sv3
As
filed with the Securities and Exchange Commission on May 21, 2009
Registration No. 333-_________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ADVENTRX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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84-1318182
(I.R.S. Employer Identification
Number) |
6725 Mesa Ridge Road,
Suite 100,
San Diego, CA 92121
(858) 552-0866
(Address, including zip code, and telephone number, including
area code, of registrants principal executive offices)
Brian M. Culley
Chief Business Officer and Senior Vice President
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, CA 92121
Telephone: (858) 552-0866
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a Copy to:
Michael S. Kagnoff
DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, CA 92121
Telephone: (858) 677-1400
Facsimile: (858) 677-1401
Approximate date of commencement of proposed sale to the public: From time to time after the
effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, check the following box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
If this form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. o
If this form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See definition of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer o |
Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company þ |
CALCULATION OF REGISTRATION FEE
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Proposed |
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Proposed |
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Maximum |
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Maximum |
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Offering Price |
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Aggregate |
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Amount of |
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Title of Each Class of Securities |
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Amount To Be |
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Per |
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Offering |
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Registration |
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To Be Registered (1) |
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Registered(2) |
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Share(2) |
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Price(3) |
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Fee |
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Common Stock, par value $0.001 per share |
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Preferred Stock, par value $0.001 per share |
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Debt Securities(4) |
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Warrants |
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Units |
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Total |
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$ |
25,000,000 |
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1,395 |
(5) |
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(1) |
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There are being registered hereunder such indeterminate number of shares of common stock,
such indeterminate number of shares of preferred stock, such indeterminate principal amount of
debt securities, and such indeterminate number of warrants to purchase common stock, preferred
stock or debt securities as will have an aggregate initial offering price not to exceed
$25,000,000. Any securities registered hereunder may be sold separately or as units with
other securities registered hereunder. The proposed maximum initial offering price per unit
will be determined, from time to time, by the registrant in connection with the issuance by
the registrant of the securities registered hereunder. The securities registered also include
such indeterminate number of shares of common stock and preferred stock and amount of debt
securities as may be issued upon conversion of or exchange for preferred stock or debt
securities that provide for conversion or exchange, upon exercise of warrants or pursuant to
the antidilution provisions of any such securities. In addition, pursuant to Rule 416 under
the Securities Act, the shares being registered hereunder include such indeterminate number of
shares of common stock and preferred stock as may be issuable with respect to the shares being
registered hereunder as a result of stock splits, stock dividends or similar transactions. |
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Not applicable pursuant to General Instruction II.D. of Form S-3. |
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The proposed maximum initial offering price per unit will be determined, from time to time,
by the registrant in connection with the issuance by the registrant of the securities
registered hereunder and is not specified as to each class of security pursuant to General
Instruction II.D. of Form S-3. The Registrant has estimated the proposed maximum aggregate
offering price solely for the purpose of calculating the registration fee pursuant to Rule
457(o) under the Securities Act of 1933, as amended (the Securities Act). |
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If any debt securities are issued at an original issue discount, then the offering price of
such debt securities shall be in such greater principal amount as shall result in an aggregate
initial offering price not to exceed $25,000,000, less the aggregate dollar amount of all
securities previously issued hereunder. |
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This registration fee was previously paid by the Registrant pursuant to Rule 457(p) under the
Securities Act. The Registrant previously paid a registration fee of $10,700 pursuant to a
registration statement on Form S-3 (File No. 333-133729) (the Prior Registration Statement),
originally filed with the Commission on May 2, 2006 and declared effective on May 8, 2006.
Pursuant to Rule 415(a)(5) under the Securities Act, the Prior Registration Statement expired
on May 8, 2009. Of the $100,000,000 securities registered pursuant to the Prior Registration
Statement, only $39,998,750 of the securities were sold before the Prior Registration
Statement expired. Pursuant to Rule 457(p), the amount of the registration fee associated
with the unsold securities from the Prior Registration Statement, $3,348, is being applied to the registration fee associated for this registration statement. The
registration fee associated with the unsold securities from the Prior Registration Statement
offsets entirely the $1,395 registration fee for this registration statement. |
The registrant hereby amends this registration statement on such date or dates as may be necessary
to delay its effective date until the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall
become effective on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED May 21, 2009
PROSPECTUS
$25,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
ADVENTRX PHARMACEUTICALS, INC.
We may, from time to time in one or more offerings, offer and sell up to $25,000,000 in the
aggregate of common stock, preferred stock, debt securities, warrants to purchase common stock,
preferred stock or debt securities, or any combination of the foregoing, either individually or as
units comprised of one or more of the other securities.
This prospectus provides a general description of the securities we may offer. We will
provide the specific terms of the securities offered in one or more supplements to this prospectus.
We may also authorize one or more free writing prospectuses to be provided to you in connection
with these offerings. You should read carefully this prospectus, the applicable prospectus
supplement and any related free writing prospectus, as well as any documents incorporated by
reference before you invest in any of our securities. This prospectus may not be used to offer or
sell any securities unless accompanied by the applicable prospectus supplement
Our common stock is listed on the NYSE Amex (formerly, the American Stock Exchange) under the
symbol ANX.
As of May 20, 2009, the aggregate market value of our outstanding common stock held by
non-affiliates was approximately $10,689,066, based on 90,252,572 shares of outstanding common
stock, of which 8,656,648 shares are held by affiliates, and a price of $0.1310 per share, which
was the last reported sale price of our common stock on the NYSE Amex on May 20, 2009. As of the
date of this prospectus, we have not offered any securities pursuant to General Instruction I.B.6.
of Form S-3 during the prior 12 calendar month period that ends on, and includes, the date of this
prospectus.
Investing in our securities involves risk. You should carefully review the risks and
uncertainties described under the heading Risk Factors beginning on page 4 of this prospectus and
contained in the applicable prospectus supplement and any related free writing prospectus.
We will sell these securities directly to investors, through agents designated from time to
time or to or through underwriters or dealers. For additional information on the methods of sale,
you should refer to the section entitled Plan of Distribution in this prospectus. If any
underwriters are involved in the sale of any securities with respect to which this prospectus is
being delivered, the names of such underwriters and any applicable commissions or discounts will be
set forth in a prospectus supplement. The price to the public of such securities and the net
proceeds we expect to receive from such sale will also be set forth in a prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2009.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and
Exchange Commission, or the SEC, using a shelf registration process. Under this shelf
registration process, we may from time to time sell common stock, preferred stock, debt securities
or warrants to purchase common stock, preferred stock or debt securities, or any combination of the
foregoing, either individually or as units comprised of one or more of the other securities, in one
or more offerings up to a total dollar amount of $25,000,000. We have provided to you in this
prospectus a general description of the securities we may offer. Each time we sell securities
under this shelf registration, we will, to the extent required by law, provide a prospectus
supplement that will contain specific information about the terms of that offering. We may also
authorize one or more free writing prospectuses to be provided to you that may contain material
information relating to these offerings. The prospectus supplement and any related free writing
prospectus that we may authorize to be provided to you may also add, update or change information
contained in this prospectus or in any documents that we have incorporated by reference into this
prospectus. To the extent there is a conflict between the information contained in this prospectus
and the prospectus supplement or any related free writing prospectus, you should rely on the
information in the prospectus supplement or the related free writing prospectus; provided that if
any statement in one of these documents is inconsistent with a statement in another document having
a later date for example, a document incorporated by reference in this prospectus or any
prospectus supplement or any related free writing prospectus the statement in the document
having the later date modifies or supersedes the earlier statement.
We have not authorized any dealer, agent or other person to give any information or to make
any representation other than those contained or incorporated by reference in this prospectus and
any accompanying prospectus supplement. You must not rely upon any information or representation
not contained or incorporated by reference in this prospectus or an accompanying prospectus
supplement. This prospectus and the accompanying prospectus supplement, if any, do not constitute
an offer to sell or the solicitation of an offer to buy any securities other than the registered
securities to which they relate, nor do this prospectus and the accompanying prospectus supplement
constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction
to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You
should not assume that the information contained in this prospectus, any applicable prospectus
supplement or any related free writing prospectus is accurate on any date subsequent to the date
set forth on the front of the document or that any information we have incorporated by reference is
correct on any date subsequent to the date of the document incorporated by reference (as our
business, financial condition, results of operations and prospects may have changed since that
date), even though this prospectus, any applicable prospectus supplement or any related free
writing prospectus is delivered or securities are sold on a later date.
As permitted by the rules and regulations of the SEC, the registration statement, of which
this prospectus forms a part, includes additional information not contained in this prospectus.
You may read the registration statement and the other reports we file with the SEC at the SECs web
site or at the SECs offices described below under the heading Where You Can Find Additional
Information.
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SUMMARY
This summary highlights selected information from this prospectus and does not contain all of
the information that you need to consider in making your investment decision. You should carefully
read the entire prospectus, including the risks of investing discussed under Risk Factors
beginning on page 4, the information incorporated by reference, including our financial statements,
and the exhibits to the registration statement of which this prospectus is a part. When used in
this prospectus, the terms ADVENTRX, we, our, us or the Company refer to ADVENTRX
Pharmaceuticals, Inc. and its consolidated subsidiaries, unless otherwise indicated or as the
context otherwise requires.
About ADVENTRX Pharmaceuticals, Inc.
We are a development-stage biopharmaceutical company whose fundamental business is focused on
in-licensing, developing and commercializing proprietary product candidates for the treatment of
cancer. We seek to improve the performance and commercial potential of existing treatments by
addressing limitations associated principally with their safety and use. We have devoted
substantially all of our resources to research and development or to acquisition of our product
candidates. We have not yet marketed or sold any products or generated any significant revenue. Our
lead product candidates, ANX-530 and ANX-514, are novel emulsion formulations of currently marketed
chemotherapy drugs. However, due to our immediate need to raise additional capital to continue our
business, we have discontinued substantially all of our development activities and fundamental
business operations to conserve cash while we pursue financing alternatives, evaluate strategic
options, including the sale or exclusive license of one or more of our product candidate programs,
a strategic business merger and other similar transactions, and consider whether to liquidate our
assets, wind-up our operations and distribute any remaining cash to our stockholders.
Our business was incorporated in Delaware in December 1995. In October 2000, we merged our
wholly-owned subsidiary, Biokeys Acquisition Corp., with and into Biokeys, Inc. and changed our
name to Biokeys Pharmaceuticals, Inc. In May 2003, we merged Biokeys, Inc., our wholly-owned
subsidiary, with and into us and changed our name to ADVENTRX Pharmaceuticals, Inc. In July 2004,
we formed a wholly-owned subsidiary, ADVENTRX (Europe) Ltd., in the United Kingdom primarily to
facilitate conducting clinical trials in the European Union and to obtain favorable pricing for
discussions with the European Medicines Agency. In April 2006, we acquired SD Pharmaceuticals, Inc.
as a wholly-owned subsidiary. Our executive offices are located at 6725 Mesa Ridge Road, Suite 100,
San Diego, California 92121, and our telephone number is (858) 552-0866. Our corporate website is
located at www.adventrx.com. We make available free of charge through our Internet website our
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the SEC. Information on our website does
not constitute part of this prospectus or any prospectus supplement.
