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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
BALLY ENTERTAINMENT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2512405
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
8700 WEST BRYN MAWR AVENUE, CHICAGO, ILLINOIS 60631, (312) 399-1300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
LEE S. HILLMAN
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND TREASURER
8700 WEST BRYN MAWR AVENUE, CHICAGO, ILLINOIS 60631, (312) 399-1300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
With a copy to:
MARK D. GERSTEIN
LAWRENCE D. LEVIN
KATTEN MUCHIN & ZAVIS
525 WEST MONROE STREET, SUITE 1600, CHICAGO, ILLINOIS 60661, (312) 902-5200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: / /
If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box: / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT PRICE (1) FEE
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<S> <C> <C> <C> <C>
Debt Securities............................................. |
Preferred Stock (par value $1.00 per share)................. |
Depositary Shares (2)....................................... } (3) (3) $750,000,000 $258,621
Common Stock (par value $.66 2/3 per share) (4)............. |
Warrants to purchase Common Stock........................... |
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(1) The maximum aggregate offering price of Debt Securities, Preferred Stock
(par value $1.00 per share), Depositary Shares, Common Stock (par value
$.66 2/3 share) and Warrants to purchase Common Stock registered hereunder
shall not exceed $750,000,000.
(2) There also are being registered hereunder an indeterminate number of
Depositary Shares to be evidenced by Depositary Receipts issued pursuant to
a Deposit Agreement. In the event that fractional interests in shares of the
Preferred Stock registered hereunder are offered, Depositary Receipts may be
distributed to those persons purchasing such fractional interests and the
shares of Preferred Stock will be deposited with the Depositary under the
Deposit Agreement.
(3) Not applicable pursuant to General Instruction II.D. of Form S-3 under the
Securities Act of 1933.
(4) In addition, the Registrant is registering Common Stock that may be issued
from time to time upon conversion of convertible Debt Securities or
convertible Preferred Stock. Because this additional Common Stock is
issuable only upon the conversion of convertible Debt Securities or
convertible Preferred Stock, no registration fee is required with respect to
such Common Stock pursuant to the provisions of Rule 457(i).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL 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> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 22, 1996
PROSPECTUS
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[BALLY LOGO]
BALLY ENTERTAINMENT CORPORATION
DEBT SECURITIES
PREFERRED STOCK (PAR VALUE $1.00 PER SHARE)
DEPOSITARY SHARES
COMMON STOCK (PAR VALUE $.66 2/3 PER SHARE)
WARRANTS TO PURCHASE COMMON STOCK
Bally Entertainment Corporation (the "Company") may from time to time
offer (i) unsecured debt securities ("Debt Securities") consisting of
debentures, notes and/or other unsecured evidences of indebtedness in one or
more series, (ii) shares of preferred stock, par value $1.00 per share
("Preferred Stock"), in one or more series, (iii) shares of Preferred Stock
represented by depositary shares ("Depositary Shares"), (iv) shares of common
stock, par value $.66 2/3 per share ("Common Stock"), or (v) warrants
("Warrants") to purchase Common Stock (the Debt Securities, Preferred Stock,
Depositary Shares, Common Stock and Warrants are collectively referred to as
"Securities"), or any combination of the foregoing, at an aggregate initial
offering price not to exceed $750,000,000, at prices and on terms to be
determined at or prior to the time of the sale.
Specific terms of the Securities in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in an accompanying
Prospectus Supplement ("Prospectus Supplement"), together with the terms of the
offering of such Securities and the initial price and the net proceeds to the
Company from their sale. The Prospectus Supplement will set forth with regard to
the Offered Securities, the following: (i) in the case of Debt Securities, the
specific designation, aggregate principal amount, ranking as senior debt or
subordinated debt, authorized denomination, maturity, rate or method of
calculation of interest and dates for payment thereof, any exchangeability,
conversion, redemption, prepayment or sinking fund provisions, the currency or
currencies or currency unit or currency units in which principal, premium, if
any, or interest, if any, is payable and additional covenants and conditions, if
any; (ii) in the case of Preferred Stock, the designation, number of shares,
liquidation preference per share, initial public offering price, dividend rate
(or method of calculation thereof), dates on which dividends, if any, shall be
payable and from which dividends shall accrue, voting rights, if any, any
redemption or sinking fund provisions, and any conversion or exchange rights;
(iii) in the case of Depositary Shares, the fractional share of Preferred Stock
represented by each such Depositary Share; (iv) in the case of Common Stock, the
number of shares of Common Stock and the terms of the offering and sale thereof;
and (v) in the case of Warrants, the number and terms thereof, the number of
shares of Common Stock issuable upon their exercise, the exercise price, the
terms of the offering and sale thereof and, where applicable, the duration and
detachability thereof.
The Company may sell the Securities directly, through agents designated
from time or through underwriters or dealers. See "Plan of Distribution." If any
agents of the Company or any underwriters or dealers are involved in the sale of
the Securities, the names of such agents, underwriters or dealers and any
applicable commissions and discounts will be set forth in the Prospectus
Supplement.
---------------------------
See "Risk Factors," commencing on page 4 of this Prospectus, for a
discussion of certain matters that should be considered in evaluating the
Securities.
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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 SECURITIES OFFERED HEREBY ARE SUBJECT TO THE NEVADA GAMING CONTROL ACT AND
THE REGULATIONS OF THE NEVADA GAMING COMMISSION. NEITHER THE NEVADA STATE GAMING
CONTROL BOARD NOR THE NEVADA GAMING COMMISSION HAS PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS OR THE INVESTMENT MERITS OF THE SECURITIES OFFERED
HEREBY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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NEITHER THE NEW JERSEY CASINO CONTROL COMMISSION NOR THE NEW JERSEY DIVISION OF
GAMING ENFORCEMENT HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is , 1996.
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AVAILABLE INFORMATION
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain items of which are contained in exhibits to the Registration
Statement as permitted by the rules and regulations of the Securities and
Exchange Commission (the "Commission"). For further information, reference is
hereby made to the Registration Statement. Statements made in this Prospectus as
to the contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed 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.
The Registration Statement, as well as such reports, proxy and information
statements, and other information filed by the Company with the Commission, can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices of the Commission: New York Regional Office, 7 World
Trade Center, New York, New York 10048; and Chicago Regional Office, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material also can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Company's Common
Stock is listed on the New York Stock Exchange ("NYSE"). Reports, proxy and
information statements may also be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act, are incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "Annual Report");
(2) the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 (the "Quarterly Report"); and
(3) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the
Commission on July 24, 1975.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities shall be deemed
incorporated by reference in this Prospectus and a part hereof from the
respective date of filing each such document. 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 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.
The Company undertakes to provide, without charge, to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any or all of the documents referred to
above that have been incorporated in this Prospectus by reference, other than
exhibits to such documents. Requests for such copies should be directed to the
Secretary and Corporate Counsel, Bally Entertainment Corporation, 8700 West Bryn
Mawr Avenue, Chicago, Illinois 60631, telephone (312) 399-1300.
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THE COMPANY
The Company, through its subsidiaries, is engaged in the operation of
casinos, some with supporting hotel operations. The Company's principal casino
operations are: Bally's Park Place casino hotel resort in Atlantic City, New
Jersey ("Bally's Park Place"); The Grand casino hotel resort in Atlantic City
("The Grand"); Bally's Las Vegas casino hotel resort in Las Vegas, Nevada
("Bally's Las Vegas"); Bally's Saloon*Gambling Hall*Hotel, a dockside casino and
hotel in Robinsonville, Mississippi ("Bally's Mississippi"); and Bally's
Casino*Lakeshore Resort, a riverboat casino facility in New Orleans, Louisiana
("Bally's New Orleans").
Bally's Park Place and The Grand are wholly-owned by the Company. The
Company's other principal casino operations are partially owned in conjunction
with other investors. The Company indirectly owns approximately 85% of the
outstanding common shares of Bally's Grand, Inc., the publicly traded company
that owns and operates Bally's Las Vegas. In addition, the Company indirectly
owns a 58% interest in the entity that owns Bally's Mississippi, and
approximately 50% of Belle of Orleans, L.L.C., the entity that owns Bally's New
Orleans. The Company manages both Bally's Mississippi and Bally's New Orleans
under separate management and fee arrangements through its subsidiaries.
The Company is organized under the laws of the State of Delaware. Its
executive offices are located at 8700 West Bryn Mawr Avenue, Chicago, Illinois
60631, and its telephone number is (312) 399-1300.
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RISK FACTORS
Prospective investors should consider, among other matters, the
following factors in connection with a decision to purchase Securities.
HOLDING COMPANY STRUCTURE AND SUBSTANTIAL CONSOLIDATED LEVERAGE
The Company is a holding company, with no material operations of its
own, and has certain cash obligations that must be satisfied by utilizing cash
on hand, obtaining cash from its subsidiaries, disposing of or leveraging
certain assets or issuing additional securities. The Company's corporate cash
operating costs for the foreseeable future are expected to be recovered
substantially by cost allocations to, and management fees from, its
subsidiaries. Cash requirements of the Company also include income tax payments,
debt service requirements and preferred stock dividend payments. Accordingly,
the Company is dependent on its subsidiaries to pay management fees, cost
allocations, income taxes pursuant to tax sharing agreements and dividends or to
advance funds in order to satisfy these obligations.
The Company and its subsidiaries have a substantial amount of
indebtedness on a consolidated basis. The Company's consolidated leverage may
adversely impact the Company's ability to obtain financing on terms satisfactory
to the Company for new gaming projects (including its planned Paris
Casino-Resort in Las Vegas) and expansion of existing properties.
RESTRICTIONS ON DISTRIBUTIONS FROM SUBSIDIARIES
Various financial covenants and regulatory restrictions limit the
payment of dividends and other distributions of funds to the Company by its
subsidiaries. The terms of the various instruments governing the indebtedness of
the Company's subsidiaries also impose restrictions on their ability to incur
debt, issue preferred stock, make acquisitions and certain restricted payments,
create liens, sell assets or enter into transactions with affiliates. These
restrictions may have an adverse impact on the ability of these subsidiaries to
raise capital and, therefore, on the Company's liquidity. The future performance
of the Company and its subsidiaries and their ability to satisfy or refinance
their obligations are also affected by prevailing economic conditions and are
subject to financial, business and other factors, including factors beyond the
control of the Company. Accordingly, there can be no assurance that the Company
will receive distributions and payments from its subsidiaries in amounts
sufficient to satisfy its cash obligations.
Bally's Casino Holdings, Inc. ("Casino Holdings"), a wholly owned
subsidiary of the Company, serves as a holding company for Bally's Park Place,
all of the Company's investment in Bally's Grand, Inc., the entity which owns
Bally's Las Vegas, and the Company's interests in Bally's Mississippi and
Bally's New Orleans. Dividends and other payments received by Casino Holdings
from subsidiaries other than Bally's Park Place (i.e., Bally's Grand, Inc.,
Bally's New Orleans, Bally's Mississippi and future casino enterprises
developed within the Casino Holdings structure) are not available to be paid to
the Company unless (i) available pursuant to a net income test (generally
limited to 50% of Casino Holdings' consolidated net income exclusive of income
attributable to Bally's Park Place) and (ii) Casino Holdings has a consolidated
fixed charge coverage ratio (as defined) of 2:1 or greater. Dividends received
by Casino Holdings from Bally's Park Place may be paid to the Company if they
were paid under a separate net income test (generally limited to 50% of Bally's
Park Place's aggregate consolidated net income since April 1, 1994). Bally's
Park Place must maintain a consolidated fixed charge coverage ratio (as
defined) of at least 2.25:1 in order to pay such dividends. In 1994 and 1995,
Bally's Park Place, pursuant to its net income test, paid approximately $12.3
million and $19.2 million, respectively, in dividends to Casino Holdings, which
were then paid to the Company.
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Limitations on dividends and other distributions to the Company from
its subsidiaries other than Bally's Park Place, and the financial requirements
of those subsidiaries, substantially limit and may preclude the receipt of
dividends and distributions by the Company for the near term. Other than from
Bally's Park Place, no dividends are expected to be paid to the Company in 1996.
SUBORDINATION TO SUBSIDIARIES' CREDITORS
Due to the Company's holding company structure, holders of Securities
of the Company have a position effectively junior to any creditors of the
Company's subsidiaries. Any rights of the Company and its creditors to
participate in the distribution of the assets of any of the Company's
subsidiaries upon any liquidation or reorganization of any of its subsidiaries
will be subject to the prior claims of that subsidiary's creditors, including
trade creditors (except to the extent the Company may itself be a creditor of
such subsidiary). Accordingly, there can be no assurance that holders of
securities will receive any proceeds in the event of a liquidation or
reorganization of the Company or any of its subsidiaries.
COMPETITION
The Company's casinos face considerable competition from both
established casinos and newly emerging gaming operations. Since April 1990,
there have been ten casino hotel facilities operating in Atlantic City in
competition with Bally's Park Place and The Grand, which are also in competition
with each other. Several Atlantic City casino hotels have recently expanded or
are currently in the process of expanding their facilities. In addition,
proposals for several new casino hotel resorts were recently announced for the
marina district in Atlantic City, and, if and when such resorts are opened,
capacity and competition will further increase.
Bally's Las Vegas competes principally with other casino hotels located
in Las Vegas. Currently, there are approximately thirty major casino hotels
located on or near the Strip, approximately ten major casino hotels located in
the Las Vegas downtown area and several major facilities located elsewhere in
the Las Vegas area. As a result of new construction projects and certain
expansions by casino hotels located on or near the Strip, Las Vegas casino space
and hotel and motel room capacity increased significantly between 1991 and 1995.
In addition, there have been various public announcements concerning the
expansion of existing casino hotel resorts and the development of new casino
hotel resorts in Las Vegas, certain of which have commenced construction. In
addition, Bally's Grand, Inc. has announced its intention to develop the Paris
Casino-Resort. Management believes that the additional casino and hotel room
capacity resulting from the opening of new casino hotels may have a short-term
negative impact on Bally's Las Vegas, but that over the long term Bally's Las
Vegas benefits from the increase in the number of visitors to Las Vegas that
these new properties attract. To enhance its competitiveness in the Las Vegas
market, Bally's Las Vegas recently completed an extensive capital improvement
program, including improvements to its frontage area along the Strip, a
monorail system, renovation of all of its hotel rooms and a new race and
sports book room, among others.
The extent and effects of competition in new gaming markets are also
unpredictable. Mississippi gaming law does not limit the number of gaming
licenses that may be granted. As a result, management believes there was a
saturation of gaming facilities in and around the Memphis, Tennessee market,
which led to the closing of six casinos in that market since April 1994. As of
April 30, 1996, nine gaming facilities were operating in this market, three of
which are located immediately adjacent to Bally's Mississippi. These gaming
facilities as well as any others which subsequently commence operations there
present significant competition for Bally's Mississippi. In addition, a casino
is expected to commence operations in mid-1996 somewhat closer to Memphis than
Bally's Mississippi and, upon opening, may affect Bally's Mississippi's
results of operations.
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Louisiana law currently limits to fifteen the number of riverboat
gaming licenses that may be granted (all of which have been granted as of April
30, 1996), with a maximum of six riverboats in any one parish. Four riverboats
are presently operating in the New Orleans area (including that of Bally's New
Orleans). During 1995, Bally's New Orleans also competed with a land-based
casino which was operating at a temporary location and was expected to become
the largest land-based casino in the United States when it moved to its
permanent location. However, in November 1995, the competitor filed for
protection under the bankruptcy laws, ceased operations at the temporary
location and suspended construction at the permanent site. It is presently not
known if, or when, construction of the permanent land-based facility will
resume.
Legalization of gaming in additional jurisdictions would also provide
opportunities for expansion by the Company's competitors, some of which have
greater financial resources than the Company, which could adversely affect the
Company's existing and planned operations. The Company believes that the
adoption of legislation approving casino gaming in any jurisdiction near New
Jersey or Nevada or the advent of full-scale gaming on nearby Native American
lands could have a material adverse effect on its present operations. Similarly,
the legalization of gaming in jurisdictions adjacent to Mississippi could have a
material adverse effect upon the operations of Bally's Mississippi. The Company
also competes with other forms of legalized gaming, including state-sponsored
lotteries and off-track wagering. In markets in which the Company commences
operations or seeks to commence operations, it often faces intense competition
for licenses, desirable sites, qualified personnel and, ultimately, customers
from other companies in the gaming industry.
The effects of competition, as well as other factors, may affect the
Company's decision to proceed with any projects or affect the scope of such
projects.
NEW DEVELOPMENTS AND EMERGING GAMING MARKETS
The initial and long-term success of gaming in a market which has never
supported gaming operations previously or only recently permitted gaming cannot
be accurately predicted or assured. Factors such as the number of prospective
visitors, the number of licenses issued in a jurisdiction and the propensity of
visitors to wager cannot always be predicted with any certainty and may
materially affect the success of a casino.
The development of new gaming projects in new or mature markets also
entails risks associated with development and construction. Any new project
entails significant construction risks which could delay development or result
in a substantial increase in costs. The Company also needs to obtain approvals
and permits in order to commence the construction of new gaming projects.
Unexpected changes required by local, state or federal authorities could involve
significant additional costs and delay the opening of a project. Further, there
can be no assurance that the Company will receive necessary permits and
approvals for any project or that such permits and approvals will be obtained
within an anticipated time frame.
The Company has also invested substantial sums in obtaining interests
in properties in jurisdictions based upon the prospects of gaming being
legalized in such jurisdictions. Whether and when gaming will be legalized in
such jurisdictions is dependent upon a variety of matters, including economic
and political considerations, and there can be no assurance which, if any,
jurisdictions in which the Company has made investments will legalize gaming, or
that, if gaming is legalized in any such jurisdiction, the Company or any
venture in which it participates will be granted a license in that jurisdiction.
Development of new gaming and expansion projects generally requires
third party financing, and there can be no assurance that such financing will be
available or, if available, will be on terms satisfactory to the Company or that
such financing will be approved, if necessary, by the governing
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<PAGE> 8
gaming authorities. The consolidated leverage of the Company may adversely
affect its ability to obtain such financing or the terms of such financing.
The success of the Company's expansion in new gaming jurisdictions is
also dependent in part on its ability to attract and retain qualified management
and operating personnel in those jurisdictions. Competition for such personnel
is often intense and there can be no assurance that in the future the Company
will be able to attract and retain such personnel.
GAMING REGULATION
Gaming is regulated in every jurisdiction in which it is currently
legalized, and regulations generally require receipt of a license prior to
commencement of gaming operations. The regulatory frameworks may impose
restrictions or costs including additional taxes that materially detract from
the feasibility or profitability of gaming operations. Gaming regulations and
their enforcement are within the discretion of the regulating jurisdictions, and
the Company cannot predict what these regulations will be, how they will be
enforced or what effect, if any, these regulations will have on the Company.
Changes in these regulations could have a material adverse effect upon the
Company. In addition, floating gaming ventures require compliance with certain
maritime laws and United States Coast Guard (the "U.S. Coast Guard")
regulations.
Gaming activities in Atlantic City are subject to the New Jersey Casino
Control Act (the "New Jersey Act"), regulations of the New Jersey Casino Control
Commission (the "New Jersey Commission") and other applicable laws. No casino
may operate unless the required permits or licenses and approvals are obtained
from the New Jersey Commission. The New Jersey Commission is authorized under
the New Jersey Act to adopt regulations covering a broad spectrum of gaming and
gaming-related activities and to prescribe the methods and forms of applications
for all classes of licensees.
The ownership and operation of casino gaming facilities in Nevada are
subject to: (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the "Nevada Act") and (ii) various local ordinances
and regulations. Bally's Las Vegas' gaming operations are subject to the
licensing and regulatory control of the Nevada Gaming Commission (the "Nevada
Commission"), the Nevada State Gaming Control Board (the "Nevada Board"), and
the Clark County Liquor and Gaming Licensing Board (the "Clark County Board").
The Nevada Commission, the Nevada Board and the Clark County Board are
collectively referred to herein as the "Nevada Gaming Authorities." Mississippi
and Louisiana have adopted regulatory requirements which are similar to Nevada's
with respect to the discretion given regulators in granting licenses, financial
qualification of licensees and qualification of officers, directors and key
employees.
For a more complete discussion of gaming regulations, see "Business and
Properties -- Gaming Regulation" in the Annual Report.
REGULATORY RESTRICTIONS ON OWNERSHIP AND TRANSFER OF SECURITIES
As described below, the New Jersey Act and the Nevada Act impose
certain restrictions on the ownership and transfer of securities issued by a
corporation that holds a casino license or is deemed a holding company,
intermediary company, subsidiary or entity qualifier (each, an "affiliate") of a
casino licensee. If the New Jersey Commission or Nevada Commission finds that a
holder or beneficial owner of the Securities must be found licensed or qualified
or suitable to hold or own the Securities under the New Jersey Act or Nevada
Act, and if such holder or such beneficial owner is not found qualified,
licensed or suitable within any time period specified by the New Jersey
Commission or Nevada Commission or the New Jersey Act or Nevada Act, the Company
has the right, at its option, (i) to require such holder or beneficial owner to
dispose of all or a portion of such holder's or beneficial
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owner's Securities within 120 days after receipt of notice by such holder or
beneficial owner of its disqualification under the New Jersey Act or Nevada Act
(the "Notice Date") (or such different period as may be prescribed by the New
Jersey Commission or Nevada Commission), or (ii) to redeem Securities held by
such holder, by action of the Board of Directors, if in the judgment of the
Board of Directors such action should be taken pursuant to Section 151(b) of the
Delaware General Corporation Law or any other applicable provision of law, to
the extent necessary to prevent the loss or secure the reinstatement of any
government-issued license or franchise held by the Company or any subsidiary to
conduct any portion of the business of the Company or any subsidiary, which
license or franchise is conditioned upon some or all of the holders of the
Company's securities possessing prescribed qualifications. Such unsuitable or
disqualified holder is required to indemnify the Company for any and all direct
or indirect costs, including attorneys' fees, incurred by the Company as a
result of such holder's continuing ownership or failure to divest promptly.
The Company and Bally's Grand, Inc. are each registered by the Nevada
Commission as a publicly traded corporation (a "Registered Corporation"). Any
beneficial holder of the Company's or Bally's Grand Inc.'s voting securities,
regardless of the number of shares owned, may be required to file an
application, be investigated, and be subject to a suitability determination as a
beneficial holder of such voting securities if the Nevada Commission has reason
to believe that such ownership would otherwise be inconsistent with the declared
policies of the State of Nevada.
The Nevada Act requires any person who acquires more than 5% of the
voting securities of a Registered Corporation to report the acquisition to the
Nevada Commission. The Nevada Act requires that beneficial owners of more than
10% of a Registered Corporation's voting securities apply to the Nevada
Commission for a finding of suitability within 30 days after the Chairman of the
Nevada Board mails a written notice requiring such filing. Under certain
circumstances, an "institutional investor," as defined in the Nevada Act, which
acquires more than 10%, but not more than 15%, of the Registered Corporation's
voting securities may apply to the Nevada Commission for a waiver of such
finding of suitability if such institutional investor holds the voting
securities for investment purposes only.
The Nevada Commission may, in its discretion, require the holder of any
debt security of a Registered Corporation to file applications, be investigated
and be found suitable to own the debt security of a Registered Corporation if
the Nevada Commission has reason to believe that such ownership would otherwise
be inconsistent with the declared policies of the State of Nevada.
For purposes of the New Jersey Act, a security holder is presumed to
have the ability to control a publicly traded corporation, or to elect one or
more members of its board of directors, and thus require qualification, if such
holder owns or beneficially holds 5% or more of any class of the equity
securities of such corporation, unless such presumption of control or ability to
elect is rebutted by clear and convincing evidence. An "institutional investor,"
as that term is defined under the New Jersey Act, is entitled to a waiver of
qualification if it holds less than 10% of any class of the equity securities of
a publicly traded holding or intermediary company of a casino licensee and: (i)
the holdings were purchased for investment purposes only, (ii) there is no cause
to believe the institutional investor may be found unqualified and (iii) upon
request by the New Jersey Commission, the institutional investor files a
certified statement to the effect that it has no intention of influencing or
affecting the affairs of the issuer, the casino licensee or its other
affiliates. The New Jersey Commission may grant a waiver of qualification to an
institutional investor holding 10% or more of such securities upon a showing of
good cause and if the conditions specified above are met.
The redemption price of Securities to be redeemed would be equal to the
lesser of (i) the holder's original purchase price for the security or (ii) the
lowest closing sale price of such security between the Notice Date and the date
120 days after Notice Date.
8
<PAGE> 10
Commencing on the date the Nevada Commission or the New Jersey
Commission serves notice upon the Company of the determination of unsuitability
or disqualification, it is unlawful under the Nevada Act and the New Jersey Act
for the unsuitable or disqualified holder (i) to receive any interest or
dividend payment upon the Securities; (ii) to exercise, directly or through any
trustee or nominee, any right conferred by the Securities; or (iii) to receive
any remuneration in any form from the Company for services rendered or
otherwise.
Mississippi and Louisiana have adopted regulatory requirements similar
to those of New Jersey and Nevada governing the qualification of security
holders. The Mississippi regulations also restrict the ability to pay interest
to debt security holders who are not found suitable and require redemption of
such debt securities from those holders who are denied licensing. The
Mississippi Gaming Commission may conduct a suitability investigation of
security holders at any time. The Louisiana regulations restrict the payment of
dividends, interest or remuneration for services rendered or otherwise to
security holders who are not found suitable and requires disposition of such
securities from those holders who are found disqualified. The Louisiana Gaming
Control Board may conduct a suitability investigation of security holders at any
time. For a more complete discussion of regulatory restrictions on ownership and
transfer of securities, see "Business and Properties -- Gaming Regulation" in
the Annual Report.
LOUISIANA GAMING REFERENDA
On April 19, 1996, the Louisiana legislature approved legislation
mandating statewide local elections on a parish-by-parish basis to determine
whether to prohibit or continue to permit three individual types of gaming. The
referendum will be brought before the Louisiana voters in the November 1996
presidential election and will determine whether each of the following types of
gaming will be prohibited or permitted in the following described Louisiana
parishes: (i) the operation of video draw poker devices in each parish; (ii) the
conduct of riverboat gaming in each parish that is contiguous to a statutorily
designated river or gateway; or (iii) the conduct of land based casino gaming
operations in Orleans Parish. If a majority of the voters in a parish elect to
prohibit one or more of the above-described gaming activities in such parish,
then no license or permit may be issued to conduct such gaming activity in such
parish and no such gaming activity may be permitted in that parish. If, however,
riverboat gaming was previously permitted in such parish, the legislation
permits the current gaming operator to continue riverboat gaming in the parish
until the expiration of its gaming license. Further, in parishes where riverboat
gaming is currently authorized and voters elect to prohibit riverboat gaming,
the legislation provides that the gaming license shall not be reissued or
transferred to any parish other than a parish in which a riverboat upon which
gaming is conducted is berthed. The current legislation, however, does not
provide for any moratorium on future local elections on gaming. Further, the
current legislation does not provide for any moratorium that must expire before
future elections on gaming could be mandated or allowed.
Bally's New Orleans' riverboat gaming license expires on March 23,
1999. If the local election in Orleans Parish were to prohibit riverboat
gaming, absent alternative relief (through legislation or otherwise) Bally's
New Orleans would cease operations upon the expiration of its license. At this
time, the outcome of the local election is uncertain. If riverboat gaming were
so prohibited, Bally's New Orleans would explore all alternatives available to
it to otherwise utilize its vessel and other assets. In any event, the Company
does not believe such a cessation of gaming would have a material adverse
effect upon the Company as a whole.
9
<PAGE> 11
USE OF PROCEEDS
The Company has no current specific plans for the proceeds of the
Offering and will apply the proceeds to its general funds to be used to provide
the Company with the flexibility to fund expansion of existing properties and
development of new projects, to fund strategic investments and acquisitions or
for such other purposes as may be set forth in the Prospectus Supplement.
10
<PAGE> 12
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data for the Company presented
below for and as of the end of each of the five years ended December 31, 1995
are derived from the audited consolidated financial statements of the Company.
The selected consolidated financial data presented below for and as of the end
of each of the three months ended March 31, 1996 and 1995 is unaudited; however,
in the opinion of management, such data includes all adjustments (which were of
a normal recurring nature) necessary for a fair presentation of the information
set forth therein. The Company's operations are subject to seasonal factors and,
therefore, the results of operations for the three months ended March 31, 1996
are not necessarily indicative of results for the full year. This data should be
read in conjunction with the Company's consolidated financial statements and the
related notes thereto and management's discussion and analysis of financial
condition and results of operations, which are set forth in the Company's
applicable Annual Report and Quarterly Report.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- ---------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ----------- ----------- ----------- ----------
(IN MILLIONS, EXCEPT PER SHARE DATA AND PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA (1):
Revenues................................. $ 286.7 $ 228.3 $ 1,023.9 $ 942.3 $ 628.2 $ 556.0 $ 544.5
Operating income......................... $ 52.3 $ 40.4 $ 186.8 $ 125.1 $ 107.9 $ 86.5 $ 66.2
Income (loss) from continuing
operations (2) (3) (4) (5)............. $ 9.1 $ 4.2 $ 76.7 $ (1.9) $ 10.2 $ -- $ (33.4)
Income (loss) from discontinued
operations............................. (11.0) (46.1) (20.0) .6 (1.2)
Extraordinary items...................... .3 .4 (20.4) (8.5) 11.2 56.1
Cumulative effect on prior years of
change in accounting for income taxes.. (28.2)
---------- ---------- ---------- ----------- ----------- ----------- ----------
Net income (loss) (2) (3) (4) (5)........ $ 9.1 $ 4.5 $ 66.1 $ (68.4) $ (46.5) $ 11.8 $ 21.5
========== ========== ========== =========== =========== =========== ==========
Per common and common equivalent
share:
Income (loss) from continuing
operations........................... $ .10 $ .07 $ 1.34 $ (.10) $ .16 $ (.06) $ (1.07)
Income (loss) from discontinued
operations........................... (.20) (.98) (.43) .01 (.03)
Extraordinary items.................... .01 .01 (.44) (.18) .27 1.65
Cumulative effect on prior years of
change in accounting for income taxes (.61)
---------- ---------- ---------- ----------- ----------- ----------- ----------
Net income (loss)...................... $ .10 $ .08 $ 1.15 $ (1.52) $ (1.06) $ .22 $ .55
========== ========== ========== =========== =========== =========== ==========
Average common and common
equivalent shares outstanding.......... 52.7 48.7 55.5 46.9 46.6 41.1 33.9
BALANCE SHEET DATA (AT END OF PERIOD) (1):
Cash and equivalents..................... $ 296.8 $ 157.3 $ 285.8 $ 178.4 $ 192.1 $ 26.0 $ 26.5
Total assets............................. 1,898.8 1,920.6 1,889.2 1,936.2 1,991.6 1,357.6 1,389.8
Total debt............................... 1,291.8 1,273.0 1,289.6 1,266.2 1,186.3 731.2 795.4
Minority interests....................... 34.9 25.2 36.1 37.4 42.4
Stockholders' equity..................... 260.8 297.6 250.6 293.6 364.1 410.2 364.7
OTHER FINANCIAL DATA (1):
EBITDA (6)............................... $ 75.5 $ 57.7 $ 267.4 $ 217.5 $ 159.1 $ 135.1 $ 114.1
EBITDA margin (6)........................ 26.3% 25.3% 26.1% 23.1% 25.3% 24.3% 21.0%
Cash provided by (used in):
Operating activities................... $ 33.4 $ 23.9 $ 120.1 $ 62.8 $ 49.7 $ 14.7 $ 37.9
Investing activities................... (18.0) (48.3) (196.7) (102.8) (56.0) (24.0) (14.0)
Financing activities................... (4.4) 3.1 176.0 25.1 156.7 (58.3) (164.4)
</TABLE>
- ------------------
(1) Bally's Las Vegas has been consolidated since December 1, 1993 as a result
of the Company's controlling interest in Bally's Grand, Inc. at that date.
