, or any rights, preferences or privileges shall at any time
be offered, with respect to the Preferred Stock, or whenever the Depositary
shall receive notice of (i) any meeting at which holders of Preferred Stock
are entitled to vote or of which holders of Preferred Stock are entitled to
notice or (ii) any election on the part of the Company to call for redemption
any shares of Preferred Stock, the Depositary shall in each such instance fix
a record date (which shall be the same date as the record
A-6
<PAGE>
date fixed by the Company with respect to the Preferred Stock) for the
determination of the holders of Receipts (i) who shall be entitled to receive
such dividend, distribution, rights, preferences or privileges or the net
proceeds of the sale thereof, or to give instructions for the exercise of
voting rights at any such meeting or to receive notice of such meeting or (ii)
whose Depositary Shares are to be so redeemed.
16. Voting Rights. Upon issuance of notice of any meeting at which the
holders of Preferred Stock are entitled to vote, the Company shall direct the
Depositary, as soon as practicable thereafter, to mail to the record holders
of Receipts a notice, which shall contain (i) such information as is contained
in such notice of meeting (and, if applicable, such information as is provided
together with such notice of meeting), (ii) a statement that the holders of
Receipts at the close of business on a specified record date determined as
provided in Paragraph 14 will be entitled, subject to any applicable provision
of law, the Certificate of Incorporation or the Certificate of Designations,
to instruct the Depositary as to the exercise of the voting rights pertaining
to the amount of Preferred Stock represented by their respective Depositary
Shares, and (iii) a brief statement as to the manner in which such
instructions may be given. Upon the written request of a holder of a Receipt
on such record date, the Depositary shall endeavor insofar as practicable to
vote or cause to be voted the amount of Preferred Stock represented by the
Depositary Shares evidenced by such Receipt in accordance with the
instructions set forth in such request. The Company has agreed to take all
reasonable action that may be deemed necessary by the Depositary in order to
enable the Depositary to vote such Preferred Stock or cause such Preferred
Stock to be voted. In the absence of specific instructions from the holder of
a Receipt, the Depositary will abstain from voting to the extent of the
Preferred Stock represented by the Depositary Shares evidenced by such
Receipt. After aggregating all voting Depositary Shares, the Depositary will
disregard for voting purposes any fractional share of Preferred Stock
remaining.
17. Reports, Inspection of Transfer Books. The Depositary shall make
available for inspection by holders of Receipts at the Depositary's Office and
at such other places as it may from time to time deem advisable during normal
business hours any reports and communications received from the Company that
are both received by the Depositary as the holder of Preferred Stock and made
generally available to the holders of Preferred Stock by the Company. The
Depositary shall keep books at the Depositary's Office for the registration
and transfer of Receipts, which books during normal business hours will be
open for inspection by the record holders of receipts as provided by
applicable law.
18. Liability of the Depositary, the Depositary's Agents and the
Company. Neither the Depositary nor any Depositary's Agent nor the Company
shall incur any liability to any holder of any Receipt if, by reason of any
provision of any present or future law or regulation of any governmental
authority or, in the case of the Depositary or any Depositary's Agent, by
reason of any provision, present or future, of the Restated Certificate of
Incorporation or the Certificate of Designations or, in the case of the
Company, the Depositary or any Depositary's Agent, by reason of any act of God
or war or other circumstance beyond the control of the relevant party, the
Depositary, any Depositary's Agent or the Company shall be prevented or
forbidden from doing or performing any act or thing that the terms of the
Deposit Agreement provide shall or may be done or performed; nor shall the
Depositary, any Depositary's Agent or the Company incur any liability to any
holder of a Receipt by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of the
Deposit Agreement provide shall or may be done or performed or by reason of
any exercise of, or failure to exercise, any discretion provided for in the
Deposit Agreement.
19. Obligations of the Depositary, the Depositary's Agents and the
Company. Neither the Depositary nor any Depositary's Agent nor the Company
assumes any obligation or shall be subject to any liability hereunder or under
the Deposit Agreement to holders of Receipts other than that each of them
agrees to use good faith in the performance of such duties as are specifically
set forth in the Deposit Agreement. Neither the Depositary nor any
Depositary's Agent nor the Company shall be under any obligation to appear in,
prosecute or defend any action, suit or other proceeding with respect to
Preferred Stock, Depositary Shares, Receipts [or Common Stock] that in its
opinion may involve it in expense or liability, unless indemnity satisfactory
to it against all expense and liability be furnished as often as may be
required. Neither the Depositary nor any Depositary's Agent nor the Company
will be liable for any action or failure to act by it in reliance upon the
advice of or information
A-7
<PAGE>
from legal counsel, accountants, any person presenting Preferred Stock for
deposit, any holder of a Receipt or any other person believed by it in good
faith to be competent to give such advice or information.
