1
EXHIBIT 4.2
================================================================================
SERVICE CORPORATION INTERNATIONAL
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
_____________________________
1998 SENIOR SUBORDINATED INDENTURE
DATED AS OF ____ 1, ____
================================================================================
2
CROSS REFERENCE SHEET*
---------------------
Provisions of Trust Indenture Act of 1939 and 1998 Senior Subordinated
Indenture to be dated as of _____ 1, ____ between SERVICE CORPORATION
INTERNATIONAL and CHASE BANK OF TEXAS, Trustee:
SECTION OF THE ACT SECTION OF INDENTURE
------------------ --------------------
310(a)(1), (2) and (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(a) and (c)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(b) and (c)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv), (v),
(vi) and (vii)
313(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
__________________________________
* This Cross Reference Sheet is not part of the Indenture.
3
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Associated Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Date of Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Last Sale Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original issue discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
i
4
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Vice president . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3 Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.4 Authentication and Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.7 Denomination and Date of Securities; Payments of Interest . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10 Cancellation of Securities; Disposition Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.12 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.2 Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.3 Office for Notices and Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.6 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.7 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.8 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.9 Prohibition on Incurrence of Senior Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE FOUR
SECURITY HOLDERS LIST AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders . . . . . . . . . 18
SECTION 4.2 Preservation and Disclosure of Securityholders Lists . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
Section 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.2 Payment of Securities on Default; Suit Therefor . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ii
5
Section 5.3 Application of Moneys Collected by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.4 Proceedings by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.5 Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.6 Remedies Cumulative and Continuing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.7 Direction of Proceedings; Waiver of Defaults by Majority of Securityholders . . . . . . . . . . . . 26
Section 5.8 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.10 Trustee May Enforce Claim without Possession of Securities . . . . . . . . . . . . . . . . . . . . . 27
Section 5.11 Waiver of Stay or Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default . . . . . . . . . . . . 28
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application
of Proceeds Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.4 Trustee and Agents May Hold Securities; Collections, etc. . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim . . . . . . . . . . . . . . . . . . 30
SECTION 6.7 Right of Trustee to Rely on Officer's Certificate, etc. . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.9 Persons Eligible for Appointment as Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . . . . . . . . 38
SECTION 6.13 Preferential Collection of Claims Against the Issuer . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities . . . . . . . . . . . . . . . . . . . 42
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.4 Securities Owned by issuer Deemed Not Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.2 Supplemental Indentures With Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.4 Documents to be Given to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.6 Subordination Unimpaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
iii
6
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc. on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.2 Successor Corporation to be Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.3 Opinion of Counsel to be Given Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities . . . . . . . . . . . . . . . . 49
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years . . . . . . . . . . . . . 50
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and Directors of Issuer Exempt from
Individual Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities . . . . . . . . . 50
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.4 Notices of Demands on Issuer, Trustee and Holders of Securities . . . . . . . . . . . . . . . . . . 50
SECTION 11.5 Officer's Certificates and Opinions of Counsel; Statements to be Contained Therein . . . . . . . . . 51
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939 . . . . . . . . . . . . . . 52
SECTION 11.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.11 Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 12.3 Payment of Securities Called for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption . . . . . . . . . . . 54
SECTION 12.5 Mandatory of Optional Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
Section 13.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 13.2 Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 13.3 Fractional Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.4 Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 13.5 Continuation of Conversion Privilege in Case of Merger, Consolidation
or Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
iv
7
Section 13.6 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 13.7 Taxes on Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 13.8 Issuer to Provide Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 13.9 Disclaimer of Responsibility for Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 13.10 Return of Funds Deposited for Redemption of Converted Securities . . . . . . . . . . . . . . . . . . 62
ARTICLE FOURTEEN
SUBORDINATION
Section 14.1 Securities Subordinated to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 14.2 Reliance on Certificate of Liquidating Agent; Further Evidence as Ownership of Senior Indebtedness . 64
Section 14.3 Payment Permitted if no Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 14.4 Disputes with Holders of Certain Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 14.5 Trustee Not Charged with Knowledge of Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 14.6 Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 14.7 Rights of Trustee as Holder of Senior indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 14.8 Article Applicable to Paying agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 14.9 Subordination Rights Not Impaired by Acts or Omissions of the Issuer or
Holders of Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 14.10 Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 66
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
* This Table of Contents is not part of the Indenture
v
8
THIS 1998 SENIOR SUBORDINATED INDENTURE, dated as of ________ 1, ____
between SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Issuer"),
and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured senior subordinated debentures, notes or other evidences of
indebtedness to be issued in one or more series (the "Securities") up to such
principal amount or amounts as may from time to time be authorized in
accordance with the terms of this Indenture:
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been undertaken and completed;
NOW, THEREFORE:
In consideration of the premises and the purchase of the Securities by
the Holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective Holders from time to time
of the Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any
indenture supplemental hereto, the following terms shall have the respective
meanings specified in this Section 1.1 (except as otherwise expressly provided
or unless the context otherwise clearly requires). All other terms used in
this Indenture that are defined in the Trust Indenture Act of 1939, including
terms defined therein by reference to the Securities Act of 1933, shall have
the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture (except as herein
otherwise expressly provided or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the date of
execution and delivery of this Indenture.
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. The expressions "date of the
Indenture", "date hereof", "date as of which this Indenture is dated" and "date
of execution and delivery of this Indenture" and other expressions of similar
import refer to the effective date of the original execution and delivery of
this Indenture, viz. ___________ 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.
"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
9
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.
"Associated Rights" means any rights to purchase shares of the
Issuer's capital stock or other securities that are associated with any class
of stock constituting Common Stock for purposes hereof if at the time of the
issuance thereof such rights are not separable from any class of stock except
upon the occurrence of a contingency, whether such rights exist at the date of
the execution hereof or are thereafter issued by the Company as a dividend on
any such class of stock or otherwise.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code Sec. 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted or
consented to by the Board of Directors and to be in full force and effect.
"Business Day" means, with respect to any Security, a day that (a) in
the Place of Payment (or in any of the Places of Payment, if more than one) in
which amounts are payable, as specified in the form of such Security, and (b)
in the city in which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or regulation to
close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act of 1939, then the body performing such duties on such
date.
"Common Stock" means the common stock, par value $1.00 per share, of
the Issuer as the same exists at the date of execution and delivery of this
Indenture or other capital stock of the Issuer into which such common stock is
reclassified or changed from time to time.
"Conversion Agent" shall have the meaning set forth in Section 3.3.
"Conversion Price" shall have the meaning set forth in Section 13.4.
"Corporate Trust Office" means the office of the Trustee in Dallas,
Texas or Houston, Texas, at which at any particular time its corporate trust
business shall be administered, which, as of the date hereof, is as follows:
(a) for payment, registration, transfer, exchange and tender of the Securities:
Chase Bank of Texas, National Association, One Main Place, 0000 Xxxx Xxxxxx,
00xx Xxxxx, Xxxxxx, Xxxxx 00000, telephone: (000) 000-0000, telecopy: (214)
672-5746; and (b) for all other communications relating to the Securities:
Chase Bank of Texas, National Association, 000 Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000, Attention: Global Trust Services for Service Corporation
International, telephone: (000) 000-0000, telecopy: (000) 000-0000.
The term "covenant" shall have the meaning set forth in Section 3.1.
"Date of Conversion" shall have the meaning set forth in Section 13.2.
2
10
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and, thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and, if at any time there is
more than one such Person, "Depositary" as used with respect to the Securities
of any such series shall mean the Depositary with respect to the Global
Securities of such series.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depositary for such series in accordance
with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the Person in whose name such Security
is registered in the security register kept by the Issuer for that purpose in
accordance with the terms hereof.
"Indebtedness" means, with respect to any Person.
(a) (i) the principal of and interest and premium, if
any, on indebtedness for money borrowed of such Person evidenced by
bonds, notes, debentures or similar obligations, including any
guaranty by such Person of any indebtedness for money borrowed of any
other Person, whether any such indebtedness or guaranty is outstanding
on the date of this Indenture or is thereafter created, assumed or
incurred, (ii) the principal of and interest and premium, if any, on
indebtedness for money borrowed, incurred, assumed or guaranteed by
such Person in connection with the acquisition by it or any of its
subsidiaries of any other businesses, properties or other assets and
(iii) lease obligations which such Person capitalizes in accordance
with Statement of Financial Accounting Standards No. 13 promulgated by
the Financial Accounting Standards Board or such other generally
accepted accounting principles as may be from time to time in effect;
(b) any other indebtedness of such Person, including any
indebtedness representing the deferred and unpaid balance of the
purchase price of any property or interest and unpaid balance of the
purchase price of any property or interest therein, including any such
balance that constitutes a trade account payable, and any guaranty,
endorsement or other contingent obligation of such Person in respect
of any indebtedness of another, which is outstanding on the date of
this Indenture or is thereafter created, assumed or incurred by such
Person; and
(c) any amendments, modifications, refundings, renewals
or extensions of any indebtedness or obligation described as
Indebtedness in clause (a) or (b) above.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented or both, including, for all purposes of this instrument and any
such supplement, the provisions of the Trust Indenture Act of 1939 that are
deemed to be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
The term "interest" means, when used with respect to non-interest
bearing Securities (including, without limitation, any Original Issue Discount
Security which by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated
3
11
maturity, upon acceleration or redemption or otherwise) or after the date, if
any, on which the Issuer becomes obligated to acquire a Security, whether upon
conversion, by purchase or otherwise.
"Issuer" means (except as otherwise provided in Section 6.8) Service
Corporation International, a Texas corporation, and subject to Article IX, its
successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president, any vice president or the treasurer of the Issuer.
"Last Sale Price" shall have the meaning set forth in Section 13.3.
"Officer's Certificate", when used with respect to the Issuer, means a
certificate signed by the chairman of the Board of Directors, the president, or
any vice president and by the treasurer, any assistant treasurer, the
controller, any assistant controller, the secretary or any assignment secretary
of the Issuer. Each such certificate shall include the statements provided for
in Section 11.5, if and to the extent required by the provisions of such
Section 11.5. One of the officers signing any Officer's Certificate given
pursuant to Section 4.3 shall be the principal executive, financial or
accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the general
counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each
such opinion shall include the statements provided for in Section 11.5, if and
to the extent required by the provisions of such Section 11.5.
The term "original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
The term "original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt security
(as set forth in the case of an Original Issue Discount Security on the face of
such Security).
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when used
with reference to Securities, shall, subject to the provisions of Section 7.4,
mean, as of any particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series as to
which the provisions of Article X hereof shall not be applicable), or
portions thereof, for the payment or redemption of which moneys or
U.S. Government Obligations (as provided for in Section 10.1) in the
necessary amount shall have been deposited in trust with the Trustee
or with any Paying Agent (other than the Issuer) or shall have been
set aside, segregated and held in trust by the Issuer for the Holders
of such Securities (if the Issuer shall act as its own Paying Agent),
provided that, if such Securities, or portions thereof, are to
4
12
be redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory to
the Trustee shall have been made for giving such notice;
(c) Securities which shall have been paid or in substitution
for which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee is presented
that such Security is held by a Person in whose hands such Security
is a legal, valid and binding obligation of the Issuer); and
(d) Securities converted into Common Stock pursuant
hereto prior to the applicable record date and, for purposes of
selection for redemption, Securities not deemed Outstanding pursuant
to Section 12.2; provided, however, that Securities surrendered for
conversion during the period between the close of business on any
record date for such Security and the opening of business on the
related interest payment date (or on the related interest payment
date) shall be considered Outstanding for purposes of payment of
interest on such related interest payment date.
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the portion of the principal amount
thereof that would be due and payable as of the date of such determination (as
certified by the Issuer to the Trustee) upon a declaration of acceleration of
the maturity thereof pursuant to Section 5.1.
"Paying Agent" shall have the meaning set forth in Section 3.3.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption and conversion provisions, if any,
with respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust, estate,
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 interest, if any,
on the Securities of such series are payable as determined in accordance with
Section 2.3.
The term "principal" of a debt security, including any Security, means
the amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Issuer, upon any purchase or exchange at the option of the Issuer
or the holder of such debt security and upon any acceleration of the maturity
of such debt security).
The term "principal amount" of a debt security, including any
Security, means the principal amount as set forth on the face of such debt
security.
The term "record date" shall have the meaning set forth in Section
2.7.
"Registrar" shall have the meaning set forth in Section 3.3.
5
13
"Responsible Officer", when used with respect to the Trustee, means
any officer assigned by the Trustee to administer its corporate trust matters.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture or, as the
case may be, securities that have been authenticated and delivered pursuant to
this Indenture.
"Senior Indebtedness" means Indebtedness of the Issuer outstanding at
any time except (a) any Indebtedness of the Issuer that pursuant to its terms
or the terms of any agreement relating thereto or by operation of law if
subordinate or junior in right of payment to any other Indebtedness of the
Issuer, provided that no Indebtedness of the Issuer shall be deemed to be
subordinate to any other Indebtedness of the Issuer solely by virtue of any
such other Indebtedness being secured or otherwise having the benefit of any
lien or security interest, (b) any Indebtedness as to which, by the terms of
the instrument creating or evidencing the same, it is provided that such
Indebtedness is not senior in right of payment to the Securities, (c) the
Securities, (d) the Issuer's subordinated indebtedness, (e) any Indebtedness of
the Issuer to a wholly owned Subsidiary of the Issuer, (f) interest accruing
after the filing of a petition initiating certain bankruptcy or insolvency
proceedings unless such interest is an allowed claim enforceable against the
Issuer in a proceeding under federal or state bankruptcy laws and (g) trade
accounts payable.
"Subsidiary" means any corporation of which the Issuer, or the Issuer
and one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own voting securities entitling any one or more of the Issuer and
its Subsidiaries to elect a majority of the directors of such corporation,
either at all times or so long as there is no default or contingency which
permits the holders of any other class or classes of securities to vote for the
election of one or more directors.
"Trading Day" shall have the meaning set forth in Section 13.3.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1, 8.2 and 13.5) means the Trust Indenture Act of 1939, as amended
by the Trust Indenture Reform Act of 1990, as in force at the date as of which
this Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article VI, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and, if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any series
shall mean the trustee with respect to the Securities of such series.
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
The term "vice president", when used with respect to the Issuer 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".