The Securities We May Offer
We may offer shares of our common stock and preferred stock, various series of debt securities
and warrants to purchase any of such securities, either individually or in units, with a total
value of up to $25,000,000 from time to time under this prospectus, together with any applicable
prospectus supplement and related free writing prospectus, at prices and on terms to be determined
by market conditions at the time of offering. If we issue any debt securities at a discount from
their original stated principal amount, then, for purposes of calculating the total dollar amount
of all securities issued under this prospectus, we will treat the initial offering price of the
debt securities as the total original principal amount of the debt securities. Each time we offer
securities under this prospectus, we will provide offerees with a prospectus supplement that will
describe the specific amounts, prices and other important terms of the securities being offered,
including, to the extent applicable:
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designation or classification; |
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aggregate principal amount or aggregate offering price; |
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maturity, if applicable; |
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original issue discount, if any; |
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rates and times of payment of interest or dividends, if any; |
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redemption, conversion, exchange or sinking fund terms, if any; |
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conversion or exchange prices or rates, if any, and, if applicable, any provisions
for changes to or adjustments in the conversion or exchange prices or rates and in the
securities or other property receivable upon conversion or exchange; |
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ranking; |
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restrictive covenants, if any; |
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voting or other rights, if any; and |
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important United States federal income tax considerations. |
A prospectus supplement and any related free writing prospectus that we may authorize to be
provided to you may also add, update or change information contained in this prospectus or in
documents we have incorporated by reference. However, no prospectus supplement or free writing
prospectus will offer a security that is not registered and described in this prospectus at the
time of the effectiveness of the registration statement of which this prospectus is a part.
We may sell the securities to or through underwriters, dealers or agents or directly to
purchasers. We, as well as any agents acting on our behalf, reserve the sole right to accept and
to reject in whole or in part any proposed purchase of securities. Each prospectus supplement will
set forth the names of any underwriters, dealers or agents involved in the sale of securities
described in that prospectus supplement and any applicable fee, commission or discount arrangements
with them, details regarding any over-allotment option granted to them, and net proceeds to us.
The following is a summary of the securities we may offer with this prospectus.
Common Stock
We currently have authorized 200,000,000 shares of common stock, par value $0.001 per share.
We may offer shares of our common stock either alone or underlying other registered securities
convertible into or exercisable for our common stock. Holders of our common stock are entitled to
such dividends as our board of directors may declare from time to time out of legally available
funds, subject to the preferential rights of the holders of any shares of our preferred stock that
are outstanding or that we may issue in the future. Currently, we do not pay any dividends. Each
holder of our common stock is entitled to one vote per share. In this prospectus, we provide a
general description of, among other things, the rights and restrictions that apply to holders of
our common stock.
Preferred Stock
We currently have authorized 1,000,000 shares of preferred stock, par value $0.001 per share,
none of which are outstanding. Under our certificate of incorporation, our board of directors has
the authority to issue shares of our preferred stock in one or more series and to fix or alter the
rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred
stock. The particular terms of each class or series of preferred stock, including redemption
privileges, liquidation preferences, voting rights, dividend rights and/or conversion rights, will
be more fully described in the applicable prospectus supplement relating to the preferred stock
offered thereby.
The rights, preferences, privileges and restrictions granted to or imposed upon any series of
preferred stock that we offer and sell under this prospectus and applicable prospectus supplements
will be set forth in a certificate of designation relating to the series. We will incorporate by
reference into the registration statement of which this prospectus is a part the form of any
certificate of designation that describes the terms of the series of preferred stock we are
offering before the issuance of shares of that series of preferred stock. You should read to read
any
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prospectus supplement and any free writing prospectus that we may authorize to be provided to
you related to the series of preferred stock being offered, as well as the complete certificate of
designation that contains the terms of the applicable series of preferred stock.
Debt Securities
We may offer general debt obligations, which may be secured or unsecured, senior or
subordinated and convertible into shares of our common stock. In this prospectus, we refer to the
senior debt securities and the subordinated debt securities together as the debt securities. We
may issue debt securities under a note purchase agreement or under an indenture to be entered
between us and a trustee; a form of the indenture is included as an exhibit to the registration
statement of which this prospectus is a part. The indenture does not limit the amount of
securities that may be issued under it and provides that debt securities may be issued in one or
more series. The senior debt securities will have the same rank as all of our other indebtedness
that is not subordinated. The subordinated debt securities will be subordinated to our senior debt
on terms set forth in the applicable prospectus supplement. In addition, the subordinated debt
securities will be effectively subordinated to creditors and preferred stockholders of our
subsidiaries. Our board of directors will determine the terms of each series of debt securities
being offered. This prospectus contains only general terms and provisions of the debt securities.
The applicable prospectus supplement will describe the particular terms of the debt securities
offered thereby. You should read any prospectus supplement and any free writing prospectus that we
may authorize to be provided to you related to the series of debt securities being offered, as well
as the complete note agreements and/or indentures that contain the terms of the debt securities.
Forms of indentures have been filed as exhibits to the registration statement of which this
prospectus is a part, and supplemental indentures and forms of debt securities containing the terms
of debt securities being offered will be incorporated by reference into the registration statement
of which this prospectus is a part from reports we file with the SEC.
Warrants
We may offer warrants for the purchase of shares of our common stock or preferred stock or of
debt securities. We may issue the warrants by themselves or together with preferred stock, common
stock or debt securities, and the warrants may be attached to or separate from any offered
securities. Each series of warrants will be issued under a separate warrant agreement to be
entered into between us and the investors or a warrant agent. Our board of directors will
determine the terms of the warrants. This prospectus contains only general terms and provisions of
the warrants. The applicable prospectus supplement will describe the particular terms of the
warrants being offered thereby. You should read any prospectus supplement and any free writing
prospectus that we may authorize to be provided to you related to the series of warrants being
offered, as well as the complete warrant agreements that contain the terms of the warrants.
Specific warrant agreements will contain additional important terms and provisions and will be
incorporated by reference into the registration statement of which this prospectus is a part from
reports we file with the SEC.
Units
We may offer units consisting of our common stock or preferred stock, debt securities and/or
warrants to purchase any of these securities in one or more series. We may evidence each series of
units by unit certificates that we will issue under a separate agreement. We may enter into unit
agreements with a unit agent. Each unit agent will be a bank or trust company that we select. We
will indicate the name and address of the unit agent in the applicable prospectus supplement
relating to a particular series of units. This prospectus contains only a summary of certain
general features of the units. The applicable prospectus supplement will describe the particular
features of the units being offered thereby. You should read any prospectus supplement and any free
writing prospectus that we may authorize to be provided to you related to the series of units being
offered, as well as the complete unit agreements that contain the terms of the units. Specific unit
agreements will contain additional important terms and provisions and will be incorporated by
reference into the registration statement of which this prospectus is a part from reports we file
with the SEC.
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RISK FACTORS
Investing in our securities involves a high degree of risk. You should carefully consider the
risk factors discussed below, together with all the other information contained or incorporated by
reference in this prospectus, as may be updated by our subsequent filings under the Securities
Exchange Act of 1934, as amended, or the Exchange Act, and the risk factors and other information
contained in any applicable prospectus supplement and in any related free writing prospectus in
connection with a specific offering, and in the documents incorporated herein or therein before
deciding whether to purchase any of the securities being registered pursuant to the registration
statement of which this prospectus is a part. Each of the risk factors could adversely affect our
business, operating results and financial condition, as well as adversely affect the value of an
investment in our securities, and the occurrence of any of these risks might cause you to lose all
or part of your investment.
RISKS RELATED TO OUR BUSINESS
Risks Related to Our Financial Performance, Operations and Ability to Continue as a Going Concern
We have incurred losses since our inception, we expect our operating expenses to continue to exceed
our revenues for the foreseeable future and we may never generate revenues sufficient to achieve
profitability.
We are a development stage company and have not generated sustainable revenues from operations or
been profitable since inception, and it is possible we will never achieve profitability. We have
devoted our resources to developing a new generation of therapeutic products, but such products
cannot be marketed until the regulatory process is completed and governmental approvals have been
obtained. Accordingly, there is no current source of revenues from operations, much less profits,
to sustain our present activities, and no revenues from operations will likely be available until,
and unless, our product candidates are approved by the U.S. Food and Drug Administration, or FDA,
or other regulatory agencies and successfully marketed, either by us or a partner, an outcome which
we are not able to guarantee.
Our financial resources are limited, we will require substantial additional funding to continue our
business, and, if we are unable to raise sufficient additional capital, we may cease operating as a
going concern and liquidate our assets.
We have experienced significant operating losses in funding the development of our product
candidates, accumulating operating losses totaling approximately $141.7 million as of March 31,
2009, and we expect to continue to incur substantial operating losses for the foreseeable future,
even if we or a future partner of ours is successful in advancing our product candidates to market.
As of March 31, 2009, we had approximately $5.3 million in cash and cash equivalents and $2.8
million in working capital and we do not expect to generate positive net cash flows for the
foreseeable future. While we have discontinued substantially all of our development activities and
fundamental business operations, we expect to incur substantial costs in connection with
evaluating, negotiating and consummating capital-raising and/or strategic transactions or
liquidating our assets and winding-up our operations. We cannot currently predict the extent of
these costs. Even if we incur costs in pursuing, evaluating and negotiating particular
capital-raising and/or strategic transactions, our efforts may not prove successful. Accordingly,
we do not believe we can provide a reasonable estimate of the rate of utilization of our cash
resources in the near term. However, excluding the potentially significant costs associated with
evaluating, negotiating and consummating capital-raising and/or strategic transactions or
liquidating our assets and winding-up our operations, we anticipate that our cash and cash
equivalents as of March 31, 2009 will be sufficient to permit us to conduct our business through at
least September 30, 2009. We will need to raise substantial additional capital to continue our
business after this period.
Our independent auditors report for the year ended December 31, 2008 includes an explanatory
paragraph stating that our recurring losses from operations and negative cash flows raise
substantial doubt about our ability to continue as a going concern. If we are unable to obtain
additional financing or consummate a strategic transaction on commercially reasonable terms, our
business, financial condition and results of operations will be materially and adversely affected
and we may be unable to continue as a going concern. If we are unable to continue as a going
concern, we may have to liquidate our assets and may receive less than the value at which those
assets are carried on our financial statements. Based on our current working capital and estimated
costs of implementing an orderly liquidation of our assets, we do not expect that there will be
material cash available for distribution to our stockholders.
4
We have been evaluating and continue to evaluate strategic options, including the sale or exclusive
license of one or more of our product candidate programs, a strategic business merger and similar
transactions. However, discussions with potential strategic transaction partners have been
unsuccessful, protracted or on terms that we determined were unacceptable. We intend to seek
funding during the second quarter of 2009 in order to continue our business and resume certain of
our development activities and fundamental business operations, including activities related to
submitting a new drug application, or NDA, to obtain approval of the FDA for marketing ANX-530 in
the United States, or U.S. Our future expenditures on our programs are subject to many
uncertainties, including whether our product candidates will be developed with a partner or
independently. Our future capital requirements will depend on, and could increase significantly as
a result of, many factors, including:
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the costs of seeking regulatory approval for our lead product candidates, ANX-530 and
ANX-514, including any bioequivalence or clinical studies, process development, scale-up
and other manufacturing activities, or other work required to achieve such approval, as
well as the timing of such activities and approval; |
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the timing and terms of any collaborative, licensing and other strategic arrangements
that we may establish; |
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the cost related to establishing or contracting for sales and marketing capabilities and
other commercial capabilities; |
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the scope, prioritization and number of development and/or commercialization programs we
pursue and the rate of progress and costs with respect to such programs; |
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the extent to which we will need to rebuild our workforce, which currently consists of
three full-time employees, and the cost involved in hiring, training and incentivizing new
employees; |
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the extent to which we invest in or acquire new technologies, products or businesses; |
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the effect of competing technological and market developments; and |
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the cost involved in establishing, enforcing or defending patent claims and other
intellectual property rights. |
We intend to seek additional funding through public or private sales of our equity securities, debt
financings, collaborations, licensing arrangements or other strategic transactions. However, we may
not be able to obtain sufficient additional funding on satisfactory terms, if at all. We believe
global economic conditions, including the credit crisis, have adversely impacted our ability to
raise additional capital and may continue to do so.