Prior to December 1, 1993, the Company's investment in Bally's Grand, Inc.
was principally recorded on the equity method of accounting. As of March
31, 1996, the Company (through a subsidiary of which it is the sole common
stockholder) owned approximately 85% of the outstanding common stock of
Bally's Grand, Inc. In addition, Bally's New Orleans commenced operation of
its riverboat casino in July 1995 and Bally's Mississippi reopened its
dockside casino in December 1995. Between December 1993 and February 1995,
Bally's Mississippi operated the dockside casino at a different site.
11
<PAGE> 13
(2) Income (loss) from continuing operations and net income (loss) for the
three months ended March 31, 1996 and 1995 and the years ended December 31,
1995, 1994 and 1993 include charges (net of taxes and minority interests)
incurred in the pursuit and development of new gaming projects and for
amortization of pre-opening costs of $1.1 million ($.02 per share), $.3
million ($.01 per share), $5.4 million ($.11 per share), $10.7 million
($.23 per share) and $2.7 million ($.06 per share), respectively.
(3) Income (loss) from continuing operations and net income (loss) for the year
ended December 31, 1995 includes a credit of $41.0 million ($.76 per share)
for certain adjustments to prior years' income taxes.
(4) Income (loss) from continuing operations and net income (loss) for the
years ended December 31, 1995 and 1994 include gains (net of taxes and
minority interests) from sales of marketable securities of $1.5 million
($.03 per share) and $4.8 million ($.10 per share), respectively.
(5) Income (loss) from continuing operations and net income (loss) for the year
ended December 31, 1994 includes a charge (net of taxes) of $8.5 million
($.18 per share) to write-off certain assets which were abandoned upon the
relocation of Bally's Mississippi's operations closer to Memphis,
Tennessee.
(6) EBITDA represents operating income before depreciation, amortization and
abandonment loss. The Company has presented EBITDA supplementally because
the Company believes it allows for a more complete analysis of its results
of operations. The EBITDA margin represents EBITDA divided by revenues and
is intended to indicate the operating efficiency of the Company. This data
should not be considered as an alternative to any measure of performance or
liquidity as promulgated under generally accepted accounting principles
(such as net income or cash provided by or used in operating, investing and
financing activities) nor should it be considered as an indicator of the
Company's overall financial performance.
12
<PAGE> 14
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges
and earnings to combined fixed charges and preferred stock dividends for the
Company and its consolidated subsidiaries for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(1)........................ 1.5X 1.2x 1.4x 1.0x 1.2x (2) (2)
Ratio of earnings to combined
fixed charges and preferred stock
dividends(3)...................... 1.3x 1.2x 1.3x 1.0x 1.1x (4) (4)
<FN>
- ------------------
(1) The ratio of earnings to fixed charges is calculated by dividing (i) income (loss) from continuing operations before income
taxes and minority interests plus fixed charges (adjusted for capitalized interest) by (ii) fixed charges. Fixed charges
consist of interest incurred (expensed or capitalized) and the portion of rent expense which is deemed representative
of interest.
(2) Earnings were insufficient to cover fixed charges for the years ended December 31, 1992 and 1991 by $6.5 million and $50.2
million, respectively.
(3) The ratio of earnings to combined fixed charges and preferred stock dividends is calculated by dividing (i) income (loss)
from continuing operations before income taxes and minority interests plus fixed charges (adjusted for capitalized interest
and preferred stock dividend requirements of the Company's consolidated subsidiaries) by (ii) fixed charges plus preferred
stock dividend requirements of the Company and its consolidated subsidiaries.
(4) Earnings were insufficient to cover combined fixed charges and preferred stock dividends for the years ended December 31,
1992 and 1991 by $9.3 million and $53.0 million, respectively.
</TABLE>
13
<PAGE> 15
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain
general terms and provisions of the Debt Securities to which any Prospectus
Supplement may relate ("Offered Debt Securities"). The particular terms of the
Offered Debt Securities and the extent to which such general provisions may
apply will be described in the Prospectus Supplement relating to such Offered
Debt Securities.
The Debt Securities will be general unsecured obligations of the
Company and each series of Offered Debt Securities will constitute either senior
debt securities or subordinated debt securities. In the case of senior debt
securities ("Senior Debt Securities"), the Debt Securities will be issued under
an Indenture (the "Senior Indenture") to be executed by the Company and First
Bank National Association, as trustee under the Senior Indenture. In the case of
subordinated debt securities ("Subordinated Debt Securities"), the Debt
Securities will be issued under an Indenture (the "Subordinated Indenture") to
be executed by the Company and First Bank National Association, as trustee under
the Subordinated Indenture. The Senior Indenture and the Subordinated Indenture
are sometimes hereinafter referred to herein individually as an "Indenture" and
collectively as the "Indentures." The trustee under each Indenture (and any
successor thereto under each Indenture) is referred to herein as the "Trustee."
The statements under this caption relating to the Debt Securities and the
Indentures are summaries only and do not purport to be complete. Such summaries
make use of terms defined in the Indentures. Wherever such terms are used herein
or particular provisions of the Indentures are referred to, such terms or
provisions, as the case may be, are incorporated by reference as part of the
statements made herein, and such statements are qualified in their entirety by
such reference. Certain defined terms in the Indenture are capitalized herein.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Indentures do not limit the aggregate principal amount of
Debt Securities which can be issued thereunder and provide that Debt Securities
may be issued from time to time thereunder in one or more series, each in an
aggregate principal amount authorized by the Company prior to issuance. The
Indentures do not limit the amount of other unsecured indebtedness or securities
which may be issued by the Company.
Unless otherwise indicated in a Prospectus Supplement, the Debt
Securities will not benefit from any covenant or other provision that would
afford Holders of such Debt Securities special protection in the event of a
highly leveraged transaction or change of control involving the Company.
Reference is made to the Prospectus Supplement for the following terms
of the Offered Debt Securities: (i) the title and aggregate principal amount;
(ii) the maturity date or dates; (iii) the interest rate or rates (which may be
fixed or variable) per annum, if any, or the method of determining such rate or
rates; (iv) the date or dates from which such interest, if any, will accrue and
the date or dates at which such interest, if any, will be payable; (v) the terms
for redemption or early payment, if any, including any mandatory or optional
sinking fund or analogous provision; (vi) the terms for conversion or exchange,
if any; (vii) the classification as Senior Debt Securities or Subordinated Debt
Securities; (viii) whether such Offered Debt Securities will be issued in fully
registered form or in bearer form or any combination thereof; (ix) whether such
Offered Debt Securities will be issued in the form of one or more global
securities and whether such global securities are to be issuable in temporary
global form or permanent global form; (x) if other than U.S. dollars, the
currency, currencies or currency unit or units in which such Offered Debt
Securities will be denominated and in which in the principal of, and premium and
interest, if any, thereon will be payable; (xi) whether, and the terms and
conditions on which, the Company or a Holder may elect that, or the other
circumstances under which, payment of principal of, or premium or interest, if
any, is to be made in a currency or currencies or currency unit or units other
than that in which such Offered Debt Securities are denominated; (xii) a summary
of the tax consequences
14
<PAGE> 16
to Holders under United States laws of owning the Offered Debt Securities,
including the possible imposition of withholding taxes; and (xiii) any other
specific terms of the Offered Debt Securities. Reference is also made to the
Prospectus Supplement for information with respect to any additional covenants
that may be included in the terms of the Offered Debt Securities.
No service charge will be made for any registration of transfer or
exchange of the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Offered Debt Securities may be sold at a discount (which may be
substantial) below their stated principal amount or bear no interest or interest
at a rate which at the time of issuance is below market rates or both. Any
material United States federal income tax consequences and other special
considerations applicable to Offered Debt Securities will be described in the
Prospectus Supplement.
If any of the Offered Debt Securities are sold for any foreign currency
or currency unit or if the principal of, or premium or interest, if any, on any
of the Offered Debt Securities is payable in any foreign currency or currency
unit, the restrictions, elections, tax consequences, specific terms and other
information with respect to such Offered Debt Securities and such foreign
currency or currency unit will be set forth in the Prospectus Supplement.
Events of Default. Unless otherwise provided in the Prospectus
Supplement with respect to any series of Offered Debt Securities, the following
are Events of Default under each Indenture with respect to each series of Debt
Securities issued under such Indenture: (a) failure to pay any interest on any
Debt Security of such series when due, continued for 30 days; (b) failure to pay
principal of (or premium, if any, on) any Debt Security of such series when due;
(c) failure to deposit any mandatory sinking fund payment, when due, in respect
of the Debt Securities of such series, continued for 60 days; (d) failure to
perform any other covenant of the Company in the Indenture (other than a
covenant included in the Indenture for the benefit of a series of Debt
Securities other than such series), continued for 90 days after written notice
as provided in the Indenture; (e) certain events of bankruptcy, insolvency or
reorganization; and (f) any other Event of Default as may be specified in the
Prospectus Supplement with respect to the Offered Debt Securities. If an Event
of Default with respect to any outstanding series of Debt Securities occurs and
is continuing, either the Trustee or the Holders of at least 25% in principal
amount of the outstanding Debt Securities of such series (in the case of an
Event of Default described in clause (a), (b), (c) or (f) above) or at least 25%
in principal amount of all outstanding Debt Securities under the applicable
Indenture (in the case of other Events of Default) may declare the principal
amount of all the Debt Securities of the applicable series (or of all
outstanding Debt Securities under the applicable Indenture, as the case may be)
to be due and payable immediately. At any time after a declaration of
acceleration has been made, but before a judgment has been obtained, the Holders
of a majority in principal amount of the outstanding Debt Securities of such
series (or of all outstanding Debt Securities under the applicable Indenture, as
the case may be) may, under certain circumstances, rescind and annul such
acceleration. Depending on the terms of other indebtedness of the Company
outstanding from time to time, an Event of Default under an Indenture may give
rise to cross defaults on such other indebtedness of the Company.
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, give to the
Holders of the Debt Securities of such series notice of all uncured and unwaived
defaults known to it; provided, however, that except in the case of a default in
the payment of the principal of (or premium, if any) or any interest on, or any
sinking fund installment with respect to, any Debt Securities of such series,
the Trustee will be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interest of the Holders
of the Debt Securities of such series; and provided, further, that such notice
shall not be given until at
15
<PAGE> 17
least 60 days after the occurrence of a default in the performance, or breach,
of any covenant or warranty of the Company under such Indenture other than for
the payment for the principal of (or premium, if any) or any interest on, or any
sinking fund installment with respect to, any Debt Securities of such series.
For the purpose of this provision, "default" with respect to Debt Securities of
any series means any event which is, or after notice or lapse of time or both,
would become, an Event of Default with respect to the Debt Securities of such
series.
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) have the right, subject to certain limitations,
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series (or of all
outstanding Debt Securities under the applicable Indenture). Each Indenture
provides that in case an Event of Default shall occur and be continuing, the
Trustee shall exercise such of its rights and powers under the applicable
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under either Indenture at the
request of any of the Holders of the Debt Securities unless they shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request.
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt Securities
under the applicable Indenture) may on behalf of the Holders of all Debt
Securities of such series (or of all outstanding Debt Securities under the
applicable Indenture) waive any past default under the applicable Indenture,
except a default in the payment of the principal of (or premium, if any) or
interest on any Debt Security or in respect of a provision which under the
applicable Indenture cannot be modified or amended without the consent of the
Holder of each outstanding Debt Security affected. The Holders of a majority in
principal amount of the outstanding Debt Securities affected thereby may on
behalf of the Holders of all such Debt Securities waive compliance by the
Company with certain restrictive provisions of the Indentures.
The Company is required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under each
Indenture and as to any default in such performance.
REDEMPTION OR FORCED SALE FOR REGULATORY REASONS
If the New Jersey Commission, Nevada Commission or any other gaming
authority in another jurisdiction, finds that a holder or beneficial owner of
Debt Securities must be found licensed or qualified or suitable to hold or own
such Debt Securities under the New Jersey Act, Nevada Act or any other gaming
regulation in such other jurisdiction, and if such holder or such beneficial
owner is not found qualified, licensed or suitable within any time period
specified by the New Jersey Commission, Nevada Commission or such other gaming
authority or the New Jersey Act, Nevada Act or such other gaming regulation, the
Company will have the right, at its option, (i) to require such holder or
beneficial owner to dispose of all or a portion of such holder's or beneficial
owner's Debt Securities within 120 days after receipt of notice by such holder
or beneficial owner of its disqualification under the New Jersey Act, Nevada Act
or any other applicable gaming regulation (the "Notice Date") (or such different
period as may be prescribed by the New Jersey Commission, Nevada Commission or
such other gaming authority), or (ii) to call for redemption of such Debt
Securities held by either such holder or beneficial owner, on not less than 30
nor more than 60 days' notice (or such different period as may be prescribed by
the New Jersey Commission, Nevada Commission or any such other gaming
authority).
On any such redemption of such Debt Securities, the redemption price
shall be the lesser of (i) the market value thereof on the date of such notice
of redemption (as determined in good faith by the
16
<PAGE> 18
Board of Directors of the Company) and (ii) the price at which such holder or
beneficial owner acquired such Debt Securities, together with (if permitted by
the New Jersey Act or any other gaming regulation in another jurisdiction or by
the orders of the New Jersey Commission or any such other gaming authority in
such other jurisdiction) accrued interest, if any, to the date of redemption,
unless a different redemption price or other payment, remuneration or related
terms or restrictions is required by the New Jersey Commission or any such other
gaming authority, in which event such price, terms and restrictions shall be the
redemption price and terms of redemption. If redemption is required by the
Nevada Commission pursuant to the Nevada Act, accrued interest will only be to
the date of the finding of unsuitability.
Commencing on the date the Nevada Commission or the New Jersey
Commission serves notice upon the Company of the determination of unsuitability
or disqualification, it is unlawful under the Nevada Act and the New Jersey Act
for the unsuitable or disqualified holder (i) to receive interest upon such Debt
Securities; (ii) to exercise, directly or through any trustee or nominee, any
right conferred by such Debt Securities; or (iii) to receive any remuneration in
any form from the Company for services rendered or otherwise.
Modification. Modifications and amendments of each Indenture may be
made by the Company and the Trustee with the consent of the Holders of a
majority in principal amount of the outstanding Debt Securities under the
Indenture affected thereby; provided, however, that no such modification or
amendment may, without the consent of the Holder of each outstanding Debt
Security affected thereby, (a) change the stated maturity date of the principal
of, or any installment of interest on, any Debt Security, (b) reduce the
principal amount of, or the premium (if any) or interest on, any Debt Security,
(c) change the place or currency, currencies, or currency unit or units or
payments of principal of, or premium (if any) or interest on, any Debt Security,
(d) impair the right to institute suit for the enforcement of any payment on or
with respect to any Debt Security, or (e) reduce the percentage in principal
amount of outstanding Debt Securities the consent of whose Holders is required
for modification or amendment of such Indenture or for waiver of compliance with
certain provisions of such Indenture or for waiver of certain defaults;
provided, however, that the Holders of 75% in principal amount of the
outstanding Debt Securities of any series may, on behalf of the Holders of all
Debt Securities of such series, consent to the postponement of any interest
payment for a period not exceeding three years from its due date.
Each Indenture provides that the Company and the Trustee may, without
the consent of any Holders of Debt Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding additional Events of Default, establishing the form or terms
of Debt Securities or curing ambiguities or inconsistencies in the applicable
Indenture, provided such action to cure ambiguities or inconsistencies shall not
adversely affect the interests of the Holders of the Debt Securities in any
material respect.
Consolidation, Merger and Sale of Assets. The Company, without the
consent of any Holders of outstanding Debt Securities, may consolidate with or
merge into, or convey, transfer or lease its assets substantially as an entirety
to, any Person, provided that the Person formed by such consolidation or into
which the Company is merged or which acquires or leases the assets of the
Company substantially as an entirety is a corporation, partnership, limited
liability company or trust organized under the laws of any United States
jurisdiction and assumes by supplemental indenture the Company's obligations in
respect of the Securities and under the Indentures, that after giving effect to
the transaction no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have occurred and be
continuing, and that certain other conditions are met. Upon compliance with
these provisions by a successor Person, the Company will (except in the case of
a lease) be relieved of its obligations under the Indentures and the Debt
Securities.
Discharge and Defeasance. The Company may terminate its obligations
under each Indenture, other than its obligation to pay the principal of (and
premium, if any) and interest on the Debt Securities of any series and certain
other obligations, if it (i) irrevocably deposits or causes to be irrevocably
deposited with the Trustee as trust funds money or U.S. Government Obligations
maturing as to principal and interest sufficient to pay the principal of (and
premium, if any, on), any interest on, and any mandatory sinking funds in
respect of, all outstanding Debt Securities of such series on the stated
maturity of such payments or on any redemption date and (ii) complies with any
additional conditions specified to be applicable with respect to the covenant
defeasance of Debt Securities of such series.
The terms of any series of Debt Securities may also provide for legal
defeasance pursuant to each Indenture. In such case, if the Company (i)
irrevocably deposits or causes to be irrevocably deposited money or U.S.
Government Obligations as described above, (ii) makes a request to the Trustee
to be discharged from its obligations on the Debt Securities of such series and
(iii) complies with any additional conditions specified to be applicable with
respect to legal defeasance of Debt Securities of such series, then the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Debt Securities of such series, and the obligations of the Company
under the applicable Indenture and the Debt Securities of such series to pay the
principal of (and premium, if any) and interest on the Debt Securities of such
series shall cease, terminate and be completely discharged, and the Holders
thereof shall thereafter be entitled only to payment out of the money or U.S.
Government Obligations so deposited with the Trustee, unless the Company's
obligations are revived and reinstated because the Trustee is unable to apply
such trust fund by reason of any legal proceeding, order or judgment.
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Form, Exchange, Registration and Transfer. Each Debt Security will be
represented by either a global security (a "Global Debt Security") registered in
the name of The Depository Trust Company, as Depository (the "Depository") or a
nominee of the Depository (each such Debt Security represented by a Global Debt
Security being herein referred to as a "Book-Entry Debt Security") or a
certificate issued in definitive registered form (a "Certificated Debt
Security"), as set forth in the applicable Prospectus Supplement. Except as set
forth below, Book-Entry Debt Securities will not be issuable in certificated
form.
Certificated Debt Securities may be transferred or exchanged at the
Trustee's office or paying agencies in accordance with the terms of the
Indenture. No service charge will be made for any transfer or exchange or
Certificated Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Certificated Debt Securities will not be exchangeable for Book-Entry
Debt Securities, except under the circumstances described below.
The transfer of Certificated Debt Securities and the right to the
principal of, premium, if any, and interest on such Certificated Debt Securities
may be effected only by surrender of the old certificate representing such
Certificated Debt Securities and either reissuance by the Company or the Trustee
of the old certificate to the new Holder or the issuance by the Company or the
Trustee of a new certificate to the new Holder.
Each Global Debt Security representing Book-Entry Debt Securities will
be deposited with, or on behalf of, the Depository, and registered in the name
of the Depository or a nominee of the Depository. Except as set forth below,
Book-Entry Debt Securities will not be exchangeable for the Certificated Debt
Securities and will not otherwise be issuable as Certificated Debt Securities.
The procedures that the Depository has indicated it intends to follow
with respect to Book-Entry Debt Securities are set forth below.
Ownership of beneficial interests in Book-Entry Debt Securities will be
limited to persons that have accounts with the Depository for the related Global
Debt Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Global Debt Security, the Depository will
credit, on its book-entry registration and transfer system, the participants'
accounts with the respective principal amounts of the Book-Entry Debt Securities
represented by such Global Debt Security beneficially owned by such
participants. The accounts to be credited shall be designated by any dealers,
underwriters or agents participating in the distribution of such Book-Entry Debt
Securities. Ownership of Book-Entry Debt Securities will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by the Depository for the related Global Debt Security (with respect
to interests of participants) and on the records of participants (with respect
to interests of persons holding through participants). The laws of some states
may require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, transfer or pledge beneficial interest in Book-Entry Debt Securities.
So long as the Depository for a Global Debt Security, or its nominee,
is the registered owner of such Global Debt Security, such Depository or such
nominee, as the case may be, will be considered the sole owner or holder of the
Book-Entry Debt Securities represented by such Global Debt Security for all
purposes under the indenture. Except as set forth below, owners of Book-Entry
Debt Securities will not be entitled to have such securities registered in their
names, will not receive or be entitled to receive physical delivery of a
certificate in definitive form representing such securities and will not be
considered the owners or holders thereof under the Indenture. Accordingly, each
person owning Book-Entry Debt Securities must rely on the procedures of the
Depository for the related Global Debt Security and, if such
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person is not the Depository for the related Global Debt Security and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder under the
Indenture.
The Company understands, however, that under existing industry
practice, the Depository will authorize the direct participants on whose behalf
it holds a Global Debt Security to exercise certain rights of holders of Debt
Securities, and the Indenture provides that the Company, the Trustee and their
respective agents will treat as the holder of a Debt Security the persons
specified in a written statement of the Depository with respect to such Global
Debt Security for purposes of obtaining any consents or directions required to
be given by holders of the Debt Securities pursuant to the Indenture.
Payments of principal, premium, if any, and interest on Book-Entry Debt
Securities will be made to the Depository or its nominee, as the case may be, as
the registered holder of the related Global Debt Security. None of the Company,
the Trustee or any other agent of the Company or any agent of the Trustee will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interest in such Global Debt
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects that the Depository, upon receipt of any payment of
principal, premium, if any, or interests on a Global Debt Security, will
immediately credit participants' accounts with payments in amounts proportionate
to the respective amounts of Book-Entry Debt Securities held by each such
participant as shown on the records of such Depository. The Company also expects
that payments by participants to owners of beneficial interests in Book-Entry
Debt Securities held through such participants will be governed by standing
customer instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such participants.
If the Depository is at any time unwilling or unable to continue as
Depository or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depository registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, the Company will issue
Certificated Debt Securities in exchange for such Global Debt Security. In
addition, the Company may at any time and in its sole discretion determine not
to have any of the Book-Entry Debt Securities represented by one or more Global
Debt Securities and, in such event, will issue Certificated Debt Securities in
exchange for such Global Debt Security or Securities. Any Certificated Debt
Securities issued in exchange for a Global Debt Security will be registered in
such name or names as the Depository shall instruct the Trustee. It is expected
that such instructions will be based upon directions received by the Depository
from participants with respect to ownership of Book-Entry Debt Securities
relating to such Global Debt Security.
THE FOREGOING INFORMATION IN THIS SECTION CONCERNING THE DEPOSITORY AND
THE DEPOSITORY'S BOOK-ENTRY SYSTEM HAS BEEN OBTAINED FROM THE DEPOSITORY, AND
THE COMPANY BELIEVES SUCH INFORMATION TO BE RELIABLE, BUT THE COMPANY TAKES NO
RESPONSIBILITY FOR ITS ACCURACY.
Meetings. The Indentures contain provisions for convening meetings of
the Holders of Debt Securities of a series. A meeting may be called at any time
by the Trustee, and also, upon request, by the Company or the Holders of at
least 10% in principal amount of the Outstanding Debt Securities of such series,
in any such case upon notice given as described under "Notices" below. Except
for any consent that must be given by the Holder of each or not less than 75% of
the Outstanding Debt Securities affected thereby, as described under
"Modification" above, any resolution presented at a meeting or adjourned meeting
at which a quorum is present may be adopted by the affirmative vote of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
that series; provided, however,
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that except for any consent that must be given by the Holder of each Outstanding
Debt Security affected thereby, as described under "Modification" above, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
Holders of a specified percentage which is less than a majority in principal
amount of the Outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Debt Securities of that series. Subject to the proviso set
forth above, any resolution passed or decision taken at any meeting of Holders
of Debt Securities of any series duly held in accordance with the Indenture will
be binding on all Holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
Persons holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series.
The Trustee. Each Indenture contains certain limitations on the right
of the Trustee, as a creditor of the Company, to obtain payment of claims in
certain cases and to realize on certain property received with respect to any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions, except that, if it acquires any conflicting interest (as
defined), it must eliminate such conflict or resign.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
Senior Debt Securities will be issued under the Senior Indenture and
will rank pari passu with all other unsecured and unsubordinated debt of the
Company.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
General. Subordinated Debt Securities will be issued under the
Subordinated Indenture and will rank pari passu with certain other subordinated
debt of the Company that may be outstanding from time to time and junior to all
Senior Indebtedness of the Company (including any Senior Debt Securities) that
may be outstanding from time to time.
Subordination. The payment of the principal of (and premium, if any)
and interest on the Subordinated Debt Securities is expressly subordinated, to
the extent and in the manner set forth in the Subordinated Indenture, in right
of payment to the prior payment in full of all Senior Indebtedness of the
Company.
In the event of any dissolution or winding up, or total or partial
liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, the holders of
Senior Indebtedness will be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Indebtedness before the
Holders of the Subordinated Debt Securities are entitled to receive any payment
on account of principal (or premium, if any) or interest on the Subordinated
Debt Securities.
Unless otherwise indicated in the applicable Prospectus Supplement, no
payment in respect of the Subordinated Debt Securities shall be made if, at the
time of such payment, there exists a default in payment of all or any portion of
any Senior Indebtedness, and such default shall not have been cured or waived in
writing or the benefits of such subordination in the Subordinated Indenture
shall not have been waived in writing by or on behalf of the holders of such
Senior Indebtedness. In addition, during the continuation of any event of
default (other than a default referred to in the immediately preceding sentence)
with respect to any Senior Indebtedness permitting the holders to accelerate the
maturity thereof and upon written notice thereof given to the Trustee, with a
copy to the Company (the delivery of which shall not affect the validity of the
notice to the Trustee), by any holder of Senior Indebtedness or its
representative, then, unless and until such an event of default shall have been
cured or waived or shall
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have ceased to exist, no payment shall be made by the Company with respect to
the principal of or interest on the Subordinated Debt Securities or to acquire
any of the Subordinated Debt Securities or on account of the redemption
provisions for the Subordinated Debt Securities; provided, however, that if the
holders of the Senior Indebtedness to which the default relates have not
declared such Senior Indebtedness to be immediately due and payable within 180
days after the occurrence of such default (or have declared such Senior
Indebtedness to be immediately due and payable and within such period have
rescinded such declaration of acceleration), then the Company shall resume
making any and all required payments in respect of the Subordinated Debt
Securities (including any missed payments). Only one such payment blockage
period may be commenced within any consecutive 365-day period with respect to
the Subordinated Debt Securities. No event of default which existed or was
continuing on the date of the commencement of any 180-day payment blockage
period with respect to the Senior Indebtedness initiating such payment blockage
period shall be, or be made, the basis for the commencement of a second payment
blockage period by a holder or representative of such Senior Indebtedness,
whether or not within a period of 365 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days.
The term "Senior Indebtedness" is defined in the Subordinated Indenture
as Indebtedness, either outstanding as of the date of the Subordinated Indenture
or issued subsequent to the date of the Subordinated Indenture, which is not
subordinated by its terms in right of payment to any other unsecured
Indebtedness of the Company or ranks pari passu with Subordinated Debt
Securities of any series, provided that the term "Senior Indebtedness" shall not
include (i) Indebtedness of the Company to any Subsidiary for money borrowed or
advanced from such Subsidiary or (ii) amounts owed (except to banks and other
financial institutions) for goods, materials or services purchased in the
ordinary course of business.
The term "Indebtedness," as applied to any Person, is defined in the
Subordinated Indenture as all indebtedness, whether or not represented by bonds,
debentures, notes or other securities, created or assumed by such Person for the
repayment of money borrowed, and obligations, computed in accordance with
generally accepted accounting principles, as lessee under leases that should be,
in accordance with generally accepted accounting principles, treated as capital
leases. All Indebtedness secured by a lien upon property owned by the Company or
any Subsidiary and upon which Indebtedness such Person customarily pays
interest, although such Person has not assumed or become liable for the payment
of such Indebtedness, shall be deemed to be Indebtedness of such Person. All
Indebtedness of others guaranteed as to payment of principal by such Person or
in effect guaranteed by such Person through a contingent agreement to purchase
such Indebtedness shall also be deemed to be Indebtedness of such Person.
Indebtedness (i) shall not include accounts payable to trade creditors or other
indebtedness for goods or services created or assumed in the ordinary course of
business and (ii) shall include only the principal component of any obligation
described in this definition.
If Subordinated Debt Securities are issued under the Subordinated
Indenture, the aggregate principal amount of Senior Indebtedness outstanding as
of a recent date will be set forth in the applicable Prospectus Supplement. The
Subordinated Indenture does not restrict the amount of Senior Indebtedness that
the Company may incur.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The following description of the capital stock of the Company is
qualified in its entirety by reference to the Company's Restated Certificate of
Incorporation, as amended (the "Restated Certificate"), which has been filed
with and is available from the offices of the Commission as referred to under
"Available Information."
The Restated Certificate authorizes the issuance of 110,000,000 shares
of capital stock of which 30,000,000 shares shall be designated preferred
stock, par value $1.00 per share ("Preferred Stock"), and 80,000,000 shares
shall be designated common stock, par value $.66 2/3 per share ("Common
Stock"). As of April 30, 1996, there were 16,821,988 shares of Preferred Stock
authorized and issued or reserved for issuance as follows: 15,525,000 shares of
8% PRIDES(sm) Convertible Preferred Stock ("PRIDES"), 496,988 shares of Series
D Convertible Exchangeable Preferred Stock ("Series D Preferred Stock") and
800,000 shares of Series B Junior Participating Preferred Stock ("Series B
Preferred Stock"). As of April 30, 1996, 15,525,000 shares of PRIDES, 496,988
shares of Series D Preferred Stock, no shares of Series B Preferred Stock and
49,146,598 shares of Common Stock were issued and outstanding. Additionally, as
described in the Annual Report, certain shares of Common Stock were reserved
for issuance upon the exercise of stock options and conversion of the PRIDES,
the Series D Preferred Stock, the Company's 6% Convertible Subordinated
Debentures due 1998, the Company's 8% Convertible Senior Subordinated
Debentures due 2000 and the Company's 10% Convertible Subordinated Debentures
due 2006 into Common Stock. All outstanding shares of Common Stock and
Preferred Stock are fully paid and nonassessable, and Common Stock and
Preferred Stock offered hereby will, upon full payment of the purchase price
therefor, likewise be fully paid and nonassessable.
PREFERRED STOCK
Under the Restated Certificate, the Board of Directors of the Company
may provide for the issuance of Preferred Stock in one or more series, and the
rights, preferences, privileges and restrictions, including dividend rights,
voting rights, conversion rights, terms of redemption and liquidation
preferences, of the Preferred Stock of each series will be fixed or designated
by the Board of Directors pursuant to a certificate of designation without any
further vote or action by the Company's stockholders.