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
6
14
ARTICLE II
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall
be substantially in such form (not inconsistent with this Indenture) as shall
be established by or pursuant to one or more Board Resolutions (as set forth in
a Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officer's Certificate detailing such
establishment) 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 imprinted or
otherwise reproduced thereon such legend or legends or endorsements, not
inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto, or with
any rules of any securities exchange or to conform to general usage, all as may
be determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner permitted by
the rules of any securities exchange on which the Securities may be listed, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be
substantially as follows:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By
----------------------------
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an alternate
certificate of authentication which shall be substantially as follows:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By
------------------------------------
as Authenticating Agent
By
------------------------------------
Authorized Signatory
7
15
SECTION 2.3 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 and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series, but all Securities issued hereunder shall be subordinate and
junior in right of payment, to the extent and in the manner set forth in
Article XIV, to all Senior Indebtedness. There shall be established in or
pursuant to one or more Board Resolutions (and, to the extent established
pursuant to rather than set forth in a Board Resolution, in an Officer's
Certificate detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance of Securities of
any series:
(1) the designation of the Securities of the series,
which shall distinguish the Securities of the series from the
Securities of all other series;
(2) whether the Securities will be convertible into
Common Stock (or cash in lieu thereof) and, if so, the terms and
conditions upon which such conversion will be effected including the
initial Conversion Price and any adjustments thereto in addition to or
different from those set forth in Section 13.4, the conversion period
and other provisions in addition to or in lieu of those set forth
herein;
(3) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5, 12.3
or 13.2);
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from which any
such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(6) the place or places where and the manner in which
the principal of and any interest on Securities of the series shall
be payable and the office or agency for the Securities of the series
maintained by the Issuer pursuant to Section 3.3 (if other than as
provided in Section 3.3);
(7) any provisions relating to the issuance of Securities
of such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which such
original issue discount shall accrue, if any, and the date or dates
from or to which or period or periods during which such original issue
discount shall accrue at such rate or rates);
(8) the right, if any, of the Issuer to redeem, purchase
or repay Securities of the series, in whole or in part, at its option
and the period or periods within which, the price or prices (or the
method by which such price or prices shall be determined or both) at
which, the form or method of payment therefor if other than in cash
and any terms and conditions upon which and the manner in which (if
different from the provisions of Article XII) Securities of the series
may be so redeemed, purchased or repaid, in whole or in part, pursuant
to any sinking fund or otherwise;
(9) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series, in whole or in part,
pursuant to any mandatory redemption, sinking fund or analogous
8
16
provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article XII) Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(10) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(11) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(12) whether the Securities of the series will be issuable
as Global Securities;
(13) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(14) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars, conversion agents or any other
agents with respect to the Securities of such series;
(15) any deleted, modified or additional events of default
or remedies or any deleted, modified or additional covenants with
respect to the Securities of such series;
(16) whether the provisions of Section 10.1(C) will be
applicable to Securities of such series;
(17) if the amounts of payments of principal of and
interest on the Securities of such series are to be determined with
reference to an index, the manner in which such amounts shall be
determined; and
(18) 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 as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officer's Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided or pursuant
to such Board Resolution, such Officer's Certificate or in any such indenture
supplemental hereto.
Any such Board Resolution or Officer's Certificate referred to above
with respect to Securities any series filed with the Trustee on or before the
initial issuance of the Securities of such series shall be incorporated herein
by reference with respect to Securities of such series and shall thereafter be
deemed to be a part of this Indenture for all purposes relating to Securities
of such series as fully as if such Board Resolution or Officer's Certificate
were set forth herein in full.
9
17
SECTION 2.4 Authentication and Delivery of Securities. The
Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication together with the applicable documents referred to
below in this Section 2.4, and the Trustee shall thereupon authenticate and
deliver such Securities to, or upon the order of, the Issuer (contained in the
Issuer Order referred to below in this Section 2.4) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be specified
from time to time by an Issuer Order. The maturity date, original issue date,
interest rate, if any, and any other terms of the Securities of such series
shall be determined by or pursuant to such Issuer Order and procedures. If
provided for in such procedures, such Issuer Order may authorize authentication
and delivery pursuant to oral instructions from the Issuer or its duly
authorized agent, which instructions shall be promptly confirmed in writing.
In authenticating the Securities of such series and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in the case of subparagraphs (2), (3) and
(4) below only at or before the time of the first request of the Issuer to the
Trustee to authenticate Securities of such series) and (subject to Section 6.1)
shall be fully protected in relying upon, unless and until such documents have
been superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions if the Securities of such series
are not to be delivered to the Issuer, provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such Issuer
Order may be delivered by the Issuer to the Trustee prior to the
delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities of
such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to telecommunication or electronic instructions from
the Issuer or its duly authorized agent or agents, and (e) after the
original issuance of the first Security of such series to be issued,
any separate request by the Issuer that the Trustee authenticate
Securities of such series for original issuance will be deemed to be a
certification by the Issuer that it is in compliance with all
conditions precedent provided for in this Indenture relating to the
authentication and delivery of such Securities;
(2) the Board Resolution, Officer's Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3 by
or pursuant to which the form or forms and terms of the Securities of
such series were established;
(3) an Officer's Certificate setting forth the form or
forms and terms of the Securities stating that the form or forms and
terms of the Securities have been established pursuant to Sections 2.1
and 2.3 and comply with this Indenture and covering such other matters
as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of
Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(A) in the case of an underwritten offering, the
Securities of such series are in the form or forms
contemplated by this Indenture and have been duly and validly
authorized as contemplated by this Indenture;
(B) in the case of an offering that is not
underwritten, the Securities of such series are in the form or
forms contemplated by this Indenture, certain terms of the
Securities of
10
18
such series have been established pursuant to a Board
Resolution, an Officer's Certificate or a supplemental
indenture in accordance with this Indenture, and when such
other terms as are to be established pursuant to procedures
set forth in an Issuer Order shall have been established, all
such terms will have been duly authorized by the Issuer and
will have been established in conformity with the provisions
of this Indenture;
(C) when the Securities of such series have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered
against payment therefor by the purchasers thereof, they will
be valid and legally binding obligations of the Issuer,
enforceable in accordance with their respective terms, and
will be entitled to the benefits of this Indenture; and
(D) to such counsel's knowledge after the inquiry
indicated therein, the execution and delivery by the Issuer
of, and the performance by the Issuer of its obligations
under, the Securities of such series will not contravene any
provision of applicable law or the articles of incorporation
or by-laws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as one
enterprise, or any judgment, order or decree of any
governmental agency or any court having jurisdiction over the
Issuer or any Subsidiary, and no consent, approval or
authorization of any governmental body or agency is required
for the performance by the Issuer of its obligations under the
Securities, except such as are specified and have been
obtained and such as may be required by the securities or blue
sky laws of the various states in connection with the offer
and sale of the Securities.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the State of Texas
and the federal law of the United States, upon opinions of other counsel
(copies of which shall be delivered to the Trustee), who shall be counsel
reasonably satisfactory to the Trustee, in which case the opinion shall state
that such counsel believes that both such counsel and the Trustee are entitled
so to rely. Such counsel may also state that, insofar as such opinion involves
factual matters, such counsel has relied, to the extent such counsel deems
proper, upon certificates of officers of the Issuer and its Subsidiaries and
certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section 2.4 if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
by the Issuer or if the Trustee in good faith by its board of directors or board
of trustees, executive committee or a trust committee of directors or trustees
or Responsible Officers shall determine that such action would expose the
Trustee to personal liability to existing Holders or would adversely affect the
Trustee's own rights, duties or immunities under the Securities, this Indenture
or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section 2.4 and the Issuer Order with respect to such series,
authenticate and deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount
of all of the Securities of such series to be issued in the form of Global
Securities and not yet cancelled, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's
11
19
instructions, and (iv) shall bear a legend substantially to the following
effect: "Unless and until it is exchanged in whole or in part for Securities
in definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of 1934 and any
other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be
signed on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one of
its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
In case of any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities
as shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized signatories, or its Authenticating Agent, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificates by the Trustee, or its Authenticating Agent,
upon any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture. Each
reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form
in denominations established as contemplated by Section 2.3 or, with respect to
the Securities of any series, if not so established, in denominations of $1,000
and any integral multiple thereof. The Securities of each series shall be
numbered, lettered or otherwise distinguished in such manner or in accordance
with such plan as the officers of the Issuer executing the same may determine
with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest, if any, shall be payable on the dates, established as contemplated by
Section 2.3.
The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or
12
20
exchange of such Security subsequent to the record date and prior to such
interest payment date, except if and to the extent the Issuer shall default in
the payment of the interest due on such interest payment date for such series,
in which case such defaulted interest shall be paid to the Persons in whose
names Outstanding Securities for such series are registered (a) at the close of
business on a subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the Issuer to the
Holders of Securities not less than 15 days preceding such subsequent record
date or (b) as determined by such other procedure as is mutually acceptable to
the Issuer and the Trustee. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) for the
Securities of any series shall mean the date specified as such in the terms of
the Securities of such series established as contemplated by Section 2.3, or, if
no such date is so established, if such interest payment date is the first day
of a calendar month, the fifteenth day of the next preceding calendar month or,
if such interest payment date is the fifteenth day of a calendar month, the
first day of such calendar month, whether or not such record date is a Business
Day.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
keep at the office of each Registrar for each series of Securities a register
or registers in which, subject to such reasonable regulations as it may
prescribe, it will provide for the registration of Securities of each series
and the registration of transfer of Securities of such series. Each such
register shall be in written form in the English language or in any other form
capable of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection and
available for copying by the Trustee.
Upon due presentation for registration of transfer of any Security of
any series at the office of any Registrar, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities of the same series, maturity date,
interest rate, if any, and original issue date in authorized denominations for
a like aggregate principal amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the office of the Registrar.
The Issuer 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 of Securities. No service charge shall be made for
any such transaction or for any exchange of Securities of any series for any
such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing or publication of notice of redemption of Securities of such
series to be redeemed, (b) any Securities selected, called or being called for
redemption, in whole or in part, except in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed or (c) any Security
if the Holder thereof has exercised his right, if any, to require the Issuer to
repurchase such Security in whole or in part, except the portion of such
Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part of the Securities
of a series may not be transferred except as a whole by the Depositary for such
series to a nominee of such
13
21
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such ineligibility, the Issuer's election pursuant to Section
2.3 that such Securities be represented by one or more Global Securities shall
no longer be effective and the Issuer shall execute, and the Trustee, upon
receipt of an Issuer Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such Securities in exchange for such Global Security
or Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities.
In such event the Issuer shall execute, and the Trustee, upon receipt of an
Officer's Certificate for the authentication and delivery of definitive
Securities of such series, shall authenticate and deliver, Securities of such
series in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such Securities, in exchange for such Global
Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series in definitive registered form on such terms as
are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Issuer or the Trustee. Securities
in definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Issuer or the Trustee. The Trustee or
such agent shall deliver at its office such Securities to or as directed by the
Persons in whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid and legally binding obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.
14
22
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee, in the absence of notice to the Trustee that such Security
has been acquired by a bona fide purchaser, shall authenticate and deliver a
new Security of the same series, maturity date, interest rate, if any, and
original issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for the mutilated
or defaced Security, or in lieu of and in substitution for the Security so
destroyed, lost or stolen. In every case the applicant for a substitute
Security shall furnish to the Issuer and to the Trustee and any agent of the
Issuer or the Trustee such security or indemnity as may be required by the
Trustee to indemnify and defend and to save each of the Trustee and the Issuer
harmless and, in every case of destruction, loss or theft, evidence to their
satisfaction of the destruction, loss or theft of such Security and of the
ownership thereof and in the case of mutilation or defacement, shall surrender
the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full or is being surrendered for conversion in full shall become
mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead of
issuing a substitute Security, pay or authorize the payment of the same or the
conversion of such Security (without surrender thereof except in the case of a
mutilated or defaced Security), if the applicant for such payment or conversion
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to hold each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of the
Issuer or the Trustee evidence to the Trustee's satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section 2.9 by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Issuer, 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
(but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities of such
series duly authenticated and delivered hereunder. All Securities shall be
held and owned upon the express condition that, to the extent permitted by law,
the foregoing provisions are exclusive with respect to the replacement, payment
or conversion of mutilated, defaced, destroyed, lost or stolen Securities and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement payment or conversion of negotiable instruments or other securities
without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, purchase, redemption, registration of
transfer, exchange or conversion, or for credit against any payment in respect
of a sinking or analogous fund, if surrendered to the Issuer or any agent of
the Issuer or the Trustee or any agent of the Trustee, shall be delivered to
the Trustee or its agent for cancellation or, if surrendered to the Trustee,
shall be cancelled by it; and no Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee or its agent shall dispose of cancelled Securities held by it, or hold
such Securities in accordance with its standard retention policy, and deliver a
certificate of disposition or retention to the Issuer. If the Issuer or its
agent shall acquire any of the Securities, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee or its agent
for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series
15
23
(printed, lithographed, typewritten or otherwise reproduced, in each case in
form satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every Temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities of such series
and thereupon temporary Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.3 and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless otherwise established
pursuant to Section 2.3.
SECTION 2.12 Computation of Interest. Except as otherwise
specified as contemplated by Section 2.1 for Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE III
COVENANTS OF THE ISSUER
SECTION 3.1 Covenants. The term "covenant", whenever used herein
with respect to the covenants of the Issuer applicable to Securities of any
series, includes without limitation the covenants set forth in this Article III,
unless it is either inapplicable to a particular series or it is specifically
deleted or modified in or pursuant to the Board Resolution of supplemental
indenture establishing such series of Securities or in the form of Security for
such series.
SECTION 3.2 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and interest, if any, on each of the Securities at the place,
at the respective times and in the manner provided in the Securities.
SECTION 3.3 Office for Notices and Payments, etc. So long as any
of the Securities are Outstanding, the Issuer will maintain in each Place of
Payment, an office or agency where the Securities may be presented for payment
("Paying Agent"), an office or agency where the Securities may be presented for
registration of transfer and for exchange ("Registrar") and, if applicable, an
office or agency where the Securities may be presented for conversion
("Conversion Agent") as in this Indenture provided, and an office or agency
where notices and demands to or upon the Issuer in respect of the Securities or
of this Indenture may be served. In case the Issuer shall at any time fail to
maintain any such office or agency, or shall fail to give notice to the Trustee
of any change in the location thereof, presentation may be made and notice and
demand may be served in respect of the Securities or of this Indenture at the
Corporate Trust Office. The Issuer hereby initially designates the Corporate
Trust Office for each such purpose and appoints the Trustee as Registrar,
Paying Agent, Conversion Agent and as the agent upon whom notices and demands
may be served with respect to the Securities.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee so
that there shall at all times be a Trustee hereunder.
16
24
SECTION 3.5 Provision as to Paying Agent.
(a) If the Issuer shall appoint a Paying Agent other than
the Trustee, it will cause such Paying Agent to execute and deliver to
the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 3.5, (1) that it
will hold all sums held by it as such agent for the payment of the
principal of or interest, if any, on the Securities (whether such sums
have been paid to it by the Issuer or by any other obligor on the
Securities) in trust for the benefit of the Holders of the Securities
or the Trustee; and (2) that it will give the Trustee notice of any
failure by the Issuer (or by any other obligor on the Securities) to
make any payment of the principal of or interest, if any, on the
Securities when the same shall be due and payable; and (3) that it
will, at any time during the continuance of any such failure, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
(b) If the Issuer shall act as its own Paying Agent, it
will, on or before each due date of the principal of or interest, if
any, on the Securities, set aside, segregate and hold in trust for the
benefit of the Holders of the Securities a sum sufficient to pay such
principal or interest, if any, so becoming due and will notify the
Trustee of any failure to take such action and of any failure by the
Issuer (or by any other obligor under the Securities) to make any
payment of the principal of or interest, if any, on the Securities when
the same shall become due and payable.