Our ability to raise capital may be limited by applicable laws and regulations.
Under current SEC regulations, we will not be eligible to use a registration statement on Form S-3
for primary offerings of our common stock or securities convertible into our common stock unless
our common stock is listed and registered on a national securities exchange. The NYSE Amex will
review the appropriateness of continued listing of any issuer that falls below the exchanges
continued listing standards and may, in its discretion, at any time, and without notice, suspend
dealings in, or may remove any security from, listing privileges. The NYSE Amex will normally
consider suspending dealings in, or removing from the list, securities of an issuer which has
stockholders equity of less than $6.0 million if such issuer has sustained losses from continuing
operations and/or net losses in its five most recent fiscal years. As of March 31, 2009, we do not
meet this continued listing standard. As of May 20, 2009, we have not received any
notice from the NYSE Amex of its intention to suspend dealings in, or remove from listing, our
common stock. However, we may receive such notice at any time. If our common stock were delisted
from the NYSE Amex, our ability to raise capital on terms and conditions we deem acceptable, if at
all, may be materially impaired. Currently, we do not anticipate being eligible to register and
list our common stock on any other national securities exchange.
In addition, even if we maintain our listing with the NYSE Amex, under current SEC regulations, at
any time during
5
which the aggregate market value of our common stock held by non-affiliates, or public float, is
less than $75.0 million (calculated as set forth in Form S-3 and SEC rules and regulations), the
amount we can raise through primary offerings of our securities in any twelve-month period using a
registration statement on Form S-3 will be limited to an aggregate of one-third of our public
float. As of May 20, 2009, our public float was
approximately 81.6 million shares, the value of
which was approximately $10.7 million based upon the closing price of our common stock of
$0.1310
on such date. As of May 20, 2009, the value of one-third of our public float calculated on the
same basis was approximately $3.6 million. Alternative means of raising capital through sales of
our securities, including through the use of a Form S-1 registration statement, may be more costly
and time-consuming.
Even if we maintain our listing with the NYSE Amex, our ability to timely raise sufficient capital
may be limited by the exchanges requirements relating to stockholder approval for transactions
involving the issuance of our common stock or securities convertible into our common stock. For
instance, the NYSE Amex requires that we obtain stockholder approval of any transaction involving
the sale, issuance or potential issuance by us of our common stock (or securities convertible into
our common stock) at a price less than the greater of book or market value, which (together with
sales by our officers, directors and principal stockholders) equals 20% or more of our presently
outstanding common stock, unless the transaction is deemed a public offering by the NYSE Amex
staff. Based on our outstanding common stock and closing price as of
May 20, 2009, we could not
raise more than approximately $2.4 million without stockholder approval, unless the transaction is
deemed a public offering or does not involve the sale, issuance or potential issuance by us of our
common stock (or securities convertible into our common stock) at a price less than the greater of
book or market value.
Obtaining stockholder approval is a costly and time-consuming process. If we are required to obtain
stockholder approval, we would expect to spend substantial additional money and resources. In
addition, seeking stockholder approval would delay our receipt of otherwise available capital,
which may materially and adversely affect our ability to continue as a going concern, and there is
no guarantee our stockholders would ultimately approve a proposed transaction. A public offering
under NYSE Amex rules typically involves broadly announcing the proposed transaction, which often
times has the effect of depressing the issuers stock price. Accordingly, the price at which we
could sell our securities in a public offering may be less and the dilution existing stockholders
experience may in turn be greater than if we were able to raise capital through other means.
Raising additional capital may cause dilution to our existing stockholders, require us to
relinquish proprietary rights or restrict our operations.
We may raise additional capital at any time and may do so through one or more financing
alternatives, including public or private sales of our equity securities, debt financings,
collaborations, licensing arrangements or other strategic transactions. Each of these financing
alternatives carries certain risks. Raising capital through the issuance of common stock may
depress the market price of our stock and may substantially dilute our existing stockholders. If we
instead seek to raise capital through strategic transactions, such as licensing arrangements or
sales of one or more of our technologies or product candidates, we may be required to relinquish
valuable rights. For example, any licensing arrangement would likely require us to share a
significant portion of any revenues generated by our licensed technologies with our licensees.
Additionally, the development of any product candidates licensed or sold to third parties will no
longer be in our control and thus we may not realize the full value of any such product candidates.
Debt financings could involve covenants that restrict our operations. These restrictive covenants
may include limitations on additional borrowing and specific restrictions on the use of our assets,
as well as prohibitions on our ability to create liens or make investments and may, among other
things, preclude us from making distributions to stockholders (either by paying dividends or
redeeming stock) and taking other actions beneficial to our stockholders. In addition, investors
could impose more one-sided investment terms and conditions on companies that have or are perceived
to have limited remaining funds or limited ability to raise additional funds. As we continue to use
our cash and cash equivalents to fund our operations, it will likely become increasingly difficult
to raise additional capital on commercially reasonable terms, or at all.
If we are unable to raise sufficient additional capital, we may be not be able to resume our
development programs or we may be forced to partner product candidates at inopportune times or
pursue less-expensive but higher-risk development paths.
Currently, we have suspended substantially all of our development activities and fundamental
business operations and we have reduced our workforce to three full-time employees in order to
provide additional time to consummate
6
a strategic transaction or otherwise obtain financing. If we are not able to raise adequate funds
to resume our development programs and operations at levels we believe would enable us to
capitalize on our assets, we may have to abandon some or all of them altogether or attempt to
continue our development and commercialization efforts by entering into arrangements with partners
or others that, if available at all, may not be on favorable terms and may require us to relinquish
some or all of our rights to our product candidates or the financial benefits thereof or we may
determine to liquidate our assets and may receive less than the value at which those assets are
carried on our financial statements.
To conserve funds, we may pursue less expensive but higher-risk development paths. For instance, we
may limit our process development activities to the minimum we feel is sufficient to support our
development and commercialization goals, in particular, with respect to ANX-530. Process
development helps define the various parameters and specifications for manufacturing products at
commercial-scale. Without comprehensive process development activities, we may lack the information
necessary to develop an accurate validation plan to support an NDA and may be unable to
successfully manufacture at commercial scale. If we are unable to validate the manufacturing
processes included in an NDA, we may be required to amend the NDA, which could result in
substantial delays in commercializing the subject drug, as well as call into question our ability
to ultimately obtain marketing approval for that drug. In addition, we would expect to spend
significant funds undertaking the activities necessary to support an amendment to an NDA.
We may seek to merge with or be acquired by another company and that transaction may adversely
affect our business and the value of our securities.
Because of our limited ability to raise funds, including for the reasons noted above, we may seek
to merge with another company with a stronger cash position, complementary work force or product
candidate portfolio or for other reasons. We believe the market price for our common stock may not
accurately reflect the value of our business. While we will continue to seek to maximize the value
of our business to our stockholders, the most attractive option for doing so may require us to
consummate a transaction involving an exchange of our common stock with that of another company.
There are numerous risks associated with merging or being acquired. These risks include, among
others, incorrectly assessing the quality of a prospective acquirer or merger-partner, encountering
greater than anticipated costs in integrating businesses, facing resistance from employees and
being unable to profitably deploy the assets of the new entity. The operations, financial
condition, and prospects of the post-transaction entity depend in part on our and our
acquirer/merger-partners ability to successfully integrate the operations related to our product
candidates, business and technologies. We may be unable to integrate operations successfully or to
achieve expected cost savings and any cost savings which are realized may be offset by losses in
revenues or other charges to operations. As a result, our stockholders may not realize the full
value of their investment.
If we fail to maintain registration of the shares of common stock issued or issuable pursuant to
the exercise of warrants we issued in our July 2005 private placement, we will be required to pay
the holders of those securities liquidated damages, which could be material in amount.
The terms of the securities purchase agreement that we entered into in connection with our July
2005 private placement require us to pay liquidated damages to the purchasers of those securities
in the event any shares issued or issuable pursuant to the exercise of warrants we issued in the
private placement cannot be resold pursuant to our registration statement on Form S-3 (No.
333-127857) filed with and declared effective by the SEC on September 2, 2005. We refer to this as
a maintenance failure. For each 30-day period or portion thereof during which a maintenance failure
remains uncured, we are obligated to pay each purchaser an amount in cash equal to 1% of the
purchasers aggregate purchase price for any shares of common stock or shares of common stock
issuable upon exercise of warrants then held by the purchaser (pro rated for any period less than a
month), increasing by an additional 1% with regard to each additional 30-day period or portion
thereof until the maintenance failure is cured. There is no cap with respect to the total amount of
these liquidated damages. The aggregate gross proceeds from our July 2005 private placement were
approximately $20 million. We are required to maintain the registration statement until the earlier
of the date (i) all of the securities issued in our July 2005 private placement have been resold
and (ii) each purchaser can resell the securities pursuant to Rule 144 under the Securities Act of
1933, as amended, without regard to the adequate current public information, volume, manner of sale
or notice filing restrictions. The amount of these liquidated damages could be substantial and
could have a material adverse effect on our financial condition.
7
For additional information, see Note 11 of the Notes to Consolidated Financial Statements,
Registration Payment Arrangement, of our annual report on Form 10-K for the year ended December
31, 2008.
We may be unable to retain the services of key personnel, and, even if we are successful in raising
additional funds to continue our business and resume development and commercialization of our
product candidates, we may not be successful in rebuilding our workforce to carry out those
activities.
As of May 20, 2009, we had only three full-time employees and we depend on the services of
certain of these employees to continue our business. We do not have a chief executive officer or
chief financial officer. Our Chief Business Officer and Senior Vice President is currently acting
as our interim principal executive officer and a member of our board of directors is currently
acting as our interim principal financial and accounting officer. To the extent we are successful
in raising additional funds to continue our business and resume our development and
commercialization activities, we may need to expand our managerial, financial, regulatory, research
and development, manufacturing, commercial, quality, compliance and other resources in order to
manage our operations, submit applications to and respond to inquiries from the FDA and, if
approved, commercialize our products. We do not expect that our current management and personnel,
systems and facilities will be adequate to support these activities.
The success of our business will depend, in part, on our ability to attract and retain highly
qualified management, scientific and other personnel, and on our ability to develop and maintain
important relationships with respected service providers and industry-leading consultants and
advisors. Competition for these types of personnel and relationships is intense from numerous
pharmaceutical and biotechnology companies, universities and other research institutions,
particularly in the San Diego, California area. In connection with the cost-cutting measures we
implemented in October 2008, January 2009 and March 2009, we eliminated, among others, our
scientific staff and our manufacturing and regulatory personnel, who had a deep background in our
product candidates and our research and development programs. Recruiting and retaining employees,
including senior-level personnel, with relevant product development experience in cancer and
process development experience with emulsified cytotoxic drugs may be costly and time-consuming.