20. Termination of Deposit Agreement. Whenever so directed by the Company
upon at least five Business Days' prior notice, the Depositary will terminate
the Deposit Agreement, provided that notice of such termination has been given
by mailing notice of such termination to the record holders of all Receipts
then outstanding at least 30 days prior to the date fixed in such notice for
such termination. The Depositary may likewise terminate the Deposit Agreement
if at any time 45 days shall have expired after the Depositary shall have
delivered to the Company a written notice of its election to resign and a
successor Depositary shall not have been appointed and accepted its
appointment as provided in Section 5.4 of the Deposit Agreement. Upon the
termination of the Deposit Agreement, the Company shall be discharged from all
obligations thereunder except for its obligations to the Depositary, any
Depositary's Agent and any Registrar under Sections 5.7 and 5.8 of the Deposit
Agreement.
If any Receipts remain outstanding after the date of termination, the
Depositary thereafter shall discontinue all functions and be discharged from
all obligations as provided in the Deposit Agreement, except as specifically
provided therein.
21. Governing Law. The Deposit Agreement and this Receipt and all rights
thereunder and hereunder and provisions thereof and hereof shall be governed
by, and construed in accordance with, the law of the State of New York without
giving effect to principles of conflict of laws.
This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose, unless this Receipt shall
have been executed manually or, if a Registrar for the Receipts (other than
the Depositary) shall have been appointed, by facsimile by the Depositary by
the signature of a duly authorized signatory and, if executed by facsimile
signature of the Depositary, shall have been countersigned manually by such
Registrar by the signature of a duly authorized signatory.
Dated:
_____________________________________
Depositary and Registrar
By: _________________________________
Authorized Signatory
A-8
<PAGE>
[NOTICE OF CONVERSION
The undersigned holder of this Receipt for Depositary Shares hereby
irrevocably exercises the option to convert that number of shares, or
fractions of shares, of [title of underlying preferred stock] of the Company
represented by Depositary Shares into shares of Common Stock of the
Company and cash for any fraction of Common Stock in accordance with the terms
of and subject to the conditions of the Preferred Stock, including the
Certificate of Designations in respect thereof and the Deposit Agreement, and
directs the Depositary to instruct the Company that the shares of Common Stock
deliverable upon such conversion be registered in the name of, and delivered
together with a check in payment for any fractional shares of Common Stock to,
the undersigned unless a different name has been indicated below. If the
shares of Common Stock are to be registered in the name of a person other than
the undersigned, the undersigned will pay all transfer and similar taxes
payable with respect thereto. If the number of shares of Preferred Stock,
represented by the number of Depositary Shares set forth above, is less than
the number of shares of Preferred Stock on deposit in respect of this Receipt,
the undersigned directs that the Depositary execute and deliver to the
undersigned, unless a different name is indicated below, a new receipt
evidencing Depositary Shares for the balance of such Preferred Stock not to be
converted.
Dated:
Signature: __________________________
( )
NOTE: The signature on this notice
of conversion must correspond with
the name as written upon the face of
this Receipt in every particular
without alteration or enlargement or
any change whatsoever, and must be
guaranteed by a commercial bank,
trust company, securities broker or
dealer, credit union, savings
association or other eligible
guarantor institution which is a
member of or participant in a
signature guarantee program
acceptable to the Depositary.
Name: _______________________________
Address: ____________________________
(Please print name and
address of Registered
Holder)
Name: _______________________________
Address: __________________________ ]
(Please indicate other
delivery instructions, if
applicable)
A-9
<PAGE>
EXHIBIT 12
TELE-COMMUNICATIONS, INC.