(c) Anything in this Section 3.5 to the contrary
notwithstanding, the Issuer may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or for any
other reason, pay or cause to be paid to the Trustee all sums held in
trust by it, or any Paying Agent hereunder, as required by this
Section 3.5, such sums to be held by the Trustee upon the trusts
herein contained.
(d) Anything in this Section 3.5 to the contrary
notwithstanding, any agreement of the Trustee or any Paying Agent to
hold sums in trust as provided in this Section 3.5 is subject to
Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more Paying
Agents, it will, on or before each due date of the principal of or
interest, if any, on any Securities, deposit with a Paying Agent a sum
sufficient to pay the principal or interest, if any, so becoming due,
such sum to be held in trust for the benefit of the Persons entitled
to such principal or interest, if any, and (unless such Paying Agent
is the Trustee) the Issuer will promptly notify the Trustee of its
action or failure so to act.
SECTION 3.6 Corporate Existence. Subject to, and except as
otherwise provided in, Article IX, the Issuer will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, and franchise to be a corporation, and will remain qualified as a
foreign corporation in good standing in each jurisdiction wherein the
ownership of its assets or the conduct of its business requires it to be so
qualified, except where the failure to so qualify would not have a material
adverse effect on the Issuer and its Subsidiaries taken as a whole.
SECTION 3.7 Maintenance of Properties. The Issuer will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Issuer 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 the
Issuer from
17
25
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Issuer, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 3.8 Payment of Taxes and Other Claims. The Issuer will
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied
or imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Issuer or any Subsidiary; provided, however, that the Issuer
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 3.9 Prohibition on Incurrence of Senior Subordinated
Debt. The Issuer will not incur or suffer to exist Indebtedness that is or
purports to be, pursuant to its terms or the terms of any agreement relating
thereto, senior in right of payment to the Securities and subordinate or junior
in right of payment to any other Indebtedness of the Issuer; provided that no
Indebtedness of the Issuer shall be deemed to be subordinate to any other
Indebtedness of the Issuer solely by virtue of any such other Indebtedness
being secured or otherwise having the benefit of any lien or security interest.
ARTICLE IV
SECURITYHOLDERS LIST AND REPORTS
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of the
names and addresses of the Holders of the Securities of each series as of a
date not more than 15 days prior to the time such information is furnished:
(a) semiannually and not more than 15 days after each
March 1 and September 1; and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Issuer of any such
request; provided that if and so long as the Trustee shall be the
Registrar for such series, such list shall not be required to be
furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the Holders of each series of Securities (i) contained in the most
recent list furnished to it as provided in Section 4.1, and (ii)
received by it in its capacity of Registrar or Paying Agent for such
series, if so acting. The Trustee may destroy any list furnished to
it as provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities
(hereinafter referred to as "applicants") apply in writing to the
Trustee and furnish to the Trustee reasonable proof that each such
applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states
that the applicants desire to communicate with other Holders of
Securities of a particular series (in which case the applicants must
all hold Securities of such series) or with Holders of all Securities
with respect to their rights under this Indenture or under such
Securities, and such application is accompanied by a copy of the form
of proxy or other communication which such
18
26
applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election,
either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate
number of Holders of Securities of such series or of all
Securities, as the case may be, whose names and addresses
appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a)
of this Section 4.2, and as to the approximate cost of mailing
to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing ,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Securities of such series or of all Securities, as the case may be, or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or, if, after entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met, and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Securityholders with reasonable promptness after
the entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every Holder of Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither
the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities
in accordance with the provisions of subsection (b) of this Section
4.2, 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 such subsection
(b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the
Issuer 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 Issuer
may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the
Issuer is not required to file information, documents or reports
pursuant to either of such Sections, then to file with the Trustee and
the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of
19
27
debt security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations presented from time to time by
the Commission, such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants provided for in this Indenture as may be required from time
to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities
within 30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in Section 4.4(c), such summaries of
any information, documents and reports required to be filed by the
Issuer pursuant to subsections (a) and (b) of this Section 4.3 as may
be required to be transmitted to such Holders by rules and regulations
prescribed from time to time by the Commission; and
(d) furnish to the Trustee, not less than annually, a
brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his knowledge
of the Issuer's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance
shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
SECTION 4.4 Reports by the Trustee.
(a) Within 60 days after September 15 of each year
commencing with the year 1999, the Trustee shall transmit by mail to
the Holders of Securities, as provided in subsection (c) of this
Section 4.4, a brief report dated as of such September 15 with respect
to any of the following events which may have occurred within the last
12 months (but if no such event has occurred within such period, no
report need be transmitted):
(i) any change to its eligibility under Section
6.9 and its qualification under Section 6.8;
(ii) the creation of, or any material change to, a
relationship specified in paragraph (i) through (x) of Section
6.8(c);
(iii) the character and amount of any advances (and
if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such)
which remain unpaid on the date of such report and for the
reimbursement of which it claims or may claim a lien or
charge, prior to that of the Securities of any series, on any
property or funds held or collected by it as Trustee, except
that the Trustee shall not be required (but may elect) to
report such advances if such advances so remaining unpaid
aggregate not more than 1/2 of 1% of the principal amount of
all Securities Outstanding on the date of such report;
(iv) the amount, interest rate, if any, and
maturity date of all other indebtedness owing by the Issuer
(or by any other obligor on the Securities) to the Trustee in
its individual capacity on the date of such report, with a
brief description of any property held as collateral security
therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in Section
6.13(b)(2), (3) (4) or (6);
(v) any change to the property and funds, if any,
physically in the possession of the Trustee (as such) on the
date of such report;
20
28
(vi) any additional issue of Securities which the
Trustee has not previously reported; and
(vii) any action taken by the Trustee in the
performance of its duties under this Indenture which it has
not previously reported and which in its opinion materially
affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by it in
accordance with the provisions of Section 5.8.
(b) The Trustee shall transmit to the Securityholders of
each series, as provided in subsection (c) of this Section 4.4, a
brief report with respect to the character and amount of any advances
(and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee, as such, since the date of
the last report transmitted pursuant to the provisions of subsection
(a) of this Section 4.4 (or if no such report has yet been so
transmitted, since the date of this Indenture) for the reimbursement
of which it claims or may claim a lien or charge prior to that of the
Securities of such series on property or funds held or collected by it
as Trustee and which it has not previously reported pursuant to this
subsection (b), except that the Trustee shall not be required (but may
elect) to report such advances if such advances remaining unpaid at
any time aggregate 10% or less of the principal amount of all
Securities Outstanding at such time, such report to be transmitted
within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted
by mail:
(i) to all Holders of Securities, as the names
and addresses of such Holders appear upon the registry books
of the Issuer; and
(ii) to all other Persons to whom such reports are
required to be transmitted pursuant to Section 313(c) of the
Trust Indenture Act of 1939.
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be
filed by the Trustee with each stock exchange upon which the
Securities of any applicable series are listed and also with the
Commission. The Issuer agrees to notify the Trustee with respect to
any series when and as the Securities of such series become admitted
to trading on any national securities exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article XIV or otherwise), unless it
is either inapplicable to a particular series or is specifically deleted or
modified in or pursuant to the Board Resolution or supplemental indenture
establishing such series of Securities or in the form of Security for such
series:
(a) default in the payment of any installment of
interest upon any of the Securities of such series as and when
the same shall become due and payable, and continuance of such
default for a period of 30 days; or
21
29
(b) default in the payment of the principal of
any of the Securities of such series as and when the same
shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or
(c) default in the payment or satisfaction of any
sinking fund or other purchase obligation with respect to the
Securities of such series, as and when such obligation shall
become due and payable; or
(d) failure on the part of the Issuer duly to
observe or perform any other of the covenants or agreements on
the part of the Issuer in the Securities of such series or in
this Indenture continued for a period of 60 days after the
date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Issuer by
the Trustee by registered mail, or to the Issuer and the
Trustee by the Holders of at least 25 percent in aggregate
principal amount of the Securities of such series then
Outstanding; or
(e) without the consent of the Issuer a court
having jurisdiction shall enter an order for relief with
respect to the Issuer under the Bankruptcy Code or without the
consent of the Issuer a court having jurisdiction shall enter
a judgment, order or decree adjudging the Issuer a bankrupt or
insolvent, or enter an order for relief for reorganization,
arrangement, adjustment or composition of or in respect of
the Issuer under the Bankruptcy Code or applicable state
insolvency law and the continuance of any such judgment, order
or decree is unstayed and in effect for a period of 60
consecutive days; or
(f) the Issuer shall institute proceedings for
entry of an order for relief with respect to the Issuer under
the Bankruptcy Code or for an adjudication of insolvency, or
shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or
seek or consent to reorganization, arrangement, composition or
relief under the Bankruptcy Code or any applicable state law,
or shall consent to filing of such petition or to the
appointment of a receiver, custodian, liquidator, assignee,
trustee, sequestrator or similar official of the Issuer or of
substantially all of its property or the Issuer shall make a
general assignment for the benefit of creditors as recognized
under the Bankruptcy Code; or
(g) default under any bond, debenture, note or
other evidence of Indebtedness for money borrowed by the
Issuer or under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Issuer,
whether such Indebtedness exists on the date hereof or shall
hereafter be created, which default shall have resulted in
such Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have been due
and payable, or any default in payment of such Indebtedness
(after the expiration of any applicable grace periods and the
presentation of any debt instruments, if required), if the
aggregate amount of all such Indebtedness which has been so
accelerated and with respect to which there has been such a
default in payment shall exceed $50,000,000, without each such
default and acceleration having been rescinded or annulled
within a period of 30 days after there shall have been given
to the Issuer by the Trustee by registered mail, or to the
Issuer and the Trustee by the Holders of at least 25 percent in
aggregate principal amount of the Securities of such series
then Outstanding, a written notice specifying each such default
and requiring the Issuer to cause each such default and
acceleration to be rescinded or annulled and stating that such
notice is a "Notice of Default" hereunder; or
22
30
(h) any other Event of Default provided with
respect to the Securities of such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than 25
percent in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the unpaid principal amount (or, if the Securities
of such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Securities of such series contained to the contrary notwithstanding. This
provision, however, is subject to the condition that, if at any time after the
unpaid principal amount (or such specified amount) of the Securities of such
series shall have been so declared due and payable and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Securities of such series and the principal of any and all Securities of
such series which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest, if any, to the extent that payment
of such interest is enforceable under applicable law and on such principal at
the rate borne by the Securities of such series to the date of such payment or
deposit) and the reasonable compensation, disbursements, expenses and advances
of the Trustee, its agents, attorneys and counsel, and any and all defaults
under this Indenture, other than the nonpayment of such portion of the principal
amount of and accrued interest, if any, on Securities of such series which shall
have become due by acceleration, shall have been cured or shall have been waived
in accordance with Section 5.7 or provision deemed by the Trustee to be adequate
shall have been made therefor -- then and in every such case the Holders of a
majority in aggregate principal amount of the Securities of such series then
Outstanding, by written notice to the Issuer and to the Trustee, may rescind and
annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon. If any Event of Default with respect to the
Issuer specified in Section 5.1(e) or 5.1(f) occurs, the unpaid principal amount
(or, if the Securities of any series then Outstanding are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1(a),
(b) or (c), the Trustee shall not be charged with knowledge of any Event of
Default unless written notice thereof shall have been given to a Responsible
Officer by the Issuer, a Paying Agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a) if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such default
shall have continued for a period of 30 days, or (b) if default shall be made
in the payment of the principal of any of the Securities of such series as and
when the same shall have become due and payable, whether at maturity of the
Securities
23
31
of such series or upon redemption or by declaration or otherwise--then, upon
demand of the Trustee, the Issuer will pay to the Trustee, for the benefit of
the Holders of the Securities, the whole amount that then shall have become due
and payable on all such Securities of such series for principal or interest, if
any, or both, as the case may be, with interest upon the overdue principal and
(to the extent that payment of such interest is enforceable under applicable
law) upon the overdue installments of interest, if any, at the rate borne by
the Securities of such series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents, attorneys and counsel, and any expenses or liabilities incurred by
the Trustee hereunder other than through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any other obligor on the
Securities of such series and collect in the manner provided by law out of the
property of the Issuer or any other obligor on the Securities of such series,
wherever situated, the moneys adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar law now or
hereafter in effect, or if a receiver or trustee or similar official shall have
been appointed for the property of the Issuer or such other obligor, or in the
case of any other similar judicial proceedings relative to the Issuer or other
obligor upon the Securities of such series, or to the creditors or property of
the Issuer or such other obligor, the Trustee, irrespective of whether the
principal of the Securities of such series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section
5.2, shall be entitled and empowered by intervention in such proceedings or
otherwise to file and prove a claim or claims for the whole amount of principal
and interest, if any, owing and unpaid in respect of the Securities of such
series, and, in case of any judicial proceedings, to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee and of the Securityholders allowed in such judicial
proceedings relating to the Issuer or any other obligor on the Securities of
such series, its or their creditors, or its or their property, and to collect
and receive any moneys or other property payable or deliverable on any such
claims, and to distribute the same after the deduction of its charges and
expenses, and any receiver, assignee or trustee or similar official in
bankruptcy or reorganization is hereby authorized by each of the Securityholders
to make such payments to the Trustee, and, if the Trustee shall consent to the
making of such payments directly to the Securityholders, to pay to the Trustee
any amount due it for compensation and expenses, including counsel fees incurred
by it up to the date of such distribution. To the extent that such payment of
reasonable compensation, expenses and counsel fees out of the estate in any such
proceedings shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
moneys, securities and other property which the Holders of the Securities of
such series may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suits or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall be for the ratable benefit of the Holders of
the Securities of the series in respect of which such judgment has been
recovered.
24
32
SECTION 5.3 Application of Moneys Collected by Trustee. Any
moneys collected by the Trustee pursuant to Section 5.2 with respect to
Securities of any series then Outstanding shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a
result of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of such
series shall not have become due and be unpaid, to the payment of
interest, if any, on the Securities of such series, in the order of
the maturity of the installments of such interest, if any, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest, if any, at the
rate borne by the Securities of such series, such payment to be made
ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities of such
series shall have become due, by declaration or otherwise, to the
payment of the whole amount then owing and unpaid upon the Securities
of such series for principal and interest, if any, with interest on
the overdue principal and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest, if
any, at the rate borne by the Securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amounts so
due and unpaid upon the Securities of such series, then to the payment
of such principal and interest, if any, without preference or priority
of principal over interest, or of interest over principal, or of any
installment of interest, over any other installment of interest, or
of any Security over any other Security, ratably to the aggregate of
such principal and accrued and unpaid interest; and
FOURTH: To the payment of any surplus then remaining to the
Issuer, its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same.
