Exhibit 4.1
================================================================================
Telefonos de Mexico, S.A. de C.V.,
as Issuer
to
JPMorgan Chase Bank,
Trustee
----------
INDENTURE
Dated as of November 19, 2003
----------
Debt Securities
================================================================================
Certain Sections of this Indenture relating to Sections 310
through 318, inclusive, of the Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
(S) 310(a)(1) ........................................... 609
(a)(2) ........................................... 609
(a)(3) ........................................... Not Applicable
(a)(4) ........................................... Not Applicable
(b) ........................................... 608
........................................... 610
(S) 311(a) ........................................... 613
(b) ........................................... 613
(S) 312(a) ........................................... 701
........................................... 702
(b) ........................................... 702
(c) ........................................... 702
(S) 313(a) ........................................... 703
(b) ........................................... 703
(c) ........................................... 703
(d) ........................................... 703
(S) 313(a) ........................................... 704
(a)(4) ........................................... 101
........................................... 1004
(b) ........................................... Not Applicable
(c)(1) ........................................... 102
(c)(2) ........................................... 102
(c)(3) ........................................... Not Applicable
(d) ........................................... Not Applicable
(e) ........................................... 102
(S) 315(a) ........................................... 601
(b) ........................................... 602
(c) ........................................... 601
(d) ........................................... 601
(e) ........................................... 513
(S) 316(a) ........................................... 101
(a)(1)(A) ........................................... 502
........................................... 512
(a)(1)(B) ........................................... 513
(a)(2) ........................................... Not Applicable
(b) ........................................... 508
(c) ........................................... 104
(S) 317(a)(1) ........................................... 503
(a)(2) ........................................... 504
(b) ........................................... 1003
(S) 318(a) ........................................... 107
----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
Parties .......................................................................1
Recitals of the Company .......................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions....................................................1
Section 102. Compliance Certificates and Opinions.......................... 9
Section 103. Form of Documents Delivered to Trustee........................10
Section 104. Acts of Holders; Record Dates.................................10
Section 105. Notices, Etc., to Trustee and Company.........................12
Section 106. Notice to Holders; Waiver.....................................12
Section 107. Conflict with Trust Indenture Act.............................13
Section 108. Effect of Headings and Table of Contents......................13
Section 109. Successors and Assigns........................................13
Section 110. Separability Clause...........................................13
Section 111. Counterparts..................................................13
Section 112. Benefits of Indenture.........................................13
Section 113. Governing Law.................................................14
Section 114. Legal Holidays................................................14
Section 115. Consent to Service; Jurisdiction..............................14
Section 116. Language of Notices, Etc......................................15
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally...............................................15
Section 202. Form of Face of Security......................................15
Section 203. Form of Reverse of Security...................................17
Section 204. Form of Trustee's Certificate of Authentication...............26
Section 205. Form of Conversion Notice.....................................26
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series..........................27
Section 302. Denominations.................................................29
Section 303. Execution, Authentication, Delivery and Dating................29
Section 304. Registration, Registration of Transfer and Exchange...........31
Section 305. Mutilated, Destroyed, Lost and Stolen Securities..............33
Section 306. Payment of Interest; Interest Rights Preserved................33
Section 307. Persons Deemed Owners.........................................35
Section 308. Cancellation..................................................35
Section 309. Computation of Interest.......................................35
Section 310. CUSIP Numbers.................................................35
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.......................36
Section 402. Application of Trust Money....................................37
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.............................................37
Section 502. Acceleration of Maturity; Rescission and Annulment............39
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee....................................................40
Section 504. Trustee May File Proofs of Claim..............................40
Section 505. Trustee May Enforce Claims Without Possession of Securities...41
Section 506. Application of Money Collected................................41
Section 507. Limitation on Suits...........................................41
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert........................42
Section 509. Restoration of Rights and Remedies............................42
Section 510. Rights and Remedies Cumulative................................42
Section 511. Delay or Omission Not Waiver..................................43
Section 512. Control by Holders............................................43
Section 513. Waiver of Past Defaults.......................................43
Section 514. Undertaking for Costs.........................................43
Section 515. Waiver of Usury, Stay or Extension Laws.......................44
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities...........................44
Section 602. Notice of Defaults............................................44
Section 603. Certain Rights of Trustee.....................................44
Section 604. Not Responsible for Recitals or Issuance of Securities........45
Section 605. May Hold Securities...........................................46
Section 606. Money Held in Trust...........................................46
Section 607. Compensation and Reimbursement................................46
Section 608. Conflicting Interests.........................................47
Section 609. Corporate Trustee Required; Eligibility.......................47
Section 610. Resignation and Removal; Appointment of Successor.............47
Section 611. Acceptance of Appointment by Successor........................48
Section 612. Merger, Conversion, Consolidation or Succession to Business...49
Section 613. Preferential Collection of Claims Against Company.............50
Section 614. Appointment of Authenticating Agent...........................50
Section 615. Trustee's Application for Instructions from the Company.......51
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.....51
Section 702. Preservation of Information; Communications to Holders........52
Section 703. Reports by Trustee............................................52
Section 704. Reports by Company............................................52
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms..........53
Section 802. Successor Substituted.........................................53
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders............54
Section 902. Supplemental Indentures with Consent of Holders...............55
Section 903. Execution of Supplemental Indentures..........................56
Section 904. Effect of Supplemental Indentures.............................56
Section 905. Conformity with Trust Indenture Act...........................56
Section 906. Reference in Securities to Supplemental Indentures............56
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest....................57
Section 1002. Maintenance of Office or Agency...............................57
Section 1003. Money for Security Payments to Be Held in Trust...............57
Section 1004. Statement by Officers as to Default...........................58
Section 1005. Exchange Act Reports..........................................59
Section 1006. Maintenance of Telecommunications Business....................59
Section 1007. Limitation on Liens...........................................59
Section 1008. Limitation on Sale/Leaseback Transactions.....................60
Section 1009. Payment of Additional Amounts.................................61
Section 1010. Indemnification of Judgment Currency..........................63
Section 1011. Book-Entry System.............................................64
Section 1012. Waiver of Certain Covenants...................................64
Section 1013. Calculation of Original Issue Discount........................64
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Right of Redemption...........................................64
Section 1102. Notice of Redemption..........................................65
Section 1103. Deposit of Redemption Price...................................66
Section 1104. Securities Payable on Redemption Date.........................66
Section 1105. Securities Redeemed in Part...................................66
ARTICLE TWELVE
CONVERSION OF CONVERTIBLE SECURITIES
Section 1201. Conversion Privilege and Conversion Rate......................67
Section 1202. Exercise of Conversion Privilege..............................67
Section 1203. Fractions of ADSs.............................................69
Section 1204. Adjustment of Conversion Rate.................................69
Section 1205. Notice of Adjustments of Conversion Rate......................73
Section 1206. Notice of Certain Corporate Action............................74
Section 1207. Company to Reserve Common Stock; Depositary to Register
ADSs; Listing on NYSE......................................75
Section 1208. Taxes and Fees on Conversions.................................75
Section 1209. Covenant as to L Shares.......................................75
Section 1210. Cancellation of Converted Convertible Securities..............76
Section 1211. Provision in Case of Consolidation, Merger or Sale of
Assets.....................................................76
Section 1212. Responsibility of Trustee for Conversion Provisions...........77
Section 1213. Termination of Deposit Agreement..............................77
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON A CHANGE IN CONTROL
Section 1301. Right to Require Repurchase...................................77
Section 1302. Notices; Method of Exercising Repurchase Right, Etc...........78
Section 1303. Certain Definitions...........................................80
SIGNATURES....................................................................81
INDENTURE, dated as of November 19, 0000, xxxxxxx Xxxxxxxxx xx Xxxxxx, S.A.
de C.V., a sociedad anonima de capital variable organized and existing under the
laws of the United Mexican States ("Mexico") (herein called the "Company"),
having its principal office at Parque Xxx 000, Xxxxxxx Xxxxxxxxxx, 00000,
Xxxxxx, X.X., Xxxxxx, and JPMorgan Chase Bank, a banking corporation duly
organized and existing under the laws of the State of New York, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debt securities
(herein called collectively the "Securities"), to be issued in one or more
series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase and acceptance of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in Mexico, and, except as otherwise herein expressly provided,
the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in Mexico at the date of such
computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case may
be, of this Indenture;
-1-
(5) unless the context otherwise requires, any reference to a statute,
rule or regulation refers to the same (including any successor statute,
rule or regulation thereto) as it may be amended from time to time; and
(6) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Additional Amounts" has the meaning specified in Section 1009.
"ADSs" means American Depositary Shares, each initially representing 20
Series L Shares.
"ADS Deposit Agreement" means the Amended and Restated Deposit Agreement,
dated as of May 1, 1991 and amended as of May 1, 1992, among the Company, Xxxxxx
Guaranty Trust Company of New York, as depositary, and the holders from time to
time of the American Depositary Receipts issued by the ADS Depositary and
evidencing the ADSs issued thereunder, as such agreement may be amended from
time to time.
"ADS Depositary" means Xxxxxx Guaranty Trust Company of New York, as
depositary under the ADS Deposit Agreement, until a successor ADS Depositary
shall have become such pursuant to such agreement, and thereafter "ADS
Depositary" shall mean such successor ADS Depositary.
"Affiliate" of any specified Person means any other Person who directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent Members" has the meaning specified in clause (5) of the last
paragraph of Section 304.
"Applicable Procedures" of the Depositary means, with respect to any matter
at any time, the policies and procedures of the Depositary, if any, that are
applicable to such matter at such time.
"Attributable Debt" means, with respect to any Sale/Leaseback Transaction,
the lesser of (x) the fair market value of the asset subject to such transaction
and (y) the present value (discounted at a rate per annum equal to the discount
rate of a capital lease obligation with a like term in accordance with Mexican
generally accepted accounting principles) of the obligations of the lessee for
net rental payments (excluding amounts on account of maintenance and repairs,
insurance, taxes, assessments and similar charges and contingent rents) during
the term of the lease.
-2-
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"beneficial owner" has the meaning specified in Section 1303; and the terms
"beneficial ownership" and "beneficially owned" have meanings correlative to the
definition of beneficial owner.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act for it in respect hereof.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is (i) not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close and (ii) a day on
which banks and financial institutions in Mexico are open for business with the
general public.
"Clearstream, Luxembourg" has the meaning specified in clause (5) of the
last paragraph of Section 304.
"Change in Control" has the meaning specified in Section 1303.
"Closing Price" on any Trading Day with respect to the per share price of
ADSs means the last reported sales price regular way or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case on the New York Stock Exchange as
reported in The Wall Street Journal (or other similar newspaper). If the ADS
Deposit Agreement is terminated for any reason, Closing Price shall refer to the
last reported sales price quoted for the L Shares on the Mexican Stock Exchange,
converted into U.S. Dollars at the noon exchange rate published by the Federal
Reserve Bank of New York on that date, and if no such rate is published by the
Federal Reserve Bank of New York, at the average of the bid and asked exchange
rates quoted by Banco de Mexico on such date.
"Commission" means the U.S. Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under applicable law, then the body
performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution, or winding-up of the Company
and which is not subject to redemption at the election of the Company (other
than by virtue of constituting variable capital). Subject to the provisions of
Section 1211, shares issuable on conversion of the Securities shall include only
L Shares or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption at the election of the Company (other than by virtue of
constituting variable capital); provided that, if at any time there shall be
more than one
-3-
such resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by the Chief Executive Officer, the Chief
Financial Officer, the Treasurer, the General Counsel or any Division Head of
the Company, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means total assets (stated net of
applicable reserves and other properly deductible items, to the extent not
already deducted in the computation of total assets) after deducting therefrom
(i) all current liabilities and (ii) all goodwill, trade names, trademarks,
patents and other like intangible assets, each as set forth on the most recent
balance sheet of the Company and its consolidated Subsidiaries and computed in
accordance with Mexican generally accepted accounting principles.
"Constituent Person" has the meaning specified in Section 1211.
"Conversion Agent" has the meaning specified in Section 1202.
"Conversion Rate" has the meaning specified in Section 1201.
"Convertible Security" means any Security that by its terms may be
converted at the option of the Holder thereof into ADSs in accordance with the
provisions of Article Twelve.