The description of Preferred Stock set forth below and the description
of the terms of a particular series of Preferred Stock that will be set forth in
a Prospectus Supplement do not purport to be complete and are qualified in their
entirety by reference to the Restated Certificate and the certificate of
designation relating to such series. The specific terms of a particular series
of Preferred Stock offered hereby will be described in a Prospectus Supplement
relating to such series and will include the following:
(i) the maximum number of shares to constitute the series
and the distinctive designation thereof;
(ii) the annual dividend rate, if any, on shares of the
series, whether such rate is fixed or variable or both, the date or
dates from which dividends will begin to accrue or accumulate and
whether dividends will be cumulative;
(iii) whether the shares of the series will be redeemable
and, if so, the price at and the terms and conditions on which the
shares of the series may be redeemed, including the time during which
shares of the series may be redeemed and any accumulated dividends
thereon that the holders of shares of the series shall be entitled to
receive upon the redemption thereof;
(iv) the liquidation preference, if any, applicable to
shares of the series;
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(v) whether the shares of the series will be subject to
operation of a retirement or sinking fund and, if so, the extent and
manner in which any such fund shall be applied to the purchase or
redemption of the shares of the series for retirement or for other
corporate purposes, and the terms and provisions relating to the
operation of such fund;
(vi) the terms and conditions, if any, on which the shares
of the series shall be convertible into, or exchangeable for, shares of
any other class or classes of capital stock of the Company or another
corporation or any series of any other class or classes, or of any
other series of the same class, including the price or prices or the
rate or rates of conversion or exchange and the method, if any, of
adjusting the same;
(vii) the voting rights, if any, of the shares of the
series; and
(viii) any other preferences and relative, participating,
optional or other special rights or qualifications, limitations or
restrictions thereof.
Shares of Preferred Stock are subject to redemption or forced sale for
regulatory reasons upon the same terms and grounds as Common Stock, as described
below in "Common Stock -- Redemption or Forced Sale for Regulatory Reasons."
DEPOSITARY SHARES
General. The Company may, at its option, elect to issue fractional
shares of Preferred Stock, rather than full shares of Preferred Stock. In the
event such option is exercised, the Company may elect to have a Depositary (as
defined below) issue receipts for Depositary Shares, each receipt representing a
fraction (to be set forth in the Prospectus Supplement relating to a particular
series of Preferred Stock) of a share of a particular series of Preferred Stock
as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement ("Deposit Agreement") between
the Company and a bank or trust company 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 ("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 Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the share of Preferred
Stock represented thereby (including dividend, voting, redemption and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of an offering of the Preferred
Stock. Copies of the forms of Deposit Agreement and Depositary Receipt are filed
as exhibits to the Registration Statement of which this Prospectus is a part,
and the following summary is qualified in its entirety by reference to such
exhibits.
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.
Upon surrender of Depositary Receipts at the office of the Depositary
and upon payment of the charges provided in the Deposit Agreement and subject to
the terms thereof, a holder of Depositary Receipts is entitled to have the
Depositary deliver to such holder the whole shares of Preferred Stock
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relating to the surrendered Depositary Receipts. Holders of Depositary Shares
will be entitled to receive whole shares of the related series of Preferred
Stock on the basis set forth in the related Prospectus Supplement for such
series of Preferred Stock, but holders of such whole shares will not thereafter
be entitled to receive Depositary Shares therefor. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of the
related series of Preferred Stock to be withdrawn, the Depositary will deliver
to such holder at the same time a new Depositary Receipt evidencing such excess
number of Depositary Shares.
Dividends and Other Distributions. The Depositary will distribute all
cash dividends or other cash distributions received in respect of the Preferred
Stock to the record holders of Depositary Shares relating to such Preferred
Stock in proportion to the numbers of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, 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, sell such property and distribute the net proceeds from such sale
to such holders.
Redemption of Depositary Shares. If a series of Preferred Stock
represented by 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 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 the Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing shares of
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.
Voting the Preferred Stock. Upon receipt of (i) notice of any meeting
at which the holders of the Preferred Stock are entitled to vote or (ii) a
solicitation of written consents, the Depositary will mail the information
contained in such notice of meeting or solicitation of written consents to the
record holders of the Depositary Shares relating to such Preferred Stock. Each
record holder of such Depositary Shares on the record date (which will be the
same date as the record date for the Preferred Stock) will be entitled to
instruct the Depositary as to the exercise of the voting rights or the execution
of a written consent pertaining to the amount of the Preferred Stock represented
by such holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote or execute the written consent with respect to the amount
of the Preferred Stock represented by such Depositary Shares in accordance with
such instructions, and the Company will agree to take all action which may be
deemed reasonably necessary by the Depositary in order to enable the Depositary
to do so. The Depositary will abstain from voting shares or executing written
consents with respect to the Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares representing such
Preferred Stock.
Redemption or Forced Sale for Regulatory Reasons. Depositary Shares are
subject to redemption or forced sale for regulatory reasons upon the same terms
and grounds as the Common Stock, as described below in "Common Stock --
Redemption or Forced Sale for Regulatory Reasons."
Amendment and Termination of the Deposit Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between the Company
and the Depositary. However, any amendment which materially and adversely alters
the rights of the holders of Depositary Shares will not be effective unless
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such amendment has been approved by the holders of at least a majority of the
Depositary Shares then outstanding. The Deposit Agreement may be terminated by
the Company or the Depositary only if (i) all outstanding Depositary Shares have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of
Depositary Receipts.
Charges of Depositary. The Company will pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements. The Company will pay charges of the Depositary in
connection with the initial deposit of the Preferred Stock and any redemption of
the Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges as are expressly
provided in the Deposit Agreement to be for their accounts.
Miscellaneous. The Depositary will forward to the record holders of the
Depositary Shares relating to such Preferred Stock all reports, notices and
communications from the Company which are delivered to the Depositary.
Neither the Depositary nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder, and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Receipts or other
persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary. The Depositary may resign at any
time by delivering to the Company notice of its election to do so, and the
Company may at any time remove the Depositary, any such resignation or removal
to take effect upon the appointment of a successor Depositary and its acceptance
of such appointment. Such successor Depositary must be appointed within 60 days
after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
DESCRIPTION OF AUTHORIZED SERIES OF PREFERRED STOCK
The following summary descriptions of the designated series of existing
Preferred Stock of the Company do not purport to be complete and are qualified
in their entirety by reference to the Restated Certificate, including the
respective certificates of designation, preferences and rights relating to such
series (the "Certificates of Designation").
8% PRIDES(SM) CONVERTIBLE PREFERRED STOCK
Dividends. Holders of shares of PRIDES are entitled to receive annual
cumulative dividends at a rate per annum of 8% of the stated liquidation
preference (equivalent to a rate of $.89 per annum for each share of PRIDES),
from the date of initial issuance, payable quarterly in arrears.
Mandatory Conversion. On October 3, 1999 (the "Mandatory Conversion
Date"), unless previously redeemed or converted, each outstanding share of
PRIDES will mandatorily convert into (i) 1.12 shares of Common Stock, subject to
adjustment in certain events, and (ii) the right to receive cash in an amount
equal to all accrued and unpaid dividends thereon (other than previously
declared dividends payable to a holder of record as of a prior date).
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Optional Redemption. Shares of PRIDES are not redeemable prior to
October 3, 1998. At any time and from time to time on or after October 3, 1998,
and ending immediately prior to the Mandatory Conversion Date, the Company may
redeem any or all of the outstanding shares of PRIDES. Upon any such redemption,
each holder will receive, in exchange for each share of PRIDES, the number of
shares of Common Stock equal to (A) the sum of (i) $11.348, declining after
October 3, 1998 to $11.125 until the Mandatory Conversion Date and (ii) all
accrued and unpaid dividends thereon (other than previously declared dividends
payable to a holder of record as of a prior date) (the "Call Price") divided by
(B) the "Current Market Price" (as calculated in a manner set forth in the
Certificate of Designation for the PRIDES) on the applicable date of
determination, but in no event less than .92 of a share of Common Stock, subject
to adjustment in certain events. The number of shares of Common Stock to be
delivered in payment of the applicable Call Price is determined on the basis of
the Current Market Price of the Common Stock prior to the announcement of the
redemption.
Conversion at the Option of the Holder. At any time prior to the
Mandatory Conversion Date, unless previously redeemed, each share of PRIDES is
convertible at the option of the holder thereof into .92 of a share of Common
Stock, subject to adjustment in certain events (the "Optional Conversion Rate"),
equivalent to a conversion price of $12.092 per share of Common Stock (the
"Conversion Price"), subject to adjustment as described in the Certificate of
Designation for the PRIDES. The right of holders to convert shares of PRIDES
called for redemption terminates immediately prior to the close of business on
the redemption date.
Voting Rights. The holders of shares of PRIDES have the right with the
holders of Common Stock to vote in the election of Directors and upon each other
matter coming before any meeting of the holders of Common Stock on the basis of
4/5 of a vote for each share of PRIDES. On such matters, the holders of shares
of PRIDES and the holders of Common Stock will vote together as one class except
as otherwise provided by law or the Restated Certificate. In addition, (i)
whenever dividends on the shares of PRIDES or any other series of the Preferred
Stock with like voting rights are in arrears and unpaid for six quarterly
dividend periods, and in certain other circumstances, the holders of the shares
of PRIDES (voting separately as a class with holders of all other series of
outstanding Preferred Stock upon which like voting rights have been conferred
and are exercisable) will be entitled to vote, on the basis of one vote for each
share of PRIDES, for the election of two Directors of the Company, such
Directors to be in addition to the number of Directors constituting the Board of
Directors immediately prior to the accrual of such right and (ii) the holders of
the shares of PRIDES will have voting rights with respect to certain alterations
of the Restated Certificate and certain other matters, voting on the same basis
or separately as a series.
Liquidation Preference and Ranking. The shares of PRIDES rank senior to
the Common Stock, but junior to the Series D Preferred Stock, as to payment of
dividends and distribution of assets upon liquidation. The liquidation
preference of each share of PRIDES is an amount equal to the sum of (i) $11.125
and (ii) all accrued and unpaid dividends thereon.
SERIES D CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
Dividends. Holders of the Series D Preferred Stock are entitled to
receive quarterly cumulative dividends at an annual rate of $4.00 per share.
Unless cumulative dividends on the Series D Preferred Stock have been paid or
declared in full, no dividends may be paid or declared on any capital stock of
the Company ranking junior to the Series D Preferred Stock, including the shares
of PRIDES.
Conversion Rights. Holders of the Series D Preferred Stock have the
right to convert such shares into shares of Common Stock at a conversion rate of
$22.52 per share, equivalent to a conversion rate of 2.22 shares of Common Stock
for each share of Preferred Stock. The conversion rate is subject to adjustment
in certain cases, as provided in the Certificate of Designation of the Series D
Preferred Stock,
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<PAGE> 28
including the issuance of Common Stock as a stock dividend; the combination,
subdivision or reclassification of the Common Stock; the issuance to all holders
of Common Stock of rights or warrants to subscribe for or purchase Common Stock
at less than the current market price (as determined in accordance with the
provisions of the Certificate of Designation of the Series D Preferred Stock) of
the Common Stock; or the distribution to all holders of Common Stock of shares
of capital stock (other than Common Stock), evidence of indebtedness or assets
or rights or warrants (other than those mentioned above). No adjustment in the
conversion rate is required unless it would amount to at least 1/100th of a
share; however, any such adjustment not made as a result of such restriction is
carried forward and taken into account in any subsequent adjustment.
Exchangeability. The Series D Preferred Stock is exchangeable at the
option of the Company in whole, but not in part, on any dividend payment date
for 8% Convertible Subordinated Debentures due 2007 that would be issued by the
Company.
Optional Redemption. The Series D Preferred Stock may be redeemed at
the option of the Company, in whole or in part, for $50.40 per share as of
February 1, 1996, declining on and after February 1, 1997 to $50 per share, in
each case plus accrued and unpaid dividends.
Voting Rights. The Series D Preferred Stock does not carry any voting
rights other than (i) the right to elect two additional directors to the Board
of Directors of the Company in the event that dividends on the Series D
Preferred Stock are in arrears in an amount equal to at least six quarterly
dividends and (ii) as the General Corporation Law of the State of Delaware (the
"GCL") may provide.
Liquidation Rights. In the event of the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, holders of the
Series D Preferred Stock are entitled to receive a preferred liquidation payment
of $50 per share plus an amount equal to the dividends accrued and unpaid to the
distribution date, before any distributions are made to holders of Junior
Securities (as defined in the Certificate of Designation).
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
The Series B Preferred Stock is issuable pursuant to purchase rights
attributable to each outstanding share of Common Stock. Under certain
conditions, each right may be exercised to purchase a unit consisting of one
1/100th of a share of Series B Preferred Stock for $60. The rights are not
exercisable or transferable apart from the Common Stock until the occurrence of
one of the following: (i) ten days after the date ("Stock Acquisition Date") of
a public announcement by a person or a group of beneficial ownership of 10% or
more of the Common Stock (an "Acquiring Person"), (ii) ten business days after a
public announcement by a person or group of a tender or exchange offer which
would result in such person or group beneficially owning 20% or more of the
Common Stock, or (iii) ten days after the occurrence of a Gaming Law Event. A
Gaming Law Event is: (i) a final court or administrative order finding that a
person or group having beneficial ownership of 5% or more of the Common Stock (a
"5% Stockholder") has violated any state gaming, casino or similar laws in
connection with such 5% Stockholder's interest in the Company, (ii) the failure
of a 5% Stockholder to eliminate or reduce to an acceptable level its beneficial
ownership of the Common Stock within 20 days after a final court or
administrative order finding that such 5% Stockholder is unsuitable or
unqualified to hold its interest in the Company under any state gaming, casino
or similar laws or regulations, and (iii) the acquisition by a person or group
of a percentage of the Common Stock at a time when the Company or any of its
subsidiaries has one or more licenses from any governmental authority
administering any gaming, casino or similar laws or regulations, which
percentage exceeds the percentage ownership that any such governmental authority
shall have determined that such person or group may acquire without such
acquisition constituting, or being presumed to constitute, control of the
Company, unless such governmental authority by final order shall have granted
its prior approval to such person or group to
27
<PAGE> 29
acquire control of the Company. Upon the occurrence of a Gaming Law Event, each
right, other than those held by the Acquiring Person or 5% Stockholder causing
such occurrence, will entitle the holder to purchase shares of the Common Stock
or, in certain cases, other assets or securities of the Company, having a value
at the time of the transaction equal to two times the exercise price. In the
event that the Company is acquired in a merger or other business combination
transaction (other than a merger with an Acquiring Person in which the Company
is the surviving corporation and the Common Stock is not changed or exchanged)
or 50% or more of the Company's assets or earning power is sold or transferred,
each holder of a right shall have the right to receive, upon exercise, common
stock of the acquiring company having a calculated value equal to twice the
purchase price of the right. The rights, which do not have voting privileges,
are subject to adjustment to prevent dilution, expire on December 4, 1996 and
may be redeemed by the Company at a price of five cents per right at any time
until 10 days (subject to extension by the Board of Directors of the Company)
following the Stock Acquisition Date. See "Common Stock -- Limitation on Changes
in Control."
COMMON STOCK
Dividends and Voting Rights. Subject to the dividend preferences of any
outstanding shares of Preferred Stock, all shares of Common Stock are entitled
to participate in such dividends as may be declared by the Board of Directors of
the Company out of assets available for the payment thereof. The holders of the
Common Stock are entitled to one vote for each share held on all matters
submitted to stockholders.
Provisions of the Restated Certificate and Bylaws. The Restated
Certificate provides for a classified Board of Directors, consisting of three
classes as nearly equal in size as practicable. Each class holds office until
the third annual stockholders' meeting electing directors following the most
recent election of such class. A director may only be removed with the consent
or vote of the holders of eighty percent (80%) of all classes of stock entitled
to vote at an election of directors.
Under the Restated Certificate, the vote of holders of 80% of the
voting stock of the Company is required for approval of, with certain
exceptions, a merger or consolidation of the Company with or into another
corporation, a sale or lease of all or substantially all of the assets of the
Company to another corporation, person or entity and, under certain conditions,
a sale or lease to the Company or any subsidiary of the Company of assets in
exchange for voting securities of the Company, in each case where the other
party to the transaction is a beneficial owner, directly or indirectly, of 5% or
more of the outstanding shares of any class or series of voting stock of the
Company. Any amendments to the Restated Certificate which would amend the
foregoing requirements require the same affirmative vote.
Section 203 of the Delaware General Corporation Law. The Company is a
Delaware corporation subject to Section 203 of the GCL. Generally, Section 203
prohibits a publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless (i) prior to such date, either the business combination or
such transaction which resulted in the stockholder becoming an interested
stockholder is approved by the board of directors of the corporation, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owns at least 85% of the
outstanding voting stock, or (iii) on or after such date, the business
combination is approved by the board of directors of the corporation and by the
affirmative vote of at least 66 2/3% of the outstanding voting stock that is not
owned by the interested stockholder. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. An "interested stockholder" is a person who, together
with affiliates and associates, owns (or, within three years, did own) 15% or
more of the corporation's outstanding voting stock.
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<PAGE> 30
Limitation on Changes in Control. Certain of the above provisions of
the Restated Certificate, the provisions of Section 203 of the GCL and the
Series B Preferred Stock could have the effect of delaying, deferring or
preventing a change in control of the Company or the removal of existing
management or deterring potential acquirors from making an offer to stockholders
of the Company. This could be the case notwithstanding that a majority of the
stockholders might benefit from such a change in control or offer. In addition,
the issuance of shares of Preferred Stock, or the issuance of rights to purchase
such shares, could be used to discourage an unsolicited acquisition proposal.
Redemption or Forced Sale for Regulatory Reasons. If the New Jersey
Commission or Nevada Commission finds that a holder or beneficial owner of
shares of Common Stock must be found licensed or suitable to hold or own shares
of Common Stock under the New Jersey Act or Nevada Act, and if such holder or
such beneficial owner is not found qualified, licensed or suitable within any
time period specified by the New Jersey Commission or Nevada Commission or the
New Jersey Act or Nevada Act, the Company has the right, at its option, (i) to
require such holder or beneficial owner to dispose of all or a portion of such
holder's or beneficial owner's shares of Common Stock within 120 days after
receipt of notice by such holder or beneficial owner of its disqualification
under the New Jersey Act or Nevada Act (the "Notice Date") (or such different
period as may be prescribed by the New Jersey Commission or Nevada Commission),
or (ii) to redeem shares of Common Stock held by such holder, by action of the
Board of Directors, if in the judgment of the Board of Directors such action
should be taken pursuant to Section 151(b) of the Delaware General Corporation
Law or any other applicable provision of law, to the extent necessary to prevent
the loss or secure the reinstatement of any government-issued license or
franchise held by the Company or any subsidiary to conduct any portion of the
business of the Company or any subsidiary, which license or franchise is
conditioned upon some or all of the holders of the Company's securities
possessing prescribed qualifications. Such unsuitable or disqualified holder is
required to indemnify the Company for any and all direct or indirect costs,
including attorneys' fees, incurred by the Company as a result of such holder's
continuing ownership or failure to divest promptly.
The redemption price of shares of Common Stock to be redeemed would be
equal to the lesser of (i) the holder's original purchase price for the security
or (ii) the lowest closing sale price of such security between the Notice Date
and the date 120 days after Notice Date.
Commencing on the date the Nevada Commission or the New Jersey
Commission serves notice upon the Company of the determination of unsuitability
or disqualification, it is unlawful under the Nevada Act and the New Jersey Act
for the unsuitable or disqualified holder (i) to receive any dividends upon such
shares; (ii) to exercise, directly or through any trustee or nominee, any right
conferred by such shares; or (iii) to receive any remuneration in any form from
the Company for services rendered or otherwise.
29
<PAGE> 31
DESCRIPTION OF WARRANTS
The Warrants may be issued independently of or together with any other
Securities and may be attached to or separate from such Securities. Each series
of Warrants will be issued under a separate Warrant Agreement (each, a "Warrant
Agreement") to be entered into between the Company and a Warrant Agent (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the Warrant of such series and will not assume any obligation
or relationship of agency for or with holders or beneficial owners of the
Warrants.
The applicable Prospectus Supplement will describe the terms of any
Warrants, including the following: (i) the title; (ii) the offering price, if
any; (iii) the aggregate number; (iv) the designation and terms of the Common
Stock purchasable upon exercise of such Warrants; (v) if applicable, the
designation and terms of the Securities with which such Warrants are issued and
the number of such Warrants issued with each such Security; (vi) if applicable,
the date from and after which such Warrants and any Securities issued therewith
will be separately transferable; (vii) the number of shares of Common Stock
purchasable upon exercise of a Warrant and the exercise price at which such
shares may be purchased; (viii) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (ix) if
applicable, the minimum or maximum amount of such Warrants which may be
exercised at any one time; (x) the currency, currencies or currency units in
which the offering price, if any, and the exercise price are payable; (xi) if
applicable, a discussion of certain United States federal income tax
considerations; (xii) the antidilution provisions, if any; (xiii) the applicable
redemption or call provisions, if any; and (xiv) any additional terms, including
terms, procedures and limitations relating to the exchange and exercise of such
Warrants.
The Warrants are subject to redemption or forced sale for regulatory
reasons upon the same terms and grounds as the Common Stock, as described above
in "Common Stock -- Redemption or Forced Sale for Regulatory Reasons."
PLAN OF DISTRIBUTION
The Company may offer the Securities directly to purchasers, to or
through underwriters, through dealers or agents or through a combination of any
such methods. Any such underwriter(s), dealer(s) or agent(s) involved in the
offer and sale of the Securities in respect of which this Prospectus is
delivered will be named in the Prospectus Supplement. The Prospectus Supplement
with respect to such Securities also will set forth the terms of the offering of
such Securities, including the purchase price of such Securities and the
proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Securities may be listed.
If underwriters are used in an offering of Securities, the Company will
execute an underwriting agreement with such underwriters, and the name of each
managing underwriter, if any, and any other
30
<PAGE> 32
underwriters and the terms of the transaction, including any underwriting
discounts and other items constituting compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement relating to such
offering, and the Securities will be acquired by the underwriters for their own
accounts and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If a dealer is used in an offering of Securities, the Company will sell
such Securities to the dealer, as principal. The dealer then may resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. The name of the dealer and the terms of the transaction will
be set forth in the Prospectus Supplement relating thereto.
If an agent is used in an offering of Securities, the agent will be
named, and the terms of the agency will be set forth, in the Prospectus
Supplement relating thereto. Unless otherwise indicated in such Prospectus
Supplement, an agent will act on a best efforts basis for the period of its
appointment.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Securities
described therein and, under agreements which may be entered into with the
Company, may be entitled to indemnification by the Company against certain civil
liabilities under the Securities Act. Underwriters, dealers and agents may be
customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
Offers to purchase Securities may be solicited, and sales thereof may
be made, by the Company directly to institutional investors or others, who may
be deemed to be underwriters within the meaning of the Securities Act with
respect to any resales thereof. The terms of any such offer will be set forth in
the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters or other agents of the Company to solicit offers by
certain institutional investors to purchase Securities from the Company pursuant
to contracts providing for payment and delivery at a future date. Institutional
investors with which such contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such purchasers must be
approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (1) the purchase of
the Securities shall not at the time of delivery be prohibited under the laws of
any jurisdiction to which such purchaser is subject and (2) if the Securities
also are being sold to underwriters, the Company shall have sold to such
underwriters the Securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
The anticipated date of delivery of Securities will be set forth in the
Prospectus Supplement relating to each applicable offering.
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<PAGE> 33
LEGAL OPINIONS
The legality of the Securities will be passed upon for the Company by
Katten Muchin & Zavis, Chicago, Illinois.
EXPERTS
The consolidated financial statements of the Company appearing in the
Annual Report have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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<PAGE> 34
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses will be paid by the Company:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............................ $258,621
Accounting Fees and Expense.................................................... *
Legal Fees and Expenses........................................................ *
Trustees' Fees and Expenses.................................................... *
Blue Sky Fees and Expenses..................................................... *
Printing and Engraving Expenses................................................ *
Miscellaneous Expenses......................................................... *
---------
Total.................................................................. $ *
=========
<FN>
All expenses other than the Securities and Exchange Commission registration fee
are estimated.
- ------------------
* To be completed by amendment.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the GCL empowers a Delaware corporation to indemnify any
persons who are, or are threatened to be made, parties to any threatened,
pending or completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided that
such officer or director acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests, and, for
criminal proceedings, had no reasonable cause to believe his conduct was
illegal. A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation under the same conditions against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action, except that
no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation in the performance of his
duty. Where an officer or director is successful on the merits or otherwise in
the defense of any action referred to above, the corporation must indemnify him
against the expenses which he actually and reasonably incurred.
The Company's Restated Certificate provides, in accordance with the
GCL, for the indemnification of directors and officers of the Company, and
persons who serve or served at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, against all expenses, liabilities and losses (including
attorneys' fees, judgment, fines, ERISA (as defined) excise taxes or penalties
in amounts paid or to be paid in settlement) reasonably incurred with respect to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative; provided, however, that the Company shall indemnify any such
person seeking indemnification in connection with a proceeding initiated by such
person only if such proceeding was authorized by the Board of Directors of the
Company. In the event a claim for indemnification by any person has not been
paid in full by the Company after written request has been received by the
Company, the claimant may at any time thereafter bring suit against the Company
to recover the unpaid amount of the claim and, if successful
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<PAGE> 35
in whole or in part, the claimant shall also be entitled to be paid the expense
of prosecuting such claim. The right to indemnification conferred in the
Restated Certificate is a contract right and includes the right to be paid by
the Company the expenses incurred in defending any such proceeding in advance of
its final disposition. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Company would
have the power to indemnify such person against such expense, liability or loss
under the GCL.
The Restated Certificate provides, in accordance with the GCL, that no
director shall be personally liable to the Company or any of its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company 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
the GCL, or (iv) for any transaction from which the director derived an improper
personal benefit. If the GCL is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the Company, in addition to the limitation on personal liability, shall be
limited to the fullest extent permitted by the amended GCL.
The Company has purchased directors' and officers' liability insurance
in the amount of $35,000,000, covering certain liabilities incurred by its
officers and directors and those of its subsidiaries and affiliates in
connection with the performance of their duties.
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<PAGE> 36
ITEM 16. EXHIBITS.
1.1* Form of Underwriting Agreement (Debt Securities).
1.2* Form of Underwriting Agreement (Preferred Stock).
1.3* Form of Underwriting Agreement (Common Stock).
1.4* Form of Underwriting Agreement (Warrants).
3.1 Restated Certificate of Incorporation of the Company, as
amended (filed as an exhibit to the Company's Registration
Statement on Form S-8 dated December 13, 1994, registration
no. 33-56831).
3.2 By-laws of the Company, as amended (filed as an exhibit to the
Company's Annual Report on Form 10-K, file no. 1-7244, for the
fiscal year ended December 31, 1995).
4.1 Form of Indenture between the Company and First Bank National
Association, as Trustee, governing the Senior Debt Securities.
4.2 Form of Indenture between the Company and First Bank National
Association, as Trustee, governing the Subordinated Debt
Securities.
4.3* Form of Senior Debt Securities.
4.4* Form of Subordinated Debt Securities.
4.5* Form of Certificate of Designation, Preferences and Rights for
Preferred Stock.
4.6 Form of Deposit Agreement.
4.7* Form of Warrant Agreement, including form of Warrant
Certificates.
5 Opinion of Katten Muchin & Zavis as to the legality of the
Securities being registered.
12 Statement of Computation of Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends.
23.1 Consent of Independent Auditors.
23.2 Consent of Katten Muchin & Zavis (contained in its opinion
filed as Exhibit 5 hereto).
24 Powers of Attorney (included on the signature page hereto).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of First Bank National Association, trustee for
the Senior Debt Securities.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of First Bank National Association, trustee for
the Subordinated Debt Securities.
- ------------------
* To be filed as an exhibit to Form 8-K in reference to the specific offering of
Securities, if any, to which it relates.
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<PAGE> 37
ITEM 17. UNDERTAKINGS.
A. 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 this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above 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 Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purposes 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 post-effective
amendment any of the Securities being registered which remain unsold at
the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 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.
C. The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus 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.
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D. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois on the 21st day of May,
1996.
BALLY ENTERTAINMENT CORPORATION
By: /s/ Lee S. Hillman
----------------------------------------------
Lee S. Hillman, Executive Vice President,
Chief Financial Officer and Treasurer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Lee S. Hillman, James S. Montana, Jr. and Carol Stone DePaul and each
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution, to sign on his or her behalf, individually and in each capacity
stated below, all amendments and post-effective amendments to this Registration
Statement on Form S-3 and to file the same, with all exhibits thereto and any
other documents in connection therewith, with the Securities and Exchange
Commission under the Securities Act of 1933, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as each might or could do in
person, thereby ratifying and confirming each act that said attorneys-in-fact
and agents may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------- ------------------------------------------------------ ----------------------
<S> <C> <C>
Chairman of the Board, President and Chief
/s/ Arthur M. Goldberg Executive Officer (Principal Executive Officer) May 21, 1996
- -----------------------------------------
Arthur M. Goldberg
Executive Vice President, Chief Financial Officer
/s/ Lee S. Hillman and Treasurer (Principal Financial Officer) May 21, 1996
- -----------------------------------------
Lee S. Hillman
Vice President and Corporate Controller
/s/ John W. Dwyer (Principal Accounting Officer) May 21, 1996
- -----------------------------------------
John W. Dwyer
/s/ George N. Aronoff Director May 21, 1996
- -----------------------------------------
George N. Aronoff
/s/ Barrie K. Brunet Director May 21, 1996
- -----------------------------------------
Barrie K. Brunet
/s/ Edwin M. Halkyard Director May 21, 1996
- -----------------------------------------
Edwin M. Halkyard
/s/ J. Kenneth Looloian Director May 21, 1996
- -----------------------------------------
J. Kenneth Looloian
/s/ Rocco J. Marano Director May 21, 1996
- -----------------------------------------
Rocco J. Marano
/s/ Patrick L. O'Malley Director May 21, 1996
- -----------------------------------------
Patrick L. O'Malley
/s/ James M. Rochford Director May 21, 1996
- -----------------------------------------
James M. Rochford
</TABLE>
II-6
<PAGE> 40
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
- ------ -----------------------
<S> <C>
1.1* Form of Underwriting Agreement (Debt Securities).
1.2* Form of Underwriting Agreement (Preferred Stock).
1.3* Form of Underwriting Agreement (Common Stock).
1.4* Form of Underwriting Agreement (Warrants).
3.1 Restated Certificate of Incorporation of the Company, as amended
(filed as an exhibit to the Company's Registration Statement on
Form S-8 dated December 13, 1994, registration no. 33-56831).
3.2 By-laws of the Company, as amended (filed as an exhibit to the
Company's Annual Report on Form 10-K, file no. 1-7244, for the fiscal
year ended December 31, 1995).
4.1 Form of Indenture between the Company and First Bank National
Association, as Trustee, governing the Senior Debt Securities.