We have historically provided incentive compensation to our officers and employees in part through
grants of stock options and, more recently, restricted stock units under our equity compensation
plans. Decreases in the trading price of our common stock, however, have substantially reduced the
value of equity compensation awards made to our officers and employees in prior years and such
awards may not provide adequate compensation to retain such individuals. Our ability to provide
competitive compensation to our officers and employees may also be adversely affected by our
limited capital resources and anticipated need to raise substantial additional capital to continue
our business. We cannot ensure that we will be able to retain existing employees or attract and
retain additional skilled personnel on acceptable terms as a result of these factors and,
accordingly, we may not achieve our development and commercialization goals.
We have significant incentive and may, under certain circumstances, have significant severance and
other obligations under agreements with certain of our current officers.
In January 2009, we entered into incentive and retention agreements with each of our current
officers that, except in the event of a termination for cause, effectively guarantee their
respective salaries through specified dates (either June 30, 2009 or September 30, 2009). Our
aggregate contractual obligation under these agreements, determined as of May 20, 2009, was
approximately $225,000. We believe these agreements were necessary to incentivize and retain these
key employees and reinforce their dedication to us during a period when they would otherwise likely
seek alternative employment. In addition, we may determine to enter into new incentive and
retention and/or severance agreements with our current officers under which we may agree to
effectively guarantee their respective salaries through specified extended dates and/or provide for
cash severance payments and/or the continuation of health insurance and other benefits upon
termination by us without cause or involuntary termination by the officer for good reason, which
may or may not be conditioned upon a change in control. Our contractual responsibility for our
current and any future incentive and/or severance obligations may cause us to cease or curtail our
operations at an earlier date than would otherwise be the case if we were not required to satisfy
these obligations. In addition, part or all of the proceeds from a future capital raising
transaction may be used to satisfy these obligations.
The use of our net operating loss carryforwards may be limited.
Net operating loss carryforwards may expire and not be used. As of December 31, 2008, we had
generated federal
8
net operating loss carryforwards of approximately $90.4 million and state net operating loss
carryforwards of approximately $41.4 million. Federal net operating loss carryforwards have a
20-year carryforward period and begin to expire in 2020. State net operating loss carryforwards
have a ten year carry forward period and begin to expire in 2012.
Pursuant to Section 382 of the Internal Revenue Code, annual use of our net operating loss
carryforwards may be limited in the event a cumulative change in ownership of more than 50 percent
occurs within a three-year period. We determined that, as of January 1, 2009, no such ownership
change had occurred. However, future financing events may cause changes in ownership under Section 382, which
could cause our net operating loss carryforwards to be subject to limitations and restrictions. If
a change in ownership were to occur, our net operating loss carryforwards could be eliminated or
restricted.
If we fail to maintain an effective system of internal control over financial reporting, we may not
be able to accurately report our financial results. As a result, current and potential investors
could lose confidence in our financial reporting, which could harm our business and have an adverse
effect on our stock price.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to annually furnish a
report by our management on our internal control over financial reporting. Such report must
contain, among other matters, an assessment by our principal executive officer and our principal
financial officer on the effectiveness of our internal control over financial reporting, including
a statement as to whether or not our internal control over financial reporting is effective as of
the end of our fiscal year. This assessment must include disclosure of any material weakness in our
internal control over financial reporting identified by management. In addition, under current SEC
rules, we will be required to obtain an attestation from our independent registered public
accounting firm as to our internal control over financial reporting for our annual report on Form
10-K for our fiscal year ending December 31, 2009. Performing the system and process documentation
and evaluation needed to comply with Section 404 is both costly and challenging. We have in the
past discovered, and may in the future discover, areas of internal controls that need improvement.
For example, during the fourth quarter of 2008, we discovered that we did not correctly apply
generally accepted accounting principles as they related to accounting for warrant liability
because our accounting staff did not have adequate training or expertise, and determined that we
had a material weakness in our internal control over financial reporting as of December 31, 2007.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a material misstatement of
our annual or interim financial statements will not be prevented or detected on a timely basis. For
a detailed description of this material weakness and our remediation of this material weakness, see
Part II Item 9A(T) Controls and Procedures of our annual report on Form 10-K for the year
ended December 31, 2008. If additional material weaknesses are identified in our internal control
over financial reporting, neither our management nor our independent registered public accounting
firm will be able to assert that our internal control over financial reporting and/or our
disclosure controls and procedures are effective, and we could be required to further implement
expensive and time-consuming remedial measures. We cannot be certain that any measures we take will
ensure that we implement and maintain adequate internal control over financial reporting and that
we will remediate the material weakness. As a result of recent reductions in our workforce and
other personnel departures, we have experienced substantial turnover in our personnel responsible
for performing activities related to our internal control over financial reporting. We have used
third-party contractors to maintain effective internal control over financial reporting during this
turn-over. However, if we fail to maintain effective internal control over financial reporting
and/or disclosure controls and procedures we could lose investor confidence in the accuracy and
completeness of our financial reports, which could have a material adverse effect on our stock
price.
Our operations might be interrupted by the occurrence of a natural disaster or other catastrophic
event.
Our corporate headquarters are located at a single business park in San Diego, California.
Important documents and records, including copies of our laboratory books and records for our
product candidates, are located at our facilities and we depend on our facilities for the continued
operation of our business. Natural disasters and other catastrophic events, such as wildfires and
other fires, earthquakes and extended power interruptions, which have impacted San Diego businesses
in the past, and terrorist attacks, drought or flood, could significantly disrupt our operations
and result in additional, unplanned expense. As a small company, we have limited capability to
establish and maintain a comprehensive disaster recovery program and, accordingly, we do not have a
formal business continuity or disaster recovery plan, and any natural disaster or catastrophic
event could delay our development and commercialization
9
efforts. Even though we believe we carry commercially reasonable insurance, we might suffer losses
that exceed the coverage available under these insurance policies. In addition, we are not insured
against terrorist attacks or earthquakes.
Risks Related to Drug Development and Commercialization
Further testing of and/or validation of manufacturing processes with respect to our product
candidates is required and regulatory approval may be delayed or denied, which would limit or
prevent us from marketing our product candidates and significantly impair our ability to generate
revenues.
Human pharmaceutical products generally are subject to rigorous preclinical testing and clinical
trials and other approval procedures mandated by the FDA and foreign regulatory authorities.
Various federal and foreign statutes and regulations also govern or influence the manufacturing,
safety, labeling, storage, record keeping and marketing of pharmaceutical products. The process of
obtaining these approvals and the subsequent compliance with appropriate U.S. and foreign statutes
and regulations is time-consuming and requires the expenditure of substantial resources. In
addition, these requirements and processes vary widely from country to country.
To varying degrees based on the regulatory plan for each product candidate, the effect of
government regulation and the need for FDA and other regulatory agency approval will delay
commercialization of our product candidates, impose costly procedures upon our activities, and put
us at a disadvantage relative to larger companies with which we compete. There can be no assurance
that FDA or other regulatory approval for any product candidates developed by us will be granted on
a timely basis, or at all. Even though the FDA has confirmed the appropriateness of a Section
505(b)(2) regulatory path for ANX-530 and ANX-514, the FDAs views may change. If the FDA requires
the longer-term regulatory approval pathway associated with traditional drug development for
ANX-530 and ANX-514, we may determine that the associated time and cost is not financially
justifiable and, as a result, discontinue those programs. If we discontinue the development of one
or both of these product candidates, our business and stock price may suffer.
In connection with any NDA that we file under Section 505(b)(2) of the Federal Food, Drug and
Cosmetic Act, or FDCA, we may be required to notify third parties that we have certified to the FDA
that any patents listed for the approved drug in the FDAs Orange Book publication are invalid or
will not be infringed by the manufacture, use or sale of our drug. If the third-party files a
patent infringement lawsuit against us within 45 days of its receipt of notice of our
certification, the FDA is automatically prevented from approving our Section 505(b)(2) NDA until,
subject to certain adjustments, the earliest of 30 months, expiration of the patent, settlement of
the lawsuit or a decision in the infringement case that is favorable to us. Accordingly, we may
invest significant time and expense in the development of our product candidates, including ANX-530
and ANX-514, only to be subject to significant delay and patent litigation before our products may
be commercialized.
We may not achieve our projected development and commercialization goals in the time frames we
announce. Delays in the commencement or completion of pre/non-clinical testing, bioequivalence or
clinical trials or manufacturing, regulatory or launch activities could result in increased costs
to us and delay or limit our ability to generate revenues.
We set goals for and make public statements regarding our estimates of the timing of the
accomplishment of objectives material to successful development and commercialization of our
product candidates. The actual timing of these events can vary dramatically due to any number of
factors, including delays or failures in our pre/non-clinical testing, bioequivalence and clinical
trials and manufacturing, regulatory and launch activities and the uncertainties inherent in the
regulatory approval process. While our regulatory strategy for ANX-530 and ANX-514 has been to
demonstrate the pharmacokinetic equivalence of each to the currently approved reference product in
small, bioequivalence trials in humans, we or our partner may determine to conduct clinical studies
to support uses in new indications or other label changes or for other reasons.
We conduct pre/non-clinical activities in the course of our development programs, including in
connection with the manufacture of our product candidates, and in response to requests by
regulatory authorities, as well as for other reasons. Delays in our pre/non-clinical activities
could occur for a number of reasons, including:
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delays in reaching agreement on acceptable terms with prospective contract research
organizations, or CROs, and contract manufacturing organizations, or CMOs, the terms of
which can be subject to extensive negotiation and may vary significantly among different
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failures on the part of our CROs and CMOs in developing procedures and protocols or
otherwise conducting activities on timeframes requested by us; |
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changes in regulatory requirements or other standards or guidance relating to
preclinical testing, including testing of pharmaceutical products in animals; |
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a lack of availability of animals that are suitable for the types of studies we plan to
conduct; |
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a lack of availability of capacity at our CMOs, or of the component materials, including
the active pharmaceutical ingredient, or API, or related materials, including vials and
stoppers, necessary to manufacture our product candidates or products; and |
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unforeseen results of preclinical or nonclinical testing that require us to amend study
or test designs or delay future testing or bioequivalence or clinical trials and related
regulatory filings. |
In addition, we do not know whether planned bioequivalence or clinical trials will commence on time
or be completed on schedule, if at all. The commencement and completion of trials can be delayed
for a variety of reasons, including delays related to:
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obtaining regulatory approval to commence a trial; |
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identifying appropriate trial sites and reaching agreement on acceptable terms with
prospective CROs, trial sites and investigators, the terms of which can be subject to
extensive negotiation and may vary significantly among different CROs, trial sites and
investigators; |
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manufacturing sufficient quantities of a product candidate; |
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obtaining institutional review board, or IRB, approval to conduct a trial at a
prospective site; |
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recruiting and enrolling patients to participate in trials for a variety of reasons,
including competition from other clinical trials for the same indication as our product
candidates and the perception that the design of a trial or the proposed treatment regimen
is less beneficial to patients than available alternatives; and |
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retaining patients who have initiated a trial but may be prone to withdraw due to side
effects from the therapy, lack of efficacy or personal issues, or who are lost to further
follow-up. |
For example, in October 2007, we announced results of our phase 2b clinical trial of ANX-510, or
CoFactor, for the first-line treatment of metastatic colorectal cancer, which demonstrated that the
CoFactor/5-FU arm did not demonstrate statistically significant improved safety in the trials
primary endpoint. In November 2007, we announced that we would discontinue enrolling patients in
our phase 3 clinical trial of CoFactor for the first-line treatment of metastatic colorectal cancer
and, in October 2008, we announced that we had discontinued active work on all product candidates
other than ANX-530 and ANX-514, including CoFactor. In addition, in May 2009, we announced that we
did not meet the primary endpoint in our bioequivalence study of ANX-514, resulting in additional
uncertainty around the cost and timeline to obtaining FDA approval for that product candidate.