"Corporate Trust Office" means the principal office of the Trustee in the
Borough of Manhattan, the City of New York, New York at which at any particular
time its corporate trust business shall be administered which office as of the
date hereof is located at 0 Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Institutional Trust Services.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Defaulted Interest" has the meaning specified in Section 306.
"Depositary" means The Depository Trust Company until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean such successor Depositary.
"Dollar" and "$" mean a U.S. Dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"Euroclear" has the meaning specified in clause (5) of the last paragraph
of Section 304.
"Event of Default" has the meaning specified in Section 501.
-4-
"Excess Payments" means the excess of (A) the aggregate of the cash and
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive evidence of such fair market value and described in a Board
Resolution delivered to the Trustee) of other consideration paid by the Company
or any of its Subsidiaries with respect to the shares of Common Stock acquired
in a tender or exchange offer over (B) the price of a share of the relevant
series of Common Stock (as reported on the principal securities exchange on
which such series of Common Stock is listed) on the Trading Day immediately
following the completion of the tender or exchange offer multiplied by the
number of acquired shares.
"Exchange Act" means the U.S. Securities Exchange Act of 1934 (including
any successor act thereto), as it may be amended from time to time, and (unless
the context otherwise requires) includes the rules and regulations of the
Commission promulgated thereunder.
"Expiration Date" has the meaning specified in Section 104(g).
"Expiration Time" has the meaning specified in Section 1204(6).
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"Holder" means, with respect to any Security, a Person in whose name such
Security is registered in the Security Register.
"Holder Repurchase Date" has the meaning specified in Section 1301.
"Holder Repurchase Notice" has the meaning specified in Section 1302(b).
"Indebtedness" means any obligation, or the guarantee of any obligation,
for the payment or repayment of money borrowed, or otherwise evidenced by
debentures, notes, bonds or similar instruments.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 1010.
"Lien" means any mortgage, charge, pledge, lien, hypothecation, security
interest or other encumbrance, including, without limitation, any equivalent of
the foregoing created under the laws of Mexico or any other jurisdiction.
"L Shares" means the Series L shares, no par value, of the Company.
-5-
"Material Subsidiary" means any Subsidiary of the Company if (i) the assets
of such Subsidiary and those of its Subsidiaries, on a consolidated basis
without duplication, constituted 10% or more of the consolidated assets of the
Company and its Subsidiaries as of the end of the then most recently ended
fiscal quarter of the Company or (ii) the operating profit of such Subsidiary
and the operating profit of its Subsidiaries, on a consolidated basis without
duplication, constituted 10% or more of the consolidated operating profit of the
Company and its Subsidiaries for the then most recently ended fiscal quarter of
the Company.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, exercise of the repurchase right or otherwise.
"Mexican Taxes" has the meaning specified in Section 1009.
"Non-electing Share" has the meaning specified in Section 1211.
"Notice of Default" means a written notice of the kind specified in Section
501(3).
"Officer's Certificate" means a certificate signed by the Chief Executive
Officer, the Chief Financial Officer, the General Counsel, the Treasurer or any
Division Head of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment, redemption or repurchase money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities; provided
that, if such Securities are to be redeemed, notice of such redemption
shall have been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee shall have been made; and
(iii) Securities which have been paid pursuant to Section 305 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a protected purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization,
-6-
direction, notice, consent, waiver or other action hereunder as of any date,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver or other action, only Securities which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series
and subject to Section 1002, means the place or places where the principal of
and any premium and interest on the Securities of that series are payable as
specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 305 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture as set
forth in such Security.
"Reference Date" has the meaning specified in Section 1204(4).
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Related Person" has the meaning specified in Section 1303.
"Repurchase Price" has the meaning specified in Section 1301.
"Responsible Officer", when used with respect to the Trustee, means any
vice president, any assistant secretary, any assistant treasurer, any trust
officer, any assistant trust officer or any other officer of the Trustee, in
each case, with direct responsibility for the administration of this Indenture,
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
-7-
"Restricted Property" means (a) any lines, exchanges, switching equipment,
transmission equipment (including satellites), cables, microwave equipment and
related facilities, whether at the date of this Indenture owned or thereafter
acquired, used in connection with the provision of telecommunications services
in Mexico, including any land, buildings, structures and other equipment or
fixtures that constitute any such facility, owned by the Company or a Restricted
Subsidiary and (b) any share of capital stock of a Restricted Subsidiary.
"Restricted Subsidiary" means any Subsidiary that owns Restricted Property.
"Rule 3.25.15" means Rule 3.25.15 issued by the Mexican Secretaria de
Hacienda y Credito Publico (Ministry of Finance and Public Credit) on March 31,
2003 (or a substantially similar successor rule), as the same may be amended
from time to time.
"Sale/Leaseback Transaction" means any arrangement that provides for the
leasing by the Company or any Restricted Subsidiary, for an initial term of
three years or more, of any Restricted Property, whether now owned or hereafter
acquired, that is to be sold or transferred by the Company or any Restricted
Subsidiary for a sale price of U.S.$1,000,000 (or the equivalent thereof) or
more.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the U.S. Securities Act of 1933 (including any
successor act thereto), as it may be amended from time to time, and (unless the
context otherwise requires) includes the rules and regulations of the Commission
promulgated thereunder.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 304.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 306.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means (i) a corporation more than 50% of the combined voting
power of the outstanding Voting Stock of which is owned, directly or indirectly,
by the Company or by one or more other Subsidiaries of the Company or by the
Company and one or more Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which the Company, or one or more other Subsidiaries of
the Company or the Company and one or more other Subsidiaries thereof, directly
or indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof.
"Trading Day" means, in the case of ADSs, any day on which the New York
Stock Exchange is open for business and, in the case of Common Stock, any day on
which the Mexican Stock Exchange is open for business.
-8-
"transfer" of any Security means any sale, pledge, transfer, hypothecation
or other disposition of such Security or any interest therein.
"Trigger Event" has the meaning specified in Section 1204(7).
"Trust Indenture Act" means the U.S. Trust Indenture Act of 1939 (including
any successor act thereto), as it may be amended from time to time, and (unless
the context otherwise requires) includes the rules and regulations of the
Commission thereunder.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one Person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series.
"United States" means the United States of America (including the States
thereof and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"Voting Stock" of any Person means capital stock of or other ownership
interest in such Person which ordinarily has voting power for the election of
directors of (or Persons performing similar functions for) such Person, whether
at all times or only as long as no senior class of securities or other ownership
interests has such voting power by reason of any contingency. For the purpose of
calculating the percentage of (x) the combined voting power of the Voting Stock
of any Person that is represented by (y) any capital stock of or other ownership
interests in such Person, all capital stock of and other ownership interests in
such Person that are beneficially owned by such Person will be excluded in
determining the combined voting power described in clause (x) but will not be
excluded from (if otherwise included in) the capital stock or other ownership
interests described in clause (y).
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be reasonably required hereunder.
Each such certificate or opinion shall be given in the form of an Officer's
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel if to be given by counsel, and shall comply with the requirements of the
Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 1004) shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
-9-
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by 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 and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such
-10-
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
(f) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Xxxxxxx 000, (xxx) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action (whereupon the record date previously set shall automatically and without
any action by any Person be canceled and of no effect), nor shall anything in
this paragraph be construed to render ineffective any action taken by Holders of
the requisite principal
-11-
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
(g) With respect to any record date set pursuant to this Section, the
party hereto that sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 105. Notices, Etc.,to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
(which may be by facsimile) to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument, Attention: Chief Financial Officer, or
at any other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this
-12-
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 regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any one or more of the provisions contained in this Indenture shall
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions contained in this
Indenture, and to the extent and only to the extent that any such provision is
invalid, illegal or unenforceable, this Indenture shall be construed as if such
provision had never been contained herein.
SECTION 111. Counterparts.
This Indenture may be simultaneously executed and delivered in any number
of counterparts, each of which so executed and delivered shall be deemed to be
an original, and such counterparts shall together constitute but one and the
same instrument.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders of Securities, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
-13-
SECTION 113. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repurchase
Date or Stated Maturity of any Security or the last date on which a Holder has
the right to convert his Securities shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) or conversion of the
Securities need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the Interest Payment
Date, Redemption Date, Repurchase Date or at the Stated Maturity, or on such
last day for conversion, as the case may be; provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
SECTION 115. Consent to Service; Jurisdiction.
The Company and the Trustee agree that any legal suit, action or proceeding
arising out of or relating to this Indenture, and the Company agrees that any
legal suit, action or proceeding arising out of or relating to the Securities,
may be instituted in any federal or state court in the Borough of Manhattan, The
City of New York and in the courts of its own corporate domicile, in respect of
actions brought against each such party as a defendant, and each waives any
objection which it may now or hereafter have to the laying of the venue of any
such legal suit, action or proceeding, waives any immunity from jurisdiction or
to service of process in respect of any such suit, action or proceeding, waives
any right to which it may be entitled on account of place of residence or
domicile and irrevocably submits to the jurisdiction of any such court in any
such suit, action or proceeding. The Company hereby designates and appoints CT
Corporation System, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
its authorized agent upon which process may be served in any legal suit, action
or proceeding arising out of or relating to this Indenture or the Securities
which may be instituted in any federal or state court in the Borough of
Manhattan, The City of New York, New York, and agrees that service of process
upon such agent, and written notice of said service to the Company by the Person
serving the same, shall be deemed in every respect effective service of process
upon the Company in any such suit, action or proceeding and further designates
its domicile, the domicile of CT Corporation System specified above and any
domicile CT Corporation System may have in the future as its domicile to receive
any notice hereunder (including service of process). If for any reason CT
Corporation System Inc. (or any successor agent for this purpose) shall cease to
act as agent for service of process as provided above, the Company will promptly
appoint a successor agent for this purpose reasonably acceptable to the Trustee.
The Company agrees to take any and all actions as may be necessary to maintain
such designation and appointment of such agent in full force and effect.
-14-
SECTION 116. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication shall be in
substantially the forms set forth in this Article or in such other form as shall
be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or Depositary thereof or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities of
any series is established by action taken pursuant to a Board Resolution, a copy
of an appropriate record of such action shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
SECTION 202. Form of Face of Security.
The following legend shall appear on the face of each Global Security:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND
ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.
The following legend shall appear on the face of each Global Security for which
The Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
-15-
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED
TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
Telefonos de Mexico, S.A. de C.V.
----------
No.
----------
CUSIP No. $
------------- --------
Telefonos de Mexico, S.A. de C.V., a sociedad anonima de capital variable
organized and existing under the laws of Mexico (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
-----------------------
Dollars on
-------------------------- -----------------------------------------
[if the Security is to bear interest prior to Maturity, insert -- , and to pay
interest thereon from or from the most recent Interest Payment
----------------
Date to which interest has been paid or duly provided for, semi-annually on
and in each year, commencing , and at
------------ ----------- --------------
the Maturity thereof, at the rate of % per annum, until the principal hereof
---
is paid or made available for payment [if applicable, insert -- , provided that
any principal [and premium], and any such installment of interest, which is
overdue shall bear interest at the rate of % per annum (to the extent that
---
the payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand]. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the or
------- -------
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest so payable, but not punctually paid or
duly provided for on any Interest Payment Date will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture].
-16-
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal [and any overdue premium] shall
bear interest at the rate of % per annum (to the extent that the payment of
----
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal [or premium] shall be payable on demand.]
Payment of the principal of [(and premium, if any)] and [if applicable,
insert -- any such] interest on this Security will be made pursuant to the
Applicable Procedures of the Depositary as permitted in the Indenture, provided,
however, that if this Security is not a Global Security, payment may be made at
the office or agency of the Company maintained for that purpose in New York, New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts, against
surrender of this Security in the case of any payment due at the Maturity of the
principal thereof (other than any payment of interest that first becomes payable
on a day other than an Interest Payment Date); and provided, further, that at
the option of the Company, payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
-------------------------
TELEFONOS DE MEXICO, S.A. de C.V.
By:
--------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of November 19, 2003 (herein called the
"Indenture", which term shall have the meaning
-17-
assigned to it in such instrument), between the Company and JPMorgan Chase Bank,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert -- , limited in aggregate principal
amount to $ ].