4.2 Form of Indenture between the Company and First Bank National
Association, as Trustee, governing the Subordinated Debt Securities.
4.3* Form of Senior Debt Securities.
4.4* Form of Subordinated Debt Securities.
4.5* Form of Certificate of Designation, Preferences and Rights for
Preferred Stock.
4.6 Form of Deposit Agreement.
4.7* Form of Warrant Agreement, including form of Warrant Certificates.
5 Opinion of Katten Muchin & Zavis as to the legality of the Securities
being registered.
12 Statement of Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
23.1 Consent of Independent Auditors.
23.2 Consent of Katten Muchin & Zavis (contained in its opinion filed as
Exhibit 5 hereto).
24 Powers of Attorney (included on the signature page hereto).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939
of First Bank National Association, trustee for the Senior Debt
Securities.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939
of First Bank National Association, trustee for the Subordinated Debt
Securities.
- ------------------
<FN>
*To be filed as an exhibit to Form 8-K in reference to the specific offering of
Securities, if any, to which it relates.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
<PAGE> 2
BALLY ENTERTAINMENT CORPORATION
and
FIRST BANK NATIONAL ASSOCIATION,
Trustee
------------
Indenture
Dated as of
------------
Senior Debt Securities
<PAGE> 3
BALLY ENTERTAINMENT CORPORATION
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939, as amended:
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 310 (a)(1).....................................................................................609
(a)(2).....................................................................................609
(a)(3)......................................................................... Not Applicable
(a)(4)......................................................................... Not Applicable
(b)...................................................................................608, 610
SECTION 311 (a)........................................................................................613
(b)........................................................................................613
SECTION 312 (a)................................................................................701, 702(a)
(b).....................................................................................702(b)
(c).....................................................................................702(c)
SECTION 313 (a).....................................................................................703(a)
(a)(4).............................................................................101, 703(a)
(b).....................................................................................703(b)
(c).....................................................................................703(a)
(d).....................................................................................703(b)
SECTION 314 (a)........................................................................................704
(b).............................................................................Not Applicable
(c)(1).....................................................................................103
(c)(2).....................................................................................103
(c)(3)..........................................................................Not Applicable
(d).............................................................................Not Applicable
(e)........................................................................................103
SECTION 315 (a)........................................................................................601
(b)........................................................................................602
(c)........................................................................................601
(d)........................................................................................601
(e)........................................................................................514
SECTION 316 (a)........................................................................................101
(a)(1)(A).............................................................................502, 512
(a)(1)(B)..................................................................................513
(a)(2)..........................................................................Not Applicable
(b)........................................................................................508
(c).....................................................................................104(a)
</TABLE>
-i-
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 317 (a)(1).....................................................................................503
(a)(2).....................................................................................504
(b).......................................................................................1003
SECTION 318 (a)........................................................................................108
- ----------------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.
</TABLE>
-ii-
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
RECITALS OF THE COMPANY.........................................................................................-1-
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION..............................................................-1-
SECTION 101. Definitions.......................................................................................-1-
Act ..............................................................................................-2-
Affiliate..............................................................................................-2-
Authenticating Agent...................................................................................-2-
Board of Directors.....................................................................................-2-
Board Resolution.......................................................................................-2-
Business Day...........................................................................................-2-
Commission.............................................................................................-2-
Common Depositary......................................................................................-2-
Company ..............................................................................................-3-
Company Request........................................................................................-3-
Consolidated Net Tangible Assets.......................................................................-3-
Corporate Trust Office.................................................................................-3-
Defaulted Interest.....................................................................................-3-
Depositary.............................................................................................-3-
Designated Subsidiary..................................................................................-3-
"Dollar" or "$"........................................................................................-3-
Event of Default.......................................................................................-4-
Exchange Rate..........................................................................................-4-
Exchange Act...........................................................................................-4-
Holder ..............................................................................................-4-
Indebtedness...........................................................................................-4-
Indenture..............................................................................................-4-
Interest ..............................................................................................-4-
Interest Payment Date..................................................................................-4-
Judgment Currency......................................................................................-4-
Maturity ..............................................................................................-4-
Officer's Certificate..................................................................................-4-
Opinion of Counsel.....................................................................................-5-
Original Issue Discount Security.......................................................................-5-
Outstanding............................................................................................-5-
Paying Agent...........................................................................................-6-
Person ..............................................................................................-6-
Place of Payment.......................................................................................-6-
Predecessor Security...................................................................................-6-
Redemption Date........................................................................................-6-
Redemption Price.......................................................................................-6-
</TABLE>
-iii-
<PAGE> 6
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C> <C>
Registered Security....................................................................................-6-
Regular Record Date....................................................................................-6-
Required Currency......................................................................................-6-
Responsible Officer....................................................................................-6-
Securities.............................................................................................-7-
Security Register......................................................................................-7-
Security Registrar.....................................................................................-7-
Special Record Date....................................................................................-7-
Stated Maturity........................................................................................-7-
Subsidiary.............................................................................................-7-
Trustee ..............................................................................................-7-
Trust Indenture Act....................................................................................-7-
United States..........................................................................................-7-
U.S. Government Obligations............................................................................-7-
Vice President.........................................................................................-8-
Wholly Owned Subsidiary................................................................................-8-
Yield to Maturity......................................................................................-8-
SECTION 102. Incorporation by Reference of Trust Indenture Act.................................................-8-
SECTION 103. Compliance Certificates and Opinions..............................................................-8-
SECTION 104. Form of Documents Delivered to Trustee............................................................-9-
SECTION 105. Acts of Holders...................................................................................-9-
SECTION 106. Notices, Etc., to Trustee and Company............................................................-11-
SECTION 107. Notice to Holders; Waiver........................................................................-12-
SECTION 108. Conflict With Trust Indenture Act................................................................-12-
SECTION 109. Effect of Headings and Table of Contents.........................................................-12-
SECTION 110. Successors and Assigns...........................................................................-12-
SECTION 111. Separability Clause..............................................................................-12-
SECTION 112. Benefits of Indenture............................................................................-13-
SECTION 113. Governing Laws...................................................................................-13-
SECTION 114. Legal Holidays...................................................................................-13-
</TABLE>
-iv-
<PAGE> 7
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C> <C>
SECTION 115. Corporate Obligation.............................................................................-13-
ARTICLE TWO
SECURITY FORMS...............................................................-14-
SECTION 201. Forms Generally..................................................................................-14-
SECTION 202. Form of Trustee's Certificate of Authentication..................................................-14-
SECTION 203. Securities in Global Form........................................................................-14-
ARTICLE THREE
THE SECURITIES................................................................-16-
SECTION 301. Amount Unlimited; Issuable in Series.............................................................-16-
SECTION 302. Denominations....................................................................................-18-
SECTION 303. Execution, Authentication, Delivery and Dating...................................................-18-
SECTION 304. Temporary Securities.............................................................................-20-
SECTION 305. Registration, Registration of Transfer and Exchange..............................................-21-
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.................................................-23-
SECTION 307. Payment of Interest; Interest Rights Preserved...................................................-23-
SECTION 308. Persons Deemed Owners............................................................................-25-
SECTION 309. Cancellation.....................................................................................-25-
SECTION 310. Computation of Interest..........................................................................-25-
ARTICLE FOUR
SATISFACTION AND DISCHARGE.........................................................-26-
SECTION 401. Satisfaction and Discharge of Indenture..........................................................-26-
SECTION 402. Application of Trust Money.......................................................................-27-
</TABLE>
-v-
<PAGE> 8
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C> <C>
SECTION 403. Discharge of Liability on Securities of Any Series...............................................-27-
SECTION 404. Reinstatement....................................................................................-28-
ARTICLE FIVE
REMEDIES...................................................................-29-
SECTION 501. Events of Default................................................................................-29-
SECTION 502. Acceleration of Maturity; Rescission and Annulment...............................................-30-
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee..................................-31-
SECTION 504. Trustee May File Proofs of Claim.................................................................-32-
SECTION 505. Trustee May Enforce Claims Without Possession of Securities......................................-33-
SECTION 506. Application of Money Collected...................................................................-33-
SECTION 507. Limitation on Suits..............................................................................-34-
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest..............................................................................................-34-
SECTION 509. Restoration of Rights and Remedies...............................................................-35-
SECTION 510. Rights and Remedies Cumulative...................................................................-35-
SECTION 511. Delay or Omission Not Waiver.....................................................................-35-
SECTION 512. Control by Holders...............................................................................-35-
SECTION 513. Waiver of Past Defaults..........................................................................-36-
SECTION 514. Undertaking for Costs............................................................................-36-
SECTION 515. Waiver of Stay or Extension Laws.................................................................-36-
ARTICLE SIX
THE TRUSTEE.................................................................-37-
</TABLE>
-vi-
<PAGE> 9
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C> <C>
SECTION 601. Certain Duties and Responsibilities..............................................................-37-
SECTION 602. Notice of Defaults...............................................................................-38-
SECTION 603. Certain Rights of Trustee........................................................................-38-
SECTION 604. Not Responsible for Recitals or Issuance of Securities...........................................-39-
SECTION 605. May Hold Securities..............................................................................-39-
SECTION 606. Money Held in Trust..............................................................................-40-
SECTION 607. Compensation and Reimbursement...................................................................-40-
SECTION 608. Disqualification; Conflicting Interests..........................................................-40-
SECTION 609. Corporate Trustee Required; Eligibility..........................................................-41-
SECTION 610. Resignation and Removal; Appointment of Successor................................................-41-
SECTION 611. Acceptance of Appointment by Successor...........................................................-43-
SECTION 612. Merger, Conversion, Consolidation or Succession to Business......................................-44-
SECTION 613. Preferential Collection of Claims Against Company................................................-44-
SECTION 614. Appointment of Authenticating Agent..............................................................-44-
ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY...........................................-47-
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders........................................-47-
SECTION 702. Preservation of Information; Communications to Holders...........................................-47-
SECTION 703. Reports by Trustee...............................................................................-47-
SECTION 704. Reports by Company...............................................................................-48-
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...........................................-48-
</TABLE>
-vii-
<PAGE> 10
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C> <C>
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.............................................-48-
SECTION 802. Successor Person Substituted.....................................................................-49-
ARTICLE NINE
SUPPLEMENTAL INDENTURES............................................................-49-
SECTION 901. Supplemental Indentures Without Consent of Holders...............................................-49-
SECTION 902. Supplemental Indentures With Consent of Holders..................................................-50-
SECTION 903. Execution of Supplemental Indentures.............................................................-51-
SECTION 904. Effect of Supplemental Indentures................................................................-52-
SECTION 905. Conformity With Trust Indenture Act..............................................................-52-
SECTION 906. Reference in Securities to Supplemental Indentures...............................................-52-
ARTICLE TEN
COVENANTS..................................................................-52-
SECTION 1001. Payment of Principal, Premium and Interest......................................................-52-
SECTION 1002. Maintenance of Office or Agency.................................................................-52-
SECTION 1003. Money for Securities Payments to be Held in Trust...............................................-53-
SECTION 1004. Existence.......................................................................................-54-
SECTION 1005. Maintenance of Properties.......................................................................-54-
SECTION 1006. Payment of Taxes and Other Claims...............................................................-54-
SECTION 1007. Liens...........................................................................................-55-
SECTION 1008. Statement by Officers as to Default.............................................................-57-
SECTION 1009. Waiver of Certain Covenants.....................................................................-57-
ARTICLE ELEVEN
</TABLE>
-viii-
<PAGE> 11
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C> <C>
REDEMPTION OF SECURITIES.......................................................-57-
SECTION 1101. Applicability of Article........................................................................-57-
SECTION 1102. Election to Redeem; Notice to Trustee...........................................................-57-
SECTION 1103. Selection by Trustee of Securities to be Redeemed...............................................-58-
SECTION 1104. Notice of Redemption............................................................................-58-
SECTION 1105. Deposit of Redemption Price.....................................................................-59-
SECTION 1106. Securities Payable on Redemption Date...........................................................-59-
SECTION 1107. Securities Redeemed in Part.....................................................................-59-
SECTION 1108. Redemption or Forced Sale Pursuant to the Casino Control Act or other
Applicable Regulation............................................................................-60-
ARTICLE TWELVE
SINKING FUNDS.................................................................-61-
SECTION 1201. Applicability of Article........................................................................-61-
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities...........................................-61-
SECTION 1203. Redemption of Securities for Sinking Fund.......................................................-61-
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES......................................................-62-
SECTION 1301. Purposes for Which Meetings May Be Called.......................................................-62-
SECTION 1302. Call, Notice and Place of Meetings..............................................................-62-
SECTION 1303. Persons Entitled to Vote at Meetings. ..........................................................-62-
SECTION 1304. Quorum; Action..................................................................................-63-
SECTION 1305. Determination of Voting Rights; Conduct and Adjournment of Meetings.............................-63-
</TABLE>
-ix-
<PAGE> 12
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C> <C>
SECTION 1306. Counting Votes and Recording Action of Meetings.................................................-64-
</TABLE>
-x-
<PAGE> 13
INDENTURE, dated as of ____ between BALLY ENTERTAINMENT
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
8700 West Bryn Mawr Avenue, Chicago, Illinois 60631, and First Bank National
Association, a national banking association duly organized and existing under
the laws of the United States of America, as Trustee (herein called the
"Trustee"), the office of the Trustee at which at the date hereof its corporate
trust business is principally administered being St. Paul, Minnesota.
RECITALS OF THE COMPANY
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 or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation; and
-1-
<PAGE> 14
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in
Section 102.
"Act", when used with respect to any Holder, has the meaning
specified in Section 105.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person, which may include the
Company, authorized by the Trustee to act on behalf of the Trustee pursuant to
Section 614 to authenticate Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in that Place of Payment are authorized or
obligated by law to close.
"CCC" means the Casino Control Commission of the State of New
Jersey, or any successor New Jersey agency or New Jersey agencies with authority
over matters currently subject to the authority of the CCC.
"Casino Control Act" means the New Jersey Casino Control Act,
as now or hereafter amended, and the regulations promulgated thereunder.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
-2-
<PAGE> 15
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by its Chairman of
the Board, its Vice Chairman of the Board, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Controller, an Assistant
Controller, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the
Trustee in _____________ at which at any particular time its corporate trust
business shall be principally administered, which office at the date hereof is
that indicated in the introductory paragraph of this Indenture.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any
series issuable or issued in the form of a global Security, the Person
designated as Depositary by the Company pursuant to Section 301 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such person, "Depositary" as used with respect to the Securities of any
series shall mean the Depositary with respect to the Securities of that series.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"Event of Default" has the meaning specified in Section 501.
"Exchange Rate" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder", when used with respect to any Security, means in the
case of a Registered Security the Person in whose name the Security is
registered in the Security Register.
"Indebtedness", as applied to any Person, means all
indebtedness, whether or not represented by bonds, debentures, notes or other
securities, created or assumed by such Person for the repayment of money
borrowed, and obligations, computed in accordance with generally accepted
accounting principles, as lessee under leases that, in accordance with generally
accepted accounting principles, should be recorded as capital leases. All
Indebtedness secured by a lien upon property owned by the Company or any
Subsidiary and upon which Indebtedness such Person customarily pays interest,
although such Person has not assumed or become liable for the payment of such
Indebtedness, for all purposes hereof, shall be deemed to be Indebtedness of
such Person. All Indebtedness of others guaranteed as to payment of principal by
such Person
-3-
<PAGE> 16
or in effect guaranteed by such Person through a contingent agreement to
purchase such Indebtedness, for all purposes hereof, shall be deemed to be
Indebtedness of such Person. Indebtedness (i) shall not include accounts payable
to trade creditors or other indebtedness for goods or services created or
assumed in the ordinary course of business and (ii) shall include only the
principal component of any obligation described in this definition.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Judgment Currency" has the meaning specified in Section 506.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, the Controller, the Secretary or an Assistant
Treasurer, Assistant Controller or Assistant Secretary, of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for or an employee of the Company.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly
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given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(iv) Securities with respect to which the Company has effected
defeasance as provided in Article 4, except to the extent provided in
Section 401.
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether a
quorum is present at a meeting of Holders of Securities, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the principal amount thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (b) the principal amount of a Security
denominated in a foreign currency shall be the Dollar equivalent, determined by
the Company on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent, determined on the date of original issuance of such Security, of the
amount determined as provided in (a) above), of such Security, (c) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding and (d) Securities owned by Holders shall be determined as of the
Record Date established pursuant to Section 105, or if not so established, as of
effectiveness of such request, demand, authorization, direction, consent, notice
or waiver, except that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver or upon any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person, which may include the
Company, authorized by the Company to pay the principal of (and premium, if any)
or interest on any one or more series of Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of (and premium, if
any) and interest on the Securities
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of that series are payable as specified in accordance with Section 301 subject
to the provisions of Section 1002.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security, shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security in the form
established pursuant to Section 201 which is registered in the Security
Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of any series means the date specified
for that purpose as contemplated by Section 301, or, if not so specified, the
last day of the calendar month preceding such Interest Payment Date if such
Interest Payment Date is the fifteenth day of the calendar month or the
fifteenth day of the calendar month preceding such Interest Payment Date if such
Interest Payment Date is the first day of a calendar month, whether or not such
day shall be a Business Day.
"Required Currency" has the meaning specified in Section 506.
"Responsible Officer", when used with respect to the Trustee,
means 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
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest on the Registered Securities of any series means a date fixed by the
Trustee pursuant to Section 307.
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"Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed, except as
provided in Section 905.
"United States" means the United States of America (including
the States and the District of Columbia) and its "possessions", which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"U.S. Government Obligations" has the meaning specified in
Section 401.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Wholly Owned Subsidiary" means a corporation all the
outstanding voting stock (other than any directors' qualifying shares) of which
is owned, directly or indirectly, by the Company or by one or more other Wholly
Owned Subsidiaries, or by the Company and one or more other Wholly Owned
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Yield to Maturity", when used with respect to any Original
Issue Discount Security, means the yield to maturity, if any, set forth on the
face thereof.
SECTION 102. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part of
this Indenture. The following Trust Indenture Act terms used in this Indenture
have the following meanings:
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"Bankruptcy Act" means the Bankruptcy Act or Title 11 of the
United States Code.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or
any other obligor on the Securities.
All the other Trust Indenture Act terms used in this Indenture
that are defined by the Trust Indenture Act, defined by Trust Indenture Act
reference to another statute or defined by Commission rule under the Trust
Indenture Act and not otherwise defined herein have the meanings assigned to
them therein.
SECTION 103. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon
any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee
an Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
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(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 105. 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, by an agent duly
appointed in writing or as evidenced by electronic confirmation consistent with
the then existing practices of the Depositary or similar institutions and
participants therein. 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 the holding of any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and 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 1306.
The Company may set a record date for purposes of determining
the identity of Holders of Registered Securities entitled to vote or consent to
any action by vote or consent
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authorized or permitted under this Indenture, which record date shall be the
later of 30 days prior to the first solicitation of such consent or the date of
the most recent list of Holders furnished to the Trustee prior to such
solicitation. If a record date is fixed, those persons who were Holders of
Registered Securities at such record date (or their duly designated proxies),
and only those persons, shall be entitled with respect to such Securities to
take such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date.
(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 acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or other authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial number of Registered
Securities held by any Person, and the date of holding the same, shall proved by
the Security Register.
(d) In determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver under this Indenture, the
principal amount of an Original Issue Discount Security that may be counted in
making such determination and that shall be deemed to be Outstanding for such
purposes shall be equal to the amount of the principal thereof that would be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502 at the time the taking of such action by the Holders of such
requisite principal amount is evidenced to the Trustee for such Securities.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security. Any consent or waiver of the Holder of any Security shall be
irrevocable for a period of six months after the date of execution thereof, but
otherwise any such Holder or subsequent Holder may revoke the request, demand,
authorization, direction, notice, consent or other Act as to his Security or
portion of his Security. Such revocation shall be effective only if the Trustee
receives the notice of revocation before the date the Act becomes effective.
(f) Until an amendment or waiver becomes effective, a consent
to it by a Holder of a Security is a continuing consent by 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. However, any such Holder or subsequent Holder may revoke
the notice of revocation before the date the amendment or waiver becomes
effective.
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(g) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular Security
may do so with regard to all or any part of the principal amount of such
Security or by one or more dully appointed agents, each of which may do so
pursuant to such appointment with regard to all or any discrete part of such
principal amount.
Any amendment or waiver once effective shall bind every Holder
of each series affected by such amendment or waiver unless it is of the type
described in Section 902. In that case, the amendment or waiver shall bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security.
SECTION 106. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: __________________, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company, Attention: President, or to any other address furnished in
writing to the Trustee by the Company.
SECTION 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of
Securities of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) to Holders of Registered Securities if in
writing and mailed, first-class postage prepaid, to each Holder affected by such
event, at the address of such Holder as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice.
In case by reason of the suspension of regular mail service,
or by reason of any other cause it shall be impractical 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 in which 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.
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Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waiver of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 108. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
any provision of the Trust Indenture Act or another provision hereof which is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision of the Trust Indenture Act shall control.
SECTION 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
rights, remedy or claim under this Indenture.
SECTION 113. Governing Laws.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 114. Legal Holidays.
In the case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provisions of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made
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on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
SECTION 115. Corporate Obligation.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, shareholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Securities or the obligations of the Company or the Trustee under this Indenture
or any certificate or other writing delivered in connection herewith.
SECTION 116. Counterparts
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series shall be in
substantially such form or forms (including temporary or permanent global form)
as shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If temporary Securities of
any series are issued in global form as permitted by Section 304, the form
thereof shall be established as provided in the preceding sentence. A copy of
the Board Resolution establishing the form or forms of Securities of any series
(or any such temporary global Security) 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 Company Order contemplated by Section 303 for the
authentication and delivery of such Securities (or any such temporary global
Security).
The definitive Securities, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution thereof.
SECTION 202. Form of Trustee's Certificate of Authentication.
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The Trustee's certificate of authentication shall be in
substantially the following form:
"This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
_____________________________________
as Trustee
By___________________________________
Authorized Signatory."
SECTION 203. Securities in Global Form.
(a) A supplemental indenture to the Indenture or a Board
Resolution (and, to the extent not set forth in the Board Resolution, an
Officer's Certificate detailing the adoption of terms pursuant to the Board
Resolution) shall establish whether the Securities of a series shall be issued
in whole or in part in the form of one or more global securities and the
Depositary for such global security or securities.
(b) Notwithstanding any provisions to the contrary contained
in Section 305 of the Indenture and in addition thereto, any global security
shall be exchangeable pursuant to Section 305 of the Indenture for securities
registered in the names of Holders other than the Depositary for such Security
or its nominee only if (i) such Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such global security or if at
any time such Depositary ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Company fails to appoint a successor
Depositary within 90 days of such event, (ii) the Company executes and delivers
to the Trustee an Officer's Certificate to the effect that such global security
shall be so exchangeable or (iii) an event shall have happened and be continuing
which is or after notice or lapse of time or both, would be, an Event of Default
with respect to the Securities represented by such global security. Any global
security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names as the Depositary shall
direct in writing in an aggregate principal amount equal to the principal amount
of the global security with like tenor and terms.
Except as provided in this Section 203, a global security may
not be transferred except as a whole by the Depositary with respect to such
global security to a nominee of such Depositary, by a nominee of such Depositary
to such Depositary or another nominee of such Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such a successor
Depositary.
(c) Any global security issued hereunder shall bear a
legend in substantially the following form:
"This Security is a global security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This
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Security is exchangeable for Securities registered in the name of a person other
than the Depository or its nominee only in the limited circumstances described
in the Indenture, and may not be transferred except as a whole by the Depository
to a nominee of the Depository, by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee to
a successor Depository or a nominee of such a successor Depository."
(d) The Depository, as a Holder, may appoint agents and
otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under the Indenture.
(e) Notwithstanding the other provisions of this Indenture,
unless otherwise specified as contemplated by Section 301, payment of the
principal of and interest on any global security shall be made to the person
specified therein.
(f) Except as provided in subsection (e), the Company, the
Trustee and any Agent shall treat a person as the Holder of such principal
amount of outstanding Securities of such series represented by a global security
as shall be specified in a written statement of the Depository with respect to
such global security, for purposes of obtaining any consents, declaration or
direction required to be given by the Holders pursuant to this Indenture.
ARTICLE THREE
THE SECURITIES
SECTION 301. 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 Board Resolution, and set forth in an
Officer's Certificate, or established in 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 the Securities of the series from all other
Securities);
(2) any limit upon the aggregate principal amount of the
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 304, 305, 306, 906 or
1107);
(3) whether Securities of the series are to be issuable as
Registered Securities, whether any Securities of the series are to be
issuable initially in temporary global form
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and whether any Securities of the series are to be issuable in
permanent global form and, if so, whether beneficial owners of
interests in any such permanent global Security may exchange such
interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in
Section 305, and the Depositary for any global Security or Securities;
(4) the extent to which, or the manner in which, any interest
payable on a temporary global Security on any Interest Payment Date
will be paid if other than in the manner provided in Section 304;
(5) the date or dates on which the principal (and premium, if
any) of the Securities of the series is payable or the method of
determination thereof, including, without limitation, the maturity date
or dates;
(6) the rate or rates (which may be fixed or variable), or the
method of determination thereof, at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest shall
be payable and, if other than as set forth in Section 101, the Regular
Record Date for the interest payable on any Registered Securities on
any Interest Payment Date;
(7) the place or places where, subject to the provisions of
Section 1002, the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company, if
the Company is to have that option;
(9) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which, Securities of the series shall be
redeemed or purchased in whole or in part pursuant to such obligation;
(10) the denomination in which any Registered Securities of
that series shall be issuable, if other than denominations of $1,000
and any integral multiple thereof;
(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 502;
(12) any additional means of satisfaction and discharge of
this Indenture with respect to Securities of the series pursuant to
Section 401, any additional conditions to discharge pursuant to Section
401 or 403 and the application, if any, of Section 403;
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(13) any deletions or modifications of or additions to the
Events of Default set forth in Section 501 or covenants of the Company
set forth in Article Ten pertaining to the Securities of the series;
(14) the terms for conversion or exchange, if any;
(15) if other than Dollars, the currency, currencies or
currency unit or units in which such Securities will be denominated and
in which the principal of, and premium and interest, if any, thereon
will be payable;
(16) whether, and the terms and conditions on which, the
Company or a Holder may elect that, or the other circumstances under
which, payment of principal of, or premium or interest, if any, is to
be made in a currency or currencies or currency unit or units other
than that in which such Securities are denominated; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one 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 the Board Resolution
referred to above and (subject to Section 303) set forth, or determined in the
manner provided, in the Officer's Certificate referred to above or in any such
indenture supplemental hereto.
At the option of the Company, interest on the Securities of
any series that bears interest may be paid by mailing a check to the address of
any Holder as such address shall appear in the Securities Register.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action together with such Board Resolution 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 Officer's Certificate setting forth the terms of
the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in such
denominations as shall be specified and/or contemplated by Section 301. In the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiple thereof. Unless otherwise
provided as contemplated by Section 301 with respect to any series of
Securities, any Securities of a series denominated in a currency other than
Dollars shall be issuable in denominations that are the equivalent, as
determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for such currency, as such rate is reported or
otherwise made available by the Federal Reserve Bank of New York, on the
applicable issue date for such Securities, of $1,000 and any integral multiple
thereof.
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SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President, its
Treasurer or one of its Vice Presidents, under its corporate seal reproduced
thereon or affixed thereto attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, 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 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in accordance with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in accordance with the provisions of this
Indenture; and
(c) 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 legal,
valid and binding obligations of the Company, enforceable in accordance
with their terms, except as such enforcement is subject to the effect
of (i) bankruptcy, insolvency, reorganization or other law relating to
or affecting creditors' rights and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication.
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No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security, a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309
together with a written statement (which need not comply with Section 103 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations.
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.
Any temporary global Security and any permanent global
security shall, unless otherwise provided therein, be delivered to the
Depositary for credit to the respective accounts of the beneficial owners of
such Securities (or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such temporary
global Security of a series (the "Exchange Date"), the Company shall deliver to
the Trustee definitive Securities of that series in aggregate principal amount
equal to the principal amount of such temporary global Security, executed by the
Company. On or after the Exchange Date such temporary global Security shall be
surrendered by the Depositary to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities of that series
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without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, a like aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in registered form or permanent global
registered form, or any combination thereof, as specified and/or contemplated by
Section 301, and if any combination thereof is so specified, as requested by the
beneficial owner thereof.
Unless otherwise specified in the temporary global Security,
the interest of a beneficial owner of Securities of a series in a temporary
global Security shall be exchanged on the Exchange Date for definitive
Securities (and where the form of the definitive Securities is not specified by
the Holder for an interest in a permanent global Security) of the same series
and of like tenor and after the Exchange Date, the interest of a beneficial
owner of Securities of a series in a temporary global Security shall be
exchanged for definitive Securities (and where the form of the definitive
Securities is not specified by the Holder for an interest in a permanent global
Security) of the same series and of like tenor. Unless otherwise specified in
such temporary global Security, any exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Securities in person at the offices of the Depositary.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified and/or contemplated by Section 301, interest payable on a temporary
global Security on an Interest Payment Date for Securities of such series shall
be payable to the Depositary on such Interest Payment Date for credit without
further interest on or after such Interest Payment Date to the respective
accounts of the Persons who are the beneficial owners of such temporary global
Security on such Interest Payment Date. Any interest so received by the
Depositary and not paid as herein provided shall be returned to the Trustee
immediately prior to the expiration of two years after such Interest Payment
Date in order to be repaid to the Company in accordance with Section 1003.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept for each series of
Securities at one of the offices or agencies maintained pursuant to Section 1002
a register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment herein referred to collectively as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities of such series. The Trustee
is hereby initially appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees,
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one or more new Registered Securities of the same series and of like tenor, of
any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Registered Securities of any
series may be exchanged for other Registered Securities of the same series and
of like tenor, of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified
and/or contemplated by Sections 203 or 301, any permanent global Security shall
be exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Security are entitled to exchange such interest
for Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified and/or contemplated by Sections
203 or 301, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee definitive Securities of that series in an aggregate
principal amount equal to the principal amount of such permanent global
Security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such permanent global Security shall be
surrendered from time to time in accordance with instructions given to the
Trustee and the Depositary (which instructions shall be in writing but need not
comply with Section 103 or be accompanied an Opinion of Counsel) by the
Depositary or such other depositary as shall be specified in the Company Order
with respect thereto to the Trustee, as the Company's agent for such purpose, to
be exchanged, in whole or in part, for definitive Securities of the same series
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such permanent global Security, a like aggregate principal
amount of other definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such permanent global Security
to be exchanged, which Securities shall be in the form of Registered Securities;
provided, however, that no such exchanges may occur during a period beginning at
the opening of business 15 days before any selection of Securities of that
series is to be redeemed and ending on the relevant Redemption Date. Promptly
following any such exchange in part, such permanent global Security shall be
returned by the Trustee to the Depositary or such other depositary referred to
above in accordance with the instructions of the Company referred to above. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same
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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 (if so required by the Company or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchange pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption and ending at
the close of business on, if Securities of the series are issuable only as
Registered Securities, the day of the mailing of the relevant notice of
redemption or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fee and expenses of the Trustee) connected therewith.