In addition, a trial may be suspended or terminated by us, the FDA or other regulatory authorities
due to a number of factors, including:
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failure to conduct the trial in accordance with regulatory requirements or the trials
protocol; |
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inspection of trial operations or trial sites by the FDA or other regulatory authorities
resulting in the imposition of a clinical hold; |
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unforeseen safety issues; or |
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lack of adequate funding to continue the trial. |
Additionally, changes in regulatory requirements and guidance relating to clinical trials may occur
and we may need to amend clinical trial protocols to reflect these changes. Amendments may require
us to resubmit our clinical trial protocols to institutional review boards, or IRBs, for
reexamination or renegotiate terms with CROs, trial sites and clinical investigators, all of which
may impact the costs, timing or successful completion of a clinical trial.
There can be no assurance that our preclinical and nonclinical testing and bioequivalence and/or
clinical trials will commence or be completed, that we will make regulatory submissions or receive
regulatory approvals as planned or that we will be able to adhere to our current schedule for the
development or commercialization of any of our product candidates. If we experience delays in
completion of, or if we terminate, our bioequivalence or clinical trials or preclinical and
nonclinical testing, the commercial prospects for our product candidates will be harmed, and our
ability to generate product revenues will be delayed. In addition, many of the factors that cause,
or lead to, a delay in the commencement or completion of bioequivalence or clinical trials or
preclinical and nonclinical testing may also ultimately lead to the denial of regulatory approval
of a product candidate. Even if we are able to ultimately commercialize our product candidates,
other therapies for the same indications may have been introduced to the market and established a
competitive advantage.
Positive results in our preclinical testing and/or bioequivalence trials do not ensure that future
bioequivalence or clinical trials will be successful or that our product candidates will receive
the regulatory approvals necessary for their commercialization.
Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we
must demonstrate through preclinical testing and bioequivalence or clinical trials that each
product is safe and effective for use in each target indication. Success in preclinical testing
and/or bioequivalence trials does not ensure that subsequent or large-scale trials will be
successful. Additionally, throughout development, we must provide adequate assurance to the FDA and
other regulatory authorities that we can consistently produce our product candidates in conformance
with current good manufacturing practices, or cGMP, and other regulatory standards. Bioequivalence
and clinical trial results are frequently susceptible to varying interpretations and regulatory
authorities may disagree on what are appropriate methods for analyzing data, any of which may
delay, limit or prevent regulatory approvals. For instance, with respect to our bioequivalence
trial of ANX-530, the FDA may perform its pharmacokinetic equivalence analysis based a patient
population other than the population on which we based our analysis, which may result in the FDA
determining that ANX-530 and Navelbine® are not bioequivalent, requiring that we evaluate
additional patients, re-perform the study or take other remedial action. In addition, the FDA may
inquire regarding the manufacturing source, in-process and product release specifications and
overall uniformity of reference product used in the bioequivalence trial of ANX-530, particularly
since it was conducted at sites in multiple countries, and we may be unable to provide
documentation satisfactory to the FDA with respect to such reference product, which may result in
the FDA requiring that we evaluate additional patients, re-perform the study or take other remedial
measures. Further, the ANX-530 bioequivalence trial was open-label, meaning
physician-investigators, as well as patients, may have been aware of which drug was being
administered. There is a risk of investigator bias in reporting adverse events as a result of the
studys open-label nature, including bias that increased the reporting of adverse events associated
with Navelbine and/or that decreased the reporting of adverse events associated with ANX-530. With
respect to ANX-514, despite positive preclinical testing that indicated pharmacokinetic equivalence
between ANX-514 and the reference product, our bioequivalence trial of ANX-514 did not demonstrate
pharmacokinetic equivalence between ANX-514 and the reference product based on benchmark regulatory
standards.
The length of time necessary to complete bioequivalence or clinical trials and manufacturing
development work and to submit an application for marketing approval for a final decision by a
regulatory authority varies significantly and may be difficult to predict. In addition, delays or
rejections may be encountered based upon changes in FDA policy for drug approval during the period
of product development and FDA regulatory review of each submitted NDA. There is a significant risk
that any of our product candidates could fail to show satisfactory results in human trials, as was
the case in our bioequivalence study of ANX-514, or manufacturing development, and, as a result, we
may not continue their development. A failure to obtain requisite regulatory approvals or to obtain
approvals of the scope requested will delay or preclude us from marketing our products or limit the
commercial use of the products, and would have a material adverse effect on our business, financial condition and results of
operations.
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If any of our product candidates for which we receive regulatory approval do not achieve broad
market acceptance (including as a result of failing to differentiate our products from competitor
products or as a result of failing to obtain reimbursement rates for our products that are
competitive from the healthcare providers perspective), the revenues we generate from their sales
will be limited and our business may not be profitable.
Our success will depend in substantial part on the extent to which our products for which we obtain
marketing approval from the FDA and comparable foreign regulatory authorities are accepted by the
medical community and reimbursed by third-party payors, including government payors. The degree of
market acceptance will depend upon a number of factors, including, among other things:
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our products perceived advantages over existing treatment methods (including relative
convenience and ease of administration and prevalence and severity of any adverse side
effects); |
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claims or other information (including limitations or warnings) in our products
approved labeling; |
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reimbursement and coverage policies of government and other third-party payors; |
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pricing and cost-effectiveness; |
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in the U.S., the ability of group purchasing organizations, or GPOs (including
distributors and other network providers), to sell our products to their constituencies; |
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the establishment and demonstration in the medical community of the safety and efficacy
of our products and our ability to provide acceptable evidence of safety and efficacy; |
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availability of alternative treatments; and |
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the prevalence of off-label substitution of chemically equivalent products. |
We cannot predict whether physicians, patients, healthcare insurers or maintenance organizations,
or the medical community in general, will accept or utilize any of our products. If our products
are approved but do not achieve an adequate level of acceptance by these parties, we may not
generate sufficient revenues from these products to become or remain profitable. In addition, our
efforts to educate the medical community and third-party payors regarding the benefits of our
products may require significant resources and may never be successful.
Under our Section 505(b)(2) regulatory strategy for ANX-530 and ANX-514, because we anticipate
submitting Section 505(b)(2) NDAs based on pharmacokinetic data, our ability to differentiate our
products from competitor products will be limited unless the FDA allows us to include certain data
in our products labels. Even if our products demonstrate clinical or pharmacoeconomic benefits, we
may be unable to market our products based on these benefits.
If we fail to obtain a unique Healthcare Common Procedure Coding System, or HCPCS, product code for
ANX-530, it is unlikely we will be able to sell that product at a price that exceeds its
manufacturing, marketing and distribution costs. Even if we obtain separate HCPCS codes for our
products, if our products are perceived to provide little or no advantage relative to competitive
products or for other reasons, we may be required to price our products at levels that do not cover
our costs to manufacture, market and distribute the products or provide any profit, or to price our
products at levels at which they are not competitive.
We do not have manufacturing capabilities and are dependent on single source manufacturers and
suppliers for certain of our product candidates and their component materials, and the loss of any
of these manufacturers or suppliers, or their failure to provide us with an adequate supply of
products or component materials on commercially acceptable terms, or at all, could harm our
business.
We do not have any manufacturing capability. We rely on third-party manufacturers and component
materials suppliers for the manufacture of our product candidates for bioequivalence or clinical
trial purposes and we
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anticipate establishing relationships with third-party manufacturers and component materials
suppliers for the commercial production of our products. Currently we do not have any commercial
supply agreements or commitments with our third-party manufacturers or component suppliers, and we
cannot ensure that we will be able to establish relationships with these parties on commercially
acceptable terms, or at all. If we fail to establish and maintain such relationships, we expect it
would have a material and adverse effect on our operations. Even if we successfully establish
relationships with third-party manufacturers and component suppliers on commercially acceptable
terms, our manufacturers and suppliers may not perform as agreed or may terminate their agreements
with us. Because many of our single source suppliers provide manufacturing services to a number of
other pharmaceutical companies, our suppliers may experience capacity constraints or choose to
prioritize one or more of their other customers over us. Any significant problem that our single
source manufacturers or suppliers experience could delay or interrupt the supply to us of
bioequivalence or clinical trial materials or products until the manufacturer or supplier cures the
problem or until we locate an alternative source of supply, if an alternative source is available,
and, as a result, any such delay or interruption could materially and adversely affect our
development and commercial activities and operations.
For instance, ANX-530 is an emulsified cytotoxic product that must be aseptically-filled. There are
a limited number of CMOs capable and willing to manufacture this type of product at the commercial
scale at which we anticipate requiring in accordance with our marketing plans for ANX-530, which
will make identifying and establishing short- or long-term relationships with willing manufacturers
more difficult and provide them with substantial leverage over us in any negotiations. Furthermore,
certain of the component materials of ANX-530 are available only from a particular supplier, and
currently we do not have any short- or long-term agreements for the supply of those materials.
Even if we successfully establish a long-term relationship with our current CMO for ANX-530 on
commercially acceptable terms, our CMO may be unable to successfully and consistently manufacture
ANX-530 at commercial scale. We and this manufacturer have limited experience manufacturing
ANX-530, and the experience we and this manufacturer do have is limited to manufacturing a single
engineering batch. Because data from a single bioequivalence trial of ANX-530 may be sufficient to
support a Section 505(b)(2) NDA, our and our current contract manufacturers ability to gain
experience manufacturing ANX-530, in particular at various scales, has been limited. If our current
CMO is unable to manufacture ANX-530 successfully and consistently at commercial scale and within
established parameters, we may be unable to validate our manufacturing process, even if the FDA
other would approve our NDA, and therefore unable to sell ANX-530. Our current CMO has similarly
limited experience with ANX-514.
All manufacturers of our products and product candidates must comply with cGMP requirements
enforced by the FDA through its facilities inspection program, as well as applicable requirements
of foreign regulatory authorities. These requirements include quality control, quality assurance
and the maintenance of records and documentation. Manufacturers of our products and product
candidates may be unable to comply with these cGMP requirements and with other FDA, state and
foreign regulatory requirements. While we or our representatives generally monitor and audit our
manufacturers systems, we have little control over our manufacturers ongoing compliance with
these regulations and standards. A failure to comply with these requirements may result in fines
and civil penalties, suspension of production, suspension or delay in product approval, product
seizure or recall, or withdrawal of product approval.
Furthermore, the manufacture of pharmaceutical products requires significant expertise and capital
investment, including the development of advanced manufacturing techniques and process controls.
Manufacturers of pharmaceutical products often encounter difficulties in production, particularly
in scaling up initial production. These problems include difficulties with production costs and
yields, quality control, including stability of the product candidate and quality assurance testing
and shortages of qualified personnel.