-----------
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than days' nor more than days' notice,
------- -------
at any time [if applicable, insert -- on or after , 20 ], as a whole
---------- --
or in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [if applicable,
insert -- on or before , %, and if redeemed] during the
--------------- ---
12-month period beginning of the years indicated,
-------------
Redemption Redemption
Year Price Year Price
---- ---------- ---- -----------
and thereafter at a Redemption Price equal to % of the principal amount,
-----
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities or one
or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
-18-
[If the Security is a Convertible Security, insert -- Subject to and upon
compliance with the provisions of the Indenture, the Holder of this Security is
entitled, at his option, at any time on or before the close of business on
, 20 , or in case this Security or a portion hereof is called for
----------- --
redemption, then in respect of this Security or such portion hereof until and
including, but (unless the Company defaults in making the payment due upon
redemption) not after, the close of business on the Business Day immediately
preceding the Redemption Date, to convert this Security (or any portion of the
principal amount hereof which is $1,000 or an integral multiple thereof), at the
principal amount at Stated Maturity hereof, or of such portion, into American
Depositary Shares ("ADSs"), each representing the right to receive
-------
Series L Shares of the Company, at a conversion rate of ADSs for each
---------
$1,000 principal amount at Stated Maturity of Securities by surrender of this
Security, duly endorsed or assigned to the Company or in blank, to the Company
at its office or agency in the Borough of Manhattan, the City of New York, New
York, accompanied by written notice to the Company that the Holder hereof elects
to convert this Security, or if less than the entire principal amount hereof is
to be converted, the portion hereof to be converted, and, in case such surrender
shall be made during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date within such
period), also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the accrued interest payable on
such Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case of
a conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an installment of interest (with certain exceptions provided in
the Indenture), no payment or adjustment is to be made on conversion for
interest accrued hereon or for dividends on the L Shares represented by ADSs
issued on conversion. No fractions of ADSs or scrip representing fractions of
ADSs will be issued on conversion, but instead of any fractional interest the
Company shall pay a cash adjustment as provided in the Indenture. The conversion
rate is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the transfer of substantially all of the assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon the consolidation, merger or transfer by a holder of the number
of shares of Common Stock into which this Security might have been converted (in
the form of ADSs) immediately prior to such consolidation, merger or transfer
(assuming such holder of Common Stock failed to exercise any rights of election
and received per share the kind and amount received per share by a plurality of
non-electing shares).]
All payments of principal, premium and interest in respect of the
Securities shall be made after withholding or deduction for any present or
future taxes, duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or on behalf of Mexico or
any authority therein or thereof having power to tax ("Mexican Taxes"). In the
event of any withholding or deduction for any Mexican Taxes, the Company shall
pay such additional amounts ("Additional Amounts") as will result in receipt by
the Holders of Securities on the respective due dates of such amounts as would
have been received by them had no such withholding or deduction (including for
any Mexican Taxes payable in respect of Additional
-19-
Amounts) been required, except that no such Additional Amounts shall be payable
with respect to any payment on a Security to the extent:
(i) that any such taxes, duties, assessments or other
governmental charges would not have been imposed but for (A) a
connection between the Holder and Mexico other than the holding of
such Security and the receipt of payments with respect to such
Security or (B) failure by the Holder to comply with any
certification, identification or other reporting requirement
concerning the nationality, residence, identity or connection with
Mexico of the Holder, if compliance is required by law, regulation or
by an applicable income tax treaty to which Mexico is a party and
which is in effect, as a precondition to exemption from, or reduction
in the rate of, the tax, assessment or other governmental charge and
we have given the Holders at least 30 days' notice that Holders will
be required to provide such information and identification;
(ii) of any such taxes, duties, assessments or other governmental
charges with respect to a Security presented for payment more than 15
days after the date on which such payment became due and payable or
the date on which payment thereof is duly provided for and notice
thereof given to Holders, whichever occurs later, except to the extent
that the Holder of such Security would have been entitled to such
Additional Amounts on presenting such Security for payment on any date
during such 15-day period;
(iii) of estate, inheritance, gift or other similar taxes imposed
with respect to a Security;
(iv) any tax, duty, assessment or other governmental charge
payable otherwise than by deduction or withholding from payments on
any series of Securities;
(v) any payment on a Security to a Holder who is a fiduciary or
partnership or a person other than the sole beneficial owner of any
such payment, to the extent that a beneficiary or settlor with respect
to such fiduciary, a member of such a partnership or the beneficial
owner of such payment would not have been entitled to the Additional
Amounts had such beneficiary, settlor, member or beneficial owner been
the Holder of such Security.
For purposes of the provisions described in Clause (i) above, the term
"Holder" of any Security means the direct nominee of any beneficial owner of
such Security, which holds such beneficial owner's interest in such Security.
Notwithstanding the foregoing, the limitations on the Company's obligation to
pay Additional Amounts set forth in Clause (i) above shall not apply if (a) the
provision of information, documentation or other evidence described in such
Clause (i) would be materially more onerous, in form, in procedure or in the
substance of information disclosed, to a Holder or beneficial owner of a
Security (taking into account any relevant differences between U.S. and Mexican
law, regulation or administrative practice) than comparable information or other
reporting requirements imposed under U.S. tax law (including the United States -
Mexico Income Tax Treaty), regulation (including proposed regulations) and
administrative practice or (b) Rule 3.25.15, is in effect, unless the provision
of the information, documentation or other evidence described in such Clause (i)
is expressly required by statute,
-20-
regulation, rule or administrative practice in order to apply Rule 3.25.15 and
the Company cannot obtain such information, documentation or other evidence on
its own through reasonable diligence and the Company otherwise would meet the
requirements for application of Rule 3.25.15. In addition, such Clause (i) shall
not be construed to require that a non-Mexican pension or retirement fund or a
non-Mexican financial institution or any other Person register with the Ministry
of Finance and Public Credit for the purpose of establishing eligibility for an
exemption from or reduction of Mexican withholding.
At the request of the Trustee, the Company shall provide the Trustee with
documentation (which may consist of certified copies of such documentation)
satisfactory to the Trustee evidencing the payment of Mexican Taxes in respect
of which the Company has paid any Additional Amounts. Copies of such
documentation shall be made available to the Holders of the Securities or the
Paying Agent, as applicable, upon request therefor.
The Company shall pay all stamp, issue, registration, documentary or other
similar duties, if any, which may be imposed by Mexico or any governmental
entity or political subdivision therein or thereof, or any taxing authority of
or in any of the foregoing, with respect to the Indenture or the issuance of the
Securities.
All references herein or in the Indenture to principal, premium or interest
in respect of any Security shall be deemed to include all Additional Amounts, if
any, payable in respect of such principal, premium or interest, unless the
context otherwise requires, and express mention of the payment of Additional
Amounts in any provision hereof shall not be construed as excluding reference to
Additional Amounts in those provisions hereof where such express mention is not
made.
In the event that Additional Amounts actually paid with respect to the
Securities pursuant to the preceding paragraph are based on rates of deduction
or withholding of withholding taxes in excess of the appropriate rate applicable
to the Holder of such Securities, and, as a result thereof such Holder is
entitled to make claim for a refund or credit of such excess from the authority
imposing such withholding tax, then such Holder shall, by accepting such
Securities, be deemed to have assigned and transferred all right, title, and
interest to any such claim for a refund or credit of such excess to the Company.
However, by making such assignment, the Holder makes no representation or
warranty that the Company will be entitled to receive such claim for a refund or
credit and incurs no other obligation with respect thereto.
All references in this Indenture and the Securities to principal in respect
of any Security shall be deemed to mean and include any Redemption Price or
Repurchase Price payable in respect of such Security pursuant to any redemption
or repurchase right hereunder (and all such references to the Stated Maturity of
the principal in respect of any Security shall be deemed to mean and include the
Redemption Date with respect to any such Redemption Price and the Repurchase
Date with respect to any such Repurchase Price), and all such references to
principal, premium, interest or Additional Amounts shall be deemed to mean and
include any amount payable in respect hereof pursuant to Section 1010 of the
Indenture, and express mention of the payment of any Redemption Price or
Repurchase Price, or any such other amount in those provisions hereof where such
express reference is not made.
The Securities are subject to redemption upon not less than 30 nor more
than 60 days' notice by mail, at any time, as a whole but not in part, at the
election of the Company, at a cash
-21-
price equal to the sum of (i) the principal amount of the Securities being
redeemed, (ii) any accrued original issue discount thereon to the date fixed for
redemption, (iii) accrued and unpaid current interest thereon to the date fixed
for redemption, (iv) any premium applicable in the case of redemption prior to
Maturity, and (v) any Additional Amounts (as defined in the Indenture) which
would otherwise be payable, if, as a result of any amendment to, or change in,
the laws (or any laws, rules, or regulations thereunder) of Mexico or any
political subdivision or taxing authority thereof or therein affecting taxation
or any amendment to or change in an official interpretation, administration or
application of such laws, rules, or regulations (including a holding by a court
of competent jurisdiction), which amendment or change of such laws, rules, or
regulations becomes effective on or after the date of the Indenture, the Company
would be obligated, after making reasonable endeavors to avoid such requirement,
to pay Additional Amounts in excess of the Additional Amounts that the Company
would be obligated to pay if payments made on the Securities were subject to
withholding or deduction of Mexican Taxes at the rate of 10 percent.
If a Change in Control (as defined in the Indenture) occurs, the Holder of
the Security, at the Holder's option, shall have the right, in accordance with
the provisions of the Indenture, to require the Company to repurchase this
Security (or any portion of the principal amount thereof that is equal to $1,000
or any integral multiple of $1,000 in excess thereof) for cash at a Repurchase
Price equal to the sum of (i) the principal amount of the security being
repurchased (ii) any accrued original issue discount thereon to the Holder
Repurchase Date, (iii) accrued and unpaid interest thereon to the Holder
Repurchase Date, and (iv) any Additional Amounts which would otherwise be
payable.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected (considered together as one
class for this purpose). The Indenture also contains provisions (i) permitting
the Holders of a majority in principal amount of the Securities at the time
Outstanding of all series to be affected under the Indenture (considered
together as one class for this purpose), on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and (ii) permitting the Holders of a majority in
principal amount of the Securities at the time Outstanding of any series to be
affected under the Indenture (with each such series considered separately for
this purpose), on behalf of the Holders of all Securities of such series, to
waive certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture, or for the appointment of a receiver or trustee, or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee indemnity
-22-
reasonably satisfactory to it, and the Trustee shall not have received from the
Holders of a majority in principal amount of Securities of this series at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any [premium or] interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any [premium and]
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any [premium and]
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of Securities
of this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Security is a Global Security and is subject to the provisions of the
Indenture relating to Global Securities, including the limitations in Section
304 thereof on transfers and exchanges of Global Securities.
This Security and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-23-
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT--
______________________
TEN ENT - as tenants by the (Cust)
entireties Custodian under Uniform
-----------------
JT TEN - as joint tenants with right (Minor)
of survivorship and not as Gifts to Minors Act
_____________________
tenants in common (State)
Additional abbreviations may also be used
though not in the above list.
-24-
HOLDER REPURCHASE NOTICE
1. Pursuant to Section 1301 of the Indenture, the undersigned hereby elects
to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay it or
an amount in cash equal to the sum of (i) the principal
------------------
amount of the Securities being repurchased, (ii) the accrued Original Issue
Discount thereon to the Holder Repurchase Date, if any, (iii) accrued and unpaid
interest thereon to the Holder Repurchase Date, and (iv) any Additional Amounts
which would otherwise be payable.
Dated:
___________________________________
___________________________________
Signature(s)
Signature(s) must be guaranteed by an Eligible Guarantor Institution with
membership in an approved signature guarantee program pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934.
___________________________________
Signature Guaranteed
-25-
Principal amount to be repurchased
(an integral multiple of $1,000): __________________________
Remaining principal amount following such repurchase:
____________________
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: ____________________
JPMorgan Chase Bank,
as Trustee
By: ____________________________________
Authorized Officer
SECTION 205. Form of Conversion Notice.