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Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. Unless otherwise provided with respect to the Securities of
any series, payment of interest may be made at the option of the Company, in the
case of Registered Securities, by check mailed or delivered to the address of
any Person entitled thereto as such address shall appear in the Security
Register.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as provided in this Clause. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Registered Securities of such series at his
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed,
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such Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture, upon registration of transfer of, in
exchange for or in lieu of, any other Security, shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. 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 premium, if any) and (subject to Sections 305 and
307) interest on such Registered Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee. All Registered Securities so delivered shall be promptly
canceled by the Trustee. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
In the case of any temporary global Security, which shall be
disposed of if the entire aggregate principal amount of the Securities
represented thereby has been exchanged, the certificate of disposition shall
state that all certificates required pursuant to Section 304 hereof,to be given
by the Depositary have been duly presented to the Trustee for such Securities by
the Depositary. Permanent global Securities shall not be disposed of until
exchanged in full for definitive Securities or until payment thereon is made in
full.
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SECTION 310. Computation of Interest.
Except as otherwise specified and/or contemplated by Section
301 for Securities of any series, interest on the Securities of each series
shall be computed on the basis of a year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect with respect to Securities of a series, and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to Securities of such
series, when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) with respect to all Outstanding Securities of
such series not theretofore delivered to the Trustee for
cancellation, the Company has deposited or caused to be
deposited with the Trustee as trust funds, under the terms of
an irrevocable trust agreement in form and substance
satisfactory to the Trustee, for the purpose money or U.S.
Government Obligations maturing as to principal and interest
in such amounts and at such times as will, together with the
income to accrue thereon, without consideration of any
reinvestment thereof, be sufficient to pay and discharge the
entire indebtedness on all Outstanding Securities of such
series not theretofore delivered to the Trustee for
cancellation for principal (and premium, if any) and interest
to the Stated Maturity or any Redemption Date contemplated by
the penultimate paragraph of this Section, as the case may be;
or
(C) the Company has properly fulfilled such other
means of satisfaction and discharge as is specified, as
contemplated by Section 301, to be applicable to the
Securities of such series;
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(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company with respect to the Outstanding
Securities of such series;
(3) the Company has complied with any other conditions
specified pursuant to Section 301 to be applicable to the discharge of
Securities of such series pursuant to this Section 401; and
(4) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to the Outstanding Securities
of such series have been complied with.
For the purposes of this Indenture, "U.S. Government
Obligations" means direct non-callable obligations of, or non-callable
obligations the payment of principal of and interest on which is guaranteed by,
the United States of America, or to the payment of which obligations or
guarantees the full faith and credit of the United States of America is pledged,
or beneficial interests in a trust the corpus of which consists exclusively of
money or such obligations or a combination thereof.
If any Outstanding Securities of such series are to be
redeemed prior to their Stated Maturity, whether pursuant to any optional
redemption provisions or in accordance with any mandatory sinking fund
requirement, the trust agreement shall provide therefor and the Company shall
make such arrangements as are satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
Notwithstanding the satisfaction and discharge of this
Indenture with respect to the Outstanding Securities of such series pursuant to
this Section 401, the obligations of the Company to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under Section
614 and, except for a discharge pursuant to subclause (A) of clause (1) of this
Section, the obligations of the Company under Sections 305, 306, 404, 1001 and
1002 and the obligations of the Trustee under Section 402 and the last paragraph
of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
SECTION 403. Discharge of Liability on Securities of Any Series.
If this Section is specified, as contemplated by Section 301,
to be applicable to Securities of any series, the Company shall be deemed to
have paid and discharged the entire indebtedness on all the Outstanding
Securities of such series, the obligation of the Company
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under this Indenture and the Securities of such series, to pay the principal of
(and premium, if any) and interest on Securities of such series, shall cease,
terminate and be completely discharged and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging such satisfaction and
discharge, when
(1) the Company has complied with the provisions of Section
401 of this Indenture (other than any additional conditions specified
pursuant to Sections 301 and 401(3)) with respect to all Outstanding
Securities of such series.
(2) the Company has delivered to the Trustee a Company
Request requesting such satisfaction and discharge.
(3) the Company has complied with any other conditions
specified pursuant to Section 301 to be applicable to the discharge of
Securities of such series pursuant to this Section 403, and
(4) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the discharge of the
indebtedness on the Outstanding Securities of such series have been
complied with.
Upon the satisfaction of the conditions set forth in this
Section with respect to all the Outstanding Securities of any series, the terms
and conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided that, the Company shall not be discharged
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law or pursuant to Section 305 or 306.
SECTION 404. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations deposited with respect to Securities of any series
in accordance with Section 401 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture with respect to the Securities of such series and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 401 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 401; provided, however, that if the Company has made any
payment of principal of (or premium, if any) or interest on any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless it is either inapplicable to a
particular series or it is specifically deleted or modified in or pursuant to
the supplemental indenture or Board Resolution establishing such series of
Securities or in the form of Security for such series:
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuation of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series, and continuation
of such default for a period of 60 days; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is specifically
dealt with elsewhere in this Section or which has expressly been
included in this Indenture solely for the benefit of one or more series
of Securities other than that series), and continuation of such default
or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of all Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuation of any such decree or order
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for relief or any such other decree or order remains unstayed and in
effect for a period of 90 consecutive days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it, of a petition or answer
or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(7) any other Event of Default provided with respect to
Securities of that series.
Notwithstanding the foregoing provisions of this Section 501,
if the principal of (and premium, if any) or any interest on any Security is
payable in a currency or currencies (including a composite currency) other than
Dollars and such currency (or currencies) is (or are) not available to the
Company for making payment thereof due to the imposition of exchange controls or
other circumstances beyond the control of the Company, the Company will be
entitled to satisfy its obligations to Holders of such Securities by making such
payment in Dollars in an amount equal to the Dollar equivalent of the amount
payable in such other currency, as determined by the Trustee by reference to the
noon buying rate in The City of New York for cable transfers for such currency
("Exchange Rate"), as such Exchange Rate is reported or otherwise made available
by the Federal Reserve Bank of New York on the date of such payment, or, if such
rate is not then available, on the basis of the most recently available Exchange
Rate. Notwithstanding the foregoing provisions of this Section 501, any payment
made under such circumstances in Dollars where the required payment is in a
currency other than Dollars will not constitute an Event of Default under this
Indenture.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to any Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of (i) the series affected by such default (in the case
of an Event of Default described in clause (1), (2), (3) or (7) of Section 501)
or (ii) all series of Securities (in the case of other Events of Default) may
declare the principal amount (or, if any such Securities are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all of the Securities of the series affected by
such default or all series, as the case may be, to be due and payable
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immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series (or of all series, as the case may be) has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the Outstanding Securities of that series (or
of all series, as the case may be), by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series (or of all series, as the case may be),
(B) the principal of (and premium, if any, on) any
Securities of that series (or of all series, as the case may
be) which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates
prescribed therefor in such Securities (in the case of
Original Issue Discount Securities, the Securities' Yield to
Maturity),
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities (in the case of
Original Issue Discount Securities, the Securities' Yield to
Maturity), and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default with respect to Securities of that
series (or of all series, as the case may be), other than the
non-payment of the principal of Securities of that series (or of all
series, as the case may be) which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of
interest on any Security of any series when such interest becomes due
and payable and such default continues for a period of 60 days, or
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(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities (or in the case of Original
Issue Discount Securities, the Securities' Yield to Maturity), and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal (or lesser amount
in the case of Original Issue Discount Securities) of the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (or lesser amount in the case of Original Issue Discount
Securities) (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
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(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceedings.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claim under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without possession of
any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
To the fullest extent allowed under applicable law, if for the
purpose of obtaining judgment against the Company in any court it is necessary
to convert the sum due in respect of the principal of (or premium, if any) or
interest on the Securities of any series (the "Required
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Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the New York Business
Day next preceding that on which final judgment is given. Neither the Company
nor the Trustee shall be liable for any shortfall nor shall it benefit from any
windfall in payments to Holders of Securities under this Section caused by a
change in exchange rates between the time the amount of a judgment against it is
calculated as above and the time the Trustee converts the Judgment Currency into
the Required Currency to make payments under this Section to Holders of
Securities, but payment of such judgment shall discharge all amounts owed by the
Company on the claim or claims underlying such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) an Event of Default with respect to Securities of such
series shall have occurred and be continuing and such Holder has
previously given written notice to the Trustee of such continuing Event
of Default;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of
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(and premium, if any) and (subject to Section 307) interest on such Security on
the Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding has been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. Control by Holders.
With respect to Securities of any series, the Holders of a
majority in principal amount of the Outstanding Securities of such series shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, relating to or arising under an Event of Default
described in clause (1), (2), (3) or (7) of Section 501, and with respect to all
Securities the Holders of a majority in principal amount of all Outstanding
Securities shall have the right to direct the time, method and place of
conducting any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, not relating to or arising under such an Event of
Default, provided that in each such case
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(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series relating to or arising under an Event of Default described in clause (3)
or (7) of Section 501 and its consequences, and the Holders of a majority in
principal amount of all Outstanding Securities may on behalf of the Holders of
all Securities waive any other past default hereunder and its consequences,
except in each case a default
(1) in the payment of the principal (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
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The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuation of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
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(3) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series
or of all series, determined as provided in Section 512,
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such
series; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
with respect to the Securities of any series, the Trustee shall transmit by mail
to all Holders of Securities of such series, as their names and addresses appear
in the Security Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 60 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or
by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with
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the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, premium, if any, or
interest, if any, on particular Securities.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign with respect to the Securities of
that series in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit by mail to all Holders of Securities of that series, as
their names and addresses appear in the Security Register, notice of such
failure.
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(c) For the purposes of this Section, the term "conflicting interest"
shall have the meaning specified in Section 310(b) of the Trust Indenture Act
and the Trustee shall comply with Section 310(b) of the Trust Indenture Act;
provided, that there shall be excluded from the operation of Section 310(b) of
the Trust Indenture Act with respect to the Securities of any series this
Indenture, and any other indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in Section
310(b)(1) of the Trust Indenture Act are met. For purposes of the preceding
sentence, the optional provision permitted by the second sentence of Section
310(b)(9) of the Trust Indenture Act shall be applicable.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall 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 exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the resigning Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder of Securities, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and such successor Trustee
or Trustees shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
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SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
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SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in Section 311(b)
of the Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent indicated
therein.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
which shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon original issue and upon exchange, registration of
transfer or partial redemption or pursuant to Section 306, 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 or equivalent amount expressed in a foreign
currency and subject to supervision or examination by Federal or State authority
or authority of such other country. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the requirements
of such 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
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succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and 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 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 mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternate certificate of authentication in the following
form:
"This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
_______________________________________
_______________________________________
As Trustee
By ____________________________________
As Authenticating Agent
By ____________________________________
Authorized Signatory"
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Notwithstanding any provision of this Section 614 to the
contrary, if at any time any Authenticating Agent appointed hereunder with
respect to any series of Securities shall not also be acting as the Security
Registrar hereunder with respect to any series of Securities, then, in addition
to all other duties of an Authenticating Agent hereunder, such Authenticating
Agent shall also be obligated: (i) to furnish to the Security Registrar promptly
all information necessary to enable the Security Registrar to maintain at all
times an accurate and current Security Register and (ii) prior to authenticating
any Security denominated in a foreign currency, to ascertain from the Company
the units of such foreign currency that are required to be determined by the
Company pursuant to Section 302.
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ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
With respect to each series of Securities, the Company will
furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after each Regular Record Date
relating to that series (or, if there is no Regular Record Date relating to that
series, on January 1 and July 1), a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of that series as
of such dates, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content, such list to be dated as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar, if so acting.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders of each series received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy any list furnished to it
as provided in Section 701 upon receipt of a new list so furnished.
(b) Holders of Securities may communicate pursuant to Section 312(b) of
the Trust Indenture Act with other Holders with respect to their rights under
this Indenture or under the Securities.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the first
May 15 following the first date of issuance of Securities under this Indenture,
the Trustee shall transmit by mail to Holders a brief report dated as of such
May 15 that complies with Section 313(a) of the Trust Indenture Act.
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(b) The Trustee shall comply with Section 313(b) of the Trust
Indenture Act.
(c) Reports pursuant to this Section shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the
names and addresses of such Holders appear in the Security Register, and
(2) except in the case of reports pursuant to Subsection (b)
of this Section, to each Holder of a Security whose name and address is
preserved at the time by the Trustee, as provided in Section 702(a).
(d) A copy of each report pursuant to Subsection (a) or (b) of this
Section 703 shall, at the time of its transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee, within 15 days after
the Company is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, and shall otherwise comply with Section 314(a)
of the Trust Indenture Act.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
(1) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership,
limited liability company or trust, shall be organized and existing
under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities
and the performance of every covenant of this Indenture on the part of
the Company to be performed or observed;
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(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by Section 1007, the
Company or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) all indebtedness secured
thereby; and
(4) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 802. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the
Company into any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of such lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) 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
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the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default with respect to
all or any series of the Securities (and, if such Event of Default is
applicable to less than all series of Securities, specifying the series
to which such Event of Default is applicable); or
(4) to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the Holders of Securities of any series in any
material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
adversely affected by such change in or elimination of such provision;
or
(6) to secure the Securities pursuant to Section 1007 or
otherwise; or
(7) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided such other
provisions as may be made shall not adversely affect the interests of
the Holders of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of a majority in principal
amount of the Outstanding Securities of all series affected by such supplemental
indenture (acting as one class), by Act of such Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the
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rate of interest thereon or any premium payable upon the redemption
thereof, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change
any Place of Payment where, or the coin or currency or currencies
(including composite currencies) in which, any Security or any premium
or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture; provided, however, that the Holders of 75% in principal
amount of the Outstanding Securities of any series may, on behalf of
the Holders of all Outstanding Securities of such series, consent to
the postponement of any interest payment for a period of 3 years from
the applicable Interest Payment Date, or
(3) modify any of the provisions of this Section, Section 513
or Section 1009, except to increase any such percentage or to provide
with respect to any particular series the right to condition the
effectiveness of any supplemental indenture as to that series on the
consent of the Holders of a specified percentage of the aggregate
principal amount of Outstanding Securities of such series (which
provision may be made pursuant to Section 301 without the consent of
any Holder) or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby, provided,
however, that this clause shall not be deemed to require the consent of
any Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section and Section 1009, or the
deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
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indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties, immunities or liabilities under this
Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail
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to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its office or agency to receive such
presentations, surrenders, notices and demands.
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 each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, the Company will, on or before each due date of the
principal of (and premium, if any) or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of
any payment of principal (and premium, if any) or interest on the
Securities of that series; and
(3) at any time during the continuation of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for three years after such principal (and premium, if any) or interest
has become due and payable shall, unless otherwise required by mandatory
provisions of applicable escheat, or abandoned or unclaimed property law, be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified herein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will, unless otherwise required by mandatory provisions of applicable escheat,
or abandoned or unclaimed property law, be repaid to the Company.
SECTION 1004. Existence.
Subject to Article Eight, 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 1005. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent that Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
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The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (2) all material lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Company or
any Subsidiary; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 1007. Reserved.
SECTION 1008. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof so long
as any Security is outstanding hereunder, an Officers' Certificate, stating that
a review of the activities of the Company during such year and of performance
under this Indenture has been made under the supervision of the signers thereof
and whether or not to the best of their knowledge the Company is in default in
the fulfillment of any of its obligations under this Indenture, and if the
Company shall be in default, specifying each such default known to them and the
nature and status thereof.
SECTION 1009. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 1004 to 1007, inclusive, or any
covenant added for the benefit of any series of Securities as contemplated by
Section 301 (unless otherwise specified pursuant to Section 301) if before or
after the time for such compliance the Holders of a majority in principal amount
of the Outstanding Securities of all series affected by such omission (acting as
one class) shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified and/or contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
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The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be
redeemed (other than pursuant to Section 1108), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of that series of
any integral multiple thereof) of the principal amount of Registered Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series or of the principal amount of global Securities of
such series.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 or more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed,
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(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
such date (or in the event of a redemption pursuant to Section 1108,
and if applicable, a statement that no interest is payable with respect
to such security),
(5) the place or places where such Securities, are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such
is the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or before any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with such notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security or, in the case of Original Issue Discount Securities,
the Securities' Yield to Maturity.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part
shall be surrendered at a Place of Payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the
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Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Registered Security or
Securities of the same series and Stated Maturity, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 1108. Redemption or Forced Sale Pursuant to the Casino Control Act or
other Applicable Regulation.
(1) Notwithstanding the other provisions of this Article
Eleven, if the CCC or any other gaming authority in another
jurisdiction finds that a Holder or beneficial owner of Securities must
be found licensed or qualified or suitable to hold or own the
Securities under the Casino Control Act or any other gaming regulation
in such other jurisdiction, and if such Holder or such beneficial owner
is not found qualified, licensed or suitable, within any time period
specified by the CCC or such other gaming authority or the Casino
Control Act or such other gaming regulation, the Company shall have the
right pursuant to this Section 1108 and the Securities, at its option,
(i) to require such Holder or beneficial owner to dispose of all or a
portion of such Holder's or beneficial owner's Securities within 120
days after receipt of notice by such Holder or beneficial owner of its
disqualification under the Casino Control Act or any other applicable
gaming regulation (or such different period as may be prescribed by the
CCC or such other gaming authority), or (ii) to call for redemption the
Securities of either such Holder or beneficial owner, on not less than
30 nor more than 60 days' notice (or such different period as may be
prescribed by the CCC or any such other gaming authority).
(2) If such Holder or beneficial owner, having been given the
opportunity by the Company to dispose of such Holder's or beneficial
owner's Securities, shall have failed to do so within the prescribed
time period, the Company shall have the right to redeem such Holder's
or beneficial owner's Securities on five days' notice.
(3) In any redemption of Securities pursuant to this Section
1108, the price for redemption shall be the lesser of (i) the market
value thereof on the date of such notice of redemption (as determined
in good faith by the Board of Directors of the Company) and (ii) the
price at which such Holder or beneficial owner acquired the Securities,
together with (if permitted by the Casino Control Act or any other
gaming regulation in another jurisdiction or by the orders of the CCC
or any such other gaming authority in such other jurisdiction) accrued
interest, if any, to the Redemption Date, unless a different price for
redemption or other payment, remuneration or related terms or
restrictions are required by the CCC or any such other gaming
authority, in which event such price, terms and restrictions shall be
the price for redemption and terms of redemption. Each holder and
beneficial owner by accepting a Security agrees to the provisions of
this Section 1108 and the Securities and agrees to inform the Company
and provide evidence, upon request made pursuant to this Section 1108
of the price at which such Holder or beneficial owner acquired such
Holder's or beneficial owner's Securities.
(4) Any redemption notice given by the Company under this
Section 1108 shall state (i) that the Securities are being called for
redemption as a result of the
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Holder's or beneficial owner's status under the Casino Control Act or
any other gaming regulation of another jurisdiction or with the CCC or
such other gaming authority, (ii) whether accrued interest is payable
to the Holder under the Casino Control Act or other applicable gaming
regulation and (iii) the information required by subsections (1), (2),
(3), (4) and (5) of Section 1104.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified and/or contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". Unless otherwise provided by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
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 have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities 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 payment shall be reduced
accordingly.
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivery of or by crediting
Securities of that series pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the
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Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of any or all 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 1302. 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 1301, to
be held at such times and at such place in New York, New York, 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 107, not
less than 20 nor more than 180 days prior to the date fixed for the
meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in aggregate principal
amount of the Outstanding Securities of any series, shall have
requested the Trustee for any such series to call a meeting of the
Holders of Securities of such series for any purpose specified in
Section 1301, 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 30
days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then 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 New York,
New York, for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in Subsection (a) of this Section.
SECTION 1303. 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
a proxy for a Holder or Holders of one or more Outstanding Securities of such
series by such Holder or Holders. The only Persons who
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shall be entitled to be present or to speak at any meeting of Holders 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 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in 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. Subject to Section 1305(d), notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1302(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly that Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
such series shall constitute a quorum.
Except as limited by the proviso to Section 902, 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
proviso to Section 902, any resolution with respect to any request, demand,
authorization, direction, notice, consent or waiver which this Indenture
expressly provides may be made, given or taken by the Holders of a specified
percentage that 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 and 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.
Except as limited by the proviso to Section 902, 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, whether or not present or represented at
the meeting.
SECTION 1305. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) The holdings of Securities shall be proved in the manner
specified in Section 105 and the appointment of any proxy shall be
proved in the manner specified in Section 105 or by having the
signature of the person executing the proxy witnessed or guaranteed by
any trust company, bank or banker. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without other proof.
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(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 1302(b), in which case the Company or the Holders of Securities
of the series calling the meeting, as the case may be, shall 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 in 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
and each 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 as a proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1302 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
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 1306. 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 amounts 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 such 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 such notice was given as provided in Section 1302 and, if
applicable, Section 1304. 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.
* * *
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This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
BALLY ENTERTAINMENT CORPORATION
[CORPORATE SEAL] By ______________________________
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION
[CORPORATE SEAL] By _______________________________
Name:
Title:
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STATE OF ___________ )
) SS
COUNTY OF __________ )
On the _____ day of _______________________________, before me
personally came _____________________________________________, to me known, who,
being by me duly sworn, did depose and say that he is ________________ of BALLY
ENTERTAINMENT CORPORATION, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
_________________________________________
Notary Public in _________ County for the
State of __________
My Commission Expires ___________________
[NOTARIAL SEAL]
STATE OF ___________ )
) SS
COUNTY OF __________ )
On the _____ day of _______________________________, before me
personally came _____________________________________________, to me known, who,
being by me duly sworn, did depose and say that he is _______________ of
____________________, one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that he signed
his name thereto by like authority.
__________________________________________
Notary Public in __________ County for the
State of ___________
My Commission Expires ____________________
[NOTARIAL SEAL]
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<PAGE> 1
EXHIBIT 4.2
<PAGE> 2
================================================================================
BALLY ENTERTAINMENT CORPORATION
and
FIRST BANK NATIONAL ASSOCIATION,
Trustee
------------
Indenture
Dated as of
------------
Subordinated Debt Securities
================================================================================
<PAGE> 3
BALLY ENTERTAINMENT CORPORATION
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939, as amended:
<TABLE>
<S> <C> <C>
SECTION 310 (a)(1).....................................................................................609
(a)(2).....................................................................................609
(a)(3)..........................................................................Not Applicable
(a)(4)..........................................................................Not Applicable
(b)...................................................................................608, 610
SECTION 311 (a)........................................................................................613
(b)........................................................................................613
SECTION 312 (a)................................................................................701, 702(a)
(b).....................................................................................702(b)
(c).....................................................................................702(c)
SECTION 313 (a).....................................................................................703(a)
(a)(4)...............................................................................101, 1004
(b).....................................................................................703(a)
(c).....................................................................................703(a)
(d).....................................................................................703(b)
SECTION 314 (a)........................................................................................704
(b).............................................................................Not Applicable
(c)(1).....................................................................................102
(c)(2).....................................................................................102
(c)(3)..........................................................................Not Applicable
(d).............................................................................Not Applicable
(e)........................................................................................102
SECTION 315 (a)........................................................................................601
(b)........................................................................................602
(c)........................................................................................601
(d)........................................................................................601
(e)........................................................................................514
SECTION 316 (a)........................................................................................101
(a)(1)(A).............................................................................502, 512
(a)(1)(B)..................................................................................513
(a)(2)..........................................................................Not Applicable
(b)........................................................................................508
(c).....................................................................................104(c)
</TABLE>
<PAGE> 4
<TABLE>
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SECTION 317 (a)(1).....................................................................................503
(a)(2).....................................................................................504
(b).......................................................................................1003
SECTION 318 (a)........................................................................................107
</TABLE>
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Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE> 5
TABLE OF CONTENTS
-----------------
<TABLE>
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RECITALS OF THE COMPANY.........................................................................................-1-
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION............................................-1-
SECTION 101. Definitions.......................................................................................-1-
Act ..............................................................................................-2-
Affiliate..............................................................................................-2-
Authenticating Agent...................................................................................-2-
Board of Directors.....................................................................................-2-
Board Resolution.......................................................................................-2-
Business Day...........................................................................................-2-
Commission.............................................................................................-2-
Common Depositary......................................................................................-2-
Company ..............................................................................................-3-
Company Request........................................................................................-3-
Company Order..........................................................................................-3-
Corporate Trust Office.................................................................................-3-
Defaulted Interest.....................................................................................-3-
Depositary.............................................................................................-3-
"Dollar" or "$"........................................................................................-3-
Event of Default.......................................................................................-3-
Exchange Act...........................................................................................-3-
Exchange Rate..........................................................................................-3-
Holder ..............................................................................................-3-
Indebtedness...........................................................................................-3-
Indenture..............................................................................................-4-
Interest ..............................................................................................-4-
Interest Payment Date..................................................................................-4-
Judgment Currency......................................................................................-4-
Maturity ..............................................................................................-4-
Officer's Certificate..................................................................................-4-
Opinion of Counsel.....................................................................................-4-
Original Issue Discount Security.......................................................................-4-
Outstanding............................................................................................-4-
Paying Agent...........................................................................................-5-
Person ..............................................................................................-5-
Place of Payment.......................................................................................-6-
Predecessor Security...................................................................................-6-
Redemption Date........................................................................................-6-
Redemption Price.......................................................................................-6-
Registered Security....................................................................................-6-
Regular Record Date....................................................................................-6-
</TABLE>
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<TABLE>
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Required Currency......................................................................................-6-
Responsible Officer....................................................................................-6-
Securities.............................................................................................-6-
Security Register......................................................................................-6-
Security Registrar.....................................................................................-6-
Senior Indebtedness....................................................................................-7-
Special Record Date....................................................................................-7-
Stated Maturity........................................................................................-7-
Subsidiary.............................................................................................-7-
Trustee ..............................................................................................-7-
Trust Indenture Act....................................................................................-7-
United States..........................................................................................-7-
U.S. Government Obligations............................................................................-7-
Vice President.........................................................................................-7-
Wholly Owned Subsidiary................................................................................-7-
Yield to Maturity......................................................................................-8-
SECTION 102. Incorporation by Reference of Trust Indenture Act.................................................-8-
SECTION 103. Compliance Certificates and Opinions..............................................................-8-
SECTION 104. Form of Documents Delivered to Trustee............................................................-9-
SECTION 105. Acts of Holders...................................................................................-9-
SECTION 106. Notices, Etc., to Trustee and Company............................................................-11-
SECTION 107. Notice to Holders; Waiver........................................................................-11-
SECTION 108. Conflict With Trust Indenture Act. .............................................................-12-
SECTION 109. Effect of Headings and Table of Contents.........................................................-12-
SECTION 110. Successors and Assigns. .........................................................................-12-
SECTION 111. Separability Clause..............................................................................-12-
SECTION 112. Benefits of Indenture............................................................................-12-
SECTION 113. Governing Laws. .................................................................................-13-
SECTION 114. Legal Holidays...................................................................................-13-
SECTION 115. Corporate Obligation.............................................................................-13-
</TABLE>
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<TABLE>
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ARTICLE TWO
SECURITY FORMS...............................................-13-
SECTION 201. Forms Generally..................................................................................-13-
SECTION 202. Form of Trustee's Certificate of Authentication..................................................-14-
SECTION 203. Securities in Global Form........................................................................-14-
ARTICLE THREE
THE SECURITIES...............................................-15-
SECTION 301. Amount Unlimited; Issuable in Series.............................................................-15-
SECTION 302. Denominations....................................................................................-18-
SECTION 303. Execution, Authentication, Delivery and Dating...................................................-18-
SECTION 304. Temporary Securities.............................................................................-19-
SECTION 305. Registration, Registration of Transfer and Exchange..............................................-21-
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.................................................-23-
SECTION 307. Payment of Interest; Interest Rights Preserved...................................................-23-
SECTION 308. Persons Deemed Owners............................................................................-25-
SECTION 309. Cancellation.....................................................................................-25-
SECTION 310. Computation of Interest..........................................................................-25-
ARTICLE FOUR
SATISFACTION AND DISCHARGE.........................................-26-
SECTION 401. Satisfaction and Discharge of Indenture..........................................................-26-
SECTION 402. Application of Trust Money.......................................................................-27-
SECTION 403. Discharge of Liability on Securities of Any Series...............................................-27-
SECTION 404. Reinstatement....................................................................................-28-
</TABLE>
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<TABLE>
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ARTICLE FIVE
REMEDIES..................................................-28-
SECTION 501. Events of Default................................................................................-28-
SECTION 502. Acceleration of Maturity; Rescission and Annulment...............................................-30-
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee..................................-31-
SECTION 504. Trustee May File Proofs of Claim.................................................................-32-
SECTION 505. Trustee May Enforce Claims Without Possession of Securities......................................-33-
SECTION 506. Application of Money Collected...................................................................-33-
SECTION 507. Limitation on Suits..............................................................................-34-
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest..............................................................................................-34-
SECTION 509. Restoration of Rights and Remedies...............................................................-35-
SECTION 510. Rights and Remedies Cumulative...................................................................-35-
SECTION 511. Delay or Omission Not Waiver.....................................................................-35-
SECTION 512. Control by Holders...............................................................................-35-
SECTION 513. Waiver of Past Defaults..........................................................................-36-
SECTION 514. Undertaking for Costs............................................................................-36-
SECTION 515. Waiver of Stay or Extension Laws.................................................................-36-
ARTICLE SIX
THE TRUSTEE................................................-37-
SECTION 601. Certain Duties and Responsibilities..............................................................-37-
SECTION 602. Notice of Defaults...............................................................................-38-
SECTION 603. Certain Rights of Trustee........................................................................-38-
SECTION 604. Not Responsible for Recitals or Issuance of Securities...........................................-39-
</TABLE>
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<TABLE>
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SECTION 605. May Hold Securities..............................................................................-39-
SECTION 606. Money Held in Trust..............................................................................-40-
SECTION 607. Compensation and Reimbursement...................................................................-40-
SECTION 608. Disqualification; Conflicting Interests..........................................................-40-
SECTION 609. Corporate Trustee Required; Eligibility..........................................................-41-
SECTION 610. Resignation and Removal; Appointment of Successor................................................-41-
SECTION 611. Acceptance of Appointment by Successor...........................................................-43-
SECTION 612. Merger, Conversion, Consolidation or Succession to Business......................................-44-
SECTION 613. Preferential Collection of Claims Against Company................................................-44-
SECTION 614. Appointment of Authenticating Agent..............................................................-44-
ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY.............................-47-
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders........................................-47-
SECTION 702. Preservation of Information; Communications to Holders...........................................-47-
SECTION 703. Reports by Trustee...............................................................................-48-
SECTION 704. Reports by Company...............................................................................-48-
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE............................-48-
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.............................................-48-
SECTION 802. Successor Person Substituted.....................................................................-49-
ARTICLE NINE
SUPPLEMENTAL INDENTURES..........................................-49-
SECTION 901. Supplemental Indentures Without Consent of Holders...............................................-49-
</TABLE>
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<TABLE>
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SECTION 902. Supplemental Indentures With Consent of Holders..................................................-50-
SECTION 903. Execution of Supplemental Indentures.............................................................-52-
SECTION 904. Effect of Supplemental Indentures................................................................-52-
SECTION 905. Conformity With Trust Indenture Act..............................................................-52-
SECTION 906. Reference in Securities to Supplemental Indentures...............................................-52-
ARTICLE TEN
COVENANTS.................................................-52-
SECTION 1001. Payment of Principal, Premium and Interest......................................................-52-
SECTION 1002. Maintenance of Office or Agency.................................................................-53-
SECTION 1003. Money for Securities Payments to be Held in Trust...............................................-53-
SECTION 1004. Existence.......................................................................................-54-
SECTION 1005. Maintenance of Properties.......................................................................-54-
SECTION 1006. Payment of Taxes and Other Claims...............................................................-55-
SECTION 1007. Statement by Officers as to Default.............................................................-55-
SECTION 1008. Waiver of Certain Covenants.....................................................................-55-
ARTICLE ELEVEN
REDEMPTION OF SECURITIES..........................................-56-
SECTION 1101. Applicability of Article........................................................................-56-
SECTION 1102. Election to Redeem; Notice to Trustee...........................................................-56-
SECTION 1103. Selection by Trustee of Securities to be Redeemed...............................................-56-
SECTION 1104. Notice of Redemption............................................................................-57-
SECTION 1105. Deposit of Redemption Price.....................................................................-57-
SECTION 1106. Securities Payable on Redemption Date...........................................................-57-
</TABLE>
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<TABLE>
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SECTION 1107. Securities Redeemed in Part.....................................................................-58-
SECTION 1108. Redemption or Forced Sale Pursuant to the Casino Control Act or
Other Applicable Regulation.....................................................................-58-
ARTICLE TWELVE
SINKING FUNDS...............................................-59-
SECTION 1201. Applicability of Article........................................................................-59-
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities...........................................-59-
SECTION 1203. Redemption of Securities for Sinking Fund.......................................................-60-
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES........................................-60-
SECTION 1301. Securities Subordinate to Senior Indebtedness...................................................-60-
SECTION 1302. Circumstances Requiring Prior Payment of Senior Indebtedness....................................-61-
SECTION 1303. Subrogation to Rights of Holders of Senior Indebtedness.........................................-62-
SECTION 1304. Provisions Solely to Define Relative Rights.....................................................-62-
SECTION 1305. Trustee to Effectuate Subordination.............................................................-63-
SECTION 1306. No Waiver of Subordination Provisions...........................................................-63-
SECTION 1307. Notice to Trustee...............................................................................-63-
SECTION 1308. Reliance on Certificate of Liquidating Agent....................................................-64-
SECTION 1309. Trustee Not Fiduciary for Holders of Senior Indebtedness........................................-64-
SECTION 1310. Rights of Trustee as Holder of Senior Indebtedness..............................................-64-
SECTION 1311. Article Applicable to Paying Agent..............................................................-64-
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES.....................................-65-
SECTION 1401. Purposes for Which Meetings May Be Called.......................................................-65-
</TABLE>
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<TABLE>
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SECTION 1402. Call, Notice and Place of Meetings..............................................................-65-
SECTION 1403. Persons Entitled to Vote at Meetings. ..........................................................-65-
SECTION 1404. Quorum; Action. ................................................................................-66-
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings.............................-66-
SECTION 1406. Counting Votes and Recording Action of Meetings.................................................-67-
</TABLE>
-viii-
<PAGE> 13
INDENTURE, dated as of between BALLY ENTERTAINMENT
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
8700 West Bryn Mawr Avenue, Chicago, Illinois 60631, and First Bank National
Association, a national banking association duly organized and existing under
the laws of the United States of America, as Trustee (herein called the
"Trustee"), the office of the Trustee at which at the date hereof its
corporate trust business is principally administered being St. Paul,
Minnesota.