If our manufacturers were to encounter any of these difficulties or otherwise fail to comply with
their contractual obligations, our ability to provide product candidates to patients in our
bioequivalence or clinical trials may be jeopardized. Any delay or interruption in the supply of
supplies could delay the completion of our trials, increase the costs associated with maintaining
our development programs and, depending upon the period of delay, require us to commence new trials
at significant additional expense or terminate the trials completely. We cannot ensure that
manufacturing or quality control problems will not arise in connection with the manufacture of our
products or product candidates, or that third-party manufacturers will be able to maintain the
necessary governmental licenses
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and approvals to continue manufacturing such products or product candidates. Any of the above
factors could cause us to delay or suspend anticipated or on-going trials, regulatory submissions,
required approvals or commercialization of our product candidates, entail higher costs or result in
our being unable to effectively commercialize our products. Our dependence upon third parties for
the manufacture of our products and product candidates may adversely affect our future costs and
our ability to develop and commercialize our products and product candidates on a timely and
competitive basis.
If any of our product candidates should be approved, any problems or delays experienced in their
manufacturing processes may impair our ability to provide commercial quantities of the products,
which would limit our ability to sell the products and would adversely affect our business. It
could take significant time to redesign our manufacturing processes or identify alternative
suppliers in response to problems we may encounter as we manufacture our products, if such
alternative processes and suppliers are available at all. Even if we are able to identify
alternative suppliers, they may be unwilling to manufacture our products on commercially reasonable
terms. Neither ANX-530 nor ANX-514 have been manufactured at the scales we believe will be
necessary to maximize their commercial value to us and, accordingly, we may encounter difficulties
in production while scaling-up initial production and may not be successful at all in scaling-up
initial production.
Any new supplier of products or component materials, including API, would be required to qualify
under applicable regulatory requirements and would need to have sufficient rights under applicable
intellectual property laws to the method of manufacturing such products or ingredients. The FDA may
require us to conduct additional bioequivalence or clinical trials, collect stability data and
provide additional information concerning any new supplier, or change in a validated manufacturing
process, before we could distribute products from that supplier or revised process. Obtaining the
necessary FDA approvals or other qualifications under applicable regulatory requirements and
ensuring non-infringement of third-party intellectual property rights could result in a significant
interruption of supply and could require the new supplier to bear significant additional costs
which may be passed on to us. For instance, with respect to ANX-530, the form of API used in the
manufacture of ANX-530 for purposes of our bioequivalence study of ANX-530 will not be the same
form of API used in the manufacture of ANX-530 for purposes of process validation batches or
commercial supply. To ensure the comparability of the ANX-530 used in the bioequivalence study and
the ANX-530 intended for commercial sale, FDA may require that we evaluate both forms of ANX-530 in
additional patients, re-perform the bioequivalence study or take other remedial actions. We may
have insufficient quantities of both forms of ANX-530 and could incur substantial cost and delay in
acquiring such quantities, in addition to the time and expense associated with conducting the
evaluation, re-performing the study or taking other remedial measures.
We rely in part on third parties to conduct our preclinical and nonclinical testing and
bioequivalence and clinical studies and other aspects of our development programs and if those
third parties do not satisfactorily perform their contractual obligations or meet anticipated
deadlines, the development of our product candidates could be adversely affected.
We do not employ personnel or possess the facilities necessary to conduct the activities associated
with our programs, particularly since we implemented severe cost-cutting measures in late 2008 and
early 2009. We engage consultants, advisors, CROs, CMOs and others to design and conduct
preclinical and nonclinical tests and bioequivalence and clinical studies in connection with the
research and development of our product candidates. As a result, many important aspects of our
product candidates development are outside our direct control. There can be no assurance that such
third parties will perform all of their obligations under arrangements with us or will perform
those obligations satisfactorily.
The CROs with which we contract for execution of our bioequivalence and clinical studies play a
significant role in the conduct of the studies and subsequent collection and analysis of data, and
we will likely depend on these and other CROs and clinical investigators to conduct our future
bioequivalence or clinical or studies or assist with our on-going bioequivalence studies.
Individuals working at the CROs with which we contract, as well as investigators at the sites at
which our studies are conducted, are not our employees, and we cannot control the amount or timing
of resources that they devote to our programs. If these CROs fail to devote sufficient time and
resources to our studies, or if their performance is substandard, it will delay the approval of our
applications to regulatory agencies and the introduction of our products. Failure of these CROs to
meet their obligations could adversely affect development of our product candidates. Moreover,
these CROs may have relationships with other commercial entities, some of which may compete with
us. If they assist our competitors at our expense, it could harm our competitive position.
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For instance, we lack the internal capabilities to fully analyze the data from our bioequivalence
study of ANX-514 and will rely on multiple third-party consultants to help us interpret and
understand the data. Because of the impact different analyses of the data may have on our business,
we believe an employee likely would approach the data and analysis in a substantially more
rigorous, thoughtful and creative manner than a consultant or contractor.
We currently have no sales or marketing capability and our failure to develop these and related
capabilities internally or contract with third parties to perform these activities successfully
could delay and/or limit our ability to generate revenues in the event one or more of our product
candidates obtains regulatory approval.
We currently do not have sales, marketing or commercialization personnel. We have limited business
development personnel. To commercialize our products, including ANX-530, we will have to acquire or
develop sales, marketing and distribution capabilities, or rely on marketing partners or other
arrangements with third parties for the marketing, distribution and sale of our products. There is
no guarantee that we will be able to establish marketing, distribution or sales capabilities or
make arrangements with third parties to perform those activities on terms satisfactory to us, or
that any internal capabilities or third party arrangements will be cost-effective. The acquisition
or development of a sales and distribution and associated regulatory compliance infrastructure will
require substantial resources, which may divert the attention of our management and key personnel
and negatively impact our product development efforts.
In addition, any third parties with which we establish marketing, distribution or sales
arrangements may have significant control over important aspects of the commercialization of our
products, including market identification, marketing methods, pricing, composition of sales force
and promotional activities. If we retain third-party service providers to perform functions related
to the sale and distribution of our products, key aspects of those functions that would be out of
our direct control could include warehousing and inventory management, distribution, contract
administration and chargeback processing, accounts receivable management and call center
management. In this event, we would place substantial reliance on third-party providers to perform
services for us, including entrusting our inventories of products to their care and handling. If
these third-party service providers fail to comply with applicable laws and regulations, fail to
meet expected deadlines, or otherwise do not carry out their contractual duties to us, or encounter
natural or other disasters at their facilitates, our ability to deliver product to meet commercial
demand could be significantly impaired. In addition, we may use third parties to perform various
other services for us relating to sample accountability and regulatory monitoring, including
adverse event reporting, safety database management and other product maintenance services. If the
quality or accuracy of the data maintained by these service providers is insufficient, our ability
to continue to market our products could be jeopardized or we could be subject to regulatory
sanctions. We do not currently have the internal capacity to perform these important commercial
functions, and we may not be able to maintain commercial arrangements for these services on
reasonable terms, or at all. Even if we are successful in establishing and maintaining these
arrangement, there can be no assurance that we will be able to control the amount and timing of
resources that any third party may devote to our products or prevent any third party from pursuing
alternative technologies or products that could result in the development of products that compete
with, or the withdrawal of support for, our products.
If we receive regulatory approval for one or more of our product candidates, we may face
competition from generic products, which could exert downward pressure on the pricing and market
share of our products and limit our ability to generate revenues.
Many of the currently marketed and anticipated products against which our product candidates may
compete are, or we anticipate will be, available as generics. For instance, ANX-530 will compete
against Navelbine, for which generic equivalents are already available. ANX-514 will compete
against Taxotere®. We anticipate that ANX-514 will also compete against other formulations of
docetaxel and that generic Taxotere will enter the market in November 2013 or May 2014 (depending
on whether a period of pediatric exclusivity is granted in the future). Even if we obtain unique
HCPCS codes for our products, the existence of generic products could make it more difficult for
our branded products, including ANX-530 and ANX-514, to gain or maintain market share and could
cause prices for our products to drop, each of which could adversely affect our business.
We may also face competition for our products from lower priced products from foreign countries
that have placed price controls on pharmaceutical products. Proposed federal legislative changes
may expand consumers ability to import lower priced versions of our and competing products from
Canada. Further, several states and local governments have implemented importation schemes for
their citizens, and, in the absence of federal action to
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curtail such activities, we expect other states and local governments to launch importation
efforts. The importation of foreign products that compete with our own products could negatively
impact our business and prospects.
Even if we receive regulatory approval in the U.S. for ANX-530 and/or ANX-514, we will likely
depend on a limited number of group purchasing organizations for retail distribution of these
products, and if we subsequently lose any significant GPO relationship, our business could be
harmed.
Our current U.S. commercialization strategy for our lead emulsion formulations initially involves
marketing and selling these products through a limited number of GPOs. Even if we are successful in
securing relationships with these entities, the subsequent loss of any one or more of these GPO
accounts or a material reduction in their participation could harm our business, financial
condition or results of operations. In addition, we may face pricing pressure from these GPOs.
Even if we receive regulatory approval for one or more of our product candidates, they may still
face future development and regulatory difficulties that could materially and adversely affect our
business, financial condition and results of operations and cause our stock price to decline.
Even if initial regulatory approval is obtained, the FDA or a foreign regulatory agency may still
impose significant restrictions on a products indicated uses or marketing or impose ongoing
requirements for potentially costly post-approval studies or marketing surveillance programs. Our
product candidates will also be subject to ongoing FDA requirements related to the labeling,
packaging, storage, advertising, promotion, record-keeping and submission of safety and other
post-market information on the product. For instance, in September 2007, amendments to the FDCA
were signed into law. These amendments significantly strengthen the FDAs regulatory authority over
drugs, including new controls over the post-approval monitoring of drugs. The FDA may now require
changes to approved drug labels, require post-approval clinical trials and impose distribution and
use restrictions on certain drugs. In addition, approved products, manufacturers and manufacturers
facilities are subject to continuing regulatory review and periodic inspections. If previously
unknown problems with a product are discovered, such as adverse events of unanticipated severity or
frequency, or problems with the facility where the product is manufactured, the FDA may impose
restrictions on that product or us, including requiring withdrawal of the product from the market.
If we or a CMO of ours fail to comply with applicable regulatory requirements, a regulatory agency
may:
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issue warning letters or untitled letters; |
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impose civil or criminal penalties; |
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suspend or withdraw regulatory approval; |
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suspend or terminate any ongoing bioequivalence or clinical trials; |
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refuse to approve pending applications or supplements to approved applications; |
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impose restrictions or affirmative obligations on our or our CMOs operations, including
costly new manufacturing requirements; |
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close the facilities of a CMO; or |
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seize or detain products or require a product recall. |
Even if one or more of our product candidates receive regulatory approval in the U.S., we may never
receive approval or commercialize our products outside of the U.S., which would limit our ability
to realize the full market potential of our product candidates.
In order to market any products outside of the U.S., we must establish and comply with numerous and
varying regulatory requirements of other countries regarding safety and efficacy. Approval
procedures vary among countries and can involve additional product testing and validation and
additional administrative review periods. The time required to obtain approval in other countries
might differ from that required to obtain FDA approval. In particular, other countries may not have
a comparable regulatory as is available under Section 505(b)(2) of FDCA. Even if a
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country did have a comparable procedure, that country may require a more robust data package than
the pharmacokinetic data package that we intend to submit in support of NDAs for ANX-530 and
ANX-514. The regulatory approval process in other countries may include all of the risks detailed
above regarding FDA approval in the U.S., as well as other risks. Regulatory approval in one
country does not ensure regulatory approval in another, but a failure or delay in obtaining
regulatory approval in one country may have a negative effect on the regulatory process in others.