No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities to which
it relates, or which in any manner shall have been kept alive after maturity by
an extension (otherwise than pursuant to an extension made pursuant to a plan
proposed by the Issuer to the Holders of all Securities of any series then
Outstanding), purchase, funding or otherwise by or on behalf or with the
consent or approval of the Issuer shall be entitled, in case of a default
hereunder, to any benefit of this Indenture, except after prior payment in full
of the principal of all Securities of any series then Outstanding and of all
claims for interest not so transferred, pledged, kept alive, extended,
purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or the Securities or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder or thereunder, unless such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25 percent in aggregate principal amount of the Securities of such
series then Outstanding shall have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice, request
and offer of
25
33
indemnity, shall have neglected or refused to institute any such action, suit
or proceeding; it being understood and intended, and being expressly covenanted
by the Holder of every Security of such series with every other taker and
Holder and the Trustee, that no one or more Holders of Securities of such
series shall have any right in any manner whatever by virtue of or by availing
of any provision of this Indenture or of the Securities to affect, disturb or
prejudice the rights of any other Holder of such Securities of such series, or
to obtain or seek to obtain priority over or preference as to any other such
Holder, or to enforce any right under this Indenture or the Securities, except
in the manner herein provided and for the equal, ratable and common benefit of
all Holders of Securities of such series.
Notwithstanding any other provisions in this Indenture, but subject to
Article XIV, the right of any Holder of any Security to receive payment of the
principal of and interest, if any, on such Security, on or after the respective
due dates expressed in such Security, or, if applicable, to convert such
Security as provided in Article XIII, or to institute suit for the enforcement
of any such payment on or after such respective dates or for the enforcement of
any such right to convert shall not be impaired or affected without the consent
of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of
Default hereunder, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceedings
in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and
remedies given by this Article V to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to the Trustee or
the Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders. The Holders of a majority in aggregate principal
amount of the Securities of any series then Outstanding shall have the right to
direct the time, method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect to Securities of such series; provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine upon advice
of counsel that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, its executive
committee, or a trust committee of directors or Responsible Officers or both
shall determine that the action or proceeding so directed would involve the
Trustee in personal liability. The Holders of a majority in aggregate
principal amount of the Securities of any series then Outstanding may on behalf
of the Holders of all of the Securities of such series waive any past default
or Event of Default hereunder and its consequences except a default in the
payment of interest, if any, on, or the principal of, the Securities of such
series. The provisions of Section 316(a)(1)(B) of the Trust Indenture Act of
1939 are expressly excluded herefrom. Upon any such waiver the Issuer, the
Trustee and the Holders of the Securities of such series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default
26
34
or Event of Default or impair any right consequent thereon. Whenever any
default or Event or Default hereunder shall have been waived as permitted by
this Section 5.7, said default or Event of Default shall for all purposes of
the Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 90
days after the occurrence of a default, with respect to Securities of any
series then Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the Security register,
notice of all defaults known to the Trustee with respect to such series, unless
such defaults shall have been cured before the giving of such notice (the term
"defaults" for the purpose of this Section 5.8 being hereby defined to be the
events specified in clauses (a), (b), (c), (d), (e), (f), (g) and (h) of
Sections 5.1, not including periods of grace, if any, provided for therein and
irrespective of the giving of the written notice specified in said clause (d)
or (g) but in the case of any default of the character specified in said clause
(d) or (g) no such notice to Securityholders shall be given until at least 60
days after the giving of written notice thereof to the Issuer pursuant to said
clause (d) or (g), as the case may be); provided, however, that, except in the
case of default in the payment of the principal of or interest, if any, on any
of the Securities, or in the payment or satisfaction of any sinking fund or
other purchase obligation, 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 or both of the Trustee in
good faith determine that the withholding of such notice is in the best
interests of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the cost 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 5.9 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder or group of Securityholders, holding in the
aggregate more than ten percent in principal amount of the Securities of any
series then Outstanding, or to any suit instituted by any Securityholders for
the enforcement of the payment of the principal of, or interest, if any, on any
Security against the Issuer on or after the due date expressed in such Security
or for the enforcement of the right to convert any Security in accordance with
Article XIII. The provisions of Section 315(e) of the Trust Indenture Act of
1939 are expressly excluded herefrom.
SECTION 5.10 Trustee May Enforce Claim Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceedings 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 5.11 Waiver of Stay or Extension Laws. The Issuer
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 Issuer (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.
27
35
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
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.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or
waiving of all such Events of Default with respect to such series
which may have occurred;
(i) the duties and obligations of the Trustee
with respect to the Securities of any series shall be
determined solely by the express provisions of this Indenture,
and the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
statements, 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 (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated
therein);
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders pursuant to Section 5.7 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
28
36
SECTION 6.2 Certain Rights of the Trustee. Subject to Section
6.1:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate
or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon,
security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate or Issuer Order (unless other evidence in respect thereof
be herein specifically prescribed); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof certified
by the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written
advice or any Opinion of Counsel and shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture (including, without limitation,
pursuant to Section 5.1), unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of Default,
the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement
instrument, opinion, report, notice, request, consent, order,
approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders
of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if
the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against
such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such investigation shall be paid by the
Issuer or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Issuer upon demand; 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 not regularly in its employ and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture,
29
37
of the Securities or of any prospectus used to sell the Securities. The
Trustee shall not be accountable for the use or application by the Issuer of
any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
Etc. The Trustee or any agent of the Issuer or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and, subject
to Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursements or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim or
liability in the premises. The obligations of the Issuer under this Section
6.6 to compensate and indemnify the Trustee and each predecessor Trustee and to
pay or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder,
shall survive the satisfaction and discharge of this Indenture or the
resignation or removal of the Trustee and shall not be subordinate to the
payment of the Senior Indebtedness pursuant to Article XIV. Such additional
indebtedness shall be a senior claim to that of the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Securities, and the
Securities are hereby subordinated to such senior claim. When the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Section 5.1 or in connection with Article V hereof, the expenses
(including the reasonable fees and expenses of its counsel) and the
compensation for the services in connection therewith are intended to
constitute expenses of administration under any bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officer's Certificate,
Etc. Subject to Section 6.1 and 6.2, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable that
a matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officer's Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith hereof.
30
38
SECTION 6.8 Qualification of Trustee; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting
interest (as defined in subsection (c)), then within 90 days after
ascertaining that it has such conflicting interest, and if the default
(as defined in subsection (c)) to which such conflicting interest
relates has not been cured or duly waived or otherwise eliminated
before the end of such 90-day period, the Trustee shall either
eliminate such conflicting interest or, except as otherwise provided
below, resign, and the Issuer shall take prompt steps to have a
successor appointed in the manner provided in Section 6.10.
(b) If the Trustee shall fail to comply with the
provisions of subsection (a), the Trustee shall, within 10 days after
the expiration of such 90-day period, transmit notice of such failure
to the Securityholders in the manner and to the extent provided in
Section 4.4 and, subject to the provisions of Section 5.9, unless the
Trustee's duty to resign is stayed as provided below, any
Securityholder who has been a bona fide holder of Securities for at
least six months may, on behalf of himself and all other similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee, and the appointment of a successor, if the Trustee
fails, after written request thereof by such Securityholder, to comply
with the provisions of subsection (a).
Except in the case of a default in the payment of the principal of or
interest on any Security, or in the payment of any sinking or purchase fund
installment, the Trustee shall not be required to resign as provided by this
Section 6.8 if the Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing thereon, that
(i) the default under this Indenture may be cured
or waived during a reasonable period and under the procedures
described in such application, and
(ii) a stay of the Trustee's duty to resign will
not be inconsistent with the interests of Holders of the
Securities.
The filing of such an application shall automatically stay the
performance of the duty to resign until the Commission orders otherwise. Any
resignation of the Trustee shall become effective only upon the appointment of
a successor trustee in accordance with the provisions of Section 6.10 and such
successor's acceptance of such an appointment.
(c) For the purposes of this Section 6.8, the Trustee
shall be deemed to have a conflicting interest with respect to
Securities of any series if the Securities of such series are in
default (as determined in accordance with the provisions of Section
5.1, but exclusive of any period of grace or requirement of notice)
and
(i) the Trustee is trustee under this Indenture
with respect to the Outstanding Securities of any other series
or is a trustee under another indenture under which any other
securities, or certificates of interest or participation in
any other securities, of the Issuer are outstanding, unless
such other indenture is a collateral trust indenture under
which the only collateral consists of Securities issued under
this Indenture; provided that there shall be excluded from the
operation of this paragraph, this Indenture with respect to
the Securities of any other series and there shall also be so
excluded any other indenture or indentures under which other
securities, or certificates of interest or participation in
other securities, of the Issuer are outstanding if (x) this
Indenture is and, if applicable, this Indenture and any series
issued pursuant to this Indenture and such other indenture or
indentures are wholly unsecured and rank equally, and such
other indenture or indentures are hereafter qualified under
the Trust Indenture Act of 1939, unless the Commission shall
have found and declared by order pursuant to Section 305(b) or
Section 307(c) of the Trust Indenture Act of 1939, that
31
39
differences exist between the provisions of this Indenture with
respect to Securities of such series and one or more other
series, or the provisions of this Indenture and the provisions
of such other indenture or indentures which are so likely to
involve a material conflict of interest as to make it necessary
in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture
with respect to Securities to such series and such other series
or under this Indenture or such other indenture or indentures,
or (y) the Issuer shall have sustained the burden of proving,
on application to the Commission and after opportunity for
hearing thereon, that trusteeship under this Indenture with
respect to Securities of such series and such other series, or
under this Indenture and such other indenture or indentures is
not so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection
of investors to disqualify the Trustee from acting as such
under this Indenture with respect to Securities of such series
and such other series, or under this Indenture and such other
indentures;
(ii) the Trustee or any of its directors or
executive officers is an underwriter for the Issuer;
(iii) the Trustee directly or indirectly controls
or is directly or indirectly controlled by or is under direct
or indirect common control with an underwriter for the
Issuer;
(iv) the Trustee or any of its directors or
executive officers is a director, officer, partner, employee,
appointee, or representative of the Issuer, or of an
underwriter (other than the Trustee itself) for the Issuer who
is currently engaged in the business of underwriting, except
that (x) one individual may be a director or an executive
officer, or both, of the Trustee and a director or an
executive officer, or both, of the Issuer, but may not be at
the same time an executive officer of both the Trustee and the
Issuer; (y) if and so long as the number of directors of the
Trustee in office is more than nine, one additional individual
may be a director or an executive officer, or both, of the
Trustee and a director of the Issuer, and (z) the Trustee may
be designated by the Issuer or by any underwriter for the
Issuer to act in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent, or
depositary, or in any other similar capacity, or, subject to
the provisions of subsection (c)(i) of this Section, to act as
trustee, whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the
Trustee is beneficially owned either by the Issuer or by any
director, partner or executive officer thereof, or 20% or more
of such voting securities is beneficially owned, collectively,
by any two or more of such persons; or 10% or more of the
voting securities of the Trustee is beneficially owned either
by an underwriter for the Issuer or by any director, partner,
or executive officer thereof, or is beneficially owned,
collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default, (x) 5% or more of the voting securities or 10% or
more of any other class of security of the Issuer, not
including the Securities issued under this Indenture and
securities issued under any other indenture under which the
Trustee is also trustee, or (y) 10% or more of any class of
security of an underwriter for the Issuer;
(vii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default, 5% or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of the
voting securities of, or controls directly or indirectly or is
under direct or indirect common control with, the Issuer;
32
40
(viii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default, 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Issuer;
(ix) the Trustee owns on the date of default (as
determined in accordance with the provisions of Section 5.1,
but exclusive of any period of grace or requirement of notice)
or on any anniversary of such default while such default
remains outstanding, in the capacity of executor,
administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an
aggregate of 25% or more of the voting securities, or of any
class of security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a
conflicting interest under paragraphs (vi), (vii) or (viii) of
this subsection. As to any such securities of which the
Trustee acquired ownership through becoming executor,
administrator, or testamentary trustee of an estate which
included them, the provisions of the preceding sentence shall
not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in
such estate do not exceed 25% of such voting securities or 25%
of any such class of security. Promptly after the dates of any
such default and annually in each succeeding year that the
Securities remain in default, the Trustee shall make a check
of its holdings of such securities in any of the
above-mentioned capacities as of such dates. If the Issuer
fails to make payment in full of principal of or interest on
any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holdings of such
Securities in any of the above-mentioned capacities as of the
date of the expiration of such 30-day period, and after such
date, notwithstanding the foregoing provisions of this
paragraph, all such Securities so held by the Trustee, with
sole or joint control over such Securities vested in it,
shall, but only so long as such failure shall continue, be
considered as though beneficially owned by the Trustee for the
purposes of paragraphs (vi), (vii) and (viii) of this
subsection; or
(x) except under the circumstances described in
paragraphs (1), (3), (4), (5) or (6) of Section 6.13(b), the
Trustee shall be or shall become a creditor of the Issuer.
For purposes of subsection (c)(i), the term "series of securities" or
"series" means a series, class or group of securities issuable under an
indenture pursuant to whose terms holders of one such series may vote to direct
the Trustee, or otherwise take action pursuant to a vote of such holders,
separately from holders of another such series; provided, that "series of
securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in subsections (c)(v) to (ix),
inclusive, of this Section 6.8 shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of subsections (c)(iii) or (vii) of this Section 6.8.
For the purposes of subsections (c)(vi), (vii), (viii) and (ix) of
this Section 6.8, only,
(i) the terms "security" and "securities" shall
include only such securities as are generally known as
corporate securities, but shall not include any note or other
evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust
companies, or banking firms, or any certificate of interest or
participation in any such note or evidence of indebtedness;
33
41
(ii) an obligation shall be deemed to be in
default when a default in payment of principal shall have
continued for 30 days or more and shall not have been cured;
and
(iii) the Trustee shall not be deemed to be the
owner or holder of (x) any security which it holds as
collateral security, as trustee or otherwise, for an
obligation which is not in default as defined in clause (ii)
above, or (y) any Security which it holds as collateral
security under this Indenture, irrespective of any default
hereunder, or (z) any security which it holds as agent for
collection, or as custodian, escrow agent, or depositary, or
in any similar representative capacity.
Except as provided above, the word "security" or "securities" as used
in this Section 6.8 shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in any profit-sharing agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant to right to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section 6.8:
(i) the term "underwriter" when used with
reference to the Issuer shall mean every person who, within a
one year period prior to the time as of which the
determination is made, was an underwriter of any security of
the Issuer outstanding at the time of the determination;
(ii) the term "director" shall mean any director
of a corporation or any individual performing similar
functions with respect to any organization whether
incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization, or a
government or political subdivision thereof; as used in this
paragraph, the term "trust" shall include only a trust where
the interest or interests of the beneficiary or beneficiaries
are evidenced by a security;
(iv) the term "voting security" shall mean any
security presently entitling the owner or holder thereof to
vote in the direction or management of the affairs of a
person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustee or agent
or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of
the affairs of a person;
(v) the term "Issuer" shall mean any obligor upon
the Securities; and
(vi) the term "executive officer" shall mean the
president, every vice president, every trust officer, the
cashier, the secretary, and the treasurer of a corporation,
and any individual customarily performing similar functions
with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the
board of directors.