AND CONSOLIDATED SUBSIDIARIES
CALCULATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS
(AMOUNTS IN MILLIONS, EXCEPT FOR RATIOS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------- --------------
1994 1993(A) 1992(A) 1991 1990 1995 1994
------ ------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings (losses) from
continuing operations
before income taxes.... $ 166 $ 161 $ 45 $ (108) $ (308) $ (196) $ 148
Add:
Interest on debt........ 811 738 815 928 990 776 582
Interest Portion of
Rentals................ 27 23 22 23 23 34 19
Amortization of debt
expense................ 13 12 9 6 6 11 8
Distributions from and
(earnings) losses of
less than 50%-owned
affiliates with debt
not guaranteed by TCI.. 38 26 (10) (27) 34 120 (104)
Minority interests in
earnings (losses) of
consolidated
subsidiaries, including
preferred stock
dividend requirement of
consolidated
subsidiaries........... 0 13 277 24 (63) (36) 8
Elimination of preferred
stock dividend
requirement of
consolidated
subsidiaries to 50%-
owned affiliates....... -- -- (250) (42) (36) -- --
Preferred stock dividend
requirement of 50%-
owned affiliates, other
than amounts to TCI.... -- -- 175 23 15 -- --
------ ----- ------ ------ ------ ------ ------
Earnings available for
combined fixed charges
and preferred stock
dividends.............. $1,055 $ 973 $1,083 $ 827 $ 661 $ 709 $ 661
====== ===== ====== ====== ====== ====== ======
Fixed charges:
Interest on debt:
TCI and consolidated
subsidiaries........... 785 731 718 826 868 745 568
Elimination of interest
of consolidated
subsidiaries to 50%-
owned affiliates....... -- -- (36) (47) (51) -- --
Less than 50%-owned
affiliates with debt
guaranteed by TCIC..... 7 -- -- -- -- 7 --
TCI's proportionate
share of interest of
50%-owned affiliates... 19 7 133 149 173 24 14
------ ----- ------ ------ ------ ------ ------
811 738 815 928 990 776 582
Interest portion of
rentals................ 27 23 22 23 23 34 19
Amortization of debt
expense................ 13 12 9 6 6 11 8
Preferred stock dividend
requirements of
consolidated
subsidiaries........... 20 14 281 61 56 52 12
Elimination of preferred
stock dividend
requirement of
consolidated
subsidiaries to 50%-
owned affiliates....... -- -- (250) (42) (36) -- --
Preferred stock dividend
requirement of 50%-
owned affiliates, other
than amounts to TCI.... -- -- 175 23 15 -- --
Capitalized interest.... 16 9 6 5 6 7 12
------ ----- ------ ------ ------ ------ ------
Total Combined Fixed
Charges................ $ 887 $ 796 $1,058 $1,004 $1,060 $ 880 $ 633
====== ===== ====== ====== ====== ====== ======
Ration of earnings to
combined fixed charges
and preferred stock
dividends.............. 1.19 1.22 1.02 -- -- -- 1.04
Deficiency.............. $ -- $ -- $ -- $ (177) $ (399) $ (171) $ --
</TABLE>
- --------
(a) Preferred Stock dividend requirements have been increased to an amount
representing the pretax earnings which would be required to cover such
dividend requirements. The effective income tax rate utilized for purposes
of increasing preferred stock dividend requirements in 1993 has been
adjusted to exclude the effect of the federal income tax rate change in
the third quarter of 1993.
<PAGE>
TELE-COMMUNICATIONS, INC.
AND CONSOLIDATED SUBSIDIARIES
CALCULATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
(AMOUNTS IN MILLIONS, EXCEPT FOR RATIOS)
(UNAUDITED)
Fixed Charges related to interest on debt of less than 50%-owned affiliates
guaranteed by TCI:
<TABLE>
<S> <C>
Year ended December 31,
1990............................ 710
1991............................ 506
1992............................ 2,517
1993............................ 13,833
1994............................ 5,777
Nine Months Ended September 30,
1992............................ 10,676
1995............................ 4,866
</TABLE>
<PAGE>
TELE-COMMUNICATIONS, INC.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(REFC)
The ratio of earnings to combined fixed charges and preferred stock
dividends of the Company was 1.02, 1.22, and 1.19 for the years ended December
31, 1992, 1993 and 1994, respectively, and 1.04 for the nine months ended
September 30, 1994. The ratio of earnings to combined fixed charges and
preferred stock dividends of the Company was less than 1.00 for the years
ended December 31, 1990 and 1991, and for the nine months ended September 30,
1995; thus, earnings available for combined fixed charges and preferred stock
dividends were inadequate to cover combined fixed charges and preferred stock
dividends for such periods. The amounts of the coverage deficiencies were $399
million and $177 million for the years ended December 31, 1990 and 1991,
respectively, and $171 million for the nine months ended September 30, 1995.