Failure to obtain regulatory approval in other countries or any delay or setback in obtaining such
approval could have the same adverse effects detailed above regarding FDA approval in the U.S. As
described above, such effects include the risks that our product candidates may not be approved for
all indications requested, which could limit the uses of our product candidates and have an adverse
effect on product sales, and that such approval may be subject to limitations on the indicated uses
for which the product may be marketed or require costly, post-marketing follow-up studies.
Our product candidates may cause undesirable side effects or have other properties that could delay
or prevent their regulatory approval or commercialization.
Undesirable side effects caused by our product candidates could interrupt, delay or halt
bioequivalence or clinical trials and could result in the denial of regulatory approval by the FDA
or other regulatory authorities for any or all indications, and in turn prevent us from
commercializing our product candidates and generating revenues from their sale.
In addition, if any of our product candidates receive marketing approval and we or others later
identify undesirable side effects caused by the product or the reference product:
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regulatory authorities may require the addition of labeling statements, such as a black
box warning or a contraindication; |
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regulatory authorities may withdraw their approval of the product; |
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we may be required to change the way the product is administered, conduct additional
clinical trials or change the labeling of the product; and |
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our reputation may suffer. |
Any of these events could prevent us from achieving or maintaining market acceptance of the
affected product or could substantially increase the costs and expenses of commercializing the
product, which in turn could delay or prevent us from generating significant revenues from its
sale.
Risks Related to Our Intellectual Property
Our success will depend on patents and other protection we obtain on our product candidates and
proprietary technology.
Our success will depend in part on our ability to:
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obtain and maintain patent protection with respect to our products; |
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prevent third parties from infringing upon our proprietary rights; |
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maintain trade secrets; |
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operate without infringing upon the patents and proprietary rights of others; and |
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obtain appropriate licenses to patents or proprietary rights held by third parties if
infringement would otherwise occur, both in the U.S. and in foreign countries. |
The patent and intellectual property positions of biopharmaceutical companies, including ours, are
uncertain and involve complex legal and factual questions. There is no guarantee that we have or
will develop or obtain the rights
to products or processes that are patentable, that patents will issue from any pending applications
or that claims
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allowed will be sufficient to protect the technology we develop or have developed or
that is used by us, our CMOs or our other service providers. In addition, we cannot be certain that
patents issued to us will not be challenged, invalidated, infringed or circumvented, including by
our competitors, or that the rights granted thereunder will provide competitive advantages to us.
Furthermore, patent applications in the U.S. are confidential for a period of time until they are
published, and publication of discoveries in scientific or patent literature typically lags actual
discoveries by several months. As a result, we cannot be certain that the inventors listed in any
patent or patent application owned by us were the first to conceive of the inventions covered by
such patents and patent applications or that such inventors were the first to file patent
applications for such inventions.
We may also rely on unpatented trade secrets and know-how and continuing technological innovation
to develop and maintain our competitive position, which we seek to protect, in part, by
confidentiality agreements with employees, consultants, collaborators and others. We also have
invention or patent assignment agreements with our employees and certain consultants. There can be
no assurance, however, that binding agreements will not be breached, that we will have adequate
remedies for any breach, or that trade secrets will not otherwise become known or be independently
discovered by competitors. In addition, there can be no assurance that inventions relevant to us
will not be developed by a person not bound by an invention assignment agreement with us.
Exclusivity for our emulsion-formulation product candidates may be limited because of the nature of
patent protection available for these candidates.
While the patent applications covering our emulsion-formulation product candidates, including
ANX-530 and ANX-514, include product claims, they cover only specific formulations of the
underlying chemical entity, or API, and not the API itself. Such product claims are not as strong
as claims covering new APIs, which are widely viewed as the strongest form of intellectual property
protection for pharmaceutical products, as they apply without regard to how the API is formulated
or the method in which the API is used. A competitor may modify our formulations and obtain
regulatory approval for products with the same API as our products. Such competitive products may
not infringe the patents we hold covering our specific formulations of the API.
If we are sued for infringing the proprietary rights of third parties, it will be costly and time
consuming, and an unfavorable outcome would have an adverse effect on our business.
Our commercial success depends on our ability and the ability of our CMOs and component suppliers
to develop, manufacture, market and sell our products and product candidates and use our
proprietary technologies without infringing the proprietary rights of third parties. Numerous U.S.
and foreign issued patents and pending patent applications, which are owned by third parties, exist
in the fields in which we are or may be developing products. As the biotechnology and
pharmaceutical industry expands and more patents are issued, the risk increases that our products
and product candidates may give rise to claims that our products or product candidates infringe the
rights of others. Because patent applications can take many years to publish and issue, there may
be currently pending applications, unknown to us, that may later result in issued patents that our
products, product candidates or technologies infringe, or that the process of manufacturing our
products or any of their respective component materials, or the component materials themselves,
infringe.
We or our CMOs or component material suppliers may be exposed to, or threatened with, future
litigation by third parties having patent or other intellectual property rights alleging that our
products, product candidates and/or technologies infringe their intellectual property rights or
that the process of manufacturing our products or any of their respective component materials, or
the component materials themselves, infringe their intellectual property rights. If one of these
patents was found to cover our products, product candidates, technologies or their uses, or any of
the underlying manufacturing processes or components, we could be required to pay damages and could
be unable to commercialize our products or use our technologies or methods unless we are able to
obtain a license to the patent or intellectual property right. A license may not be available to us
on acceptable terms, if at all. In addition, during litigation, a patent holder could obtain a
preliminary injunction or other equitable remedy that could prohibit us from making, using or
selling our products, technologies or methods.
In connection with any NDA that we file under Section 505(b)(2) of the FDCA, we may be required to
notify third
parties that we have certified to the FDA that any patents listed for the approved drug in the
FDAs Orange Book
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publication are invalid or will not be infringed by the manufacture, use or sale
of our drug. If the third-party files a patent infringement lawsuit against us within 45 days of
its receipt of notice of our certification, the FDA is automatically prevented from approving our
Section 505(b)(2) NDA until, subject to certain adjustments, the earliest of 30 months, expiration
of the patent, settlement of the lawsuit or a decision in the infringement case that is favorable
to us. Accordingly, we may invest significant time and expense in the development of our product
candidates, including ANX-514, only to be subject to significant delay and patent litigation before
our product candidates may be commercialized.
There is a substantial amount of litigation involving patent and other intellectual property rights
in the biotechnology and pharmaceutical industries generally. If a third party claims that we or
our CMOs or component material suppliers infringe its intellectual property rights, we may face a
number of issues, including, but not limited to:
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infringement and other intellectual property claims which, with or without merit, may be
expensive and time consuming to litigate and may divert our managements attention from our
core business; |
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substantial damages for infringement, including treble damages and attorneys fees,
which we may have to pay if a court decides that the product at issue infringes on or
violates the third partys rights; |
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a court prohibiting us from selling or licensing the product unless the third party
licenses its product rights to us, which it may not be required to do; |
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if a license is available from the third party, we may have to pay substantial
royalties, fees and/or grant cross-licenses to our products; and |
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redesigning our products or processes so they do not infringe, which may not be possible
or may require substantial funds and time. |
No assurance can be given that patents do not exist, have not been filed, or could not be filed or
issued, which contain claims covering our products, technology or methods or those of our CMOs or
component material suppliers. Because of the number of patents issued and patent applications filed
in our field, we believe there is a risk that third parties may allege they have patent rights
encompassing our products, technology or methods or those of our CMOs or component material
suppliers.
In addition, it may be necessary for us to enforce patents under which we have rights, or to
determine the scope, validity and unenforceability of other parties proprietary rights, which may
affect our rights. There can be no assurance that our patents would be held valid by a court or
administrative body or that an alleged infringer would be found to be infringing. The uncertainty
resulting from the mere institution and continuation of any technology-related litigation or
interference proceeding could have a material and adverse effect on us.
RISKS RELATED TO OUR INDUSTRY
We expect intense competition in the marketplace for all of our product candidates.
The industry in which we operate is highly competitive and rapidly changing. If successfully
developed and approved, all of our products will likely compete with existing and new products and
therapies and our competitors may succeed in commercializing products more rapidly or effectively
than us, which would have a material and adverse effect on our results of operations and financial
condition. In addition, there are numerous companies with a focus in oncology and/or that are
pursuing the development of pharmaceuticals that target the same diseases as are targeted by the
products being developed by us or that focus on reformulating currently approved drugs. We
anticipate that we will face intense and increasing competition in the future as new products enter
the market and advanced technologies become available. There is no assurance that existing products
or new products developed by competitors will not be more effective, or more effectively marketed
and sold, than those we may market and sell. Competitive products may render our products and
product candidates obsolete or noncompetitive.
For instance, numerous companies are focused on reformulating currently approved chemotherapeutic
agents. In particular, the taxanes, the class of drugs of which Taxotere is a member, have
experienced substantial commercial
success, in part as a result of their effectiveness in treating a wide variety of cancers, which
has generated significant
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interest in reformulating Taxotere and other taxanes. In addition to our
approach of emulsifying docetaxel, other companies are pursuing alternative delivery vehicles,
including the use of albumin nanoparticles, prodrugs, polyglutamates, analogs, co-solvents,
liposomes and microspheres. Many of these or similar approaches could be applied to vinorelbine.
Relative to our formulations, formulations based on one or more of these other methods may result
in greater efficacy or safety, provide better drug delivery to tumor sites or otherwise increase
benefits to patients and healthcare providers.
In particular, ANX-530 and ANX-514, if approved, may compete against Navelbine and Taxotere,
respectively, as well as their generic equivalents and other formulations of vinorelbine and
docetaxel. In addition to Navelbine, currently there are at least 6 generic versions of vinorelbine
on the market. In addition, there is an oral formulation of vinorelbine approved for use in the
European Union, or EU, against which we would compete if our emulsion formulation of vinorelbine
were approved for use in the EU. In the U.S., in May 2010 (but subject to any period of pediatric
exclusivity that may be granted in the future), patent protection ends for docetaxel and, in
November 2013 (but subject to any period of pediatric exclusivity that may be granted in the
future), patent protection ends for Taxotere. We are aware of two leading generics companies that
each have developed or acquired a formulation of docetaxel and have certified that, after May 2010,
their respective formulations of docetaxel will not infringe any unexpired Taxotere patents.
Under our current regulatory strategy, because we anticipate submitting Section 505(b)(2) NDAs with
only bioequivalence data, the ability to differentiate our products from competitor products will
be limited. Even if we believe our products demonstrate clinical or pharmacoeconomic benefits, we
may be unable to market our products based on these benefits. If our products fail to obtain unique
HCPCS codes, we may be required to price our products at levels that do not cover our costs to
manufacture, market and distribute the products or provide any profit, or to price our products at
levels at which they are not competitive.
Companies likely to have products that will compete with our product candidates have significantly
greater financial, technical and human resources and are better equipped to develop, manufacture,
market and distribute products. Many of these companies have extensive experience in preclinical
testing and clinical trials, obtaining FDA and other regulatory approvals and manufacturing and
marketing products and have products that have been approved or are in late-stage development and
operate large, well-funded research and development programs.
Smaller companies may also prove to be significant competitors, particularly through collaborative
arrangements with large pharmaceutical and biotechnology companies. Furthermore, academic
institutions, government agencies and other public and private research organizations are becoming
increasingly aware of the commercial value of their inventions and are actively seeking to
commercialize the technology they have developed.