RECITALS OF THE COMPANY
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 or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation; and
-1-
<PAGE> 14
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined
in Section 102.
"Act", when used with respect to any Holder, has the meaning
specified in Section 105.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person, which may include the
Company, authorized by the Trustee to act on behalf of the Trustee pursuant to
Section 614 to authenticate Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in that Place of Payment are authorized or
obligated by law to close.
"CCC" means the Casino Control Commission of the State of New
Jersey, or any successor New Jersey agency or New Jersey agencies with authority
over matters currently subject to the authority of the CCC.
"Casino Control Act" means the New Jersey Casino Control Act,
as now or hereinafter amended, and the regulations promulgated thereunder.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
-2-
<PAGE> 15
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by its Chairman of
the Board, its Vice Chairman of the Board, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Controller, an Assistant
Controller, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the
Trustee in _____________ at which at any particular time its corporate trust
business shall be principally administered, which office at the date hereof is
that indicated in the introductory paragraph of this Indenture.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any
series issuable or issued in the form of a global Security, the Person
designated as Depositary by the Company pursuant to Section 301 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such person, "Depositary" as used with respect to the Securities of any
series shall mean the Depositary with respect to the Securities of that series.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Rate" has the meaning specified in Section 501.
"Holder", when used with respect to any Security, means in the
case of a Registered Security the Person in whose name the Security is
registered in the Security Register.
"Indebtedness", as applied to any Person, means all
indebtedness, whether or not represented by bonds, debentures, notes or other
securities, created or assumed by such Person for the repayment of money
borrowed, and obligations, computed in accordance with generally accepted
accounting principles, as lessee under leases that, in accordance with generally
accepted accounting principles, should be recorded as capital leases. All
Indebtedness secured by a lien upon property owned by the Company or any
Subsidiary and upon which Indebtedness such Person customarily pays interest,
although such Person has not assumed or become liable for the payment of such
Indebtedness, for all purposes hereof, shall be deemed to be Indebtedness
-3-
<PAGE> 16
of such Person. All Indebtedness of others guaranteed as to payment of principal
by such Person or in effect guaranteed by such Person through a contingent
agreement to purchase such Indebtedness, for all purposes hereof, shall be
deemed to be Indebtedness of such Person. Indebtedness (i) shall not include
accounts payable to trade creditors or other indebtedness for goods or services
created or assumed in the ordinary course of business and (ii) shall include
only the principal component of any obligation described in this definition.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Judgment Currency" has the meaning specified in Section 506.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, the Controller, the Secretary or an Assistant
Treasurer, Assistant Controller or Assistant Secretary, of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for or an employee of the Company.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the
-4-
<PAGE> 17
Company shall act as its own Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(iv) Securities with respect to which the Company has effected
defeasance as provided in Article 4, except to the extent provided in
Section 401.
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether a
quorum is present at a meeting of Holders of Securities, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the principal amount thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (b) the principal amount of a Security
denominated in a foreign currency shall be the Dollar equivalent, determined by
the Company on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent, determined on the date of original issuance of such Security, of the
amount determined as provided in (a) above), of such Security, (c) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, and (d) Securities owned by Holders shall be determined as of
the Record Date established pursuant to Section 105, or if not so established,
as of effectiveness of such request, demand, authorization, direction, consent,
notice or waiver, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver or upon any such determination as to the presence of a
quorum, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person, which may include the
Company, authorized by the Company to pay the principal of (and premium, if any)
or interest on any one or more series of Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
-5-
<PAGE> 18
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of (and premium, if
any) and interest on the Securities of that series are payable as specified in
accordance with Section 301 subject to the provisions of Section 1002.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security in the form
established pursuant to Section 201 which is registered in the Security
Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of any series means the date specified
for that purpose as contemplated by Section 301, or, if not so specified, the
last day of the calendar month preceding such Interest Payment Date if such
Interest Payment Date is the fifteenth day of the calendar month or the
fifteenth day of the calendar month preceding such Interest Payment Date if such
Interest Payment Date is the first day of a calendar month, whether or not such
day shall be a Business Day.
"Required Currency" has the meaning specified in Section 506.
"Responsible Officer", when used with respect to the Trustee,
means 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
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
-6-
<PAGE> 19
"Senior Indebtedness" means Indebtedness of the Company,
whether currently outstanding or hereafter issued, which is not subordinated by
its terms in right of payment to any other unsecured Indebtedness of the Company
or ranks PARI PASSU with subordinated Indebtedness of any series of the Company;
PROVIDED that "Senior Indebtedness" shall not include (i) Indebtedness of the
Company to any Subsidiary for money borrowed or advanced from such Subsidiary or
(ii) amount owed (except to banks and other financial institutions) for goods,
materials or services purchased in the ordinary course of business.
"Special Record Date" for the payment of any Defaulted
Interest on the Registered Securities of any series means a date fixed by the
Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed, except as
provided in Section 905.
"United States" means the United States of America (including
the States and the District of Columbia) and its "possessions", which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"U.S. Government Obligations" has the meaning specified in
Section 401.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Wholly Owned Subsidiary" means a corporation all the
outstanding voting stock (other than any directors' qualifying shares) of which
is owned, directly or indirectly, by the Company or by one or more other Wholly
Owned Subsidiaries, or by the Company and one or
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more other Wholly Owned Subsidiaries. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
"Yield to Maturity", when used with respect to any Original
Issue Discount Security, means the yield to maturity, if any, set forth on the
face thereof.
SECTION 102. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part of
this Indenture. The following Trust Indenture Act terms used in this Indenture
have the following meanings:
"Bankruptcy Act" means the Bankruptcy Act or Title 11 of the
United States Code.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or
any other obligor on the Securities.
All the other Trust Indenture Act terms used in this Indenture
that are defined by the Trust Indenture Act, defined by Trust Indenture Act
reference to another statute or defined by Commission rule under the Trust
Indenture Act and not otherwise defined herein have the meanings assigned to
them therein.
SECTION 103. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Indenture, upon
any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee
an Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
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(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 104. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 105. 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, by an agent duly
appointed in writing or as evidenced by electronic confirmation consistent with
the then existing practices of the Depositary or similar institutions and
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participants therein. 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 the holding of any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and 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 1306.
The Company may set a record date for purposes of determining
the identity of Holders of Registered Securities entitled to vote or consent to
any action by vote or consent authorized or permitted under this Indenture,
which record date shall be the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation. If a record date is fixed, those persons who
were Holders of Registered Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled with respect to
such Securities to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be Holders
after such record date.
(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 acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or other authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial number of Registered
Securities held by any Person, and the date of holding the same, shall proved by
the Security Register.
(d) In determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver under this Indenture, the
principal amount of an Original Issue Discount Security that may be counted in
making such determination and that shall be deemed to be Outstanding for such
purposes shall be equal to the amount of the principal thereof that would be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502 at the time the taking of such action by the Holders of such
requisite principal amount is evidenced to the Trustee for such Securities.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the
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Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security. Any consent or waiver of the Holder of any
Security shall be irrevocable for a period of six months after the date of
execution thereof, but otherwise any such Holder or subsequent Holder may revoke
the request, demand, authorization, direction, notice, consent or other Act as
to his Security or portion of his Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the Act
becomes effective.
(f) Until an amendment or waiver becomes effective, a consent
to it by a Holder of a Security is a continuing consent by 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. However, any such Holder or subsequent Holder may revoke
the notice of revocation before the date the amendment or waiver becomes
effective.
(g) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular Security
may do so with regard to all or any part of the principal amount of such
Security or by one or more duly appointed agents, each of which may do so
pursuant to such appointment with regard to all or any discrete part of such
principal amount.
Any amendment or waiver once effective shall bind every Holder
of each series affected by such amendment or waiver unless it is of the type
described in Section 902. In that case, the amendment or waiver shall bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security.
SECTION 106. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall
be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: __________________, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company, Attention: President, or to any other address furnished in
writing to the Trustee by the Company.
SECTION 107. NOTICE TO HOLDERS; WAIVER.
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Where this Indenture provides for notice to Holders of
Securities of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) to Holders of Registered Securities if in
writing and mailed, first-class postage prepaid, to each Holder affected by such
event, at the address of such Holder as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice.
In case by reason of the suspension of regular mail service,
or by reason of any other cause it shall be impractical 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 in which 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.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waiver of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 108. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with
any provision of the Trust Indenture Act or another provision hereof which is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision of the Trust Indenture Act shall control.
SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 110. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 111. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 112. BENEFITS OF INDENTURE.
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Nothing in this Indenture or in the Securities express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders and holders of any Senior Indebtedness, any
benefit or any legal or equitable rights, remedy or claim under this Indenture.
SECTION 113. GOVERNING LAWS.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 114. LEGAL HOLIDAYS.
In the case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provisions of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, PROVIDED that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
SECTION 115. CORPORATE OBLIGATION.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, shareholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Securities or the obligations of the Company or the Trustee under this Indenture
or any certificate or other writing delivered in connection herewith.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Registered Securities, if any, of each series shall be in
substantially such form or forms (including temporary or permanent global form)
as shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If temporary Securities of
any series are issued in global form as permitted by Section 304, the form
thereof shall be
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established as provided in the preceding sentence. A copy of the Board
Resolution establishing the form or forms of Securities of any series (or any
such temporary global Security) 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 Company Order contemplated by Section 303 for the
authentication and delivery of such Securities (or any such temporary global
Security).
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the following form:
"This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
-------------------------------------
as Trustee
By___________________________________
Authorized Signatory."
SECTION 203. SECURITIES IN GLOBAL FORM.
(a) A supplemental indenture to the Indenture or a Board
Resolution (and, to the extent not set forth in the Board Resolution, an
Officer's Certificate detailing the adoption of terms pursuant to the Board
Resolution) shall establish whether the Securities of a series shall be issued
in whole or in part in the form of one or more global securities and the
Depositary for such global security or securities.
(b) Notwithstanding any provisions to the contrary contained
in Section 305 of the Indenture and in addition thereto, any global security
shall be exchangeable pursuant to Section 305 of the Indenture for securities
registered in the names of Holders other than the Depositary for such Security
or its nominee only if (i) such Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such global security or if at
any time such Depositary ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Company fails to appoint a successor
Depositary within 90 days of such event, (ii) the Company executes and delivers
to the Trustee an Officer's Certificate to the effect that such global security
shall be so exchangeable or (iii) an event shall have happened and be continuing
which is or after notice or lapse of time or both, would be, an Event of Default
with respect to the Securities represented by such global security. Any global
security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names
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as the Depositary shall direct in writing in an aggregate principal amount equal
to the principal amount of the global security with like tenor and terms.
Except as provided in this Section 203, a global security may
not be transferred except as a whole by the Depositary with respect to such
global security to a nominee of such Depositary, by a nominee of such Depositary
to such Depositary or another nominee of such Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such a successor
Depositary.
(c) Any global security issued hereunder shall bear a legend
in substantially the following form:
"This Security is a global security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."
(d) The Depository, as a Holder, may appoint agents and
otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under the Indenture.
(e) Notwithstanding the other provisions of this Indenture,
unless otherwise specified as contemplated by Section 301, payment of the
principal of and interest on any global security shall be made to the person
specified therein.
(f) Except as provided in Subsection (e), the Company, the
Trustee and any Agent shall treat a person as the Holder of such principal
amount of outstanding Securities of such Series represented by a global security
as shall be specified in a written statement of the Depository with respect to
such global security, for purposes of obtaining any consents, declarations or
directions required to be given by the Holders pursuant to this Indenture.
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
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The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution, and set forth in an
Officer's Certificate, or established in 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 the Securities of the series from all other
Securities);
(2) any limit upon the aggregate principal amount of the
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 304, 305, 306, 906 or
1107);
(3) whether Securities of the series are to be issuable as
Registered Securities, whether any Securities of the series are to be
issuable initially in temporary global form and whether any Securities
of the series are to be issuable in permanent global form and, if so,
whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and
of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than
in the manner provided in Section 305, and the Depositary for any
global Security or Securities;
(4) the manner in which, or the extent to which, any interest
payable on a temporary global Security on any Interest Payment Date
will be paid if other than in the manner provided in Section 304;
(5) the date or dates on which the principal (and premium, if
any) of the Securities of the series is payable or the method of
determination thereof, including, without limitation, the maturity date
or dates;
(6) the rate or rates (which may be fixed or variable), or the
method of determination thereof, at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest shall
be payable and, if other than as set forth in Section 101, the Regular
Record Date for the interest payable on any Registered Securities on
any Interest Payment Date;
(7) the place or places where, subject to the provisions of
Section 1002, the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company, if
the Company is to have that option;
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(9) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which, Securities of the series shall be
redeemed or purchased in whole or in part pursuant to such obligation;
(10) the denomination in which any Registered Securities
of that series shall be issuable, if other than denominations of
$1,000 and any integral multiple thereof;
(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 502;
(12) any additional means of satisfaction and discharge of
this Indenture with respect to Securities of the series pursuant to
Section 401, any additional conditions to discharge pursuant to Section
401 or 403 and the application, if any, of Section 403;
(13) any deletions or modifications of or additions to the
Events of Default set forth in Section 501 or covenants of the Company
set forth in Article Ten pertaining to the Securities of the series;
(14) the terms for conversion or exchange, if any;
(15) if other than Dollars, the currency, currencies or
currency unit or units in which such Securities will be denominated and
in which the principal of, and premium and interest, if any, thereon
will be payable;
(16) whether, and the terms and conditions on which, the
Company or a Holder may elect that, or the other circumstances under
which, payment of principal of, or premium or interest, if any, is to
be made in a currency or currencies or currency unit or units other
than that in which such Securities are denominated; and
(17) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any one 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 the Board Resolution
referred to above and (subject to Section 303) set forth, or determined in the
manner provided, in the Officer's Certificate referred to above or in any such
indenture supplemental hereto.
At the option of the Company, interest on the Securities of
any series that bears interest may be paid by mailing a check to the address of
any Holder as such address shall appear in the Securities Register.
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If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action together with such Board Resolution 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 Officer's Certificate setting forth the terms of
the series.
The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Thirteen.
SECTION 302. DENOMINATIONS.
The Securities of each series shall be issuable in such
denominations as shall be specified and/or contemplated by Section 301. In the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiple thereof. Unless otherwise
provided as contemplated by Section 301 with respect to any series of
Securities, any Securities of a series denominated in a currency other than
Dollars shall be issuable in denominations that are the equivalent, as
determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for such currency, as such rate is reported or
otherwise made available by the Federal Reserve Bank of New York, on the
applicable issue date for such Securities, of $1,000 and any integral multiple
thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President, its
Treasurer or one of its Vice Presidents, under its corporate seal reproduced
thereon or affixed thereto attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture
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in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in accordance with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in accordance with the provisions of this
Indenture; and
(c) 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 legal,
valid and binding obligations of the Company, enforceable in accordance
with their terms, except as such enforcement is subject to the effect
of (i) bankruptcy, insolvency, reorganization or other law relating to
or affecting creditors' rights and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security, a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309
together with a written statement (which need not comply with Section 103 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form,and with such appropriate insertions, omissions,
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substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations.
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.
Any temporary global Security and any permanent global
security shall, unless otherwise provided therein, be delivered to the
Depositary for credit to the respective accounts of the beneficial owners of
such Securities (or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such temporary
global Security of a series (the "Exchange Date"), the Company shall deliver to
the Trustee definitive Securities of that series in aggregate principal amount
equal to the principal amount of such temporary global Security, executed by the
Company. On or after the Exchange Date such temporary global Security shall be
surrendered by the Depositary to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities of that series without charge and the Trustee shall authenticate and
deliver, in exchange for each portion of such temporary global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary
global Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in registered form, or
permanent global registered form, or any combination thereof, as specified
and/or contemplated by Section 301, and if any combination thereof is so
specified, as requested by the beneficial owner thereof.
Unless otherwise specified in the temporary global Security,
the interest of a beneficial owner of Securities of a series in a temporary
global Security shall be exchanged on the Exchange Date for definitive
Securities (and where the form of the definitive Securities is not specified by
the Holder for an interest in a permanent global Security) of the same series
and of like tenor and after the Exchange Date, the interest of a beneficial
owner of Securities of a series in a temporary global Security shall be
exchanged for definitive Securities (and where the form of the definitive
Securities is not specified by the Holder for an interest in a permanent global
Security) of the same series and of like tenor. Unless otherwise specified in
such temporary global Security, any exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear
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the cost of insurance, postage, transportation and the like in the event that
such Person does not take delivery of such definitive Securities in person at
the offices of the Depositary.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified and/or contemplated by Section 301, interest payable on a temporary
global Security on an Interest Payment Date for Securities of such series shall
be payable to the Depositary on such Interest Payment Date, for credit without
further interest on or after such Interest Payment Date to the respective
accounts of the Persons who are the beneficial owners of such temporary global
Security on such Interest Payment Date. Any interest so received by the
Depositary and not paid as herein provided shall be returned to the Trustee
immediately prior to the expiration of two years after such Interest Payment
Date in order to be repaid to the Company in accordance with Section 1003.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept for each series of
Securities at one of the offices or agencies maintained pursuant to Section 1002
a register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment herein referred to collectively as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities of such series. The Trustee
is hereby initially appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series and of like tenor, of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Registered Securities of any
series may be exchanged for other Registered Securities of the same series and
of like tenor, of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified
and/or contemplated by Sections 203 or 301, any permanent global Security shall
be exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Security are entitled to exchange such interest
for Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified and/or contemplated by Sections
203 or 301, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee
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definitive Securities of that series in an aggregate principal amount equal to
the principal amount of such permanent global Security, executed by the Company.
On or after the earliest date on which such interests may be so exchanged, such
permanent global Security shall be surrendered from time to time in accordance
with instructions given to the Trustee and the Depositary (which instructions
shall be in writing but need not comply with Section 103 or be accompanied an
Opinion of Counsel) by the Depositary or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or in part, for
definitive Securities of the same series without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, a like aggregate principal amount of other definitive Securities of
the same series of authorized denominations and of like tenor as the portion of
such permanent global Security to be exchanged, which Securities shall be in the
form of Registered Securities; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities of that series is to be redeemed and ending on the
relevant Redemption Date. Promptly following any such exchange in part, such
permanent global Security shall be returned by the Trustee to the Depositary or
such other depositary referred to above in accordance with the instructions of
the Company referred to above. If a Registered Security is issued in exchange
for any portion of a permanent global Security after the close of business at
the office or agency where such exchange occurs on (i) any Regular Record Date
and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, interest or Defaulted Interest, as the case may be, will not
be payable on such Interest Payment Date or proposed date for payment, as the
case may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchange pursuant to Section 304, 906 or 1107 not involving any transfer.
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The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption and ending at
the close of business on, if Securities of the series are issuable only as
Registered Securities, the day of the mailing of the relevant notice of
redemption or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fee and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
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Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. Unless otherwise provided with respect to the Securities of
any series, payment of interest may be made at the option of the Company in the
case of Registered Securities, by check mailed or delivered to the address of
any Person entitled thereto as such address shall appear in the Security
Register.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as provided in this Clause. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Registered Securities of such series at his
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
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Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture, upon registration of transfer of, in
exchange for or in lieu of, any other Security, shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. 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 premium, if any) and (subject to Sections 305 and
307) interest on such Registered Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee. All Registered Securities so delivered shall be promptly
canceled by the Trustee. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
In the case of any temporary global Security, which shall be
disposed of if the entire aggregate principal amount of the Securities
represented thereby has been exchanged, the certificate of disposition shall
state that all certificates required pursuant to Section 304 hereof, to be given
by the Depositary have been duly presented to the Trustee for such Securities by
the Depositary . Permanent global Securities shall not be disposed of until
exchanged in full for definitive Securities or until payment thereon is made in
full.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified and/or contemplated by Section
301 for Securities of any series, interest on the Securities of each series
shall be computed on the basis of a year of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of
further effect with respect to Securities of a series, and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to Securities of such
series, when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) with respect to all Outstanding Securities of
such series not theretofore delivered to the Trustee for
cancellation, the Company has deposited or caused to be
deposited with the Trustee as trust funds, under the terms of
an irrevocable trust agreement in form and substance
satisfactory to the Trustee, for the purpose money or U.S.
Government Obligations maturing as to principal and interest
in such amounts and at such times as will, together with the
income to accrue thereon, without consideration of any
reinvestment thereof, be sufficient to pay and discharge the
entire indebtedness on all Outstanding Securities of such
series not theretofore delivered to the Trustee for
cancellation for principal (and premium, if any) and interest
to the Stated Maturity or any Redemption Date contemplated by
the penultimate paragraph of this Section, as the case may be;
or
(C) the Company has properly fulfilled such other
means of satisfaction and discharge as is specified, as
contemplated by Section 301, to be applicable to the
Securities of such series;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company with respect to the Outstanding
Securities of such series;
(3) the Company has complied with any other conditions
specified pursuant to Section 301 to be applicable to the discharge of
Securities of such series pursuant to this Section 401; and
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(4) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to the Outstanding Securities
of such series have been complied with.
For the purposes of this Indenture, "U.S. Government
Obligations" means direct non-callable obligations of, or non-callable
obligations the payment of principal of and interest on which is guaranteed by,
the United States of America, or to the payment of which obligations or
guarantees the full faith and credit of the United States of America is pledged,
or beneficial interests in a trust the corpus of which consists exclusively of
money or such obligations or a combination thereof.
If any Outstanding Securities of such series are to be
redeemed prior to their Stated Maturity, whether pursuant to any optional
redemption provisions or in accordance with any mandatory sinking fund
requirement, the trust agreement shall provide therefor and the Company shall
make such arrangements as are satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
Notwithstanding the satisfaction and discharge of this
Indenture with respect to the Outstanding Securities of such series pursuant to
this Section 401, the obligations of the Company to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under Section
614 and, except for a discharge pursuant to subclause (A) of clause (1) of this
Section, the obligations of the Company under Sections 305, 306, 404, 1001 and
1002 and the obligations of the Trustee under Section 402 and the last paragraph
of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
SECTION 403. Discharge of Liability on Securities of Any Series.
If this Section is specified, as contemplated by Section 301,
to be applicable to Securities of any series, the Company shall be deemed to
have paid and discharged the entire indebtedness on all the Outstanding
Securities of such series, the obligation of the Company under this Indenture
and the Securities of such series, to pay the principal of (and premium, if any)
and interest on Securities of such series, shall cease, terminate and be
completely discharged and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging such satisfaction and discharge, when
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(1) the Company has complied with the provisions of Section
401 of this Indenture (other than any additional conditions specified
pursuant to Sections 301 and 401(3)) with respect to all Outstanding
Securities of such series.
(2) the Company has delivered to the Trustee a Company
Request requesting such satisfaction and discharge.
(3) the Company has complied with any other conditions
specified pursuant to Section 301 to be applicable to the discharge of
Securities of such series pursuant to this Section 403, and
(4) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the discharge of the
indebtedness on the Outstanding Securities of such series have been
complied with.
Upon the satisfaction of the conditions set forth in this
Section with respect to all the Outstanding Securities of any series, the terms
and conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided that, the Company shall not be discharged
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law or pursuant to Section 305 or 306.
SECTION 404. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations deposited with respect to Securities of any series
in accordance with Section 401 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture with respect to the Securities of such series and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 401 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 401; provided, however, that if the Company has made any
payment of principal of (or premium, if any) or interest on any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
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"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless it is either inapplicable to a
particular series or it is specifically deleted or modified in or pursuant to
the supplemental indenture or Board Resolution establishing such series of
Securities or in the form of Security for such series:
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuation of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series, and continuation
of such default for a period of 60 days; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is specifically
dealt with elsewhere in this Section or which has expressly been
included in this Indenture solely for the benefit of one or more series
of Securities other than that series), and continuation of such default
or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of all Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuation of any such decree or order for relief or any such other
decree or order remains unstayed and in effect for a period of 90
consecutive days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company
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in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it, of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company in furtherance of
any such action; or
(7) any other Event of Default provided with respect to
Securities of that series.
Notwithstanding the foregoing provisions of this Section 501,
if the principal of (and premium, if any) or any interest on any Security is
payable in a currency or currencies (including a composite currency) other than
Dollars and such currency (or currencies) is (or are) not available to the
Company for making payment thereof due to the imposition of exchange controls or
other circumstances beyond the control of the Company, the Company will be
entitled to satisfy its obligations to Holders of such Securities by making such
payment in Dollars in an amount equal to the Dollar equivalent of the amount
payable in such other currency, as determined by the Trustee by reference to the
noon buying rate in The City of New York for cable transfers for such currency
("Exchange Rate"), as such Exchange Rate is reported or otherwise made available
by the Federal Reserve Bank of New York on the date of such payment, or, if such
rate is not then available, on the basis of the most recently available Exchange
Rate. Notwithstanding the foregoing provisions of this Section 501, any payment
made under such circumstances in Dollars where the required payment is in a
currency other than Dollars will not constitute an Event of Default under this
Indenture.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to any Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of (i) the series affected by such default (in the case
of an Event of Default described in clause (1), (2), (3) or (7) of Section 501)
or (ii) all series of Securities (in the case of other Events of Default) may
declare the principal amount (or, if any such Securities are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all of the Securities of the series affected by
such default or all series, as the case may be, to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series (or of all series, as the case may be) has
been made and before a judgment or decree
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for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series (or of all series, as the case may be), by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series (or of all series, as the case may be),
(B) the principal of (and premium, if any, on) any
Securities of that series (or of all series, as the case may
be) which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates
prescribed therefor in such Securities (in the case of
Original Issue Discount Securities, the Securities' Yield to
Maturity),
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities (in the case of
Original Issue Discount Securities, the Securities' Yield to
Maturity), and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default with respect to Securities of that
series (or of all series, as the case may be), other than the
non-payment of the principal of Securities of that series (or of all
series, as the case may be) which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of
interest on any Security of any series when such interest becomes due
and payable and such default continues for a period of 60 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
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the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities (or in the case of Original
Issue Discount Securities, the Securities' Yield to Maturity), and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal (or lesser amount
in the case of Original Issue Discount Securities) of the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (or lesser amount in the case of Original Issue Discount
Securities) (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceedings.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claim under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without possession of
any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
To the fullest extent allowed under applicable law, if for the
purpose of obtaining judgment against the Company in any court it is necessary
to convert the sum due in respect of the principal of (or premium, if any) or
interest on the Securities of any series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking
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procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Business Day next preceding
that on which final judgment is given. Neither the Company nor the Trustee shall
be liable for any shortfall nor shall it benefit from any windfall in payments
to Holders of Securities under this Section caused by a change in exchange rates
between the time the amount of a judgment against it is calculated as above and
the time the Trustee converts the Judgment Currency into the Required Currency
to make payments under this Section to Holders of Securities, but payment of
such judgment shall discharge all amounts owed by the Company on the claim or
claims underlying such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) an Event of Default with respect to Securities of such
series shall have occurred and be continuing and such Holder has
previously given written notice to the Trustee of such continuing Event
of Default;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security on the Stated
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Maturity or Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding has been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. Control by Holders.
With respect to Securities of any series, the Holders of a
majority in principal amount of the Outstanding Securities of such series shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, relating to or arising under an Event of Default
described in clause (1), (2), (3) or (7) of Section 501, and with respect to all
Securities the Holders of a majority in principal amount of all Outstanding
Securities shall have the right to direct the time, method and place of
conducting any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, not relating to or arising under such an Event of
Default, provided that in each such case
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(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series relating to or arising under an Event of Default described in clause (3)
or (7) of Section 501 and its consequences, and the Holders of a majority in
principal amount of all Outstanding Securities may on behalf of the Holders of
all Securities waive any other past default hereunder and its consequences,
except in each case a default
(1) in the payment of the principal (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
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The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuation of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
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(3) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series
or of all series, determined as provided in Section 512,
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such
series; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
with respect to the Securities of any series, the Trustee shall transmit by mail
to all Holders of Securities of such series, as their names and addresses appear
in the Security Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 60 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or
by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the
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owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, premium, if any, or
interest, if any, on particular Securities.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign with respect to the Securities of
that series in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days
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after the expiration of such 90-day period, transmit by mail to all Holders of
Securities of that series, as their names and addresses appear in the Security
Register, notice of such failure.