For the ratio calculations, earnings available for combined fixed charges and
preferred stock dividends consists of earnings (losses) before income taxes
plus combined fixed charges and preferred stock dividends (minus capitalized
interest), distributions from and (earnings) loss of less than 50%-owned
affiliates with debt not guaranteed by the Company (net of earnings not
distributed of less than 50%-owned affiliates), and minority interest in
earnings (losses) of consolidated subsidiaries (including an amount
representing the pretax earnings which would be required to cover preferred
stock dividend requirements of consolidated subsidiaries). Combined fixed
charges and preferred stock dividends consist of (i) interest (including
capitalized interest) on debt, including interest of less than 50%-owned
affiliates with debt guaranteed by the Company and excluding interest to 50%-
owned affiliates, (ii) the Company's proportionate share of interest of 50%-
owned affiliates, (iii) that portion of rental expense the Company believes to
be representative of interest (one-third of rental expense), (iv) amortization
of debt expense, (v) that portion of minority interests in earnings of
consolidated subsidiaries that represent the amount of pretax earnings that
would be required to cover preferred stock dividend requirements excluding
similarly adjusted preferred stock dividend requirements of consolidated
subsidiaries to 50%-owned affiliates, and (vi) the amount representing the
pretax earnings which would be required to cover preferred stock dividend
requirements of 50%-owned affiliates, other than 50%-owned affiliates and
certain other entities in which it has an interest. Combined fixed charges and
preferred stock dividends of $710,000, $506,000, $2,517,000, $13,833,000 and
$5,777,000 relating to such guarantees for the years ended December 31, 1990,
1991, 1992, 1993 and 1994, respectively, and combined fixed charges and
preferred stock dividends of $10,676,000 and $4,866,000 relating to such
guarantees for the nine months ended September 30, 1994 and 1995,
respectively, have not been included in combined fixed charges and preferred
stock dividends.
3
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Tele-Communications, Inc. of our reports dated March 27, 1995,
relating to the consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1994, and all related
financial statement schedules, which reports appear in the December 31, 1994
Annual Report on Form 10-K, as amended, of Tele-Communications, Inc. and to
the reference to our firm under the heading "Experts" in the registration
statement. Our reports covering the December 31, 1994 consolidated financial
statements refer to the adoption of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," in 1994.
KPMG Peat Marwick LLP
Denver, Colorado
February 2, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders of
TeleWest Communications plc:
We consent to incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report dated 21 March 1995,
relating to the consolidated balance sheet of TeleWest Communications plc and
subsidiaries as of 31 December 1994 and 1993, and the related consolidated
statements of operations and cash flows for each of the years in the three-
year period ended 31 December 1994, which report appears in the 31 December
1994 Annual Report on Form 10-K of Tele-Communications, Inc., as amended, and
to the reference to our firm under the heading "Experts" in the registration
statement.
KPMG
London, England
2 February 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
of Cablevision:
We consent to the incorporation by reference in the registration statement
of Form S-3 of Tele-Communications, Inc. of our report dated March 24, 1995,
relating to the combined balance sheets of Cablevision (A combination of
certain cable television assets of Cablevision S.A., Televisora Belgrano S.A.,
Construred S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and the
related combined statements of operations and deficit and cash flows for each
of the years in the three-year period ended December 31, 1994, report appears
in the Current Report on Form 8-K of Tele-Communications, Inc., dated April
20, 1995, as amended, and to the reference to our firm under the heading
"Experts" in the registration statement.
KPMG Finsterbusch Pickenhayn Sibille
Juan Carlos Pickenhayn
Partner
Buenos Aires, Argentina
February 2, 1996
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
QVC Inc.:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Tele-Communications, Inc. of our report, dated March 4, 1994,
relating to the consolidated balance sheets of QVC, Inc. and subsidiaries as
of January 31, 1994 and 1993, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended January 31, 1994, which report appears in the Current
Report on Form 8-K of Tele-Communications, Inc. dated February 3, 1995, as
amended, and to the reference to our firm under the heading "Experts" in the
registration statement. Our report refers to a change in the method of
accounting for income taxes.
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
February 2, 1996
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Tele-Communications, Inc. of our report dated
February 4, 1994 relating to the consolidated financial statements of
TeleCable Corporation and subsidiaries, which appears on page 12 of the TCI
Communications, Inc. and Tele-Communications, Inc. Current Report on Form 8-K
dated August 26, 1994. We also consent to the reference to us under the
heading "Experts" in such registration statement.
Price Waterhouse LLP
Norfolk, Virginia
February 2, 1996