(e) The percentage of voting securities and other securities
specified in this Section 6.8 shall be calculated in accordance with
the following provisions:
34
42
(i) a specified percentage of the voting
securities of the Trustee, the Issuer or any other person
referred to in this Section 6.8 (each of whom is referred to
in this Section 6.8 (each of whom is referred to as a "person"
in this paragraph) means such amount of the outstanding voting
securities of such person as entitles the holder or holders
thereof to cast such specified percentage of the aggregate
votes which the holders of all the outstanding voting
securities of such person are entitled to cast in the
direction or management of the affairs of such person;
(ii) a specified percentage of a class of
securities of a person means such percentage amount of
securities of the class outstanding;
(iii) the term "amount", when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating to
capital shares, and the number of units if relating to any
other kind of security;
(iv) the term "outstanding" means issued and not
held by or for the account of the issuer; the following
securities shall not be deemed outstanding within the meaning
of this definition;
(A) securities of an issuer held in a
sinking fund relating to securities of the issuer of
the same class;
(B) securities of an issuer held in a
sinking fund relating to another class of securities
of the Issuer, if the obligation evidenced by such
other class of securities is not in default as to
principal or interest or otherwise;
(C) securities pledged by the issuer
thereof as security for an obligation of the issuer
not in default as to principal or interest or
otherwise; and
(D) securities held in escrow if placed
in escrow by the issuer thereof;
provided, that any voting securities of an issuer shall be deemed outstanding
if any person other than the issuer is entitled to exercise the voting rights
thereof; and
(v) a security shall be deemed to be of the same class
as another security if both securities confer upon the holder or
holders thereof substantially the same rights and privileges; provided
that, in the case of secured evidences of indebtedness, all of which
are issued under a single indenture, differences in the interest rates
or maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes and provided,
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The
Trustee for each series of Securities hereunder shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any state or the District of Columbia having a combined capital
and surplus of at least $50,000,000 and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal, state or District of Columbia authority, or a corporation or other
Person permitted to act as trustee by the Commission. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 6.9, the combined capital and surplus of such
corporation shall be deemed to be
35
43
its combined capital and surplus as set forth in its most recent report of
condition so published. No obligor upon the Securities or any Affiliates of
such obligor shall serve as Trustee upon the Securities. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 6.9, the Trustee shall resign immediately in the manner and with
the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee.
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to one or more or all
series of Securities by giving written notice of resignation to the
Issuer and by mailing notice of such resignation to the Holders of
then Outstanding Securities of each series affected at their addresses
as they shall appear on the registry books. Upon receiving such notice
of resignation, the Issuer shall promptly appoint a successor trustee
or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee or trustees.
If no successor trustee shall have been so appointed with respect to
any series and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning trustee may
petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Securityholder who has been a bona fide
Holder of a Security or Securities of the applicable series for at
least six months may, subject to the provisions of Section 5.9, on
behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 6.8 with respect to any series of
Securities after written request therefor by the Issuer or by
any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months;
or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.9 and shall fail
to resign after written request therefor by the Issuer or by
any such Securityholder; or
(iii) the Trustee shall become incapable of acting
with respect to any series of Securities, or shall be adjudged
a bankrupt or insolvent, or a receiver or liquidator 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, the Issuer may remove the Trustee with
respect to the applicable series of Securities and appoint a
successor trustee for such series by written instrument, in
duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to
the provisions of Section 5.9, any Securityholder who has been
a bona fide Holder of a Security or Securities 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 removal of the Trustee and the appointment
of a successor trustee with respect to such series. Such court
may thereupon, after such notice, if any, as it may deem proper
and prescribe, remove the Trustee and appoint a successor
trustee.
36
44
(c) The Holders of a majority in aggregate principal
amount of the Securities of each series then Outstanding may
at any time remove the Trustee with respect to Securities of
such series and appoint a successor trustee with respect to
the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the
Issuer the evidence provided for in Section 7.1 of the action
in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor trustee with
respect to such series pursuant to any of the provisions of this
Section 6.10 shall become effective upon acceptance of appointment by
the successor trustee as provided in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor trustee with respect to
the Securities of any series as to which the predecessor trustee is not
retiring shall continue to be vested in the predecessor trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or 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 under
separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the acceptance
of appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer fails to give such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Issuer.
37
45
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 6.8 and eligible
under the provisions of Section 6.9, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the certificate of
Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims against the Issuer.
(a) Subject to the provisions of this Section, if the
Trustee shall be or shall become a creditor, directly or indirectly,
secured or unsecured, of the Issuer within three months prior to a
default, as defined in subsection (c) of this Section 6.13, or
subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of
the Securities and the holders of other indenture securities (as
defined in this Section 6.13);
(1) an amount equal to any and all reductions in
the amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the beginning
of such three month period and valid as against the Issuer and
its other creditors, except any such reduction resulting from
the receipt or disposition of any property described in
subsection (a)(2) of this Section, or from the exercise of any
right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Issuer
upon the date of such default; and
(2) all property received by the Trustee in
respect of any claim as such creditor, either as security
therefor, or in satisfaction or composition thereof, or
otherwise, after the beginning of such three month period, or
an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the
Issuer and its other creditors in such property or proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i)
payments made on account of any such claim by any Person (other
than the Issuer) who is liable thereon, (ii) the proceeds of
the bona fide sale of any such claim by the Trustee to a third
Person, and (iii) distributions made in cash, securities or
other property in respect of claims filed against the Issuer
in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Bankruptcy Code or applicable
state law;
38
46
(B) to realize, for its own account,
upon any property held by it as security for any such claim,
if such property was so held prior to the beginning of such
three month period;
(C) to realize, for its own account, but
only to the extent of the claim hereinafter mentioned, upon
any property held by it as security for any such claim, if
such claim was created after the beginning of such three month
period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause
to believe that a default as defined in subsection (c) of this
Section would occur within three months; or
(D) to receive payment on any claim
referred to in paragraph (B) or (C), against the release of
any property held as security for such claim as provided in
such paragraph (B) or (C), as the case may be, to the extent
of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the propose of repaying or refunding
any pre- existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, such Securityholders and the
holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Bankruptcy Code or applicable state law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Issuer of the funds and
property in such special account and before crediting to the respective claims
of the Trustee, such Securityholders and the holders of other indenture
securities dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Bankruptcy
Code or applicable state law, but after crediting thereon receipt on account of
the indebtedness represented by their respective claims from all sources other
than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term "dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Bankruptcy Code or applicable state law, whether such distribution is made in
cash, securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceeding for reorganization is pending shall
have jurisdiction (i) to apportion between the Trustee, such Securityholders
and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and the proceeds thereof, or (ii) in lieu of such apportionment, in
whole or in part, to give to the provisions of this paragraph due consideration
in determining the fairness of the distributions to be made to the Trustee,
such Securityholders and the holders of other indenture securities with respect
to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
39
47
Any Trustee who has resigned or been removed after the beginning of
such three month period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim
which would have given rise to the obligation to account, if
such Trustee had continued as trustee, occurred after the
beginning of such three month period; and
(ii) such receipt of property or reduction of
claim occurred within three months after such resignation or
removal.
(b) There shall be excluded from the operation of this Section
6.13 a creditor relationship arising from:
(1) the ownership or acquisition of
securities issued under any indenture or any security
or securities having a maturity of one year or more
at the time of acquisition by the Trustee;
(2) advances authorized by a
receivership or bankruptcy court of competent
jurisdiction, or by this Indenture, for the purpose
of preserving any property which shall at any time be
subject to the lien of this Indenture or of
discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and
of the circumstances surrounding the making thereof
is given to the Securityholders at the time and in
the manner provided in this Indenture;
(3) disbursements made in the ordinary
course of business in the capacity of trustee under
an indenture, transfer agent, registrar, custodian,
paying agent, fiscal agent or depositary, or other
similar capacity;
(4) an indebtedness created as a result
of services rendered or premises rented or an
indebtedness created as a result of goods or
securities sold in a cash transaction as defined in
subsection (c)(2) of this Section 6.13;
(5) the ownership of stock or of other
securities of a corporation organized under the
provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a
creditor of the Issuer; or
(6) the acquisition, ownership,
acceptance or negotiation of any drafts, bills of
exchange, acceptances or obligations which fall
within the classification of self liquidating paper
as defined in subsection (c)(3) of this Section 6.13.
(c) As used in this Section 6.13:
(1) the term "default" shall mean any
failure to make payment in full of the principal of
or interest on any of the Securities when and as such
principal or interest becomes due and payable;
(2) the term "cash transaction" shall
mean any transaction in which full payment for goods
or securities sold is made within seven days after
delivery of the
40
48
goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon
demand;
(3) the term "self-liquidating paper"
shall mean any draft, xxxx of exchange, acceptance or
obligation which is made, drawn, negotiated or
incurred by the Issuer for the purpose of financing
the purchase, processing, manufacture, shipment,
storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to,
possession of, or a lien upon the goods, wares or
merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise
previously constituting the security, provided the
security is received by the Trustee simultaneously
with the creation of the creditor relationship with
the Issuer arising from the making, drawing,
negotiating or incurring of the draft, xxxx of
exchange, acceptance or obligation; and
(4) the term "Issuer" shall mean any
obligor upon the Securities.
SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is
made in this Indenture to the authentication and delivery of Securities of any
series by the Trustee or to the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent for such series and a certificate of
authentication executed on behalf of the Trustee by such authenticating Agent.
Such authenticating Agent shall at all times be a corporation organized and
doing business under the laws the United States of America or of any state or
the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,00,000
(determined as provided in Section 6.9 with respect to the Trustee) and subject
to supervision or examination by federal or state authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency
business of any Authenticating Agent, shall continue to be the authenticating
Agent with respect to all series of Securities for which it served as
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to the
Issuer. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and to the
Issuer.
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.14 with respect to one or more
series of Securities, the Trustee may appoint a successor Authenticating Agent
which shall be acceptable to the Issuer and the Issuer shall provide notice of
such appointment to all Holders of Securities of such series in the manner and
to the extent provided in Section 11.4. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. The Issuer agrees
to pay to the Authenticating Agent for such series from time to time
41
49
reasonable compensation. The Authenticating Agent for the Securities of any
series shall have no responsibility or liability for any action taken by it as
such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Article VII.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any
Holder of any instrument may be proved by the certificate of any
notary public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the person executing
such instruments acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such
notary or other such officer. Where such execution is by or on behalf
of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of
the person executing the same.
(b) The ownership of Securities shall be proved
by the Security register or by a certificate of the Security
registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer,
the Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security register
for such series as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest, if any,
on such Security and for all other purposes; and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have concurred
in any direction, consent or waiver under this Indenture, Securities which are
owned by the Issuer or any other obligor on the Securities with respect to
which such determination is being made or by any Affiliate of the Issuer or any
other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which the Trustee knows are 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
42
50
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 Issuer or any other obligor
upon the Securities or any Affiliate of the Issuer or any other obligor on the
Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officer's Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above described Persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purposes of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the case
may be, specified in this Indenture in connection with such action, any Holder
of a Security the serial number of which is shown by the evidence to be
included among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article VII, revoke such
action so far as concerns such Security, provided that such revocation shall
not become effective until three business days after such filing. Except as
aforesaid any such action taken by the Holder of any Security shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of such Security and of any Securities issued in exchange or substitution
therefor or on registration of transfer thereof, irrespective of whether or not
any notation in regard thereto is made upon any such Security. Any action
taken by the Holders of the percentage in aggregate principal amount of the
Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
SECTION 7.6 Record Date for Consents and Waiver. The
Issuer may, but shall not be obligated to, direct the Trustee to establish a
record date for the purpose of determining the Persons entitled to (i) waive
any past default with respect to the Securities of such series in accordance
with Section 5.7 of this Indenture, (ii) consent to any supplemental indenture
in accordance with Section 8.2 of this Indenture, or (iii) waive compliance
with any term, condition or provision of any covenant hereunder. If a record
date is fixed, the Holders on such record date, or their duly designated
proxies, and any such Persons, shall be entitled to waive any such past
default, consent to any such supplemental indenture or waive compliance with
any such term, condition or provision, whether or not such Holder remains a
Holder after such record date; provided, however, that unless such waiver or
consent is obtained from the Holders, or duly designated proxies, of the
requisite principal amount of Outstanding Securities of such series prior to
the date which is the 180th day after such record date, any such waiver or
consent previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures without Consent of
Securityholders. The Issuer, when authorized by a resolution of the Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of
1939 as in force at the date of the execution thereof) for one or more of the
following purposes:
43
51
(a) to evidence the succession of another corporation to
the Issuer, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Issuer pursuant to Article IX;
(b) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and
the Trustee shall consider to be for the protection of the Holders of
all or any series of Securities (and if such covenants, restrictions,
conditions or provisions are to be for the protection of less than all
series of Securities, stating that the same are expressly being
included solely for the protection of such series), and to make the
occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an
Event of Default permitting the enforcement of all or any of the
several remedies provided, in this Indenture as herein set forth;
provided, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may
provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such an
Event of Default or may limit the remedies available to the Trustee
upon such an Event of Default or may limit the right of the Holders of
a majority in aggregate principal amount of the Securities of such
series to waive such an Event of Default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make any other provisions as
to the Issuer may deem necessary or desirable, provided that no such
action shall adversely affect the interests of the Holders of the
Securities;
(d) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3 and to provide for
adjustment of conversion rights pursuant to Section 13.5; and
(e) 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 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 8.1 may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article VII) of the
Holders of not less than a majority in aggregate principal amount of the
Securities then Outstanding of any series affected by such supplemental
indenture, the Issuer, when authorized by a resolution of the Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any
44
52
manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities of such series; provided, that no such supplemental indenture
shall (a) extend the final maturity of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest,
if any, thereon (or, in the case of an Original Issue Discount Security, reduce
the rate of accrual of original issue discount thereon), or reduce or alter the
method of computation of any amount payable on redemption, repayment or
purchase by the Company thereof (or the time at which any such redemption,
repayment or purchase may be made), or make the principal thereof (including
any amount in respect of original issue discount), or interest, if any, thereon
payable in any coin or currency other than that provided in the Securities or
in accordance with the terms of the Securities, or reduce the portion of the
principal amount of an Original Issue Discount Security that would be due and
payable upon an acceleration of the maturity thereof pursuant to Section 5.1 or
the amount thereof provable in bankruptcy pursuant to Section 5.2, or impair or
affect the right of any Securityholder to institute suit for the payment or
conversion thereof or materially and adversely affect the right to convert the
Securities in accordance herewith or, if the Securities provide therefor, any
right of repayment or purchase at the option of the Securityholder, in each
case without the consent of the Holder of each Security so affected, or change,
amend or modify the subordination provisions of Article XIV of this Indenture
or Section 3.9 of this Indenture or any of the definitions used in such Article
XIV or Section 3.9 or consent to the departure from any of the terms of such
Article XIV or Section 3.9, in each case in any manner that would adversely
affect the Holders of any Securities of any series issued under this Indenture
or (b) reduce the aforesaid percentage of Securities of any series, the consent
of the Holders of which is required for any such supplemental indenture,
without the consent of the Holders of each Security so affected. No consent of
any Holder of any Security shall be necessary under this Section 8.2 to permit
the Trustee and the Issuer to execute supplemental indentures pursuant to
Sections 8.1, 9.2 and 13.5.