(c) For the purposes of this Section, the term "conflicting interest"
shall have the meaning specified in Section 310(b) of the Trust Indenture Act
and the Trustee shall comply with Section 310(b) of the Trust Indenture Act;
provided, that there shall be excluded from the operation of Section 310(b) of
the Trust Indenture Act with respect to the Securities of any series this
Indenture, and any other indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in Section
310(b)(1) of the Trust Indenture Act are met. For purposes of the preceding
sentence, the optional provision permitted by the second sentence of Section
310(b)(9) of the Trust Indenture Act shall be applicable.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall 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 exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the resigning Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
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(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder of Securities, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and such successor Trustee
or Trustees shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses
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appear in the Security Register. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in Section 311(b)
of the Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent indicated
therein.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
which shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon original issue and upon exchange, registration of
transfer or partial redemption or pursuant to Section 306, 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 or equivalent amount expressed in a foreign
currency and subject to supervision or examination by Federal or State authority
or authority of such other country. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the requirements
of such 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.
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Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and 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 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 mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternate certificate of authentication in the following
form:
"This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
_______________________________________
_______________________________________
As Trustee
By ____________________________________
As Authenticating Agent
By ____________________________________
Authorized Signatory"
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Notwithstanding any provision of this Section 614 to the
contrary, if at any time any Authenticating Agent appointed hereunder with
respect to any series of Securities shall not also be acting as the Security
Registrar hereunder with respect to any series of Securities, then, in addition
to all other duties of an Authenticating Agent hereunder, such Authenticating
Agent shall also be obligated: (i) to furnish to the Security Registrar promptly
all information necessary to enable the Security Registrar to maintain at all
times an accurate and current Security Register and (ii) prior to authenticating
any Security denominated in a foreign currency, to ascertain from the Company
the units of such foreign currency that are required to be determined by the
Company pursuant to Section 302.
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ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
With respect to each series of Securities, the Company will furnish or
cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after each Regular Record Date
relating to that series (or, if there is no Regular Record Date relating to that
series, on January 1 and July 1), a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of that series as
of such dates, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content, such list to be dated as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar, if so acting.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders of each series received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy any list furnished to it
as provided in Section 701 upon receipt of a new list so furnished.
(b) Holders of Securities may communicate pursuant to Section 312(b) of
the Trust Indenture Act with other Holders with respect to their rights under
this Indenture or under the Securities.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
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SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the first
May following the first date of issuance of Securities under this Indenture, the
Trustee shall transmit by mail to Holders a brief report dated as of such May 15
that complies with Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) of the Trust
Indenture Act.
(c) Reports pursuant to this Section shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names
and addresses of such Holders appear in the Security Register; and
(2) except in the case of reports pursuant to Subsection (b)
of this Section, to each Holder of a Security whose name and address is
preserved at the time by the Trustee, as provided in Section 702(a).
(d) A copy of each report pursuant to Subsection (a) or (b) of this
Section 703 shall, at the time of its transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee, within 15 days after
the Company is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, and shall otherwise comply with Section 314(a)
of the Trust Indenture Act.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
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(1) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership,
limited liability company or trust, shall be organized and existing
under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities
and the performance of every covenant of this Indenture on the part of
the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 802. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the
Company into any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of such lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
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(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) 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; or
(3) to add any additional Events of Default with respect to
all or any series of the Securities (and, if such Event of Default is
applicable to less than all series of Securities, specifying the series
to which such Event of Default is applicable); or
(4) to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the Holders of Securities of any series in any
material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
adversely affected by such change in or elimination of such provision;
or
(6) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided such other
provisions as may be made shall not adversely affect the interests of
the Holders of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of a majority in principal
amount of the Outstanding Securities of all series affected by such supplemental
indenture (acting as one class), by Act of such Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
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the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency or currencies (including composite currencies) in
which, any Security or any premium or the interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture; provided, however, that the Holders of 75% in principal
amount of the Outstanding Securities of any series may, on behalf of
the Holders of all Outstanding Securities of such series, consent to
the postponement of any interest payment for a period of 3 years from
the applicable Interest Payment Date, or
(3) modify any of the provisions of this Section, Section 513
or Section 1008, except to increase any such percentage or to provide
with respect to any particular series the right to condition the
effectiveness of any supplemental indenture as to that series on the
consent of the Holders of a specified percentage of the aggregate
principal amount of Outstanding Securities of such series (which
provision may be made pursuant to Section 301 without the consent of
any Holder) or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby, provided,
however, that this clause shall not be deemed to require the consent of
any Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section and Section 1008, or the
deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(7).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties, immunities or liabilities under this
Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.
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SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its office
or agency to receive such presentations, surrenders, notices and demands.
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 each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, the Company will, on or before each due date of the
principal of (and premium, if any) or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities of that series in
trust for the benefit of the Persons
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entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of
any payment of principal (and premium, if any) or interest on the
Securities of that series; and
(3) at any time during the continuation of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for three years after such principal (and premium, if any) or interest
has become due and payable shall, unless otherwise required by mandatory
provisions of applicable escheat, or abandoned or unclaimed property law, be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified herein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will, unless otherwise required by mandatory provisions of applicable escheat,
or abandoned or unclaimed property law, be repaid to the Company.
SECTION 1004. Existence.
Subject to Article Eight, 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 1005. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business to be maintained and kept in good condition, repair and
working order and supplied
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with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent that Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (2) all material lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Company or
any Subsidiary; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 1007. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof so long
as any Security is outstanding hereunder, an Officers' Certificate, stating that
a review of the activities of the Company during such year and of performance
under this Indenture has been made under the supervision of the signers thereof
and whether or not to the best of their knowledge the Company is in default in
the fulfillment of any of its obligations under this Indenture, and if the
Company shall be in default, specifying each such default known to them and the
nature and status thereof.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 1004 to 1006, inclusive, or any
covenant added for the benefit of any series of Securities as contemplated by
Section 301 (unless otherwise specified pursuant to Section 301) if before or
after the time for such compliance the Holders of a majority in principal amount
of the Outstanding Securities of all series affected by such omission (acting as
one class) shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified and/or contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be
redeemed (other than pursuant to Section 1108), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of that series of
any integral multiple thereof) of the principal amount of Registered Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series or of the principal amount of global Securities of
such series.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
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SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 or more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
such date (or in the event of a redemption pursuant to Section 1108,
and if applicable, a statement that no interest is payable with respect
to such security),
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such
is the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or before any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with such notice, such
Security
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shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security or, in the case of Original Issue Discount Securities,
the Securities' Yield to Maturity.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part
shall be surrendered at a Place of Payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series and Stated Maturity, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
SECTION 1108. Redemption or Forced Sale Pursuant to the Casino Control Act or
Other Applicable Regulation.
(1) Notwithstanding the other provisions of this Article
Eleven, if the CCC or any other gaming authority in another jurisdiction finds
that a Holder or beneficial owner of Securities must be found licensed or
qualified or suitable to hold or own the Securities under the Casino Control Act
or any other gaming regulation in such other jurisdiction, and if such Holder or
such beneficial owner is not found qualified, licensed or suitable, within any
time period specified by the CCC or such other gaming authority or the Casino
Control Act or such other gaming regulation, the Company shall have the right
pursuant to this Section 1108 and the Securities, at its option, (i) to require
such Holder or beneficial owner to dispose of all or a portion of such Holder's
or beneficial owner's Securities within 120 days after receipt of notice by such
Holder or beneficial owner of its disqualification under the Casino Control Act
or any other applicable gaming regulation (or such different period as may be
prescribed by the CCC or such other gaming authority), or (ii) to call for
redemption the Securities of either such Holder or beneficial owner, on not less
than 30 nor more than 60 days' notice (or such different period as may be
prescribed by the CCC or any such other gaming authority).
(2) If such Holder or beneficial owner, having been given the
opportunity by the Company to dispose of such Holder's or beneficial owner's
Securities, shall have failed to do so within the prescribed time period, the
Company shall have the right to redeem such Holder's or beneficial owner's
Securities on five days' notice.
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(3) On any redemption of Securities pursuant to this Section
1108, the price for redemption shall be the lesser of (i) the market value
thereof on the date of such notice of redemption (as determined in good faith by
the Board of Directors of the Company) and (ii) the price at which such Holder
or beneficial owner acquired the Securities, together with (if permitted by the
Casino Control Act or any other gaming regulation in another jurisdiction or by
the orders of the CCC or any such other gaming authority in such other
jurisdiction) accrued interest, if any, to the Redemption Date, unless a
different price for redemption or other payment, remuneration or related terms
or restrictions are required by the CCC or any such other gaming authority, in
which event such price, terms and restrictions shall be the price for redemption
and terms of redemption. Each holder and beneficial owner by accepting a
Security agrees to the provisions of this Section 1108 and the Securities and
agrees to inform the Company and provide evidence, upon request made pursuant to
this Section 1108 of the price at which such Holder or beneficial owner acquired
such Holder's or beneficial owner's Securities.
(4) Any redemption notice given by the Company under this
Section 1108 shall state (i) that the Securities are being called for redemption
as a result of the Holder's or beneficial owner's status under the Casino
Control Act or any other gaming regulation of another jurisdiction or with the
CCC or such other gaming authority, (ii) whether accrued interest is payable to
the Holder under the Casino Control Act or other applicable gaming regulation
and (iii) the information required by subsections (1), (2), (3), (4) and (5) of
Section 1104.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified and/or contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". Unless otherwise provided by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
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 have been redeemed either at the election of the
Company pursuant to the terms of such
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Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities 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 payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivery of or by crediting
Securities of that series pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 1301. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, whether upon original issue or upon
transfer or assignment, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth, the payment of the principal of (and
premium, if any) and interest on each and all of the Securities is hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness.
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SECTION 1302. Circumstances Requiring Prior Payment of Senior Indebtedness.
In the event of any dissolution or winding up or total or
partial liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, then the holders
of Senior Indebtedness shall be entitled to receive payment in full of all
amounts due or to become due on or in respect of all Senior Indebtedness before
the Holders of the Securities are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the Securities.
Unless otherwise provided in Section 301, no payment in
respect of Securities shall be made if, at the time of such payment, there
exists a default in payment of all or any portion of any Senior Indebtedness,
and such default shall not have been cured or waived in writing or the benefits
of this sentence waived in writing by or on behalf of the holders of such Senior
Indebtedness. In addition, unless otherwise provided in Section 301, during the
continuation of any event of default (other than a default referred to in the
immediately preceding sentence) with respect to any Senior Indebtedness
permitting the holders to accelerate the maturity thereof and upon written
notice thereof given to the Trustee, with a copy to the Company (the delivery of
which shall not affect the validity of the notice to the Trustee), by any holder
of such Senior Indebtedness or its representative, then, unless and until such
an event of 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 the redemption provisions for the Securities; provided, however, that if the
holders of the Senior Indebtedness to which the default relates have not
declared such Senior Indebtedness to be immediately due and payable within 180
days after the occurrence of such default (or have declared such Senior
Indebtedness to be immediately due and payable within such period have rescinded
such declaration of acceleration), then the Company shall resume making any and
all required payments in respect of the Securities (including any missed
payments). Only one payment blockage period under the immediately preceding
sentence may be commenced within any consecutive 365-day period with respect to
the Securities. No event of default which existed or was continuing on the date
of the commencement of any 180-day payment blockage period with respect to the
Senior Indebtedness initiating such payment blockage period shall be, or be
made, the basis for the commencement of a second payment blockage period by a
Holder or representative of such Senior Indebtedness whether or not within a
period of 365 consecutive days unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days (and, in the
case of any such waiver, no payment shall be made by the Company to the holders
of Senior Indebtedness in connection with such waiver other than amounts due
pursuant to the terms of the Senior Indebtedness as in effect at the time of
such default).
In the event that, notwithstanding the foregoing, the Trustee
or the Holder of any Security shall have received any payment or distribution of
any kind or character, whether in cash, property or securities, before all
Senior Indebtedness is paid in full or payment thereof provided for, and if such
fact shall then have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, agent or other Person making payment of all Senior
Indebtedness remaining unpaid, to the extent
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necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
Nothing in this Section shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.
In addition, nothing in this Section shall prevent the Company
from making or the Trustee from receiving or applying any payment in connection
with the redemption of Securities if the first publication of notice of such
redemption (whether by mail or otherwise in accordance with this Indenture) has
been made, and the Trustee has received such payment from the Company, prior to
the occurrence of any of the contingencies specified in the first two paragraphs
of this Section.
SECTION 1303. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article) to the rights of the holders of such Senior
Indebtedness to receive payments or distributions from the Company applicable to
the Senior Indebtedness until the principal of (and premium, if any) and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness to which the holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments pursuant to
the provisions of this Article to the holders of Senior Indebtedness by Holders
of the Securities or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness, and the Holders of the Securities be
deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness.
SECTION 1304. Provisions Solely to Define Relative Rights.
The provisions of this Article 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 Senior Indebtedness, on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as between the Company 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 premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights against the Company of the Holders of the Securities and creditors of the
Company other than the holders of Senior Indebtedness, 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 of the holders of
Senior Indebtedness to receive cash, property or securities of the Company
otherwise payable or deliverable to the Trustee or such Holder.
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SECTION 1305. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof, whether
upon original issue or upon transfer or assignment, authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes.
SECTION 1306. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided 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, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations of
the Holders of the Securities to the holders of Senior Indebtedness, do any one
or more of the following: (i) change the manner, place or terms of payment of,
or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; or (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 1307. Notice to Trustee.
The Company shall give prompt written notice to the Trustee in
the form of an Officers' Certificate of any fact known to the Company which
would prohibit the making of any payment of money to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article, unless and
until the Trustee shall have received at its Corporate Trust Office written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor at least two Business Days prior to such payment date;
and, prior to the receipt of any such written notice, the Trustee, subject to
the provisions of Section 601, shall be entitled in all respects to assume that
no such facts exist.
Subject to the provisions of Section 601, 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 Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given
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by a holder of Senior Indebtedness or a 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
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, 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.
SECTION 1308. Reliance on Certificate of Liquidating Agent.
Upon any payment or distribution referred to in this Article,
the Trustee, subject to the provisions of Section 601, and the Holders of the
Securities shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which a dissolution, winding up or total or
partial liquidation or reorganization of the Company is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness 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.
SECTION 1309. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and shall not be liable to any such holders
if it shall in good faith mistakenly pay over or distribute to Holders of the
Securities or to the Company or to any other Person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
SECTION 1310. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
SECTION 1311. Article Applicable to Paying Agent.
In case at any time any Payment Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Payment Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee;
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provided, however, that this Section shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any or all 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 1402. 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 1401, to
be held at such times and at such place in New York, New York, 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 107, not
less than 20 nor more than 180 days prior to the date fixed for the
meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in aggregate principal
amount of the Outstanding Securities of any series, shall have
requested the Trustee for any such series to call a meeting of the
Holders of Securities of such series for any purpose specified in
Section 1401, 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 30
days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then 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 New York,
New York, for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in Subsection (a) of this Section.
SECTION 1403. 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
a 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 Holders of Securities of any series
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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 1404. Quorum; Action.
The Persons entitled to vote a majority in 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. Subject to Section 1405(d), notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1402(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly that Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
such series shall constitute a quorum.
Except as limited by the proviso to Section 902, 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
proviso to Section 902, any resolution with respect to any request, demand,
authorization, direction, notice, consent or waiver which this Indenture
expressly provides may be made, given or taken by the Holders of a specified
percentage that 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 and 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.
Except as limited by the proviso to Section 902, 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, whether or not present or represented at
the meeting.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) The holdings of Securities shall be proved in the manner
specified in Section 105 and the appointment of any proxy shall be
proved in the manner specified in Section 105 or by having the
signature of the person executing the proxy witnessed or guaranteed by
any trust company, bank or banker. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without other proof.
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(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 1402(b), in which case the Company or the Holders of Securities
of the series calling the meeting, as the case may be, shall 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 in 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
and each 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 as a proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1402 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
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 1406. 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 amounts 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 such 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 such notice was given as provided in Section 1402 and, if
applicable, Section 1404. 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.
* * *
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<PAGE> 80
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
BALLY ENTERTAINMENT CORPORATION
[CORPORATE SEAL] By
--------------------------------
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION
[CORPORATE SEAL] By
--------------------------------
Name:
Title:
-68-
<PAGE> 81
STATE OF ___________ )
) SS
COUNTY OF __________ )
On the _____ day of _______________________________, before me
personally came _____________________________________________, to me known, who,
being by me duly sworn, did depose and say that he is ________________ of BALLY
ENTERTAINMENT CORPORATION, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
------------------------------------------
Notary Public in _________ County for the
State of __________
My Commission Expires ___________________
[NOTARIAL SEAL]
STATE OF ___________ )
) SS
COUNTY OF __________ )
On the _____ day of _______________________________, before me
personally came _____________________________________________, to me known, who,
being by me duly sworn, did depose and say that he is _______________ of
____________________, one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that he signed
his name thereto by like authority.
------------------------------------------
Notary Public in __________ County for the
State of __________
My Commission Expires ___________________
[NOTARIAL SEAL]
-69-
<PAGE> 1
EXHIBIT 4.6
<PAGE> 2
BALLY ENTERTAINMENT CORPORATION
_____________________________________________, AS DEPOSITARY
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
DEPOSIT AGREEMENT
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE I
Definitions
<S> <C>
"Certificate".....................................................................................................1
"Company".........................................................................................................1
"Deposit Agreement"...............................................................................................1
"Depositary"......................................................................................................1
"Depositary Shares"...............................................................................................1
"Depositary's Agent"..............................................................................................1
"Depositary's Office".............................................................................................2
"Receipt".........................................................................................................2
"Record Holder"...................................................................................................2
"Registrar".......................................................................................................2
"Stock" .........................................................................................................2
</TABLE>
<TABLE>
<CAPTION>
ARTICLE II
Form of Receipts, Deposit of Stock, Execution and Delivery,
Transfer, Surrender and Redemption of Receipts
<S> <C> <C>
SECTION 2.01. Form and Transfer of Receipts...................................................................2
SECTION 2.02. Deposit of Stock; Execution and Delivery of
Receipts in Respect Thereof.....................................................................3
SECTION 2.03. Redemption of Stock.............................................................................4
SECTION 2.04. Registration of Transfer of Receipts............................................................5
SECTION 2.05. Split-ups and Combinations of Receipts; Surrender
of Receipts and Withdrawal of Stock.............................................................5
SECTION 2.06. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts..............................................................6
SECTION 2.07. Lost Receipts, etc..............................................................................6
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts............................................7
ARTICLE III
Certain Obligations of Holders
of Receipts and the Company
SECTION 3.01. Filing Proofs, Certificates and Other Information...............................................7
SECTION 3.02. Payment of Taxes or Other Governmental Charges..................................................7
SECTION 3.03. Warranty as to Stock............................................................................7
ARTICLE IV
</TABLE>
-i-
<PAGE> 4
<TABLE>
<CAPTION>
The Deposited Securities; Notices
<S> <C> <C>
SECTION 4.01. Cash Distributions..............................................................................8
SECTION 4.02. Distributions Other Than Cash, Rights, Preferences
or Privileges...................................................................................8
SECTION 4.03. Subscription Rights, Preferences or Privileges..................................................8
SECTION 4.04. Notice of Dividends; Fixing of Record Date for
Holders of Receipts.............................................................................9
SECTION 4.05. Voting Rights..................................................................................10
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassification, Recapitalizations, etc.......................................................10
SECTION 4.07. Inspection of Reports..........................................................................11
SECTION 4.08. Lists of Receipt Holders.......................................................................11
ARTICLE V
The Depositary, the Depositary's Agents,
the Registrar and the Company
SECTION 5.01. Maintenance of Offices, Agencies and Transfer
Books by the Depositary; Registrar.............................................................11
SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, the Registrar
or the Company.................................................................................12
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Company..........................................................12
SECTION 5.04. Resignation and Removal of the Depositary;
Appointment of Successor Depositary............................................................13
SECTION 5.05. Corporate Notices and Reports..................................................................13
SECTION 5.06. Indemnification by the Company.................................................................14
SECTION 5.07. Charges and Expenses...........................................................................14
ARTICLE VI
Amendment and Termination
SECTION 6.01. Amendment......................................................................................14
SECTION 6.02. Termination....................................................................................15
ARTICLE VII
Miscellaneous
SECTION 7.01. Counterparts...................................................................................15
SECTION 7.02. Exclusive Benefit of Parties...................................................................15
SECTION 7.03. Invalidity of Provisions.......................................................................15
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 7.04. Notices........................................................................................15
SECTION 7.05 Depositary's Agents............................................................................16
SECTION 7.06. Holders of Receipts Are Parties................................................................16
SECTION 7.07. Governing Law..................................................................................16
SECTION 7.08. Inspection of Deposit Agreement................................................................16
SECTION 7.09. Headings.......................................................................................16
</TABLE>
-iii-
<PAGE> 6
DEPOSIT AGREEMENT dated as of ____________, 199_ among BALLY ENTERTAINMENT
CORPORATION, a Delaware corporation, ______________________________, an
_______{bank} {corporation}, and the holders from time to time of the Receipts
described herein.
WHEREAS it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of _____% Cumulative Preferred
Stock, Series _______, without par value, of Bally Entertainment Corporation
with the Depositary for the purposes set forth in this Deposit Agreement and for
the issuance hereunder of Receipts evidencing Depositary Shares in respect of
the Stock so deposited; and
WHEREAS the Receipts are to be substantially in the form of Exhibit A
annexed hereto, with a insertions, modifications and omissions, as hereinafter
provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
Definitions
The following definitions shall for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement:
"Certificate" shall mean the certificate of designation filed with the
Secretary of State of Delaware establishing the Stock as a series of preferred
stock of the Company.
"Company" shall mean Bally Entertainment Corporation, a Delaware
corporation, and its successors.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.
"Depositary" shall mean _________________________, and any successor as
Depositary hereunder.
"Depositary Shares" shall mean Depositary Shares, each representing
___________ of a share of Stock and evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 7.05.
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<PAGE> 7
"Depositary's Office" shall mean the principal office of the Depositary
in {Chicago, Illinois, or New York, New York}, at which at any particular time
its depositary receipt business shall be administered.
"Receipt" shall mean one of the Depositary Receipts (each evidencing
one Depositary Share) issued hereunder, 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 of the Depositary maintained for such
purpose.
"Registrar" shall mean any bank or trust company which shall be
appointed to register ownership and transfers of Receipts as herein provided.
"Stock" shall mean shares of the Company's _____% Cumulative Preferred
Stock, Series _______, without par value.
ARTICLE II
Form of Receipts, Deposit of Stock, Execution and Delivery, Transfer,
Surrender and Redemption of Receipts
SECTION 2.01. Form and Transfer of Receipts. Definitive Receipts shall
be engraved or printed or lithographed on 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 the preparation of definitive Receipts, the
Depositary, the written order of the Company or any holder of Stock, as the case
may be, delivered in compliance with Section 2.02, 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 issued 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 issued,
the Company 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 last paragraph of Section 2.02, 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 Stock, as definitive
Receipts.
-2-
<PAGE> 8
Receipts shall be executed by the Depositary by the manual signature of
a duly authorized officer of the Depositary; provided that such signature may be
a facsimile if a Registrar for the Receipts shall have been appointed and such
Receipts are countersigned by manual signature of a duly authorized officer of
the Registrar. No Receipt shall be entitled benefits under this Deposit
Agreement or be valid or obligatory for any purpose unless it shall have been
executed manually by a duly authorized officer of the Depositary or, if a
Registrar for the Receipts shall have been appointed, by manual or facsimile
signature of a duly authorized officer of the Depositary and countersigned
manually by a duly authorized officer of such Registrar. The Depositary or the
Registrar, as applicable, shall record on its books each Receipt so signed and
delivered as hereinafter provided.
Receipts shall be in denominations of any number of whole Depositary
Shares up to but not in excess of ____________ Depositary Shares for any
particular Receipt.
Receipt 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 Company or the Depositary or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange upon which the Stock, the
Depositary Shares or the Receipts may be listed or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions to
which any particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt which is properly
endorsed, or accompanied by a properly executed instrument of transfer, shall be
transferable delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Receipt shall be
registered on the books of the Depositary as provided in Section 2.04, the
Depositary shall, 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 distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.02. Deposit of 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 Stock may from time to time deposit shares of the
Stock under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Stock to be deposited, properly endorsed or
accompanied, if required by the Depositary, by a duly executed instrument of
transfer or endorsement, in form satisfactory to the Depository, together with
all such certifications as may be required by Depositary in accordance with the
provisions of this Deposit Agreement, and together with a written order of the
Company or such holder, as the case may be, 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 Stock.
Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places as the Depositary shall determine.
-3-
<PAGE> 9
Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together with
the other documents required as above specified, and upon proper registration of
the Stock on the books of the Company in the name of the Depositary or its
nominee, 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, a Receipt or Receipts for the number of
Depositary Shares representing the Stock so deposited and registered in such
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 or
such other offices, if any, as the Depositary may designate other offices shall
be at the risk and expense of the person requesting such delivery.
Other than in the case of splits, combinations or other
reclassification affecting the Stock, or in the case of dividends or other
distributions of stock, if any, there shall be deposited hereunder not more than
__________ shares of Stock.
SECTION 2.03. Redemption of Stock. Whenever the Company shall elect to
redeem shares of Stock in accordance with the provisions of the Certificate, it
shall (unless otherwise agreed in writing with the Depositary) give the
Depositary not less than 46 nor more than 91 days' notice of the date of such
proposed redemption of Stock and of the number of shares held by the Depositary
to be so redeemed, which notice shall be accompanied by a certificate from the
Company stating that such redemption of Stock is in accordance with the
provisions of the Certificate. Such notice, if given more than 90 days prior to
the redemption date, shall be in addition to the notice required to be given for
redemption pursuant to the Certificate. On the date of such redemption, provided
that the Company shall then have paid in full to the Depositary the redemption
price of the Stock to be redeemed, plus any accrued and unpaid dividends
thereon, the Depositary shall redeem the number of Depositary Shares
representing such Stock. The Depositary shall mail notice of such redemption and
the proposed simultaneous redemption of the number of Depositary Shares
representing the Stock to be redeemed, first-class postage prepaid, not less
than 45 and not more than 90 days prior to the date fixed for redemption of such
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 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 Stock represented by the
Depositary Shares to be redeemed will cease to accumulate on such Redemption
Date. In case less than all the outstanding Depositary Shares are to be
redeemed, the Depositary Shares to be so redeemed shall be selected by lot or
pro rata as may be determined by the Depositary to be equitable.
-4-
<PAGE> 10
Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Company shall have failed to redeem the
shares of Stock to be redeemed by it as set forth in the Company's notice
provided for in the preceding paragraph) all dividends in respect of the shares
of Stock so called for redemption shall cease to accumulate, the Depositary
Shares being redeemed from such proceeds shall be deemed no longer to be
outstanding, all rights of the holders of Receipts evidencing such Depositary
(except the right to receive the redemption price) shall, to the extent of such
Depositary Shares, cease and terminate and, upon surrender in accordance with
such notice of the Receipts evidencing any such Depositary Shares (properly
endorsed or assigned for transfer, if the Depositary shall so require), such
Depositary Shares shall be redeemed by the Depositary at a redemption price per
Depositary Share equal to one-tenth of the redemption price per share paid in
respect of the shares of Stock plus all money and other party, if any,
represented by such Depositary Share, including all amounts paid by the Company
in respect of dividends which on the Redemption Date have accumulated on the
shares of Stock to be so redeemed and have not theretofore been paid.
If less than all 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 payment, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.
SECTION 2.04. Registration of Transfer of Receipts. Subject to the
terms and conditions of this Deposit Agreement, the Depositary shall register on
its books from time to time transfers of Receipts upon any surrender thereof by
the holder in person or by duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer. Thereupon the
Depositary shall execute a new Receipt or Receipts evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered and deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.
SECTION 2.05. Split-ups and Combinations of Receipts; Surrender of
Receipts and Withdrawal of Stock. Upon surrender of a Receipt or Receipts at the
Depositary's Office or at such other offices as it may designate for the purpose
of effecting a split up or combination of such Receipt or Receipts, and subject
to the terms and conditions of this Deposit Agreement, the Depositary shall
execute and deliver a new Receipt or Receipts in the authorized denomination or
denominations requested, evidencing the aggregate number of Depositary Shares
evidenced by the Receipt or Receipts surrendered.
Any holder of a Receipt or Receipts representing any number of whole
shares of Stock may withdraw the Stock and all money and other property, if any,
represented thereby by surrendering such Receipt or Receipts, at the
Depositary's Office or at such other offices as the Depositary may designate for
such withdrawals. Thereafter, without unreasonable delay, the Depositary shall
deliver to such holder, or to the person or persons designated by such holder as
hereinafter provided, the number of whole shares of Stock and all money and
other property, if any, represented by the Receipt or Receipts for such whole
shares of Stock 50 surrendered for withdrawal, but holders of such whole shares
of Stock will not thereafter be entitled to deposit such Stock hereunder or to
receive Depositary Shares the therefor. If a Receipt
-5-
<PAGE> 11
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
Depositary Shares representing the number of whole shares of Stock to be so
withdrawn, the Depositary shall at the same time, in addition to such number of
whose shares of Stock and such money and other property, if any, to be so
withdrawn, deliver to such holder, or (subject to Section 2.03) upon his order,
a new Receipt evidencing such excess number of Depositary Shares. Delivery of
the Stock and 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.
If the 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 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 Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer.
Delivery of the Stock and the money and other property, if any,
represented by Receipts surrendered for withdrawal shall be made by the
Depositary 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 2.06. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, any of the Depositary' s Agents or the
Company may require 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 charges or expenses payable by the holder of a
Receipt pursuant to Section 5.07, may require the production of evidence
satisfactory to it as to the identity and genuineness of any signature and may
also require compliance with such regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against
Stock may be suspended, the registration of transfer of Receipts may be refused
and the registration of transfer, surrender or exchange of outstanding Receipts
may be suspended (i) during any period when the register of stockholders of the
Company is closed or (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 governmental body
or commission or under any provision of this Deposit Agreement. Without
limitation of the foregoing, the Depositary shall not knowingly accept for
deposit under this Deposit Agreement any shares of Stock which are required to
be registered under the Securities Act of 1933, unless a registration statement
under such Act is in effect as to such shares of Stock.
SECTION 2.07. Lost Receipts, etc. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form
-6-
<PAGE> 12
and tenor in exchange and substitution for such mutilated Receipt, or in lieu of
and in substitution for such destroyed, lost or stolen Receipt, upon (i) the
filing by the holder thereof with the Depositary of evidence satisfactory to the
Depositary of such destruction or loss or theft of such Receipt, of the
authenticity thereof and of his or her ownership thereof and (ii) the furnishing
of the Depositary with reasonable indemnification satisfactory to it.