The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or any portion of the principal amount hereof
(which is an integral multiple of $1,000, provided that the unconverted portion
of such principal amount is $1,000 or any integral multiple of $1,000 in excess
thereof) below designated, into American Depositary Shares ("ADSs") of Telefonos
de Mexico, S.A. de C.V. in accordance with the terms of the Indenture referred
to in this Security, and directs that such ADSs deliverable on conversion,
together with a check in payment for any fractional ADS and any Securities
representing any unconverted principal amount hereof, be delivered to and be
registered in the name of the undersigned unless a different name has been
indicated below. If ADSs or Securities are to be delivered to and registered in
the name of a Person other than the undersigned, (a) the undersigned will pay
all transfer taxes payable with respect thereto and (b) signature(s) must be
guaranteed by an Eligible Guarantor Institution with membership in an approved
signature guarantee program pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934. Any amount required to be paid by the undersigned on
account of accrued interest accompanies this Security.
Dated: _________________________________ _________________________________
________________________________________ _________________________________
Signature Guarantee Signature(s)
Fill in for registration of ADSs if
to be issued, and Securities if to be
delivered, other than to and in the
name of the registered Holder:
-26-
_______________________________________________
(Name)
_______________________________________________
Address (including zip code number)
SOCIAL SECURITY OR TAXPAYER
IDENTIFICATION NUMBER
_______________________________________________
Portion of Security to be Converted (in an
integral multiple of $1,000, if less than all):
_______________________________________________
Account number at The Depository Trust
Company (if applicable):
_______________________________________________
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officer's Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities, including CUSIP Numbers, of the
series (which shall distinguish the Securities of the series from
Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 906, 1105, 1202 or 1302(e) and except
for any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder);
-27-
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date for any interest payable on any Interest Payment
Date;
(6) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable and the manner in
which any payment may be made;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) if other than the currency of the United States of America, the
currency, currencies or currency units in which payment of the principal of
and any premium and interest on any Securities of the series shall be
payable and the manner of determining the equivalent thereof in the
currency of the United States of America for purposes of the definition of
"Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to an index, the manner in which such amounts shall be determined;
(12) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
-28-
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(14) the applicability, nonapplicability, or variation, of Section
1009 with respect to the Securities of such series;
(15) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the Depositary or Depositaries for such Global Security
or Global Securities and any circumstances other than those set forth in
Section 304 in which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name of, a Person
other than the Depositary for such Global Security or a nominee thereof and
in which any such transfer may be registered;
(16) the terms and conditions, if any, pursuant to which the
Securities are convertible into ADSs;
(17) the terms and conditions, if any, pursuant to which the
Securities are convertible into or exchangeable for any other securities;
(18) any addition to or change in the covenants set forth in Article
Ten which applies to the Securities of the series; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officer's Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth the terms of the series.
SECTION 302. Denominations.
Except as contemplated by Section 301, the Securities of each series shall
be issuable only in registered form without coupons and only in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by any two of its
Chief Executive Officer, its Treasurer, its Chief Financial Officer, its General
Counsel or any Division Head. The signature of any of these officers on the
Securities may be manual or facsimile.
-29-
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if, in the opinion of counsel to the
Trustee, the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officer's Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
-30-
SECTION 304. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided. Upon surrender for registration of
transfer of any Security at an office or agency of the Company designated
pursuant to Section 1002 for such purpose, and subject to the other provisions
of this Section, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Securities of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, and subject to the other provisions of this
Section, Securities of any series may be exchanged for other Securities of any
same series, of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, and subject to
the other provisions of this Section, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and subject to the other provisions of this Section, entitled to the same
benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 906, 1105, 1202 or 1302(e) not involving any
transfer.
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3), (4) and (5) below shall apply only
to Global Securities:
-31-
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary or a nominee thereof and delivered
to such Depositary or a nominee thereof or custodian therefor, and each
such Global Security shall constitute a single Security for all purposes of
this Indenture.
(2) Notwithstanding any other provision in this Indenture or the
Securities, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the Depositary
or a nominee thereof unless (A) the Depositary (i) has notified the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or (ii) has ceased to be a clearing agency registered under the
Exchange Act, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security or (C) a request for
certificates has been made by the Company upon 60 days' prior written
notice given to the Trustee in accordance with the Depositary's customary
procedures and a copy of such notice has been received by the Company from
the Trustee. Any Global Security exchanged pursuant to Clause (A) above
shall be so exchanged in whole and not in part and any Global Security
exchanged pursuant to Clause (B) or (C) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Security
issued in exchange for a Global Security or any portion thereof shall be a
Global Security, provided that any such Security so issued that is
registered in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Security.
(3) Securities issued in exchange for a Global Security or any portion
thereof pursuant to Clause (2) above shall be issued in definitive, fully
registered form, without interest coupons, shall have an aggregate
principal amount equal to that of such Global Security or portion thereof
to be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall bear
any legends required hereunder. Any Global Security to be exchanged in
whole shall be surrendered by the Depositary to the Trustee, as Security
Registrar. With regard to any Global Security to be exchanged in part,
either such Global Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its nominee with
respect to such Global Security, the principal amount thereof shall be
reduced, by an amount equal to the portion thereof to be so exchanged, by
means of an appropriate adjustment made on the records of the Trustee. Upon
any such surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the order of the
Depositary or an authorized representative thereof.
(4) In the event of the occurrence of any of the events specified in
Clause (2) above, the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully
registered form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary ("Agent
Members") nor any other Persons on whose behalf Agent Members may act
(including the Euroclear System ("Euroclear") and Clearstream Banking, S.A.
("Clearstream, Luxembourg") and account holders and participants therein)
shall have any rights under this Indenture with respect to any Global
Security, or under any Global Security, and the Depositary or such nominee,
as the case may be, may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and holder of
-32-
such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
such nominee, as the case may be, or impair, as between the Depositary, its
Agent Members and any other person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the exercise
of the rights of a holder of any Security.
SECTION 305. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a protected
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 306. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
-33-
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
In the case of any Security which is converted after the close of business
on any Regular Record Date and on or prior to the next succeeding Interest
Payment Date (other than any Security that, if not converted, would have a
Maturity prior to such Interest Payment Date), interest whose Stated Maturity is
on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or one or more
-34-
Predecessor Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security which is converted, interest whose Stated
Maturity is after the date of conversion of such Security shall not be payable.
SECTION 307. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 306) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 308. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of in accordance with its
customary procedures unless otherwise directed by a Company Order.
SECTION 309. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 310. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
-35-
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 305 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose funds in an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any) and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
-36-
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive such satisfaction and discharge.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee. All moneys deposited with the Trustee pursuant to Section 401 (and held
by it or any Paying Agent) for the payment of Securities subsequently converted
shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest (including any Additional
Amounts) upon any Security of that series when it becomes due and payable,
and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal (including any Redemption
Price or Repurchase Price and any Additional Amounts) of or premium on any
Security of that series at its Maturity; or
(3) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the Outstanding
Securities of that series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(4) a default or defaults under any bond, debenture, note or other
evidence of indebtedness for money borrowed of the Company or any Material
Subsidiary, or under any mortgage, indenture, agreement or instrument under
which there may be issued or
-37-
borrowed or by which there may be secured or evidenced any indebtedness of
the Company or any Material Subsidiary, whether such indebtedness now
exists or shall hereafter be created, provided that such indebtedness,
individually or in the aggregate, has an aggregate principal amount then
outstanding in excess of $100 million (or the equivalent thereof in other
currencies or currency units) and that such default or defaults,
individually or in the aggregate, (A) shall constitute a failure to pay the
principal of such indebtedness (or any portion thereof having an aggregate
principal amount in excess of $100 million or such equivalent thereof) when
due and payable after the expiration of any applicable grace period with
respect thereto or (B) shall have resulted in such indebtedness (or any
portion thereof having an aggregate principal amount in excess of $100
million or such equivalent thereof) becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable; or
(5) a final judgment or judgments (not subject to appeal) for the
payment of money are entered against the Company and/or any one or more
Material Subsidiaries in an aggregate amount in excess of $100 million (or
the equivalent thereof in other currencies or currency units), by a court
or courts of competent jurisdiction, which judgment(s) (A) are neither
discharged nor bonded in full within 30 days after the right to appeal all
such judgments has expired or (B) if bonded in full within such 30-day
period, cease to be fully bonded; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Material
Subsidiary in an involuntary case or proceeding under any applicable
bankruptcy, insolvency, suspension of payments, concurso mercantil,
reorganization or other similar law, or (B) a decree or order adjudging the
Company or any Material Subsidiary a bankrupt or insolvent, or suspending
payments, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or
any Material Subsidiary under any applicable law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sindico, conciliador,
sequestrator or other similar official of the Company or any Material
Subsidiary or of any substantial part of the property of the Company or any
Material Subsidiary, or ordering the winding up or liquidation of the
affairs of the Company or any Material Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company or any Material Subsidiary of a
voluntary case or proceeding under any applicable bankruptcy, insolvency,
concurso mercantil, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any Material Subsidiary to the entry of a decree
or order for relief in respect of the Company or any Material Subsidiary in
an involuntary case or proceeding under any applicable bankruptcy,
insolvency, suspension of payments, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding
against the Company or any Material Subsidiary of the Company, or the
filing by the Company or any Material Subsidiary of a petition or answer or
consent seeking reorganization or relief under any applicable law or the
consent by the Company or any Material Subsidiary to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sindico, conciliador, sequestrator
or
-38-
similar official of the Company or any Material Subsidiary or of any
substantial part of the property of the Company or any Material Subsidiary,
or the making by the Company or any Material Subsidiary of an assignment
for the benefit of creditors, or the admission by the Company or any
Material Subsidiary in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company or any
Material Subsidiary in furtherance of any such action (evidenced by the
adoption of a corporate resolution in favor of any such actions or an
action of any of the officers of the Company or such Material Subsidiary
that similarly binds the Company or such Material Subsidiary, as the case
may be).
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to any series of Securities (other than
an Event of Default specified in Sections 501(6) and (7)) occurs and is
continuing, then and in every such case the Trustee shall, at the written
request of the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series, by notice in writing to the Company,
declare the principal of all the Securities to be due and payable immediately,
and upon any such declaration such principal and any accrued interest and any
unpaid Additional Amounts thereon shall become immediately due and payable. If
an Event of Default specified in Sections 501(6) and (7) with respect to
Securities of any series at the time Outstanding occurs and is continuing, the
principal and any accrued interest, together with any Additional Amounts
thereon, on all of the Securities of that series then Outstanding shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series at the time Outstanding has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest and any Additional Amounts thereon on
all of the Securities of that series,
(B) the principal of any Securities of that series which have
become due otherwise than by such declaration of acceleration
(including any Securities required to have been purchased on the
Repurchase Date pursuant to Article Thirteen),
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities of
that series, and
(D) all sums paid or advanced by the Trustee hereunder and all
amounts owing the Trustee under Section 607;
and
-39-
(2) all Events of Default, other than the non-payment of the principal
of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest (including any
Additional Amounts) on any Security when such interest becomes due and
payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal (including any
Redemption Price or Repurchase Price) of (or premium, if any, on) any
Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest, and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate borne by such
Securities, together with any Additional Amounts thereon, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and all
amounts due the Trustee under Section 607.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of that series by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
-40-
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 505. Trustee May Enforce Claims 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 proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium and interest,
respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
-41-
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 306)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption or repurchase, on the Redemption Date or
the Repurchase Date, respectively) and, if such Security is a Convertible
Security, to convert such Convertible Security in accordance with its term and
the provisions of Article Twelve, and to institute suit for the enforcement of
any such payment and right to convert, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
305, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
-42-
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Section 502, the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs,
including reasonable attorneys' fees and expenses, against any such party
litigant, in the manner and to the extent provided in the Trust Indenture Act;
provided that neither this Section nor the Trust Indenture Act shall be deemed
to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company or the Trustee or in any suit
-43-
for the enforcement of the right to convert any Convertible Security in
accordance with its terms or to require the Company to repurchase any Security
in accordance with its terms.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(3) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(whether in its original or facsimile form) believed by it to be genuine and to
have been signed or presented by the proper party or parties;
-44-
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel of its own choice and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document in connection
with this Indenture, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; provided that the Trustee shall be required to terminate any such
agent if it has actual knowledge of any failure by such agent to perform its
delegated duties; and
(h) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
Neither the Trustee nor any Authenticating Agent assume any responsibility
for the correctness of the recitals contained herein and in the Securities,
except the Trustee's certificates of authentication. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
-45-
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as shall
be agreed in writing between the parties for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable and documented expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or willful misconduct; and
(3) to fully indemnify each of the Trustee and any predecessor Trustee
for, and to hold it harmless against, any and all losses, liabilities,
damages, claims or expenses incurred without negligence or willful
misconduct on its part, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim (whether asserted by the
Company, a Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
(4) To secure the Company's obligation under this Section, the Trustee
shall have a lien prior to the Securities upon all money or property held
or collected by the Trustee in its capacity as Trustee, except for such
money and property which is held in trust to pay principal (and premium, if
any) or interest on particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
-46-
The provisions of this Section shall survive the resignation or removal of
the Trustee and the termination of this Indenture.
SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such, has a combined
capital and surplus of at least $50,000,000 and has its Corporate Trust Office
in the Borough of Manhattan, the City of New York. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 60 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
-47-
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an
-48-
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
-49-
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer, partial
conversion or partial redemption or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
-50-
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
JPMorgan Chase Bank,
As Trustee
By:
____________________________________
As Authenticating Agent
By:
____________________________________
Authorized Officer
SECTION 615. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the Company
may, at the option of the Trustee, set forth in writing any action proposed to
be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such omission shall be effective. The
Trustee shall not be liable for any action taken by, or omission of, the Trustee
in accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date with respect to each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Securities of such series as of such Regular Record Date, and
-51-
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each May 15 following the date of this Indenture deliver to
Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
-52-
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or,
directly or indirectly, transfer, convey, sell, lease or otherwise dispose of
its properties and assets substantially as an entirety and shall not permit any
Person to consolidate with or merge into the Company unless:
(1) immediately after giving effect to such transaction, no Event of
Default, or an event or condition which, after the giving of notice or
lapse of time, or both, would become an Event of Default, with respect to
any series of Securities shall have occurred and be continuing;
(2) the Person formed by such consolidation or merger or the Person
which acquires by transfer, conveyance, sale, lease or other disposition of
the properties and assets of the Company substantially as an entirety shall
be a corporation organized and validly existing under the laws of Mexico or
the United States of America or any political subdivision thereof and, if
not the Company, shall expressly assume by an indenture supplemental hereto
executed and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, the due and punctual payment of the principal of and any
premium and interest on all the Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed and, in the case of Convertible Securities, shall have provided
for conversion rights in accordance with the terms thereof and the
provisions of Article Twelve; and
(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
-53-
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) to secure the Securities pursuant to the requirements of Article
Ten or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611; or
-54-
(9) to make provision with respect to the conversion rights of Holders
of Convertible Securities pursuant to the requirements of Section 1211; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this clause (10) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of any
Security that would be due and payable upon a declaration of acceleration
of the Maturity thereof pursuant to Section 502, or modify in any way the
Company's obligation to pay Additional Amounts pursuant to Section 1009 or
change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or adversely affect the right to convert any Security as
provided in Article Twelve (except as permitted by Section 901(9)), or
adversely affect the right to cause the Company to repurchase the
Securities as provided in Article Thirteen, or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1012, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1012, or the
deletion of this proviso, in accordance with the requirements of Section
611.
-55-
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
-56-
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of and any premium
and interest (together with any Additional Amounts payable thereon) on the
Securities in accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
With respect to any Global Security, and except as otherwise may be
specified for such Global Security as contemplated by Section 301, the Corporate
Trust Office of the Trustee shall be the Place of Payment where such Global
Security may be presented or surrendered for payment or for registration of
transfer or exchange, or where successor Securities may be delivered in exchange
therefor; provided, however, that any such payment, presentation, surrender or
delivery effected pursuant to the Applicable Procedures of the Depositary for
such Global Security shall be deemed to have been effected at the Place of
Payment for such Global Security in accordance with the provisions of this
Indenture.
With respect to any securities that are not in the form of a Global
Security, the Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange, where (in the case of Convertible Securities) conversion notices,
certificates and other items required to be delivered to effect conversion may
be delivered and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, the City of New York) where
the Securities of one or more series, notices and other items may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in the Borough of Manhattan, the City of New York for such purposes.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until
-57-
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may, at the expense of the Company, cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
-58-
The Company will deliver to the Trustee, as soon as possible and in any
event within 15 days after the Company becomes aware of the occurrence of any
Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officer's Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.
SECTION 1005. Exchange Act Reports.
The Company will file with the Trustee, within 15 days after it files them
with the Commission, copies of its annual report and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) which the Company is
required to file with the Commission pursuant to Section 12, 13 or 15(d) of the
Exchange Act. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 12, 13 or 15(d) of the Exchange
Act, the Company will continue to file with the Commission and provide the
Trustee with such annual reports and such information, documents and other
reports (or copies of such portions of any of the foregoing as the Commission
may by rules and regulations prescribe) which are specified in Sections 12, 13
and 15(d) of the Exchange Act.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
SECTION 1006. Maintenance of Telecommunications Business.
The Company will maintain the business of providing a public
telecommunications network as a principal business of the Company.
SECTION 1007. Limitation on Liens.
The Company will not itself, and will not permit any Restricted Subsidiary
to, create, incur, issue or assume any Indebtedness secured by any Lien on any
Restricted Property without in any such case effectively providing that the
Securities (together with, if the Company shall so determine, any other
indebtedness of the Company or such Restricted Subsidiary then existing or
thereafter created) shall be secured equally and ratably with or prior to such
secured Indebtedness, so long as such secured Indebtedness shall be so secured,
unless, after giving effect thereto, the aggregate principal amount of all such
secured Indebtedness then outstanding (excluding any secured Indebtedness
permitted under subsections (a) through (e) below) plus the aggregate amount of
Attributable Debt of the Company and its Restricted Subsidiaries in respect of
Sale/Leaseback Transactions then outstanding (other than any Sale/Leaseback
Transaction permitted by clause (b) of Section 1008 or the proviso to Section
1008) would not exceed an amount equal to 12% of Consolidated Net Tangible
Assets; provided, however, that nothing contained in this Section shall prevent
or restrict Indebtedness secured by:
(a) any Lien existing on any Restricted Property prior to the
acquisition thereof by the Company or any of its Restricted Subsidiaries, or any
Lien arising after such acquisition pursuant to contractual commitments entered
into prior to such acquisition;
-59-
(b) any Lien on any Restricted Property securing Indebtedness incurred
or assumed for the purpose of financing the purchase price thereof or the cost
of construction, improvement or repair of all or any part thereof, provided that
such Lien attaches to such Restricted Property concurrently with or within 12
months after the acquisition thereof or completion of construction, improvement
or repair thereof and does not attach to any other Restricted Property;
(c) any Lien existing on any Restricted Property of any Restricted
Subsidiary prior to the time such Restricted Subsidiary becomes a Subsidiary of
the Company, or any Lien arising after such time pursuant to contractual
commitments entered into prior to and not in contemplation thereof;
(d) any Lien on any Restricted Property securing Indebtedness owed by
a Subsidiary to the Company or to another Subsidiary; or
(e) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness described in any of subsections (a) through (d)
above, provided that the aggregate principal amount of such Indebtedness is not
increased and such Lien does not extend to any additional Restricted Property.
For the purposes of this Section, the giving of a guarantee which is
secured by a Lien on a Restricted Property, and the creation of a Lien on a
Restricted Property to secure Indebtedness which existed prior to the creation
of such Lien, shall be deemed to involve the creation of Indebtedness in an
amount equal to the principal amount guaranteed or secured by such Lien; but the
amount of Indebtedness secured by Liens on Restricted Properties shall be
computed without cumulating the underlying Indebtedness with any guarantee
thereof or Lien securing the same.
SECTION 1008. Limitation on Sale/Leaseback Transactions.
The Company will not itself, and will not permit any Restricted Subsidiary
to, enter into any Sale/Leaseback Transaction without in any such case
effectively providing that the Securities (together with, if the Company shall
so determine, any other indebtedness of the Company or such Restricted
Subsidiary then existing or thereafter created) shall be secured equally and
ratably with or prior to such Sale/Leaseback Transaction, so long as such
Sale/Leaseback Transaction shall be outstanding, unless, after giving effect
thereto, (a) the aggregate principal amount of all Indebtedness then outstanding
secured by any Lien on any Restricted Property, which Lien does not equally and
ratably secure the Securities (excluding any secured Indebtedness permitted
under subsections (a) through (e) of Section 1007) plus the aggregate amount of
Attributable Debt of the Company and its Restricted Subsidiaries in respect of
Sale/Leaseback Transactions then outstanding (other than any Sale/Leaseback
Transaction permitted by clause (b) of this Section or the proviso to this
Section) would not exceed an amount equal to 12% of Consolidated Net Tangible
Assets or (b) the Company or a Restricted Subsidiary, within 12 months after
such Sale/Leaseback Transaction, applies to the retirement of secured
Indebtedness of the Company or a Restricted Subsidiary permitted under Section
1007 which is not subordinate to the Securities an amount equal to the greater
of (i) the net proceeds of the sale or transfer of the property or other assets
that are the subject of such Sale/Leaseback Transaction or (ii) the fair market
value of the Restricted Property so leased (in each case as reasonably
determined by the Company); provided, however, that nothing contained in this
Section shall prevent or restrict any
-60-
Sale/Leaseback Transaction in which a Subsidiary of the Company is the lessee
and the Company or another Subsidiary is the lessor of such Restricted Property.
Notwithstanding the foregoing, where the Company or any Restricted
Subsidiary is the lessee in any Sale/Leaseback Transaction, Attributable Debt
shall not include any Indebtedness resulting from the guarantee by the Company
or any other Restricted Subsidiary of the lessee's obligation thereunder.
SECTION 1009. Payment of Additional Amounts.
(a) All payments of principal, premium and interest in respect of the
Securities shall be made without withholding or deduction for any present or
future taxes, duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or on behalf of Mexico or
any authority therein or thereof having power to tax ("Mexican Taxes"), except
to the extent that such Mexican Taxes are required by Mexico or any such
authority to be withheld or deducted. In the event of any withholding or
deduction for any Mexican Taxes, the Company shall pay such additional amounts
("Additional Amounts") as will result in receipt by the Holders of Securities on
the respective due dates of such amounts as would have been received by them had
no such withholding or deduction (including for any Mexican Taxes payable in
respect of Additional Amounts) been required, except that no such Additional
Amounts shall be payable with respect to any payment on a Security to the
extent:
(i) that any such taxes, duties, assessments or other
governmental charges would not have been imposed but for (A) a
connection between the Holder and Mexico other than the holding of
such Security and the receipt of payments with respect to such
Security or (B) failure by the Holder to comply with any
certification, identification or other reporting requirement
concerning the nationality, residence, identity or connection with
Mexico of the Holder, if compliance is required by law, regulation or
by an applicable income tax treaty to which Mexico is a party and
which is in effect, as a precondition to exemption from, or reduction
in the rate of, the tax, assessment or other governmental charge and
we have given the Holders at least 30 days' notice that Holders will
be required to provide such information and identification;
(ii) of any such taxes, duties, assessments or other governmental
charges with respect to a Security presented for payment more than 15
days after the date on which such payment became due and payable or
the date on which payment thereof is duly provided for and notice
thereof given to Holders, whichever occurs later, except to the extent
that the Holder of such Security would have been entitled to such
Additional Amounts on presenting such Security for payment on any date
during such 15-day period;
(iii) of estate, inheritance, gift or other similar taxes imposed
with respect to a Security;
(iv) any tax, duty, assessment or other governmental charge
payable otherwise than by deduction or withholding from payments on
any series of Securities;
-61-
(v) any payment on a Security to a Holder who is a fiduciary or
partnership or a person other than the sole beneficial owner of any
such payment, to the extent that a beneficiary or settlor with respect
to such fiduciary, a member of such a partnership or the beneficial
owner of such payment would not have been entitled to the Additional
Amounts had such beneficiary, settlor, member or beneficial owner been
the Holder of such Security.
For purposes of the provisions described in Clause (i) above, the term
"Holder" of any Security means the direct nominee of any beneficial owner of
such Security, which holds such beneficial owner's interest in such Security.