A supplemental indenture which changes or eliminates any covenant,
Event of Default or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of Holders of Securities of such series, with
respect to such covenant or provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as
aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Trustee shall give notice thereof to the Holders of then Outstanding Securities
of each series affected thereby, by mailing a notice thereof by first-class
mail to such Holders at their addresses as they shall appear on the Security
register. Any failure of the Issuer to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
45
53
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes and every Holder of Securities of each series affected thereby
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 8.4 Documents to be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall be entitled to receive
an Officer's Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article VIII complies with
the applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article VIII may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
SECTION 8.6 Subordination Unimpaired. This Indenture may not be
amended to alter the subordination of any Outstanding Securities without the
written consent of each holder of Senior Indebtedness then outstanding that
would be adversely affected thereby.
ARTICLE IX
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE
OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms.
Subject to the provisions of Section 9.2, nothing contained in this Indenture or
in any of the Securities shall prevent any consolidation or merger of the Issuer
with or into any other corporation or corporations (whether or not affiliated
with the Issuer), or successive consolidations or mergers in which the Issuer or
its successor or successors shall be a party or parties, or shall prevent any
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Issuer to any other corporation (whether or not
affiliated with the Issuer) authorized to acquire and operate the same;
provided, however, and the Issuer hereby covenants and agrees, that any such
consolidation, merger, sale, lease, exchange or other disposition shall be upon
the conditions that (a) immediately after such consolidation, merger, sale,
lease, exchange or other disposition the corporation (whether the Issuer or such
other corporation) formed by or surviving any such consolidation or merger, or
to which such sale, lease, exchange or other disposition shall have been made,
shall not be in default in the performance or observance of any of the terms,
covenants and conditions of this Indenture to be kept or performed by the
Issuer; (b) the corporation (if other than the Issuer) formed by or surviving
any such consolidation or merger, or to which such sale, lease, exchange or
other disposition shall have been made, shall be a corporation organized under
the laws of the United States of America, any state thereof or the District of
Columbia; and (c) the due and punctual payment of the principal of and interest,
if any, on all the Securities, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Issuer, shall be expressly assumed and the
conversion
46
54
rights, if any, shall be provided for in accordance with this Indenture, by
supplemental indenture satisfactory in form to the Trustee executed and
delivered to the Trustee, by the corporation (if other than the Issuer) formed
by such consolidation, or into which the Issuer shall have been merged, or by
the corporation which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In case of
any such consolidation, merger, sale, lease, exchange or other disposition and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the due and punctual payment of the principal of and interest, if any, on all
of the Securities and the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Issuer, such successor
corporation shall succeed to and be substituted for the Issuer, with the same
effect as if it had been named herein as the party of the first part, and the
Issuer (including any intervening successor to the Issuer which shall have
become the obligor hereunder) shall be relieved of any further obligation under
this Indenture and the Securities; provided, however, that in the case of a
lease of the property and assets of the Issuer (including any such intervening
successor), the Issuer (including any such intervening successor) shall continue
to be liable on its obligations under this Indenture and the Securities to the
extent, but only to the extent, of liability to pay the principal of and
interest, if any, on the Securities at the time, places and rate prescribed in
this Indenture and the Securities. Such successor corporation thereupon may
cause to be signed, and may issue either in its own name or in the name of the
Issuer, any and all of the Securities issuable hereunder which theretofore shall
not have been signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor corporation instead of the Issuer and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall have
been signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease, exchange or
other disposition such changes in phraseology and form (but not in substance)
may be made in the Securities, thereafter to be issued, as may be appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, may receive an Officer's Certificate and
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, lease, exchange or other disposition and any such assumption and any such
provision for conversion rights comply with the provisions of this Article IX.
ARTICLE X
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at
any time (a) the Issuer shall have paid or caused to be paid the principal of
and interest, if any, on all the Securities Outstanding (other than Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.9) as and when the same shall have become due and
payable, or (b) the Issuer shall have delivered to the Trustee for cancellation
all Securities theretofore authenticated (other than Securities which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9); and if, in any such case, the Issuer shall also pay or cause to
be paid all other sums payable hereunder by the Issuer, then this Indenture
shall cease to be of further effect, and the Trustee, on demand of the Issuer
accompanied by an Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent relating to the
47
55
satisfaction and discharge contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction and discharging this Indenture.
The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred, and to compensate the Trustee for any
services thereafter reasonably and properly rendered, by the Trustee in
connection with this Indenture or the Securities.
(B) If at any time (a) the Issuer shall have paid or caused to
be paid the principal of and interest, if any, on all the Securities of any
series Outstanding (other than Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9) as and when the same shall have become due and payable, or (b) the
Issuer shall have delivered to the Trustee for cancellation all Securities of
any series theretofore authenticated (other than any Securities of such series
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.9), or (c) in the case of any series of Securities
with respect to which the exact amount described in clause (ii) below can be
determined at the time of making the deposit referred to in such clause (ii),
(i) all the Securities of such series not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption, and (ii) the Issuer shall have irrevocably deposited
or caused to be deposited with the Trustee as funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
Securities of such series, cash in an amount (other than moneys repaid by the
Trustee or any Paying Agent to the Issuer in accordance with Section 10.4) or
direct obligations of the United States of America, backed by its full faith
and credit ("U.S. Government Obligations"), maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the
principal of and interest, if any, on all Securities of such series on each
date that such principal or interest, if any, is due and payable, and (B) any
mandatory sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of this Indenture and the Securities of
such series; then the Issuer shall be deemed to have paid and discharged the
entire indebtedness on all the Securities of such series on the date of the
deposit referred to in clause (ii) above and the provisions of this Indenture
with respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (c) of this Section 10.1(B), as to (i) rights of
registration of transfer and exchange of Securities of such series, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities of
such series, (iii) rights of Holders of Securities of such series to receive
payments of principal thereof and interest, if any, thereon upon the original
stated due dates therefor (but not upon acceleration), and remaining rights of
the Holders of Securities of such series to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them, (vi) the obligations of the Issuer under
Section 3.3 with respect to Securities of such series and (vii) the obligations
of the Issuer under Article XIII) and the Trustee, on demand of the Issuer
accompanied by an Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging the same.
(C) The following provisions shall apply to the Securities of
each series (other than Securities that are convertible into Common Stock)
unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of this Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities with respect to which the
exact amount described in subparagraph (a) below can be determined at the time
of making the deposit referred to in such subparagraph (a), the Issuer shall be
deemed to have paid and discharged the entire indebtedness on all the Securities
of such a series on the 91st day after the date of the deposit referred to in
subparagraph (a) below, and the provisions of this Indenture with respect to the
Securities of such series shall
48
56
no longer be in effect (except as to (i) rights of registration of transfer and
exchange of Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders of
Securities of such series to receive payments of principal thereof and
interest, if any, thereon upon the original stated due dates therefor (but not
upon acceleration), and remaining rights of the Holders of Securities of such
series to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the Holders of Securities of such series as beneficiaries hereof with respect
to the property so deposited with the Trustee payable to all or any of them,
(vi) the obligations of the Issuer under Section 3.3 with respect to Securities
of such series and (vii) the obligations of the Issuer under Article XIII) and
the Trustee, on demand of the Issuer accompanied by an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
contemplated by this provision have been complied with, and at the cost and
expense of the Issuer, shall execute proper instruments acknowledging the same,
if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (i) cash in an amount, or (ii) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the
principal of and interest, if any, on all Securities of such series on
each date that such principal or interest, if any, is due and payable,
and (B) any mandatory sinking fund payments on the dates on which such
payments are due and payable in accordance with the terms of this
Indenture and the Securities of such series;
(b) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to
which the Issuer is a party or by which it is bound; and
(c) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling or
(y), since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income tax on the same
amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not
occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 shall be held
in trust, and such moneys and all moneys from such U.S. Government Obligations
shall be applied by it to the payment, either directly or through any Paying
Agent (including the Issuer acting as its own paying agent), to the Holders of
the particular Securities of such series for the payment or redemption of which
such moneys and U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest,
if any, but such moneys need not be segregated from other funds except to the
extent required by law. The Trustee and any Paying Agent shall promptly pay to
the Issuer, upon the written request of the Issuer, any excess moneys or U.S.
Government Obligations held by them at any time, including all moneys deposited
with the Trustee pursuant to Section 10.1(B) and held by it or any Paying Agent
for the payment of Securities subsequently converted.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any Paying Agent
49
57
under the provisions of this Indenture with respect to such series of
Securities shall, upon demand of the Issuer, be repaid to it or paid to the
Trustee and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any Paying Agent for the payment of the principal of or interest, if any, on any
Security of any series and not applied but remaining unclaimed for two years
after the date upon which such principal or interest, if any, shall have become
due and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such Paying Agent, and the Holder of the Securities of such series shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for any
payment which such Holder may be entitled to collect, and all liability of the
Trustee or any Paying Agent with respect to such moneys shall thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The
Issuer shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or in
any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of the
Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Holders of Senior Indebtedness and of Securities. Nothing in this
Indenture or in the Securities, expressed or implied, shall give or be
construed to give to any Person, other than the parties hereto and their
successors and the holders of Senior Indebtedness and the Holders of the
Securities, any legal or equitable right, remedy or claim under this Indenture
or under any covenant or provision herein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and their
successors, the holders of the Senior Indebtedness and the Holders of the
Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer, or as required pursuant to the Trust Indenture
Act of 1939, may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee)
to Service Corporation International, 0000 Xxxxx Xxxxxxx, P. O. Box 130548,
Xxxxxxx, Xxxxx 00000, Attention:
50
58
Secretary. Any notice, direction, request or demand by the Issuer or any
Holder of Securities to or upon the Trustee shall be deemed to have been
sufficiently given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed (until
another address of the Trustee is filed by the Trustee with the Issuer) to
Chase Bank of Texas, National Association, 000 Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxx 00000, Attention: Vice President, Corporate Trust Department.
Where this Indenture provides for notice to Holders of Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
entitled thereto, at his last address as it appears in the Security register.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail any notice when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably satisfactory to the Trustee
shall be deemed to be sufficient notice.
SECTION 11.5 Officer's Certificates and Opinions of Counsel;
Statements to be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officer's Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture (other than
a certificate provided pursuant to Section 4.3(d)) and delivered to the Trustee
with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such certificate
or opinion has read such covenant or condition, (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based, (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion as to whether
or not such covenant or condition has been complied with, and (d) a statement
as to whether or not, in the opinion of such person, such condition or covenant
has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters, information with respect to which is
in the possession of the Issuer, upon the certificate, statement or opinion of
or representations by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
51
59
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of principal of or interest, if any, on the Securities of
any series or the date fixed for redemption, purchase or repayment of any such
Security or the last date for conversion of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or the
Securities) payment of interest, if any, or principal need not be made on such
date and such conversion need not be made by such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date of maturity or the date fixed for redemption, purchase or repayment or the
last date of such conversion, and, in the case of payment, no interest shall
accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 Governing Law. THIS INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF TEXAS, AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE OR APPLICABLE FEDERAL LAW.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and in the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 11.11 Separability Clause. In case any provision of 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.
ARTICLE XII
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Issuer shall be given by
52
60
mailing notice of such redemption by first-class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for redemption
to such Holders of Securities of such series at their last addresses as they
shall appear upon the registry books. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender of
such Securities, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest, if any, (or, in the
case of Original Issue Discount Securities, original issue discount) accrued to
the date fixed for redemption will be paid as specified in such notice and that
on and after said date interest, if any, thereon or on the portions thereof to
be redeemed (or, in the case of Original Issue Discount Securities, original
issue discount) will cease to accrue and, if applicable, shall also specify the
Conversion Price then in effect and the date on which the right to convert such
Securities or the portions thereof to be redeemed will expire. In case any
Security of a series is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and
shall state that on and after the date fixed for redemption, upon surrender of
such Security, a new Security or Securities of such series in principal amount
equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section 12.2, the Issuer will deposit with the
Trustee or with one or more Paying Agents (or, if the Issuer is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.5) an amount of money sufficient to redeem on the redemption date all the
Outstanding Securities of such series so called for redemption (other than
those theretofore surrendered for conversion into Common Stock and deemed not
to be Outstanding hereunder) at the appropriate redemption price, together with
accrued interest, if any, to the date fixed for redemption on all the
Outstanding Securities of such series so called for redemption (other than
those theretofore surrendered for conversion into Common Stock and deemed not
to be Outstanding hereunder). If any Security called for redemption is
converted pursuant hereto, any moneys deposited with the Trustee or any Paying
Agent or so segregated and held in trust for the redemption of such Security
shall be paid to the Issuer upon the Issuer's request, or, if then held by the
Issuer, shall be discharged from such trust. The Issuer will deliver to the
Trustee at least 30 days prior to the date fixed for redemption (unless a
shorter notice shall be satisfactory to the Trustee) an Officer's Certificate
stating the aggregate principal amount of Securities to be redeemed. In case
of a redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee, prior
to the giving of any notice of redemption to Holders pursuant to this Section
12.2, an Officer's Certificate stating that such restriction has been complied
with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed. Securities may be redeemed in part
in multiples equal to the minimum authorized denomination for Securities of
such series or any multiple thereof. The Trustee shall promptly notify the
Issuer in writing of the Securities of such series selected for redemption and,
in the case of any Securities of such series 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 of any series shall relate, in the case of any
Security
53
61
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Security which has been or is to be redeemed. If any Security selected
for partial redemption is surrendered for conversion after such selection, the
converted portion of such Security shall be deemed (so far as may be) to be the
portion selected for redemption. Upon any redemption of less than all the
Securities of a series, for purposes of selection for redemption the Issuer and
the Trustee may treat as Outstanding Securities surrendered for conversion
during the period of 15 days next preceding the mailing of a notice of
redemption, and need not treat as Outstanding any Security authenticated and
delivered during such period in exchange for the unconverted portion of any
Security converted in part during such period.