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary or any Depositary's Agent s all be
canceled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so canceled.
ARTICLE III
Certain Obligations of Holders
of Receipts and the Company
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
holder of a Receipt may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such a representations and warranties as the Depositary or the
Company may reasonably deem necessary or proper. The Depositary or the Company
may withhold the delivery, or delay the registration of transfer, are on or
exchange, of any Receipt or the withdrawal Stock represented by the Depositary
Shares evidenced by any Receipt or the distribution of any dividend or their
distribution or the sale of any rights or of the proceeds thereof until such
proof or other information is filed or such certificates are executed or such
representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges. Holders
of Receipts shall be obligated to make payments to the Depositary of certain
charges and expenses, as provided in Section 5.07. Registration of transfer of
any Receipt or any withdrawal of Stock and all money or other property, if
represented by the Depositary Shares evidenced by such Receipt may be refused
until any such payment due is made, and any dividends, interest payments or
other distributions may be withheld or any part of or all the Stock or other
property represented by the Depositary Shares evidenced by such Receipt and not
theretofore sold may be sold for the account of the holder thereof (after
attempting by reasonable means to notify such holder prior to such sale), and
such dividends, interest payments or other distributions or the proceeds of any
such sale applied to any payment of such charges or expenses, the of such
Receipt remaining liable for any deficiency.
SECTION 3.03. Warranty as to Stock. The Company hereby sent and
warrants that the Stock, when issue , will be issued, fully paid and
nonassessable. Such representation and warranty shall survive the deposit of the
Stock and the issuance of Receipts.
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<PAGE> 13
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01. Cash Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on Stock, the Depositary shall,
subject to Sections 3.01 and 3.02, distribute to record holders of Receipts
pursuant to Section 4.04 such amounts of such dividend or distribution as are,
as nearly as practicable, in proportion 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 wit
ho Id from any case dividend or other cash distribution in respect of the Stock
n amount on account of taxes, the amount made available for distribution or
distributed in respect of Depositary Shares shall be reduced according attribute
to any Depositary shall not be required to Depositary Shares a fraction of one
cent, and any amounts held by the Depositary in such event will be distributed
to holders of Rec in such reasonable manner as the Company and the Depositary
determine.
SECTION 4.02. Distributions Other Than Cash, Rights, Preferences or
Privileges. Whenever the Depositary, receive any distribution other than cash,
rights, references or privileges upon Stock, the Depositary shall , subject to
Sections 3.01 and 3.02, distribute to record elders of Receipts pursuant to
Section 4.04 such amounts of the securities or property received by it as are,
as nearly as practicable, in the respective numbers of Depositary Shares to
Receipts held b such holders, in any manner that the Depositary may deem and
practicable for accomplishing such distribution in the opinion of the Depositary
such distribution cannot be made proportionately among such record holders, or
if for an other reason (including any requirement that the Company or the
Depositary withhold an amount on account of taxes) the Depositary deems, after
consultation with the Company, such distribution not to be feasible, the
Depositary may, with the approval of the Company, adopt such 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 Sections 3.01 and 3.02, be
distributed or made available for distribution, as the case may be, by the
Depositary to record holders of Receipts as provided by Section 4.01 in the case
of a distribution received in cash. The Company shall not make any distribution
of such securities unless the Company shall have provided an opinion of counsel
stating that such securities have been registered under the Securities Act of
1933 or do not need to be registered.
SECTION 4.03. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is recorded 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 in such manner as the Depositary may determine,
either by the issue to such record holders of warrants representing such rights,
preferences or privileges or by such other method as may be approved by the
Depositary in its discretion with the approval of Company; provided, however,
that (i) if at the time of issue or offer of any such rights, preferences or
privileges the Depositary determines that it is not lawful or (after
consultation with the
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<PAGE> 14
Company) not feasible to make such rights, preferences or privileges available
to holders of Receipts by the issue of warrants or otherwise, or (ii) if and to
the extent so instructed by holders of Receipts who do not desire to exercise
such rights, preferences or privileges, then the Depositary, in its discretion
(with the approval of the Company, in any case where the Depositary has
determined that it is not feasible to make such rights, preferences or
privileges available), may, if applicable laws or the terms of such rights,
preferences or privileges permit such transfer, sell such rights, preferences or
privileges 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
Sections 3.01 and 3.02, be distributed by the Depositary to the record holders
of Receipts entitled thereto as provided by Section 4.01 in the case of a
distribution received in cash. The Company shall not make any distribution of
any such rights, preferences or privileges unless the Company shall have
provided an opinion of counsel stating that such rights, preferences or
privileges have been registered under the Securities Act of 1933 or do not need
to be registered.
If in order for holders of Receipts to be offered or sold the
securities to which any rights, preferences or privileges relate, registration
under the Securities Act of 1933 of the securities to which such rights,
preferences or privileges relate is required, the Company will promptly file a
registration statement pursuant to such Act with respect to such rights,
preferences or privileges and securities and use its best efforts and 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 and
securities unless and until such a registration statement shall have become
effective, or unless the offering and sale of such securities to such holders
are exempt from registration under the provisions of such Act.
If any other action under the laws 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 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 4.04. 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 if rights,
preferences or privileges shall at any time be offered, with respect to Stock,
or whenever the Depositary shall receive notice of any meeting at which holders
of Stock are entitled to vote or any meeting of which holders of Stock are
entitled to notice, or whenever the Depositary and the Company shall decide it
is appropriate, 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 Stock) for the determination of the holders of Receipts 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 who shall be entitled to
notice of such meeting or for any other appropriate reason.
-9-
<PAGE> 15
SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of meeting and
(ii) a statement that the holders may, subject to any applicable restrictions,
instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of Stock represented by their respective Depositary Shares (including
an express indication that instructions may be given to the Depositary to give a
discretionary proxy to a person designated by the Company) and a brief statement
as to the manner in which such instructions may be given. Upon the written
request of the holders of Receipts on the relevant record date, the Depositary
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of whole shares of Stock represented by the Depositary Shares evidenced by all
Receipts as to which an particular voting instructions are received. The Company
hereby agrees to take action which may be deemed necessary by the Depositary in
order to enable the Depositary to vote such Stock or cause such Stock to be
voted. In the absence of specific instructions from the holder of a Receipt, the
Depositary will abstain from voting (but, at its discretion, not from appearing
at any meeting with respect to such Stock unless directed to the contrary by the
holders of all the Receipts) to the extent of the Stock represented by the
Depositary Shares evidenced by such Receipt.
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassification, Recapitalizations, etc. Upon any change in par or stated
value, split-up, combination or any other reclassification of the Stock, or upon
any recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party, the Depositary may in its
discretion with the approval of, and shall upon the instructions of, the
Company, and (in either case) in such manner as the Depositary may deem
equitable, (i) make such adjustments as are certified by the Company in (x) the
fraction of an interest represented' by one Depositary Share in one share of
Stock and (y) the ratio of the redemption price per Depositary Share to the
redemption price of a share of Stock, in each case as may be necessary fully to
reflect the effects of such change in par or stated value, split-up, combination
or ocher reclassification of Stock, or of such recapitalization, reorganization,
merger amalgamation or consolidation and (ii) treat any securities which shall
be received by the Depositary in exchange for or upon conversion of or in
respect of the Stock as new deposited securities under this Deposit Agreement,
and Receipts then outstanding shall thenceforth represent the new deposited
securities so received in exchange for or upon conversion or in respect of such
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 securities. Anything to the contrary
herein notwithstanding, holders of Receipts shall have the right from and after
the effective date of any such change in par or stated value, split-up,
combination or other reclassification of the Stock or any such recapitalization,
reorganization, merger, amalgamation or consolidation to surrender such Receipts
to the Depositary with instructions to convert, exchange or surrender the Stock
represented thereby only into or for, as the case may be, the kind and amount of
shares of stock and other securities and property and cash into which the Stock
represented by such Receipts might have been converted or to have been exchanged
or surrendered immediately prior to the effective date of such transaction.
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<PAGE> 16
SECTION 4.07. 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, any reports and
communications received from the Company which are received by the Depositary as
the holder of Stock.
SECTION 4.08. Lists of Receipt Holders. Promptly request from time to
time by the Company, 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, the Depositary's Agents,
the Registrar and the Company
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by
the Depositary; Registrar. Upon execution of this Deposit Agreement, the
Depositary shall maintain at the Depositary's Office, or at the Registrar's
Office, at which the Depositary shall have complete access to all books and
records maintained on the Company's behalf, facilities for the execution and
delivery, registration and registration of transfer, surrender and exchange of
Receipts, and at the offices of the Depositary's Agents, if any, facilities for
the delivery, registration of transfer, surrender and exchange of Receipts, all
in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Receipts, which books at all
reasonable times shall been by the record holders of Receipt provided, that any
holder requesting to exercise such right shall certify to the Depositary that
such inspection shall be for a proper purpose reasonably related to such
person's interest as an owner of Depositary Shares evidenced by the Receipts.
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.
The Depositary may, with the approval of the Company, appoint a
Registrar for registration of the Receipts or the Depositary Shares evidenced
thereby. If the Receipts or the Depositary Shares evidenced thereby or the Stock
represented by such Depositary Shares shall be listed on the New York Stock
Exchange, the Depositary will appoint a Registrar (acceptable to the Company)
for registration of such Receipts or Depositary Shares in accordance with any
requirements of such Exchange. Such Registrar (which may be the Depositary if so
permitted by the requirements of such Exchange) 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 Stock are listed on
one or more other stock exchanges, the Depositary will, at the request of the
Company, arrange such facilities for the delivery, registration, registration of
transfer, surrender and exchange of such Receipts, such Depositary Shares or
such Stock as may be required by law or applicable stock exchange regulation.
-11-
<PAGE> 17
SECTION 5.02. Prevention of or Delay in Performance by the Depositary,
the Depositary's Agents, the Registrar 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, the Depositary's Agent
or reason the Registrar, by reason of any provision, present or future, of the
Company's Certificate of Incorporation (including the Certificate) or by reason
of any act of God or war or other circumstance beyond the control of the
relevant party, the Depositary, the Depositary the Registrar or the Company
shall be prevented or from, or subjected to an penalty on account of, doing or
performing any act or thing which the terms of this Depositary Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
any Registrar or the Company incur any liability to any holder of a Receipt (i)
by reason of any nonperformance or delay, caused as aforesaid, in the
performance of an act or thing which the terms of this Deposit Agreement provide
shall or may be done or performed, or (ii) by reason of any exercise of, or
failure to exercise, any discretion provided for in this Deposit Agreement
except, in case of any such exercise or failure to exercise discretion not
caused as aforesaid, if caused by the negligence or willful misconduct of the
party charged with such exercise or failure to exercise.
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents,
the Registrar and the Company. Neither the Depositary nor any Agent nor any
Registrar nor the Company assumes any obligation or shall be subject to any
liability under this Deposit Agreement to holders of Receipts other than for its
negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor
the Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Stock, the Depositary Shares
or the Receipts which 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 any Registrar nor
the Company shall be liable for any action or any failure to act by it in
reliance upon the written advice of legal counsel or accountants, or information
from any person presenting Stock for deposit, any holder of a Receipt or any
other person believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, any Registrar and the
Company may each rely and shall each be protected in acting upon written notice,
request, direction or other document believe to be genuine and to have been
signed or presented by the proper party or parties.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the shares of Stock or for the manner or effect
of any such vote made, as long as any such action or non-action is, in good
faith. The Depositary undertakes, and any Registrar shall be required to
understanding to, perform such duties and only such duties as are specifically
set forth in this Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Depositary or any Registrar. The Depositary
will indemnify the Company against any liability which may arise out of acts
performed or omitted by the
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<PAGE> 18
Depositary or its agents due to its or their negligence or bad faith. The
Depositary, the Depositary's Agents, and any Registrar may own and deal in any
class of securities of the Company and its affiliates and in Receipts. The
Depositary may also act as transfer agent or registrar of any of the securities
of the Company and its affiliates.
SECTION 5.04. Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by having 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 hereunder shall resign or be
removed, the Company shall, within 60 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 having its principal office in the United
States of America and a combined capital and surplus of at least $50,000,000. If
no successor Depositary shall have been so appointed and have accepted
appointment within 60 days after delivery of such notice, the resigning or
removed Depositary may petition any court of competent jurisdiction for the
appointment of 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 execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the 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. Any successor Depositary shall promptly mail notice
of its appointment to thee record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act, and notice thereof shall
not be required hereunder. Such successor Depositary may authenticate the
Receipts in the name of the predecessor Depositary or in the name of the
successor Depositary.
SECTION 5.05. Corporate Notices and Reports. The Company agrees that it
will transmit to the record holders of Receipts, in each case at the addresses
furnished to it pursuant to Section 4.08, all notices and reports (including
without limitation financial statements) required by law, by the rules of any
national securities exchange upon which the Stock, the Depositary Shares or the
Receipts are listed or by the Company's Certificate of Incorporation
-13-
<PAGE> 19
(including the Certificate) to be furnished by the Company to holders of Stock.
Such transmission will be at the Company's expense.
SECTION 5.06. Indemnification by the Company. The Company shall
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harm less from, any loss, liability or expense (including the
costs and expenses of defending itself) which may arise out of (a) acts
performed or omitted in connection with this Agreement and the Receipts (i) by
the Depositary, any Registrar or any of their respective agents (including any
Depositary's Agent), except for any liability arising out of negligence or bad
faith on the respective parts of any such person or persons, or (ii) by the
Company or any of its agents, or (b) the offer, sale or registration of the
Receipts, Depositary Shares or the Stock pursuant to the provisions hereof. The
obligations of the Company set forth in this Section 5.06 shall survive any
succession of any Depositary, Registrar or Depositary's Agent.
SECTION 5.07. Charges and Expenses. The Company shall pay all transfer
and other taxes and governmental charges arising solely from the existence of
the depositary arrangements. The Company shall pay all charges of the Depositary
in connection with the initial deposit of the Stock and the initial issuance of
the Depositary Shares, redemption of the Stock at the option of the Company and
all withdrawals of shares of the Stock by owners of Depositary Shares. All other
transfer and other taxes and governmental charges shall be at the expense of
holders of Depositary Shares. If, at the request of a holder of Receipts, the
Depositary charges or expenses for which it is not otherwise liable hereunder,
such holder will be liable for such charges and expenses. All other charges and
expenses of the Depositary and any Depositary's Agent hereunder and of any
Registrar (including, in each case, fees and expenses of counsel) incident to
the performance of their respective obligations hereunder will be paid upon
consultation and agreement between the Depositary and the Company as to the
amount and nature of such charges and expenses. The Depositary shall present its
statement for charges and expenses to the Company once every three months or at
such other intervals as the Company and the Depositary may agree.
ARTICLE VI
Amendment and Termination
SECTION 6.01. 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 which they may
deem necessary or desirable; provided, however, that no such amendment (other
than any change in the fees of any Depositary or Registrar, which shall go into
effect not sooner than three months after notice thereof to the holders of the
Receipts) which shall materially and adversely alter the rights of the holders
of Receipts shall be effective unless such amendment shall have been approve the
holders of at least a majority of the Depositary Shares outstanding. 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 the Deposit Agreement as amended
thereby.
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<PAGE> 20
SECTION 6.02. Termination. This Agreement may be terminated by the
Company or the Depositary only after (i) all outstanding Depositary Shares shall
have been redeemed pursuant to Section 2.03 or (ii) there shall have been made a
final distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Depositary Shares pursuant to Section 4.01 or
4.02, as applicable.
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's Agent and any Registrar under
Sections 5.06 and 5.07.
ARTICLE VII
Miscellaneous
SECTION 7.01. Counterparts. This Deposit Agreement may be executed in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.
SECTION 7.02. Exclusive Benefit 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 7.03. 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 7.04. Notices. Any and all 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 mail or telegram or telex
confirmed by letter, addressed to the Company at 8700 West Bryn Mawr AVenue,
Chicago, Illinois 60631, to the attention of the Secretary, or at any other
address of which the Company shall have notified the Depositary in writing.
Any and all 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 mail or by telegram or telex confirmed by
letter, addressed to the Depositary at the Depositary's Office,
at____________________, _____________, or at any other address of which the
Depositary shall have notified the Company in writing.
Any and all notices to be 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 mail or by telegram or telex
confirmed by letter, addressed to such record holder at
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<PAGE> 21
the address of such record holder as it appears on the books of the Depositary,
or if such holder shall have 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 shall be
deemed to be effected at the time when a duly addressed letter containing the
same (or a confirmation thereof in the case of a telegram or telex message) is
deposited, postage prepaid, in a post office letter box. The Depositary or the
Company may, however, act upon any telegram or telex message received by it from
the other or from any holder of a Receipt, notwithstanding that such telegram or
telex message shall not subsequently be confirmed by letter or as aforesaid.
SECTION 7.05 Depositary's Agents. The Depositary may from time to time
appoint, with the prior approval of the Company 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 Company has also requested that the Depositary act as Registrar and
Transfer Agent.
SECTION 7.06. Holders of Receipts Are Parties. The holders of Receipts
from time to time shall 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 thereof.
SECTION 7.07. 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 laws of the State of
Illinois.
SECTION 7.08. Inspection of Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agents 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 7.09. 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.
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<PAGE> 22
IN WITNESS WHEREOF, the Company and the Depositary have duly executed
this Agreement as of the day end year first above set forth, and all holders of
Receipts shall become parties hereto by and upon acceptance by them of delivery
of Receipts issued in accordance with the terms hereof.
BALLY ENTERTAINMENT CORPORATION
Attested by By:________________________________
___________________________________ ___________________________________
Assistant Secretary (Title)
{SEAL}
___________________________________
as Depositary,
Attested by By:________________________________
___________________________________ ___________________________________
(Title) (Title)
{SEAL}
-17-
<PAGE> 1
EXHIBIT 5
<PAGE> 2
May 22, 1996
Bally Entertainment Corporation
8700 West Bryn Mawr Avenue
Chicago, Illinois 60631
Re: Bally Entertainment Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for Bally Entertainment Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing of a Registration Statement on Form S-3 (the "Registration Statement")
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "1933 Act"). The Registration Statement relates to the offering of
up to $750,000,000 aggregate initial offering price of an indeterminate amount
of the following: (i) shares of the Company's common stock, par value $.66 2/3
per share (the "Common Stock"), (ii) unsecured debt securities ("Debt
Securities"), consisting of debentures, notes and/or other unsecured evidences
of indebtedness in one or more series which are to be issued pursuant to an
indenture (the "Indenture") between the Company and First Bank National
Association, as trustee (the "Trustee"), (iii) shares of preferred stock, par
value $1.00 per share ("Preferred Stock"), in one or more series, (iv) shares of
Preferred Stock represented by depositary shares ("Depositary Shares"), or (v)
warrants ("Warrants") to purchase Common Stock. The Debt Securities, Preferred
Stock, Depositary Shares, Common Stock and Warrants (collectively referred to as
"Securities"), may be issued from time to time, pursuant to Rule 415 under the
Act and will be subject to specific terms pertaining to each respective series
of Securities as determined at the time of sale and as set forth in one or more
supplements to the Prospectus constituting part of the Registration Statement.
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the 1933 Act.
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon certificates of public officials and others and upon
affidavits, certificates and written statements of directors, officers and
employees of, and the accountants for, the Company. We also have examined
originals or copies, certified or otherwise identified to our satisfaction, of
such instruments, documents and records as we have deemed relevant and necessary
to examine for the purpose of this opinion, including (a) the Registration
Statement,
<PAGE> 3
Bally Entertainment Corporation
May 22, 1996
Page 2
(b) the Restated Certificate of Incorporation of the Company, as amended (the
"Restated Certificate of Incorporation"), (c) the By-Laws of the Company, (d)
certain resolutions adopted by the Board of Directors of the Company (the
"Resolutions") and (e) a form of the Indenture.
In connection with this opinion, we have assumed the accuracy and
completeness of all documents and records that we have reviewed, the genuineness
of all signatures, the authenticity of the documents submitted to us as
originals and the conformity to authentic original documents of all documents
submitted to us as certified, conformed or reproduced copies. We have further
assumed that all natural persons involved in the transactions contemplated by
the Registration Statement (the "Offering") have sufficient legal capacity to
enter into and perform their respective obligations and to carry out their roles
in the Offering.
Based upon and subject to the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and existing
under the laws of the State of Delaware.
2. The Common Stock (including any Common Stock that may be
issuable pursuant to the conversion of any Preferred Stock or Debt
Securities or the exercise of any Warrants or as part of any Units)
will, upon the issuance and sale thereof in the manner contemplated by
the Registration Statement, be validly issued, fully paid and
nonassessable.
3. The issuance of the Preferred Stock (including any
Preferred Stock that may be issuable pursuant to the conversion of any
Debt Securities or the exercise of any Warrants or as part of any
Units) will be duly authorized by all necessary corporate action of the
Company upon (i) approval by the Company's Board of Directors of the
terms of the Preferred Stock, including the number of shares, dividend
rate, mandatory conversion rate, optional conversion rate and
liquidation preference thereof, and (ii) the completion with
appropriate insertions, execution and filing with the Secretary of
State of the State of Delaware of the Certificate of Designations and
its effectiveness in accordance with the Delaware General Corporation
Law. The Preferred Stock, when duly authorized and, assuming that (i)
in accordance with the Resolutions, the pricing committee of the
Company's Board of Directors adopts resolutions fixing the price per
share at which the Preferred Shares are to be sold and such price is at
least equal to the par value of the Preferred Stock, and (ii) the form
of certificate evidencing the Preferred Stock complies with applicable
law, when sold or otherwise delivered, will be validly issued, fully
paid and nonassessable.
<PAGE> 4
Bally Entertainment Corporation
May 22, 1996
Page 3
4. Each series of Debt Securities will be legally issued and
binding obligations of the Company (except to the extent enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting the
enforcement of creditors' rights generally and by the effect of general
principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law) when (i) the
Registration Statement, as finally amended (including any necessary
post-effective amendments), shall have become effective under the
Securities Act and the related Indenture, including any necessary
supplemental indenture, or any alternate indenture, including any
necessary supplemental indenture, filed as an exhibit to the
Registration Statement, as the case may be, shall have been qualified
under the Trust Indenture Act of 1939, as amended, and, in the case of
such alternative indenture, duly executed and delivered by the Company
and the Trustee thereunder; (ii) a Prospectus Supplement with the
respect to such series of Debt Securities shall have been filed (or
mailed for filing) with the SEC pursuant to the Securities Act and the
rules and regulations thereunder; (iii) the Company's Board of
Directors or a duly authorized committee thereof shall have duly
adopted final resolutions authorizing the issuance and sale of such
series of Debt Securities as contemplated by the Registration
Statement; and (iv) such series of Debt Securities shall have been duly
executed and authenticated and shall have been duly delivered to the
purchasers thereof against payment of the agreed consideration
therefor.
5. When (i) the Warrant Agreement relating to the Warrants
(the "Warrant Agreement") has been duly executed and delivered; (ii)
the terms of the Warrants and of their issuance and sale have been duly
established in conformity with the Warrant Agreement relating to such
Warrants so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction imposed by any
court or governmental or regulatory body having jurisdiction over the
Company; and (iii) the Warrants have been duly executed and
countersigned in accordance with the Warrant Agreement relating to such
Warrants, and issued and sold in the form and manner contemplated in
the Registration Statement and any prospectus supplement relating
thereto, such Warrants will be legally issued and binding obligations
of the Company (except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws affecting the enforcement of creditors' rights generally
and by the effect of general principles of equity, regardless of
whether considered in a proceeding in equity or at law).
<PAGE> 5
Bally Entertainment Corporation
May 22, 1996
Page 4
Our opinions expressed above are limited to the laws of the State of
Illinois, the laws of the United States of America and the General Corporation
Law of the State of Delaware.
We hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus forming a part of the Registration Statement and to
the use of this opinion for filing as Exhibit 5 to the Registration Statement.
We hereby consent to the incorporation by reference of this opinion into a
subsequent registration statement filed by the Company pursuant to Rule 462(b)
under the 1933 Act relating to the offering covered by the Registration
Statement.
Very truly yours,
KATTEN MUCHIN & ZAVIS
/s/ KATTEN MUCHIN & ZAVIS
<PAGE> 1
EXHIBIT 12
<PAGE> 2
BALLY ENTERTAINMENT CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(ALL DOLLAR AMOUNTS IN THOUSANDS) (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------- ------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------- ------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing operations before
income taxes and minority interests ......... $18,431 $ 8,229 $ 56,897 $ 6,078 $ 15,070 $ (7,270) $ (50,917)
Add:
Interest expense(1) ......................... 33,519 32,252 132,361 130,834 92,876 93,795 117,156
Amortization of capitalized interest ........ 326 264 1,164 915 849 839 828
Interest component of rent expense(2) ....... 678 302 1,703 1,132 421 231 1,015
------- ------- -------- -------- -------- -------- ---------
Earnings available for fixed charges .......... $52,954 $41,047 $192,125 $138,959 $109,216 $ 87,595 $ 68,082
======= ======= ======== ======== ======== ======== =========
Fixed charges:
Interest expense(1) ......................... $33,519 $32,252 $132,361 $130,834 $ 92,876 $ 93,795 $ 117,156
Capitalized interest ........................ 159 747 2,838 2,067 422 74 149
Interest component of rent expense(2) ....... 678 302 1,703 1,132 421 231 1,015
------- ------- -------- -------- -------- -------- ---------
Total fixed charges ........................... $34,356 $33,301 $136,902 $134,033 $ 93,719 $ 94,100 $ 118,320
======= ======= ======== ======== ======== ======== =========
Ratio of earnings to fixed charges ............ 1.5x 1.2x 1.4x 1.0x 1.2x (3) (3)
<FN>
- ------------------
(1) Includes amortization of debt issuance costs and discount.
(2) Assumed interest component to be one-third of rent expense.
(3) Earnings were insufficient to cover fixed charges for the years ended
December 31, 1992 and 1991 by $6,505 and $50,238, respectively.
</TABLE>
<PAGE> 3
BALLY ENTERTAINMENT CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(ALL DOLLAR AMOUNTS IN THOUSANDS) (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------- ------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------- ------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing operations before
income taxes and minority interests ........... $18,431 $ 8,229 $ 56,897 $ 6,078 $ 15,070 $ (7,270) $ (50,917)
Add:
Interest expense(1) ........................... 33,519 32,252 132,361 130,834 92,876 93,795 117,156
Amortization of capitalized interest .......... 326 264 1,164 915 849 839 828
Interest component of rent expense(2) ......... 678 302 1,703 1,132 421 231 1,015
Preferred stock dividends of subsidiaries ..... 235 229 572
------- ------- -------- -------- -------- -------- ---------
Earnings available for combined fixed charges and
preferred stock dividends ..................... $53,189 $41,276 $192,697 $138,959 $109,216 $ 87,595 $ 68,082
======= ======= ======== ======== ======== ======== =========
Fixed charges and preferred stock dividends:
Interest expense(1) ........................... $33,519 $32,252 $132,361 $130,834 $ 92,876 $ 93,795 $ 117,156
Capitalized interest .......................... 159 747 2,838 2,067 422 74 149
Interest component of rent expense(2) ......... 678 302 1,703 1,132 421 231 1,015
Preferred stock dividends(3) .................. 7,046 1,344 6,804 5,490 4,300 2,778 2,778
------- ------- -------- -------- -------- -------- ---------
Combined fixed charges and
preferred stock dividends ..................... $41,402 $34,645 $143,706 $139,523 $ 98,019 $ 96,878 $ 121,098
======= ======= ======== ======== ======== ======== =========
Ratio of earnings to combined fixed charges and
preferred stock dividends ..................... 1.3x 1.2x 1.3x 1.0x 1.1x (4) (4)
<FN>
- ------------------
(1) Includes amortization of debt issuance costs and discount.
(2) Assumed interest component to be one-third of rent expense.
(3) Includes preferred stock dividend requirements of Bally Entertainment
Corporation and its consolidated subsidiaries.
(4) Earnings were insufficient to cover combined fixed charges and preferred
stock dividends for the years ended December 31, 1992 and 1991 by $9,283
and $53,016, respectively.
</TABLE>
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333- ) and related Prospectus of Bally
Entertainment Corporation for the registration of $750,000,000 of its debt
securities, preferred stock, depository shares, common stock, and warrants to
purchase common stock and to the incorporation by reference therein of our
report dated February 7, 1996, with respect to the consolidated financial
statements and schedules of Bally Entertainment Corporation included in its
Annual Report on Form 10-K for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
/s/ ERNST & YOUNG LLP
Chicago, Illinois
May 20, 1996
<PAGE> 1
EXHIBIT 25.1
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM T-1
Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0256895
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
BALLY ENTERTAINMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2512405
(State of Incorporation) (I.R.S. Employer
Identification No.)
8700 West Bryn Mawr Avenue
Chicago IL. 60631
(Address of Principal Executive Offices) (Zip Code)
SENIOR DEBT SECURITIES
(Title of the Indenture Securities)
<PAGE> 3
GENERAL
1. General Information Furnish the following information as to the
Trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe
each such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which
the Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification. Each of the exhibits listed
below, except Exhibit 6, is incorporated by reference from
registration number 33-90786.
1. Copy of Articles of Association.
2. Copy of Certificate of Authority to Commence Business.
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).
4. Copy of existing By-Laws.
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consent of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
-2-
<PAGE> 4
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Bank National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 21st day of May, 1996.
FIRST BANK NATIONAL ASSOCIATION
[SEAL]
/s/ Richard Prokosch
--------------------
Richard Prokosch
Trust Officer
/s/ Kathe Barrett
- -------------------
Kathe Barrett
Assistant Secretary
-2-
<PAGE> 5
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: May 21, 1996
FIRST BANK NATIONAL ASSOCIATION
/s/ Richard Prokosch
--------------------
Richard Prokosch
Trust Officer
<PAGE> 1
EXHIBIT 25.2
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM T-1
Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0256895
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
BALLY ENTERTAINMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2512405
(State of Incorporation) (I.R.S. Employer
Identification No.)
8700 West Bryn Mawr Avenue
Chicago IL. 60631
(Address of Principal Executive Offices) (Zip Code)
SUBORDINATED DEBT SECURITIES
(Title of the Indenture Securities)
<PAGE> 3
GENERAL
1. General Information Furnish the following information as to the
Trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe
each such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which
the Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification. Each of the exhibits listed
below, except Exhibit 6, is incorporated by reference from
registration number 33-90786.
1. Copy of Articles of Association.
2. Copy of Certificate of Authority to Commence Business.
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).
4. Copy of existing By-Laws.
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consent of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
-1-
<PAGE> 4
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Bank National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 21st day of May, 1996.
FIRST BANK NATIONAL ASSOCIATION
[SEAL]
/s/ Richard Prokosch
--------------------
Richard Prokosch
Trust Officer
/s/ Kathe Barrett
- -------------------
Kathe Barrett
Assistant Secretary
-2-
<PAGE> 5
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: May 21, 1996
FIRST BANK NATIONAL ASSOCIATION
/s/ Richard Prokosch
-------------------------------
Richard Prokosch
Trust Officer