Notwithstanding the foregoing, the limitations on the Company's obligation to
pay Additional Amounts set forth in Clause (i) above shall not apply if (a) the
provision of information, documentation or other evidence described in such
Clause (i) would be materially more onerous, in form, in procedure or in the
substance of information disclosed, to a Holder or beneficial owner of a
Security (taking into account any relevant differences between U.S. and Mexican
law, regulation or administrative practice) than comparable information or other
reporting requirements imposed under U.S. tax law (including the United States -
Mexico Income Tax Treaty), regulation (including proposed regulations) and
administrative practice or (b) Rule 3.25.15, as the same may be amended from
time to time, is in effect, unless the provision of the information,
documentation or other evidence described in such Clause (i), is expressly
required by statute, regulation, rule or administrative practice in order to
apply Rule 3.25.15 and the Company cannot obtain such information, documentation
or other evidence on its own through reasonable diligence and the Company
otherwise would meet the requirements for application of Rule 3.25.15. In
addition, such Clause (i) shall not be construed to require that a non-Mexican
pension or retirement fund or a non-Mexican financial institution or any other
Person register with the Ministry of Finance and Public Credit for the purpose
of establishing eligibility for an exemption from or reduction of Mexican
withholding.
The Company shall provide the Trustee with the xxxxxxxxxx or other relevant
documentation, if any, (which may consist of certified copies of such
documentation) reasonably satisfactory to the Trustee evidencing the payment of
Mexican Taxes in respect of which the Company has paid any Additional Amounts.
Copies of such documentation shall be made available to the Holders of the
Securities or the Paying Agent, as applicable, upon request therefor.
In respect of the Securities issued hereunder, at least 10 days prior to
the first date of payment of interest on the Securities and at least 10 days
prior to each date, if any, of payment of principal or interest thereafter if
there has been any change with respect to the matters set forth in the
below-mentioned Officer's Certificate, the Company shall furnish the Trustee and
each Paying Agent with an Officer's Certificate instructing the Trustee and such
Paying Agent as to whether such payment of principal of or any interest on such
Securities shall be made without deduction or withholding for or on account of
any tax, duty, assessment or other governmental charge. If any such deduction or
withholding shall be required by Mexico or under the federal laws of the United
States, then such certificate shall specify, by country, the amount, if any,
required to be deducted or withheld on such payment to Holders of such
Securities, and the Company shall pay or cause to be paid to the Trustee or such
Paying Agent Additional Amounts, if any, required by this Section. The Company
agrees to indemnify the Trustee and each Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by them in reliance on any Officer's Certificate
furnished pursuant to this Section.
-62-
(b) The Company shall pay all stamp, issue, registration, documentary
or other similar duties, if any, which may be imposed by Mexico or any other
governmental entity or political subdivision therein or thereof, or any taxing
authority of or in any of the foregoing, with respect to the Indenture or the
issuance of the Securities.
(c) The Company shall provide each Paying Agent and any withholding
agent under relevant tax regulations with copies of each certificate received by
the Company from a Holder of a Security pursuant to the text of such Security.
Each such Paying Agent and withholding agent shall retain each such certificate
received by it for as long as any Security is outstanding and in no event for
less than four years after its receipt, and for such additional period
thereafter, as set forth in an Officer's Certificate, as such certificate may
become material in the administration of applicable tax laws.
(d) In the event that Additional Amounts actually paid with respect to
the Securities pursuant to the preceding paragraphs are based on rates of
deduction or withholding of withholding taxes in excess of the appropriate rate
applicable to the Holder of such Securities, and, as a result thereof such
Holder is entitled to make claim for a refund or credit of such excess from the
authority imposing such withholding tax, then such Holder shall, by accepting
such Securities, be deemed to have assigned and transferred all right, title,
and interest to any such claim for a refund or credit of such excess to the
Company. However, by making such assignment, the Holder makes no representation
or warranty that the Company will be entitled to receive such claim for a refund
or credit and incurs no other obligation with respect thereto.
(e) All references in this Indenture and the Securities to principal,
premium or interest in respect of any Security shall be deemed to mean and
include all Additional Amounts, if any, payable in respect of such principal,
premium or interest, unless the context otherwise requires, and express mention
of the payment of Additional Amounts in any provision hereof shall not be
construed as excluding reference to Additional Amounts in those provisions
hereof where such express mention is not made. All references in this Indenture
and the Securities to principal in respect of any Security shall be deemed to
mean and include any Redemption Price or Repurchase Price payable in respect of
such Security pursuant to any redemption or repurchase right hereunder (and all
such references to the Stated Maturity of the principal in respect of any
Security shall be deemed to mean and include the Redemption Date with respect to
any such Redemption Price and the Repurchase Date with respect to any such
Repurchase Price), and all such references to principal, premium, interest or
Additional Amounts shall be deemed to mean and include any amount payable in
respect hereof pursuant to Section 1010, and express mention of the payment of
any Redemption Price or Repurchase Price, or any such other amount in those
provisions hereof where such express reference is not made.
SECTION 1010. Indemnification of Judgment Currency.
The Company shall indemnify the Trustee and any Holder of a Security
against any loss incurred by the Trustee or such Holder, as the case may be, as
a result of any judgment or order being given or made for any amount due under
this Indenture or such Security and being expressed and paid in a currency (the
"Judgment Currency") other than Dollars, and as a result of any variation
between (i) the rate of exchange at which the Dollar amount is converted into
the Judgment Currency for the purpose of such judgment or order and (ii) the
spot rate of exchange in the City of New York at which the Trustee or such
Holder, as the case may be, on the date of payment of such judgment or order is
able to purchase Dollars with the amount of the Judgment
-63-
Currency actually received by the Trustee or such Holder. The foregoing
indemnity shall constitute a separate and independent obligation of the Company
and shall continue in full force and effect notwithstanding any such judgment or
order as aforesaid. The term "spot rate of exchange" shall include any premiums
and costs of exchange payable in connection with the purchase of, or conversion
into, Dollars.
SECTION 1011. Book-Entry System.
If the ADSs cease to trade in the Depositary's book-entry settlement
system, the Company covenants and agrees that it shall use reasonable efforts to
make such other book-entry arrangements that it determines, after consultation
with the ADS Depositary, are reasonable for the ADSs.
SECTION 1012. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities
of such series, the Company may, with respect to the Securities of any series,
omit in any particular instance to comply with any term, provision or condition
set forth in any covenant provided pursuant to Section 301(18), 901(2) or 901(7)
for the benefit of the Holders of such series or in Section 1007 or 1008, if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holder, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
SECTION 1013. Calculation of Original Issue Discount.
The Company will file with the Trustee promptly at the end of each calendar
year (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities as
of the end of such year and (ii) such other specific information relating to
such original issue discount as may then be relevant under the Internal Revenue
Code of 1986, as amended from time to time.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
(a) The Securities of any series which are redeemable before their
Stated Maturity may not be redeemed at the election of the Company except in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for such Securities) in accordance with the provisions of this
Article.
(b) The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 45 days prior to the Redemption Date
-64-
fixed by the Company, notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed.
(c) If, as a result of any amendment to, or change in, the laws (or
any rules or regulation thereunder) of Mexico or any political subdivision or
taxing authority thereof or therein affecting taxation or any amendment to or
change in an official interpretation or application of such laws, rules or
regulations, which amendment or change of such laws, rules or regulations
becomes effective on or after the date of this Indenture, the Company would be
obligated to pay on the next succeeding Interest Payment Date Additional Amounts
in respect of interest payments on the Securities of any series pursuant to the
terms and conditions thereof in excess of those attributable to the Mexican
withholding tax on the basis of a statutory rate of 10% imposed on interest
payments with respect to such series of Securities, and if such obligation
cannot be avoided by the Company after taking measures the Company considers
reasonable to avoid it, then, at the Company's option, the Securities of such
series may be redeemed in whole, but not in part, at any time, on giving not
less than 30 nor more than 60 days' notice to the Trustee and the Holders of
such Securities, at a Redemption Price equal to 100% of the principal amount
thereof and any premium applicable thereto, together with accrued interest up to
but not including the Redemption Date and any Additional Amounts which would
otherwise be payable; provided, however, that (1) no notice of such redemption
may be given earlier than 90 days prior to the earliest date on which the
Company would but for such redemption be obligated to pay such Additional
Amounts were a payment on such Securities then due, and (2) at the time such
notice is given, such obligation to pay such Additional Amounts remains in
effect.
(d) Before any notice of redemption pursuant to Section 1101(c) is
given to the Trustee or the Holders of Securities of the relevant series, the
Company shall deliver to the Trustee (i) an Officer's Certificate stating that
the Company is entitled to effect such redemption and setting forth a statement
of facts showing that the condition or conditions precedent to the right of the
Company so to redeem have occurred or been satisfied and (ii) an Opinion of
Counsel to the effect that the Company has or shall become obligated to pay such
Additional Amounts as a result of such change or amendment. Such notice, once
given to the Trustee, shall be irrevocable.
SECTION 1102. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and amount of accrued interest, if any,
(3) that on the Redemption Date the Redemption Price and any accrued
interest shall become due and payable upon each Security to be redeemed and
that interest thereon shall cease to accrue on and after said date,
-65-
(4) the Conversion Rate, the date on which the right to convert the
Securities to be redeemed shall terminate and the place or places where
such Securities may be surrendered for conversion,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and any accrued interest, and
(6) applicable CUSIP Numbers.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company, and such notice, when
given to the Holders, shall be irrevocable.
SECTION 1103. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date other than any Securities called for
redemption on that date which have been converted prior to the date of such
deposit.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 306) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
SECTION 1104. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price herein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 306.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security.
SECTION 1105. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a
-66-
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities of the same series and of like tenor, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE TWELVE
CONVERSION OF CONVERTIBLE SECURITIES
SECTION 1201. Conversion Privilege and Conversion Rate.
A Holder of Convertible Securities may convert the principal amount thereof
(or any portion thereof that is an integral multiple of $1,000) into fully paid
and nonassessable ADSs of the Company at any time following the date of original
issuance thereof and prior to the close of business on the Business Day
immediately preceding the Convertible Securities' Maturity at the Conversion
Rate then in effect for such series, except that, with respect to any
Convertible Securities called for redemption such conversion right shall
terminate at the close of business on the Business Day immediately preceding the
Redemption Date (unless the Company shall default in making the redemption
payment when it becomes due, in which case the conversion right shall terminate
on the date such default is cured). The rate at which ADSs shall be delivered
upon conversion of Convertible Securities (the "Conversion Rate") shall be
expressed as a number of ADSs per $1,000 principal amount at Maturity of
Convertible Securities.
The initial Conversion Rate with respect to any series of Convertible
Securities shall be stated in such Convertible Securities and shall be subject
to adjustment as provided in this Article.
A Holder of Convertible Securities is not entitled to any rights of a
holder of ADSs (other than as provided pursuant to the Company's shareholders
rights plan, if any) until such Holder has converted such Convertible Securities
into ADSs, and only to the extent that such Convertible Securities are deemed to
have been converted into ADSs under this Article.
SECTION 1202. Exercise of Conversion Privilege.
In order to exercise the conversion privilege applicable to any series of
Convertible Securities, the Holder of any Convertible Security to be converted
shall surrender such Convertible Security, duly endorsed or assigned to the
Company or in blank, at any office or agency of the Company maintained for that
purpose pursuant to Section 1002 (a "Conversion Agent"), accompanied by a duly
signed conversion notice substantially in the form set forth in Section 205
stating that the Holder elects to convert such Convertible Security or, if less
than the entire principal amount thereof is to be converted, the portion thereof
to be converted. Each Convertible Security surrendered for conversion (in whole
or in part) during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of any Convertible Security or
portion thereof which has been called for redemption on a Redemption Date, or
which is repurchasable on a Holder Repurchase Date, occurring, in either case,
within such period) be accompanied by payment in New York Clearing House funds
or other funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on such
-67-
Convertible Security (or part thereof, as the case may be) being surrendered for
conversion. The interest so payable on such Interest Payment Date with respect
to any Convertible Security (or portion thereof, if applicable) which has been
called for redemption on a Redemption Date, or is repurchasable on a Holder
Repurchase Date, occurring, in either case, during the period from the close of
business on any Regular Record Date with respect to such series next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date, which Convertible Security (or portion thereof, if applicable) is
surrendered for conversion during such period, shall be paid to the Holder of
such Convertible Security being converted in an amount equal to the interest
that would have been payable on such Convertible Security if such Convertible
Security had been converted as of the close of business on such Interest Payment
Date. The interest so payable on such Interest Payment Date in respect of any
Convertible Security (or portion thereof, as the case may be) which has not been
called for redemption on a Redemption Date, or is not eligible for repurchase on
a Holder Repurchase Date, occurring, in either case, during the period from the
close of business on any Regular Record Date next preceding any Interest Payment
Date to the opening of business on such Interest Payment Date, which Convertible
Security (or portion thereof, as the case may be) is surrendered for conversion
during such period, shall be paid to the Holder of such Convertible Security as
of such Regular Record Date. Other than as set forth above in this Section, no
interest shall be payable in respect of any Convertible Security surrendered for
conversion. Except as provided in this paragraph and subject to the last
paragraph of Section 306, no cash payment or adjustment shall be made upon any
conversion on account of any interest accrued from the Interest Payment Date
next preceding the conversion date, in respect of any Convertible Security (or
part thereof, as the case may be) surrendered for conversion, or on account of
any dividends on the ADSs issued upon conversion. The Company's delivery to the
Holder of the number of ADSs (and cash in lieu of fractions thereof, as provided
in this Indenture) into which a Convertible Security is convertible shall be
deemed to satisfy the Company's obligation to pay the principal amount at Stated
Maturity of the Convertible Security.