SECTION 12.3 Payments of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place or places stated in such notice at the applicable
redemption price, together with interest, if any, accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest, if
any, accrued to said date) interest (or, in the case of Original Issue Discount
Securities, original issue discount) on the Securities or portions of
Securities so called for redemption shall cease to accrue, and such Securities
shall cease from and after the date fixed for redemption (unless an earlier
date shall be specified in a Board Resolution, Officer's Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3 by or
pursuant to which the form and terms of the Securities of such series were
established) to be convertible into Common Stock, and, except as provided in
Sections 6.5 and 10.4, to be entitled to any other benefit or security under
this Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of
such Securities at a place of payment specified in said notice, said Securities
or the specified portions thereof shall be paid and redeemed by the Issuer at
the applicable redemption price, together with interest, if any, accrued
thereon to the date fixed for redemption; provided that payment of interest, if
any, becoming due on or prior to the date fixed for redemption shall be payable
to the Holders of Securities registered as such on the relevant record date
subject to the terms and provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
of interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security, and such Security shall remain convertible
into Common Stock until the redemption price of such Security (together with
such interest thereon) shall have been paid or duly provided for.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 45 days
prior to the last date on which notice of redemption may be given as being
owned of record and beneficially by, and not pledged or hypothecated by, either
(a) the Issuer or (b) a Person specifically identified in such written
statement as an Affiliate of the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of the
54
62
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for Securities (not
previously so credited) converted into Common Stock and so delivered to the
Trustee for cancellation, (c) receive credit for optional sinking fund payments
(not previously so credited) made pursuant to this Section 12.5, or (d) receive
credit for Securities of such series (not previously so credited) redeemed by
the Issuer through any optional redemption provision contained in the terms of
such series. Securities so delivered or credited shall be received or credited
by the Trustee at the sinking fund redemption price specified in such
Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officer's
Certificate (a) specifying the portion of the mandatory sinking fund payment to
be satisfied by payment of cash and the portion to be satisfied by credit of
Securities of such series and the basis for such credit,
(b) stating that none of the Securities of such series to
be so credited has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect
to such series have occurred (which have not been waived or cured or
otherwise ceased to exist) and are continuing, and (d) stating whether
or not the Issuer intends to exercise its right to make an optional
sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the
Issuer intends to pay on or before the next succeeding sinking fund
payment date. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Issuer to be
entitled to credit therefor as aforesaid which have not theretofore
been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officer's
Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officer's Certificate shall be irrevocable and upon
its receipt by the Trustee the Issuer shall become unconditionally
obligated to make all the cash payments or payments therein referred
to, if any, on or before the next succeeding sinking fund payment
date. Failure of the Issuer, on or before any such 60th day, to
deliver such Officer's Certificate and Securities (subject to the
parenthetical clause in the second preceding sentence) specified in
this paragraph, if any, shall not constitute a default but shall
constitute, on and as of such date, the irrevocable election of the
Issuer (i) that the mandatory sinking fund payment for such series due
on the next succeeding sinking fund payment date shall be paid
entirely in cash without the option to deliver or credit Securities of
such series in respect thereof, and (ii) that the Issuer will make no
optional sinking fund payment with respect to such series as provided
in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 or a lesser sum if the Issuer shall so request with respect to
the Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest, if
any, to the date fixed for redemption. If such amount shall be $50,000 or less
and the Issuer makes no such request, then it shall be carried over until a sum
in excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section 12.2, for redemption on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall (if requested
55
63
in writing by the Issuer) inform the Issuer of the serial numbers of the
Securities of such series (or portions thereof) so selected. The Trustee, in
the name and at the expense of the Issuer (or the Issuer, if it shall so
request the Trustee in writing) shall cause notice of redemption of the
Securities of such series to be given in substantially the manner provided in
Section 12.2 (and with the effect provided in Section 12.3) for the redemption
of Securities of such series in part at the option of the Issuer. The amount
of any sinking fund payments not so applied or allocated to the redemption of
Securities of such series shall be added to the next cash sinking fund payment
for such series and, together with such payment, shall be applied in accordance
with the provisions of this Section 12.5. Any and all sinking fund moneys held
on the stated maturity date of the Securities of any particular series (or
earlier, if such maturity is accelerated), which are not held for the payment
or redemption of particular Securities of such series shall be applied,
together with other moneys, if necessary, sufficient for the purpose, to the
payment of the principal of and interest, if any, on, the Securities of such
series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest,
if any, accrued to the date fixed for redemption of Securities to be redeemed
on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that it
shall have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such default or Event of Default shall occur, and any moneys
thereafter paid into the sinking fund, shall, during the continuance of such
default or Event of Default, be deemed to have been collected under Article V
and held for the payment of all such Securities. In case such Event of Default
shall have been waived as provided in Section 5.7 or the default cured on or
before the 60th day preceding the sinking fund payment date in any year, such
moneys shall thereafter be applied on the next succeeding sinking fund payment
date in accordance with this Section 12.5 to the redemption of such Securities.
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
convertible into Common Stock or, if so provided in a Board Resolution,
Officer's Certificate or executed supplemental indenture referred to in
Sections 2.1 and 2.3 by or pursuant to which the form and terms of the
Securities of such series were established, cash in lieu thereof, as and to the
extent provided by the terms of the Securities of such series.
SECTION 13.2 Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the Holder of any Security to be converted
shall surrender such Security to the Conversion Agent at any time during usual
business hours at its office or agency maintained for the purpose as provided
in this Indenture, accompanied by a fully executed written notice, in
substantially the form set forth on the reverse of the Security, that the
Holder elects to convert such Security or a stated portion thereof constituting
a multiple of $1,000 in principal amount, and, if such Security is surrendered
for conversion during the period between the close of business on any record
date for such Security and the opening of business on the related interest
payment date (or on such interest payment date), accompanied also by payment of
an amount equal to the interest payable on such interest payment date on the
portion of the principal amount of the Security being surrendered for
conversion. Such notice shall also state the name or names (and address) in
which the
56
64
certificate or certificates for shares of Common Stock shall be issued (or to
whom payment in cash in lieu of Common Stock shall be made). Securities
surrendered for conversion shall (if so required by the Issuer or the
Conversion Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Issuer and
the Conversion Agent duly executed by, the Holder or his attorney duly
authorized in writing. As promptly as practicable after the receipt of such
notice and the surrender of such Security as aforesaid, the Issuer shall,
subject to the provisions of Section 13.7, issue and deliver at such office or
agency to such Holder, or on his written order, a certificate or certificates
for the number of all shares of Common Stock issuable on conversion of such
Security in accordance with the provisions of such Security and cash, as
provided in Section 13.3, in respect of any fraction of a share of Common Stock
otherwise issuable upon such conversion or, if so provided in a Board
Resolution, Officer's Certificate or executed supplemental indenture referred
to in Sections 2.1 and 2.3 by or pursuant to which the form and terms of the
Securities of such series were established, cash in lieu of shares of Common
Stock. Such conversion shall be at the Conversion Price in effect, and shall
be deemed to have been effected, immediately prior to the close of business on
the date (herein called the "Date of Conversion") on which such notice in
proper form shall have been received by the Conversion Agent and such Security
shall have been surrendered as aforesaid, and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable, if any, upon such conversion shall be deemed to have become on the
Date of Conversion the holder or holders of record of the shares represented
thereby; provided, however, that any such surrender on any date when the stock
transfer books of the Issuer shall be closed shall constitute the Person or
Persons in whose name or names the certificate or certificates for such shares
are to be issued, if any, as the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open but such conversion shall nevertheless be at the
Conversion Price in effect at the close of business on the date when such
Security shall have been so surrendered with the conversion notice in proper
form. In the case of conversion of a portion, but less than all, of a Security,
the Issuer shall execute, and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Issuer, a Security or Securities in the
aggregate principal amount of the unconverted portion of the Security
surrendered. Except as otherwise expressly provided in this Indenture, no
payment or adjustment shall be made for interest accrued on any Security (or
portion thereof) converted or for dividends or distribution on any Common Stock
issued upon conversion of any Security. The right, if any, of a Holder of any
Security to cause the Issuer to redeem, purchase or repay such Security shall
terminate upon receipt by the Issuer of any notice of conversion of such
Security.
SECTION 13.3 Fractional Interests. No fractions of shares or
scrip representing fractions of shares shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities so surrendered. If any fraction of a share
of Common Stock would, except for the provisions of this Section 13.3, be
issuable on the conversion of any Security or Securities, the Issuer shall make
payment in lieu thereof in cash equal to the value of such fraction computed on
the basis of the Last Sale Price of one share of Common Stock on the most
recent Trading Day prior to the Date of Conversion. "Last Sale Price" on any
Trading Day shall mean (i) the closing price regular way (or, if no closing
price is reported the average of the bid and asked prices) as reported on the
New York Stock Exchange Composite Tape, or (ii) if on such Trading Day the
Common Stock is not listed or admitted to trading on such exchange, the closing
price regular way (or, if no closing price is reported the average of the bid
and asked prices) on the principal national securities exchange on which the
Common Stock is listed or admitted to trading, or (iii) if not listed or
admitted to trading on any national securities exchange on such Trading Day,
then the average of the closing bid and asked prices as reported through the
National Association of Securities Dealers, Inc. on its NASDAQ National Market
System or NASDAQ System or a similar organization if NASDAQ is no longer
reporting information, or (iv) if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on such National Market
System or NASDAQ System on such Trading Day, then the average of the closing
bid and asked prices in the
57
65
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Issuer for that purpose or (v) if not quoted
by any such organization on such Trading Day, the fair value of such Common
Stock on such Trading Day, as determined by the Board of Directors. The term
"Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on any of the
above-mentioned exchanges or in such markets.
SECTION 13.4 Adjustment of Conversion Price. The conversion price
or rate (herein called the "Conversion Price") for a series of Securities shall
be as set forth in a Board Resolution, Officer's Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to
which the form and terms of the Securities of such series were established,
and, except as otherwise provided therein, shall be subject to adjustment from
time to time as follows:
(a) In case the Issuer shall (1) pay a dividend or make a
distribution in shares of Common Stock on the Common Stock, (2)
subdivide its outstanding shares of Common Stock into a greater number
of shares, (3) combine its outstanding shares of Common Stock into a
smaller number of shares, (4) issue by reclassification of its Common
Stock any shares of capital stock of the Issuer or (5) redeem any
Associated Rights, the Conversion Price in effect immediately prior to
such action shall be adjusted so that the Holder of any Security
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other capital stock of the Issuer
which he would have owned immediately following such action had such
Security been converted immediately prior thereto. An adjustment made
pursuant to this subsection (a) shall become effective immediately,
except as provided in subsection (e) below, after the record date in
the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or reclassification. If as a result of an adjustment made
pursuant to this subsection (a), the Holder of any Security
thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes of capital stock (including
shares of Common Stock and other capital stock) of the Issuer, the
Board of Directors (whose determination shall be conclusive and shall
be described in a statement filed with the Trustee) shall determine
the allocation of the adjusted Conversion Price between or among
shares of such classes of capital stock or shares of Common Stock and
other capital stock.
(b) In case the Issuer shall issue rights or warrants to
all holders of Common Stock entitling them (for a period not exceeding
45 days from the date of such issuance) to subscribe for or purchase
shares of Common Stock at a price per share less than the current
market price per share (as determined pursuant to subsection (d) below)
of the Common Stock on the record date mentioned below, the Conversion
Price shall be adjusted to a price, computed to the nearest cent, so
that the same shall equal the price determined by multiplying:
(1) the Conversion Price in effect immediately
prior to the date of issuance of such rights or warrants by a
fraction, of which
(2) the numerator shall be (A) the number of
shares of Common Stock outstanding on the date of issuance of
such rights or warrants, immediately prior to such issuance,
plus (B) the number of shares which the aggregate offering
price of the total number of shares so offered for
subscription or purchase would purchase at such current market
price (determined by multiplying such total number of shares
by the exercise price of such rights or warrants and dividing
the product so obtained by such current market price), and of
which
(3) the denominator shall be (A) the number of
shares of Common Stock outstanding on the date of issuance of
such rights or warrants, immediately prior to such
58
66
issuance, plus (B) the number of shares of Common Stock which
are so offered for subscription or purchase.
Such adjustment shall become effective immediately, except as provided
in subsection (e) below, after the record date for the determination of holders
entitled to receive such rights or warrants.
(c) In case the Issuer shall distribute to substantially
all holders of Common Stock, evidences of indebtedness, equity
securities (including equity interests in the Issuer's Subsidiaries)
other than Common Stock, or other assets (other than cash dividends
paid out of surplus of the Issuer), or shall distribute to
substantially all holders of Common Stock rights or warrants to
subscribe for securities (other than those referred to in subsection
(b) above) then in each such case the Conversion Price shall be
adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
date of such distribution by a fraction of which the numerator shall
be the current market price per share (determined as provided in
subsection (d) below) of the Common Stock on the record date mentioned
below less then fair market value (as determined by the Board of
Directors, whose determination shall, if made in good faith, be
conclusive evidence of such fair market value) of the portion of the
assets so distributed or of such subscription rights or warrants
applicable to one share of Common Stock, and of which the denominator
shall be such current market price per share of the Common Stock.
Such adjustment shall become effective immediately, except as provided
in subsection (e) below, after the record date for the determination
of stockholders entitled to receive such distribution.
(d) For the purpose of any computation under subsections
(b) and (c) above, the current market price per share of Common Stock
on any date shall be deemed to be the average of the Last Sale Prices
for the 30 consecutive Trading Days commencing 45 Trading Days before
the date in question.
(e) In any case in which this Section 13.4 shall require
that an adjustment be made immediately following a record date, the
Issuer may elect to defer the effectiveness of such adjustment (but in
no event until a date later than the effective time of the event giving
rise to such adjustment), in which case the Issuer shall, with respect
to any Security converted after such record date and before such
adjustment shall have become effective, (i) defer paying any cash
payment pursuant to Section 13.3 or issuing to the Holder of such
Security the number of shares of Common Stock and other capital stock
of the Issuer issuable upon such conversion in excess of the number of
shares of Common Stock and other capital stock of the Issuer issuable
thereupon only on the basis of the Conversion Price prior to
adjustment, and (ii) not later than five Business Days after such
adjustment shall have become effective, pay to such Holder the
appropriate cash payment pursuant to Section 13.3 and issue to such
Holder the additional shares of Common Stock and other capital stock of
the Issuer issuable on such conversion.
(f) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease
of at least 1% of the Conversion Price; provided, that any adjustments
which by reason of this subsection (f) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment and, provided further, that adjustment shall be required
and made in accordance with the provisions of this Article XIII (other
than this subsection (f)) not later than such time as may be required
in order to preserve the tax-free nature of a distribution to the
Holders of Securities or Common Stock. All calculations under this
Article XIII shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
59
67
(g) Whenever the Conversion Price is adjusted as herein
provided, the Issuer shall promptly (i) file with the Trustee and each
Conversion Agent an Officer's Certificate setting forth the Conversion
Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment, which certificate shall be
conclusive evidence of the correctness of such adjustment, and
(ii) mail or cause to be mailed a notice of such
adjustment to each Holder of Securities in the manner provided
in Section 11.4. Anything in this Section 13.4 to the
contrary notwithstanding, the Issuer shall be entitled to make
such reductions in the Conversion Price, in addition to those
required by this Section 13.4, as it in its discretion shall
determine to be advisable in order that any stock dividend,
subdivision of shares, distribution of rights or warrants to
purchase stock or securities, or distribution of other assets
(other than cash dividends) hereafter made by the Issuer to
its stockholders shall not be taxable.
SECTION 13.5 Continuation of Conversion Privilege in Case of
Merger, Consolidation or Sale of Assets. If any of the following shall occur,
namely: (a) any consolidation or merger of the Issuer as a result of which the
holders of Common Stock shall be entitled to receive stock, other securities or
other assets (including cash) with respect to or in exchange for Common Stock;
or
(b) sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Issuer as an
entirety, then the Issuer, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to
such consolidation, merger, sale, lease, exchange or other
disposition, execute and deliver to the Trustee a supplemental
indenture (which shall conform to the Trust Indenture Act of 1939 as
in force at the date of the execution thereof) providing that the
Holder of each convertible Security then Outstanding shall have the
right to convert such Security into the kind and amount of shares of
stock and other securities and property (including cash) receivable
upon or in connection with such consolidation, merger, sale, lease,
exchange or other disposition by a holder of the number of shares of
Common Stock issuable upon conversion of such Security immediately
prior to such consolidation, merger, sale, lease, exchange or other
disposition. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable
to the adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article XIII. If,
in the case of any such consolidation, merger, sale, lease, exchange
or other disposition, the stock or other securities and property
(including cash) receivable thereupon or in connection therewith by a
holder of shares of Common Stock includes shares of stock or other
securities and property (including cash) of a corporation other than
the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale, lease, exchange or other disposition,
then such supplemental indenture shall also be executed by such other
corporation and shall contain such additional provisions to protect
the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the
foregoing. The provisions of this Section 13.5 shall similarly apply
to successive consolidations, mergers, sales, leases, exchanges or
other dispositions.
Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Securities in the manner provided in Section 11.4.
Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
consolidation, merger, sale, lease, exchange or other disposition or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Sections 6.1 and 6.2, may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected
60
68
in relying upon, the Officer's Certificate (which the Issuer shall be obligated
to file with the Trustee prior to the execution of any such supplemental
indenture) with respect thereto.
SECTION 13.6 Notice of Certain Events. If:
(a) the Issuer shall declare a dividend (or any other
distribution) payable to the holders of Common Stock otherwise than in
cash; or
(b) the Issuer shall authorize the granting to all
holders of Common Stock of rights to subscribe for or purchase any
shares of stock of any class or of any other rights; or
(c) the Issuer shall authorize any reclassification or
change of the Common Stock (other than a subdivision or combination of
its outstanding shares of Common Stock), or any consolidation or
merger to which the Issuer is a party and for which approval of any
stockholders of the Issuer is required, or the sale, lease, exchange
or other disposition of all or substantially all the property and
assets of the Issuer; or
(d) there shall be authorized or ordered any voluntary or
involuntary dissolution, liquidation or winding-up of the Issuer;
then, the Issuer shall cause to be filed at the office or agency
maintained for the purpose of conversion of the Securities as provided
in Section 3.3, and shall cause to be mailed to each Holder of
Securities, in the manner provided in Section 11.4, at least 20 days
before the date hereinafter specified (or the earlier of the dates
hereinafter specified, in the event that more than one date is
specified), a notice stating the date on which (1) a record is
expected to be taken for the purpose of such dividend, distribution or
rights, or if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (2) such
reclassification, change, consolidation, merger, sale, lease, exchange
or other disposition, dissolution, liquidation or winding-up is
expected to become effective and the date, if any is to be fixed, as
of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reclassification, change,
consolidation, merger, sale, lease, exchange or other disposition,
dissolution, liquidation or wind-up.
SECTION 13.7 Taxes on Conversion. The Issuer will pay any and all
documentary, stamp or similar taxes payable to the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
the issue or delivery of shares of Common Stock on conversion of Securities
pursuant thereto; provided, however, that the Issuer shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock in a name other than that of the
Holder of the Securities to be converted (or payment of cash in lieu thereof to
a Person other than such Holder) and no such issue or delivery (or payment)
shall be made unless and until the Person requesting such issue or delivery (or
payment) has paid to the Issuer the amount of any such tax or has established,
to the satisfaction of the Issuer, that such tax has been paid. The Issuer
extends no protection with respect to any other taxes imposed in connection
with conversion of Securities.
SECTION 13.8 Issuer to Provide Stock. The Issuer shall reserve,
free from preemptive rights, out of its authorized but unissued shares,
sufficient shares to provide for the conversion of convertible Securities from
time to time as such Securities are presented for conversion; provided,
however, that nothing contained herein shall be construed to preclude the
Issuer from satisfying its obligations in respect to the conversion of
Securities by delivery of repurchased shares of Common Stock which are held in
the treasury of the Issuer.
61
69
If any shares of Common Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any federal or state law before such shares may be
validly issued or delivered upon conversion, then the Issuer covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be; provided, however, that nothing
in this Section 13.8 shall be deemed to affect in any way the obligations of
the Issuer to convert Securities into Common Stock as provided in this Article
XIII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Issuer will take all corporate action which may, in the opinion of counsel, be
necessary in order that the Issuer may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Issuer covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
non-assessable by the Issuer and free of preemptive rights.
SECTION 13.9 Disclaimer of Responsibility for Certain Matters.
Neither the Trustee, any Conversion Agent nor any agent of either shall at any
time be under any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the Officer's Certificate referred to in
Section 13.4(g), or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. Neither
the Trustee, any Conversion Agent nor any agent of either shall be accountable
with respect to the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities or property (including cash), which may at
any time be issued or delivered upon the conversion of any Security; and
neither the Trustee, any Conversion Agent nor any agent of either makes any
representation with respect thereto. Neither the Trustee, any Conversion Agent
nor any agent of either shall be responsible for any failure of the Issuer to
issue, register the transfer of or deliver any shares of Common Stock or stock
certificates or other securities or property (including cash) upon the surrender
of any Security for the purpose of conversion or, subject to Sections 6.1 and
6.2, to comply with any of the covenants of the Issuer contained in this Article
XIII.
SECTION 13.10 Return of Funds Deposited for Redemption of Converted
Securities. Any funds which at any time shall have been deposited by the
Issuer or on its behalf with the Trustee or any Paying Agent for the purpose of
paying the principal of and interest, if any, on any of the Securities and
which shall not be required for such purposes because of the conversion of such
Securities, as provided in this Indenture, shall forthwith after such
conversion be repaid to the Issuer by the Trustee or such Paying Agent.
ARTICLE XIV
SUBORDINATION
SECTION 14.1 Securities Subordinated to Senior Indebtedness. The
Issuer covenants and agrees that anything in this Indenture or the Securities
of any series to the contrary notwithstanding, the indebtedness evidenced by
the Securities of each series is subordinate and junior in right of payment to
all Senior Indebtedness to the extent provided herein, and each Holder of
Securities of each series, by his acceptance thereof, likewise covenants and
agrees to the subordination herein provided and shall be bound by the
provisions hereof.
Subject to Section 14.4, if the Issuer shall default in the payment of
any principal of or interest on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, upon written notice of such
default to the Issuer by the holders of such Senior Indebtedness or any trustee
therefor, unless and until such default shall
62
70
have been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) shall be made
or agreed to be made on account of the principal of or interest on any of the
Securities, or in respect of any redemption, retirement, purchase or other
acquisition of any of the Securities other than those made in capital stock of
the Issuer (or cash in lieu of fractional shares thereof, pursuant to Article
XIII or otherwise made in capital stock of the Issuer (or cash in lieu of
fractional shares thereof).
If (a) without the consent of the Issuer a court having jurisdiction
shall enter an order for relief with respect to the Issuer under the Bankruptcy
Code or without the consent of the Issuer a court having jurisdiction shall
enter a judgment, order or decree adjudging the Issuer as bankrupt or insolvent,
or enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Issuer under the Bankruptcy Code or
applicable state insolvency law, or (b) the Issuer shall institute proceedings
for entry of an order for relief with respect to the Issuer under the Bankruptcy
Code or for an adjudication of insolvency, or shall consent to the institution
of bankruptcy or insolvency proceedings against it, or shall file a petition
seeking, or seek or consent to reorganization, arrangement, composition or
relief under the Bankruptcy Code or any applicable state law, or shall consent
to the filing of such petition or to the appointment of a receiver, custodian,
liquidator, assignee, trustee, sequestrator or similar official of the Issuer or
of substantially all of its property, or the Issuer shall make a general
assignment for the benefit of creditors as recognized under the Bankruptcy Code,
then all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, shall be
made to any Holder of any Securities on account thereof. Any payment or
distribution, whether in cash, securities or other property (other than
securities of the Issuer or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), which would otherwise
(but for these subordination provisions) be payable or deliverable in respect of
the Securities of any series shall be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) shall have been paid in
full. In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the Holders of the Securities,
together with the holders of any obligations of the Issuer ranking on a parity
with the Securities, shall be entitled to be paid from the remaining assets of
the Issuer the amounts at the time due and owing on account of unpaid principal
of and interest, if any, on the Securities and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any capital stock or any obligations of the Issuer ranking
junior to the Securities and such other obligations.
If, notwithstanding the foregoing, any payment or distribution of any
character, whether in cash, securities or other property (other than securities
of the Issuer or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinate, at least to the extent
provided in the subordination provisions with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the Trustee or any
Holder in contravention of any of the terms hereof, such payment or
distribution shall be received in trust for the benefit of, and shall be paid
over or delivered and transferred to, the holders of the Senior Indebtedness
then outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all such Senior Indebtedness in full. In
the event of the failure of the Trustee or any Holder to endorse or assign any
such payment, distribution or security, each holder of Senior Indebtedness is
hereby irrevocably authorized to endorse or assign the same.
63
71
No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness evidenced
by the Securities by any act or failure to act on the part of the Issuer.
Nothing contained herein shall impair, as between the Issuer and the Holders of
Securities of each series, the obligation of the Issuer and the Holders of
Securities of each such series, the obligation of the Issuer to pay to such
Holders the principal of and interest, if any, on such Securities or prevent
the Trustee or the Holder from exercising all rights, powers and remedies
otherwise permitted by applicable law or hereunder upon a default or Event of
Default hereunder, all subject to the rights of the holders of the Senior
Indebtedness to receive cash, securities or other property otherwise payable or
deliverable to the Holders.
Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness then outstanding. Upon
the payment in full of all Senior Indebtedness, the Holders of Securities of
each series shall be subrogated to all rights of any holders of Senior
Indebtedness to receive any further payments or distributions applicable to the
Senior Indebtedness until the indebtedness evidenced by the Securities of such
series shall have been paid in full, and such payments or distributions received
by such Holders, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Issuer and its creditors other than the
holders of Senior Indebtedness, on the one hand, and such Holders, on the other
hand, be deemed to be a payment by the Issuer on account of Senior Indebtedness,
and not on account of the Securities of such series.
The provisions of this Section 14.1 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Issuer in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Issuer, otherwise ranking on a
parity with the Securities or ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
SECTION 14.2 Reliance on Certificate of Liquidating Agent; Further
Evidence as to Ownership of Senior Indebtedness. Upon any payment or
distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent
jurisdiction in which such dissolution or winding up or liquidation or
reorganization or arrangement proceedings are pending or upon a certificate of
the trustee in bankruptcy, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or
the Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIV. In the absence of any such bankruptcy trustee,
receiver, assignee or other Person, the Trustee shall be entitled to rely upon
a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder) as
evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If 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 distributions
pursuant to this Article XIV, 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, as to the extent to which such Person
is entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such Person under this Article XIV, 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 14.3 Payment Permitted if no Default. Nothing contained
in this Article XIV or elsewhere in this Indenture, or in any of the
Securities, shall prevent (a) the Issuer at any time, except during
64
72
the pendency of any default in the payment of any principal of or interest on
any Senior Indebtedness as described in Section 14.1 or of any of the events
described in clauses (a) and (b) of Section 14.1, from making payments of the
principal of or interest, if any, on the Securities, or (b) the application by
the Trustee or any Paying Agent of any moneys deposited with it hereunder to
payments of the principal of or interest, if any, on the Securities, unless and
until the Trustee or such Paying Agent, as the case may be, shall have timely
received the Officer's Certificate or written notice provided for in Section
14.5.
SECTION 14.4 Disputes With Holders of Certain Senior
Indebtedness. Any failure by the Issuer to make any payment on or under any
Senior Indebtedness, other than any Senior Indebtedness as to which the
provisions of this Section 14.4 shall have been waived by the Issuer in the
instrument or instruments by which the Issuer incurred, assumed, guaranteed or
otherwise created such Senior Indebtedness, shall not be deemed a default under
Section 14.1 if (i) the Issuer shall be disputing its obligation to make such
payment or perform such obligation, and (ii) either (A) no final judgment
relating to such dispute shall have been issued against the Issuer which is in
full force and effect and is not subject to further review, including a
judgment that has become final by reason of the expiration of the time within
which a party may seek further appeal or review, or (B) in the event of a
judgment that is subject to further review or appeal has been issued, the
Issuer shall in good faith be prosecuting an appeal or other proceeding for
review, and a stay of execution shall have been obtained pending such appeal or
review.
SECTION 14.5 Trustee Not Charged With Knowledge of Prohibition.
Anything in this Article XIV or elsewhere in this Indenture contained to the
contrary notwithstanding, the Trustee shall not at any time be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of moneys to or by the Trustee and shall be entitled to assume
conclusively that no such facts exist and that no event specified in clauses
(a) and (b) of Section 14.1 has happened, unless and until the Trustee shall
have received an Officer's Certificate to that effect or notice in writing to
that effect signed by or on behalf of the holder or holders, or their
representatives, of Senior Indebtedness who shall have been certified by the
Issuer or otherwise established to the reasonable satisfaction of the Trustee
to be such holder or holders or representatives or from any trustee under any
indenture pursuant to which such Senior Indebtedness shall be outstanding;
provided, however, that, if the Trustee shall not have received the Officer's
Certificate or notice provided for in this Section 14.5 at least three Business
Days preceding the date upon which by the terms hereof any such moneys may
become payable for any purpose (including, without limitation, the payment of
either the principal of or interest, if any, on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and apply the same to the purpose
for which they were received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days preceding such
date. The Issuer shall give prompt written notice to the Trustee and to each
Paying Agent of any facts which would prohibit any payment of moneys to or by
the Trustee or any Paying Agent, and the Trustee shall not be charged with
knowledge of the curing of any default or the elimination of any other fact or
condition preventing such payment or distribution unless and until the Trustee
shall have received an Officer's Certificate to such effect.
SECTION 14.6 Trustee to Effectuate Subordination. Each Holder
of Securities by his acceptance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as between such Holder and holders of Senior Indebtedness as
provided in this Article XIV and appoints the Trustee its attorney-in-fact for
any and all such purposes.
SECTION 14.7 Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article XIV
with respect to any Senior Indebtedness which may at the 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.
Nothing in this Article XIV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
65
73
SECTION 14.8 Article Applicable to Paying Agents. In case at
any time any Paying Agent other than the Trustee shall have been appointed by
the Issuer and be then acting hereunder, the term "Trustee" as used in this
Article XIV shall in such case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if the Paying Agent were named in this
Article XIV in addition to or in place of the Trustee; provided, however, that
Sections 14.5 and 14.7 shall not apply to the Issuer if it acts as Paying
Agent.
SECTION 14.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Indebtedness. No right of any
present or future holders 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 Issuer or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Issuer
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or be otherwise charged with.
The holders of Senior Indebtedness may, at any time or from time to time and in
their absolute discretion, change the manner, place or terms of payment, change
or extend the time of payment of, or renew or alter, any such Senior
Indebtedness, or amend or supplement any instrument pursuant to which any such
Senior Indebtedness is issued or by which it may be secured, or release any
security therefor, or exercise or refrain from exercising any other of their
rights under the Senior Indebtedness, including, without limitation, the waiver
of default thereunder, all without notice to or assent from the Holders of the
Securities or the Trustee and without affecting the obligations of the Issuer,
the Trustee or the Holders of Securities under this Article XIV.
SECTION 14.10 Trustee not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of the Senior Indebtedness, and shall not be liable to any such holders
if it shall mistakenly pay over or distribute money or assets to
Securityholders or the Issuer.
66
74
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, effective as of _______________ 1, ____.
SERVICE CORPORATION INTERNATIONAL
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
67