Convertible Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Convertible
Securities for conversion in accordance with the foregoing provisions, and at
such time the rights of the Holders of such Convertible Securities as Holders
shall cease, and the Person or Persons entitled to receive the ADSs issuable
upon conversion shall be treated for all purposes as the record holder or
holders of such ADSs at such time. As promptly as practicable on or after the
conversion date, the Company shall issue and deliver to the ADS Depositary L
Shares and shall cause the ADS Depositary to issue and deliver to the Trustee,
for delivery to the Holder, a certificate or certificates for the number of full
ADSs issuable upon conversion, together with payment in lieu of any fraction of
an ADS as provided in Section 1203.
In the case of any Convertible Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Convertible Security or Convertible Securities of the same series and of
like tenor, of authorized denominations in an aggregate principal amount equal
to the unconverted portion of the principal amount of such Convertible Security.
A Convertible Security may be converted in part, but only if the principal
amount of such Convertible Security to be converted is any integral multiple of
$1,000 and the principal amount of such Convertible Security to remain
Outstanding after such conversion is equal to $1,000 or any integral multiple of
$1,000 in excess thereof.
-68-
SECTION 1203. Fractions of ADSs.
No fractional ADSs shall be issued upon conversion of any Convertible
Security or Convertible Securities. If more than one Convertible Security shall
be surrendered for conversion at one time by the same Holder, the number of full
ADSs which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount at Stated Maturity of the Convertible
Securities (or specified portions thereof) so surrendered. Instead of any
fractional ADSs which would otherwise be issuable upon conversion of any
Convertible Security or Convertible Securities (or specified portions thereof),
the Company shall calculate and pay a cash adjustment in respect of such
fraction (calculated to the nearest 1/100th of an ADS) in an amount equal to the
same fraction of the Closing Price per ADS at the close of business on the day
of conversion.
SECTION 1204. Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments (or securities or other
property other than ADSs representing the right to receive shares of Common
Stock may become issuable) from time to time as set forth below. Any adjustment
to the Conversion Rate shall take into account the number of shares of Common
Stock represented by each ADS before and after each such adjustment.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares
of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be increased
by multiplying such Conversion Rate by a fraction of which the numerator
shall be the sum of the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the total
number of shares constituting such dividend or other distribution and the
denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination, such
increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes
of this paragraph (1), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock. The Company shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) Subject to the last sentence of paragraph (7) of this Section, in
case the Company shall issue rights, options or warrants (expiring within
45 days after the record date for the determination of stockholders
entitled to receive such rights, warrants or options) to all holders of its
Common Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the current market price per share
(determined as provided in paragraph (8) of this Section) of the Common
Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants, the Conversion Rate in effect at
the opening of business on the day following the date fixed for such
determination shall be increased by multiplying such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus
-69-
the number of shares of Common Stock so offered for subscription or
purchase and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the aggregate
of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such current market
price, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For
the purposes of this paragraph (2), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company shall
not issue any rights, options or warrants in respect of shares of Common
Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the Conversion
Rate in effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately reduced,
such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(4) Subject to the last sentence of paragraph (7) of this Section, in
case the Company shall, by dividend or otherwise, distribute to all holders
of its Common Stock evidences of its indebtedness, shares of any class of
capital stock, or other property (including securities, but excluding (i)
any rights, options or warrants referred to in paragraph (2) of this
Section, (ii) any dividend or distribution paid exclusively in cash, (iii)
any dividend or distribution referred to in paragraph (1) of this Section
and (iv) any distribution in connection with any merger or consolidation to
which Section 1211 applies), the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate
in effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution by
a fraction of which the numerator shall be the current market price per
share (determined as provided in paragraph (8) of this Section) of the
Common Stock on the date fixed for such determination (the "Reference
Date") and the denominator shall be the current market price per share of
the Common Stock on the Reference Date less the then fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee) on
the Reference Date of the portion of the assets, shares or evidences of
indebtedness so distributed applicable to one share of Common Stock, such
adjustment to become effective immediately prior to the opening of business
on the day following the Reference Date.
(5) In case the Company shall, by dividend or otherwise (other than
regular or quarterly cash dividends), distribute to all holders of its
Common Stock cash in an aggregate amount that, combined together with (I)
the aggregate amount of any other cash distributions (other than regular or
quarterly cash dividends) to all holders of its
-70-
Common Stock made exclusively in cash (and not included in clause (II) of
this sentence) within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
paragraph (5) has been made and (II) the aggregate amount of all Excess
Payments in respect of any tender or exchange offer by the Company or any
of its Subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of such distribution and
in respect of which no adjustment pursuant to paragraph (6) of this Section
has been made (the "combined cash and tender amount"), exceeds 12.5% of the
product of the current market price per share (determined as provided in
paragraph (8) of this Section) of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date (the "aggregate current market price"), then, and in each such case,
immediately after the close of business on such date for determination, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior
to the close of business on the date fixed for determination of the
stockholders entitled to receive such distribution by a fraction of which
the numerator shall be the current market price per share (determined as
provided in paragraph (8) of this Section) of the Common Stock on the date
fixed for such determination and the denominator shall be the current
market price per share (determined as provided in paragraph (8) of this
Section) of the Common Stock on such date for determination less an amount
equal to the quotient of (x) the excess of such combined cash and tender
amount over 12.5% of such aggregate current market price divided by (y) the
number of shares of Common Stock outstanding on such date for
determination.
(6) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to stockholders of Excess Payments in an aggregate
amount that combined together with (I) all Excess Payments payable in
respect of any other tender or exchange offer by the Company or any
Subsidiary for all or any portion of the Common Stock expiring within the
12 months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to this paragraph (6) has been made
and (II) the aggregate amount of any cash distribution (other than regular
or quarterly cash dividends) to all holders of the Company's Common Stock
within 12 months preceding the expiration of such tender or exchange offer
and in respect of which no adjustment pursuant to paragraph (5) of this
Section has been made (the "combined tender and cash amount") exceeds 12.5%
of the product of the current market price per share of the Common Stock
(determined as provided in paragraph (8) of this Section) as of the last
time (the "Expiration Time") tenders or exchanges could have been made
pursuant to such tender or exchange offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) as of the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of
the Expiration Time, the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate
immediately prior to close of business on the date of the Expiration Time
by a fraction of which (i) the numerator shall be the product of (A) the
current market price per share of the Common Stock (determined as provided
in paragraph (8) of this Section) as of the Expiration Time multiplied by
(B) the number of shares of Common Stock outstanding (including any
-71-
tendered or exchanged shares) as of the Expiration Time less the number of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time, and (ii) the denominator shall be (A) the product of (I)
the current market price per share of the Common Stock (determined as
provided in paragraph (8) of this Section) on the date of the Expiration
Time multiplied by (II) the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the date of the Expiration
Time less (B) the combined tender and cash amount.
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or
merger to which Section 1211 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and "the date fixed for such determination"
within the meaning of paragraph (4) of this Section), and (b) a subdivision
or combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which
such subdivision or combination becomes effective" within the meaning of
paragraph (3) of this Section). Rights or warrants issued by the Company to
all holders of its Common Stock entitling the holders thereof to subscribe
for or purchase shares of Common Stock, which rights or warrants (i) are
deemed to be transferred with such shares of Common Stock, (ii) are not
exercisable and (iii) are also issued in respect of future issuances of
Common Stock, in each case in clauses (i) through (iii) until the
occurrences of a specified event or events ("Trigger Event"), shall for the
purposes of this Section not be deemed issued until the occurrence of the
earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5)
and (6) of this Section, the current market price per share of Common Stock
on any date shall be calculated by the Company and be deemed to be the
average of the last reported sale price of the Common Stock on the Mexican
Stock Exchange for 30 consecutive Trading Days commencing not more than 45
Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph,
the term " 'ex' date", when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular
way in the applicable securities market or on the applicable securities
exchange without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one
percent in such rate; provided, however, that any adjustments which by
reason of this paragraph (9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
-72-
(10) The Company may make such increases in the Conversion Rate, for
the remaining term of the Convertible Securities of any series or any
shorter term, in addition to those required by paragraphs (1), (2), (3),
(4), (5) and (6) of this Section, as it considers to be advisable in order
to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes.
(11) In any case in which this Section 1204 shall require that an
adjustment shall become effective immediately after a determination date
for an event, the Company may defer until the occurrence of such event (i)
issuing to the Holder of any Convertible Security converted after such
record date and before the occurrence of such event the additional ADSs
issuable upon such conversion by reason of the conversion rate adjustment
required by such event over and above the ADSs issuable upon such
conversion before giving effect to such conversion rate adjustment and (ii)
paying to such Holder any amount in cash in lieu of a fractional ADS
pursuant to Section 1203; provided, however, that the Company shall deliver
to such Holder a due xxxx or other appropriate instrument evidencing such
Holder's right to receive such additional ADSs, and such cash, upon the
occurrence of the event requiring such adjustment.
(12) The initial Conversion Rate reflects that as of the date of this
Indenture, each ADS represents 20 L Shares. If the number of L Shares
represented by an ADS should change, whether in conjunction with one of the
foregoing adjustment events or otherwise, the Conversion Rate (as so
changed) shall be adjusted proportionately.
SECTION 1205. Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate for the Convertible Securities of any series
is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 1204 and shall prepare a certificate signed by the
principal accounting or financial officer of the Company setting forth the
adjusted Conversion Rate and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall promptly be
filed with the Trustee and with each Conversion Agent; and
(2) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be prepared, and
as soon as practicable after it is prepared, such notice shall be provided
by the Company, or the Company shall cause such notice to be provided by
the Trustee to, all Holders of Convertible Securities of such series in
accordance with Section 106.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Convertible Securities of such series desiring inspection thereof at its office
during normal business hours.
-73-
SECTION 1206. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require any adjustment pursuant to
Section 1204; or
(b) the Company shall authorize the granting to the holders of its
Common Stock generally of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company, or of
any consolidation, merger or share exchange to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) of the termination of the Deposit Agreement; or
(f) the Company or any Subsidiary shall commence a tender offer for
all or a portion of the outstanding shares of Common Stock (or shall amend any
such tender offer);
then the Company shall cause to be filed, or the Company shall cause the Trustee
to cause to be filed, at each office or agency maintained for the purpose of
conversion of Convertible Securities pursuant to Section 1002, and the Company
shall cause to be provided, or the Company shall cause the Trustee to cause to
be provided, to all Holders of Convertible Securities in accordance with Section
106, at least 20 days (or 10 days in any case specified in clause (a) or (b)
above) prior to the applicable record, expiration or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options or warrants, 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, rights, options or
warrants are to be determined, (y) the date on which the right to make tenders
under such tender offer expires or (z) the date on which such reclassification,
consolidation, merger, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up is expected to become effective, and the date 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, cash or other property
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up. Neither the
failure to give such notice nor any defect therein shall affect the legality or
validity of the proceedings described in clauses (a) through (f) of this
Section. If at the time the Trustee shall not be a Conversion Agent, a copy of
such notice shall also forthwith be filed by the Company with the Trustee.
-74-
SECTION 1207. Company to Reserve Common Stock; Depositary to Register ADSs;
Listing on NYSE.
(a) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued or duly repurchased L
Shares, for the purpose of effecting the conversion of Convertible Securities,
the full number of shares of L Shares then issuable upon the conversion of all
Outstanding Convertible Securities.
(b) The Company shall cause the ADS Depositary at all times to
register and maintain registered under the Securities Act, for the purpose of
effecting the conversion of Convertible Securities, the full number of ADSs then
issuable upon the conversion of all Outstanding Convertible Securities.
(c) The Company has arranged for listing on the New York Stock
Exchange of all ADSs deliverable upon conversion of Convertible Securities, and
agrees to maintain registered with the National Registry of Securities and
Intermediaries and listed with the Mexican Stock Exchange the underlying L
Shares, and shall take all action (including obtaining or giving approvals and
consents and paying listing fees) necessary to ensure that each ADS delivered on
conversion of a Convertible Security shall, upon such delivery and at all times
thereafter when outstanding, be so listed.
SECTION 1208. Taxes and Fees on Conversions.
Except as provided in the next sentence, the Company shall pay any and all
taxes and duties and any and all fees of the ADS Depositary that may be payable
in respect of the issue or delivery to the ADS Depositary of L Shares and the
issue and delivery of the ADSs on conversion of Convertible Securities pursuant
hereto. The Company shall not, however, be required to pay any tax or duty which
may be payable in respect of (i) income of the Holder (including franchise,
capital gains and doing business taxes imposed on a net income basis) or (ii)
any transfer involved in the issue and delivery of ADSs in a name other than
that of the Holder of the Convertible Security or Convertible Securities to be
converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax
or duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.
SECTION 1209. Covenant as to L Shares.
The Company agrees that all L Shares represented by ADSs which may be
issued and delivered to the ADS Depositary upon conversion of Convertible
Securities shall be duly authorized and validly issued and maintain, at all
times, that any principal amount of, or premium or interest on any Convertible
Security remains unpaid in treasury of the Company, and upon such issue and
delivery, shall be fully paid and nonassessable and, except as provided in
Section 1208, the Company shall pay all taxes, liens and charges with respect to
the issue and delivery thereof.
-75-
SECTION 1210. Cancellation of Converted Convertible Securities.
All Convertible Securities delivered for conversion shall be delivered to
the Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 308.
SECTION 1211. Provision in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation or merger of the Company with or into any
other Person, any merger of another Person with or into the Company (other than
a merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Convertible Security then Outstanding shall have the right thereafter,
during the period such Convertible Security shall be convertible as specified in
Section 1201, to convert such Convertible Security only into the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, conveyance, sale, transfer or lease by a holder of the number of L
Shares of the Company into which such Convertible Security might have been
converted immediately prior to such consolidation, merger, conveyance, sale,
transfer or lease, assuming such holder of Common Stock of the Company (i) is
not a Person with which the Company consolidated or merged with or into or which
merged into or with the Company or to which such conveyance, sale, transfer or
lease was made, as the case may be ("Constituent Person"), or an Affiliate of a
Constituent Person and (ii) failed to exercise his rights of election, if any,
as to the kind or amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance, sale, transfer or lease (provided that
if the kind or amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance, sale, transfer, or lease is not the same
for each share of Common Stock of the Company held immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale, transfer
or lease by the holders of each Non-electing Share shall be deemed to be the
kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental indenture shall provide for adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, conveyances, sales, transfers or leases.
Notice of the execution of such a supplemental indenture shall be given by the
Company, or the Company shall cause the Trustee to give such notice, to the
Holder of each Convertible Security as provided in Section 106 promptly upon
such execution.
Neither the Trustee, any Paying Agent 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 other securities or property or cash receivable by
Holders of Convertible Securities upon the conversion of their Convertible
Securities after any such consolidation, merger, conveyance, transfer, sale or
lease or to any such adjustment, but may accept as conclusive evidence of the
correctness of any such provisions, and
-76-
shall be protected in relying upon, an Opinion of Counsel with respect thereto,
which the Company shall cause to be furnished to the Trustee upon request.
SECTION 1212. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Article Six, and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder of
Convertible Securities to determine whether any facts exist which may require
any adjustment of the Conversion Rate, 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, or whether a supplemental indenture need be entered into. Neither the
Trustee, subject to the provisions of Article Six, nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Convertible Security; and it or they do not make any representation with respect
thereto. Neither the Trustee, subject to the provisions of Article Six, nor any
Conversion Agent shall be responsible for any failure of the Company to make or
calculate any cash payment or to issue, transfer or deliver any shares of Common
Stock or share certificates or other securities or property or cash upon the
surrender of any Convertible Security for the purpose of conversion; and the
Trustee, subject to the provisions of Article Six, and any Conversion Agent
shall not be responsible for any failure of the Company to comply with any of
the covenants of the Company contained in this Article.
SECTION 1213. Termination of Deposit Agreement.
If the ADS Deposit Agreement is terminated for any reason (and no successor
deposit agreement is established), Holders of the Convertible Securities shall
thereafter receive upon conversion the number of L Shares that was represented
by the number of ADSs deliverable upon conversion of the Convertible Securities
at the date of such termination (subject to adjustment from time to time as set
forth in this Article).
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 1301. Right to Require Repurchase.
In the event that a Change in Control (as hereinafter defined) shall occur,
then each Holder shall have the right, at the Holder's option, but subject to
the provisions of Section 1302, to require the Company to repurchase, and upon
the exercise of such right the Company shall repurchase, all of such Holder's
Securities, or any portion of the principal amount thereof that is equal to
$1,000 or any integral multiple of $1,000 in excess thereof, on the date (the
"Holder Repurchase Date") that is 60 days after the date the Company provides
the Holder Repurchase Notice pursuant to Section 1302 at a cash price equal to
the sum of (i) the principal amount and premium of the Securities being
repurchased, (ii) accrued and unpaid interest thereon to the Holder Repurchase
Date, (iii) any original issue discount applicable to such security, and (iv)
any Additional Amounts which would otherwise be payable (the "Repurchase
Price"); provided, however, that installments of interest on Securities whose
Stated Maturity is on or prior to the
-77-
Holder Repurchase Date shall be payable to the Holders of such Securities,
registered as such at the close of business on the Regular Record Date according
to their terms and the provisions of Section 306. Such right to require the
repurchase of the Securities shall not continue after a discharge of the Company
from its obligations with respect to the Securities in accordance with Article
Four, unless a Change in Control shall have occurred prior to such discharge.
SECTION 1302. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption
all of the Outstanding Securities or unless all of the Outstanding Securities
shall have theretofore been converted in accordance with Article Twelve, on or
before the seventh Business Day after the occurrence of a Change in Control, the
Company shall give to all Holders, in the manner provided in Section 106, notice
of the occurrence of the Change in Control and of the repurchase right set forth
herein arising as a result thereof. The Company shall also deliver a copy of
such notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Holder Repurchase Date,
(2) the date and time by which the repurchase right must be exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such Securities
are to be surrendered for payment of the Repurchase Price,
(5) that on the Holder Repurchase Date the Repurchase Price, including
any accrued interest and Additional Amounts, shall become due and payable
upon each such Security designated by the Holder to be repurchased, and
that interest thereon shall cease to accrue on and after said date,
(6) the Conversion Rate then in effect, the date and time at which the
right to convert the principal amount of the Securities to be repurchased
shall terminate and the place or places where such Securities may be
surrendered for conversion, and
(7) the place or places that the form of certificate required by
Section 203 shall be delivered, and the form of such certificate.
No failure of the Company to give the foregoing notices or defect therein
shall limit any Holder's right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Securities.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent prior to the close of business on the Holder
Repurchase Date written notice (the "Holder Repurchase Notice") of the Holder's
exercise of such right, which notice shall set forth the name of the Holder, the
principal amount at Stated Maturity of the Securities to be repurchased (and, if
any Security is to be repurchased in part, the portion of the principal amount
-78-
thereof to be repurchased and the name of the Person in which the portion
thereof to remain Outstanding after such repurchase is to be registered) and a
statement that an election to exercise the repurchase right is being made
thereby. Any Holder Repurchase Notice may be withdrawn by the Holder by a
written notice of withdrawal delivered to the Trustee or to any other office or
agency maintained for that purpose on or prior to the Holder Repurchase Date.
The notice of withdrawal shall state the principal amount at Stated Maturity as
to which the withdrawal notice relates and the principal amount at Stated
Maturity, if any, that remains subject to the original Holder Repurchase Notice.
The right of the Holder to convert the Securities with respect to which the
repurchase right is being exercised shall continue until 12:00 noon on the
Holder Repurchase Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the Paying Agent the Repurchase Price in cash, as provided above, for payment
to the Holder on the Holder Repurchase Date. Payment of the Repurchase Price for
a Security for which a Holder Repurchase Notice has been delivered and not
withdrawn is conditioned upon delivery of the Security to the Trustee or to any
other office or agency maintained for that purpose, at any time (whether prior
to, on or after the Holder Repurchase Date) after delivery of the Holder
Repurchase Notice. Payment of the Repurchase Price for the Security shall be
made promptly following the later of the Holder Repurchase Date or the time of
delivery of the Security. If the Trustee holds, in accordance with this
Indenture, money sufficient to pay the Repurchase Price of the Security on the
Holder Repurchase Date, then, on and after the Holder Repurchase Date, the
Security shall cease to be outstanding and interest thereon shall cease to
accrue, whether or not the Security is delivered to the Trustee or to any other
office or agency maintained for that purpose, and all other rights of the Holder
shall terminate (other than the right to receive the Repurchase Price upon
delivery of the Security).
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Holder Repurchase Date by the Company, the principal
amount at Stated Maturity of such Security (or portion thereof, as the case may
be) shall, until paid, bear interest to the extent permitted by applicable law
from the Holder Repurchase Date at the rate borne by such Security, and each
such Security that is a Convertible Security shall remain convertible into ADSs
until the Repurchase Price of such Convertible Security (or portion thereof, as
the case may be) shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities of the same
series, containing identical terms and conditions, each in an authorized
denomination in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
(f) All Securities delivered for repurchase shall be delivered to the
Trustee, the Paying Agent or any other agents (as shall be set forth in the
Holder Repurchase Notice pursuant to paragraph (b) of this Section) to be
canceled by or at the direction of the Trustee, which shall dispose of the same
as provided in Section 308.
-79-
SECTION 1303. Certain Definitions.
For purposes of this Article,
(a) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3, as in effect on the date of the original execution of this
instrument, promulgated by the Commission pursuant to the Exchange Act;
(b) a "Change in Control" shall be deemed to have occurred at the
time, after the date of this instrument, that any person, together with any
Affiliates or Related Persons thereof, shall beneficially own (determined in
accordance with Rule 13d-3 under the Exchange Act, as in effect on the date of
original execution of this instrument), directly or indirectly, shares of
capital stock of the Company entitling such person to exercise 50% or more of
the total voting power of all shares of capital stock of the Company entitled to
vote generally in elections of directors; provided, however, that a Change in
Control shall not be deemed to have occurred if such person, together with such
Affiliates or Related Persons, is any of Grupo Carso Telecom, S.A. de C.V., or
any of its Affiliates or one or more members of the family of Xxxxxx Xxxx Xxxx
who are beneficial owners of Grupo Carso Telecom, S.A. de C.V. as of the date of
this instrument;
(c) a "Related Person" of any Person means any other Person directly
or indirectly owning (a) 10% or more of the outstanding common stock of such
Person (or, in the case of a person that is not a corporation, 10% or more of
the equity interest in such person) or (b) 10% or more of the combined voting
power of the Voting Stock of such person; and
(d) for the purposes of paragraphs (b) and (c) of this Section, the
term "person" includes any syndicate or group which would be deemed to be a
"person" under Section 13(d)(3) of the Exchange Act, as in effect on the date of
the original execution of this instrument.
----------
-80-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the day and year first above written.
TELEFONOS DE MEXICO, S.A. de C.V.
By: /s/ Xxxxxx Xxxxxx
____________________________________
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
By: /s/ Xxxx Xxxxxx Xxxxxxx
____________________________________
Name: Xxxx Xxxxxx Xxxxxxx
Title: Treasurer
JPMORGAN CHASE BANK
By: /s/ Xxxxx Xxxxx
____________________________________
Name: Xxxxx Xxxxx
Title: Vice President
-81-