We are subject to uncertainty relating to healthcare reform measures and reimbursement policies
that, if not favorable to our products, could hinder or prevent our products commercial success.
Our ability to commercialize our products successfully will depend in part on the extent to which
reimbursement for the costs of such products and related treatments will be available from
government health administration authorities, private health insurers and other third-party payors.
Significant uncertainty exists as to the reimbursement status of newly approved medical products.
The continuing efforts of the government, insurance companies, managed care organizations and other
payors of healthcare services to contain or reduce costs of healthcare may adversely effect:
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our ability to set a price we believe is fair for our products; |
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our ability to generate revenues or achieve or maintain profitability; |
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the future revenues and profitability of our potential customers, suppliers and
collaborators; and |
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the availability to us of capital. |
If we are successful in obtaining FDA approval for ANX-530, we will compete with Navelbine and
several generic versions of Navelbine. Our ability to commercialize ANX-530 will depend in part on
the extent to which
governmental authorities, private health insurers and other organizations establish appropriate
coverage and
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reimbursement levels for the cost of our products and related treatments. These payors
are increasingly attempting to contain healthcare costs by limiting both coverage and the level of
reimbursement, particularly for new therapeutic products or if there is a perception that the
target indication of the new product is well-served by existing treatments. Accordingly, even if
coverage and reimbursement are provided, market acceptance of our products would be adversely
affected if the amount of coverage and/or reimbursement available for the use of our products
proved to be unprofitable for healthcare providers or less profitable than alternative treatments.
There have been federal and state proposals to subject the pricing of healthcare goods and services
to government control and to make other changes to the U.S. healthcare system. While we cannot
predict the outcome of current or future legislation, we anticipate, particularly given President
Obamas focus on healthcare reform, that Congress and state legislatures will introduce initiatives
directed at lowering the total cost of healthcare. In addition, in certain foreign markets, the
pricing of drugs is subject to government control and reimbursement may in some cases be
unavailable or insufficient. It is uncertain if future legislative proposals, whether domestic or
abroad, will be adopted that might affect our product candidates or what actions federal, state, or
private payors for healthcare treatment and services may take in response to any such healthcare
reform proposals or legislation. Any such healthcare reforms could have a material and adverse
effect on the marketability of any products for which we ultimately receive FDA or other regulatory
agency approval.
We face potential product liability exposure and, if successful claims are brought against us, we
may incur substantial liability for a product or product candidate and may have to limit its
commercialization. In the future, we anticipate that we will need to obtain additional or increased
product liability insurance coverage and it is uncertain that such increased or additional
insurance coverage can be obtained on commercially reasonable terms.
Our business (in particular, the use of our product candidates in clinical trials and the sale of
our products for which we obtain marketing approval) will expose us to product liability risks.
Product liability claims might be brought against us by patients, health care providers,
pharmaceutical companies or others selling our products. If we cannot successfully defend ourselves
against these claims, we will incur substantial liabilities. Regardless of merit or eventual
outcome, liability claims may result in:
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decreased demand for our products or product candidates; |
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impairment of our business reputation; |
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withdrawal of bioequivalence or clinical trial participants; |
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costs of related litigation; |
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substantial monetary awards to patients or other claimants; |
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loss of revenues; and |
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the inability to commercialize our products and product candidates. |
We maintain limited product liability insurance for our bioequivalence and clinical trials, but our
insurance coverage may not reimburse us or may not be sufficient to reimburse us for any expenses
or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and, in
the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient
amounts to protect us against losses.
We intend to expand our insurance coverage to include the sale of commercial products if we obtain
marketing approval of any of our product candidates, but we may be unable to obtain product
liability insurance on commercially acceptable terms or may not be able to maintain such insurance
at a reasonable cost or in sufficient amounts to protect us against potential losses. Large
judgments have been awarded in class action lawsuits based on drugs that had unanticipated side
effects. A successful product liability claim or series of claims brought against us could cause
our stock price to fall and, if judgments exceed our insurance coverage, could decrease our cash
and adversely affect our business.
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RISKS RELATED TO OUR COMMON STOCK
Our common stock may be delisted from the NYSE Amex if we fail to maintain compliance with
continued listing criteria.
Our common stock currently trades on the NYSE Amex. NYSE Amex will normally consider suspending
dealings in, or removing from the list, securities of an issuer which has stockholders equity of
less than $6.0 million if such issuer has sustained losses from continuing operations and/or net
losses in its five most recent fiscal years. As of March 31, 2009, our stockholders equity was
approximately $3.0 million and we have incurred annual net losses since inception. In addition,
NYSE Amex will normally consider suspending dealings in, or removing from the list, securities
selling for a substantial period of time at a low price per share if the issuer fails to effect a
reverse split of such stock within a reasonable time after being notified that the NYSE Amex deems
such action to be appropriate under the circumstances. While the NYSE Amex does not provide bright
line minimum share price standards for continued listing, we believe that a price less than $1.00
per share for a substantial period of time will be investigated.
Since October 1, 2007 through May 20, 2009, the closing price of a share of our common stock has been less than $1.00.
If we are unable to comply with the NYSE Amexs continued listing standards, including its
stockholders equity and minimum trading price requirements, our common stock may be suspended from
trading on and/or delisted from the NYSE Amex. The delisting of our common stock from the NYSE Amex
is likely to reduce the trading volume and liquidity in our common stock and may lead to further
decreases in the trading price of our common stock. The delisting of our common stock may also
materially impair our stockholders ability to buy and sell shares of our common stock. In
addition, the delisting of our common stock could significantly impair our ability to raise
capital, which is critical to the continuation of our business.
If our common stock were delisted and determined to be a penny stock, a broker-dealer may find it
more difficult to trade our common stock and an investor may find it more difficult to acquire or
dispose of our common stock in the secondary market.
In addition, if our common stock were removed from listing with the NYSE Amex, it may be subject to
the so-called penny stock rules. The SEC has adopted regulations that define a penny stock to
be any equity security that has a market price per share of less than $5.00, subject to certain
exceptions, such as any securities listed on a national securities exchange. For any transaction
involving a penny stock, unless exempt, the rules impose additional sales practice requirements
on broker-dealers, subject to certain exceptions. If our common stock were delisted and determined
to be a penny stock, a broker-dealer may find it more difficult to trade our common stock and an
investor may find it more difficult to acquire or dispose of our common stock on the secondary
market. Investors in penny stocks should be prepared for the possibility that they may lose their
whole investment.
The market price of our common stock has been and is likely to continue to be highly volatile.
On October 1, 2007, the market price for our common stock dropped almost 80% following our
announcement of the results of our phase 2b clinical trial of CoFactor for the first-line treatment
of metastatic colorectal cancer. In addition, the market price for our common stock has
historically been highly volatile, and the market for our common stock has from time to time
experienced significant price and volume fluctuations that are unrelated to our operating
performance. The market price of our common stock may fluctuate significantly in response to a
number of factors, including:
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the level of our financial resources and ability to continue as a going concern; |
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announcements of entry into or consummation of a financing or strategic transaction; |
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any decision by us to liquidate our assets and wind-up operations; |
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changes in the regulatory status of our product candidates, including results of our
bioequivalence and clinical trials and other research and development programs; |
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FDA or international regulatory actions and regulatory developments in the U.S. and
foreign countries; |
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announcements of new products or technologies, commercial relationships or other events
(including bioequivalence and clinical trial results and regulatory events and actions) by
us or our competitors; |
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market conditions in the pharmaceutical, biopharmaceutical and biotechnology sectors; |
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developments concerning intellectual property rights generally or those of us or our
competitors; |
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litigation or public concern about the safety of our products or product candidates; |
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changes in securities analysts estimates of our financial performance or deviations in
our business and the trading price of our common stock from the estimates of securities
analysts; |
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events affecting any future collaborations, commercial agreements and grants; |
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fluctuations in stock market prices and trading volumes of similar companies; |
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sales of large blocks of our common stock, including sales by our executive officers,
directors and significant stockholders or pursuant to shelf or resale registration
statements that register shares of our common stock that may be sold by certain of our
current or future stockholders; |
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discussion of us or our stock price by the financial and scientific press and in online
investor communities; |
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additions or departures of key personnel; and |
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changes in third party reimbursement policies. |
As evidenced by the October 1, 2007 decline, the realization of any of the foregoing could have a
dramatic and adverse impact on the market price of our common stock. In addition, class action
litigation has often been instituted against companies whose securities have experienced periods of
volatility in market price. Moreover, regulatory entities often undertake investigations of
investor transactions in securities that experience volatility following an announcement of a
significant event or condition. Any such litigation brought against us or investigation involving
our investors could result in substantial costs and a diversion of managements attention and
resources, which could hurt our business, operating results and financial condition.
Sales of substantial amounts of our common stock or the perception that such sales may occur could
cause the market price of our common stock to drop significantly, even if our business is
performing well.
The market price of our common stock could decline as a result of sales by, or the perceived
possibility of sales by, us or our existing stockholders of shares of our common stock. These sales
might also make it more difficult for us to sell equity securities at a time and price that we deem
appropriate. In addition, this shelf registration statement and our resale registration statements
register a significant number of shares of our common stock, and securities convertible into our
common stock, that may be sold by us or certain of our stockholders, which may increase the
likelihood of sales by, or the perception of an increased likelihood of sales by, us or our
existing stockholders of shares of our common stock.
Anti-takeover provisions in our charter documents and under Delaware law may make an acquisition of
us, which may be beneficial to our stockholders, more difficult, which could depress our stock
price. Alternatively, prohibitions on anti-takeover provisions in our charter documents may
restrict us from acting in the best interests of our stockholders.
We are incorporated in Delaware. Certain anti-takeover provisions of Delaware law and our charter
documents as currently in effect may make a change in control of our company more difficult, even
if a change in control would be beneficial to our stockholders. Our bylaws limit who may call a
special meeting of stockholders and establish advance notice requirements for nomination of
individuals for election to our board of directors or for proposing matters that can be acted upon
at stockholders meetings. Delaware law also prohibits corporations from engaging in a business
combination with any holders of 15% or more of their capital stock until the holder has held the
stock for three years unless, among other possibilities, the board of directors approves the
transaction. Our board of directors
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may use these provisions to prevent changes in the management and control of our company. Also,
under applicable Delaware law, our board of directors may adopt additional anti-takeover measures
in the future. In addition, provisions of certain compensatory contracts with our management, such
as equity award agreements and retention and incentive agreements with our executive officers, may
have an anti-takeover effect by resulting in accelerated vesting of outstanding equity securities
held by these officers and cash payments upon termination without cause or involuntary termination
following a change in control.
In connection with a July 2005 private placement, we agreed with the investors in that transaction
that we would not implement certain additional measures that would have an anti-takeover effect. As
a result, under our amended and restated certificate of incorporation, we are prohibited from
dividing our board of directors into classes and adopting or approving any rights plan, poison
pill or other similar plan or device. A classified board of directors could serve to protect our
stockholders against unfair treatment in takeover situations, by making it more difficult and
time-consuming for a potential acquirer to take control of our board of directors. A company may
also adopt a classified board of directors to ensure stability in the board of directors and
thereby improve long-term planning, which may benefit stockholders. A poison pill or similar plan
or device may encourage potential acquirers to discuss their intentions with the board of directors
of a company and avoid the time, expense and distraction of a hostile take-over. Any benefit to us
and our stockholders from instituting a classified board or adopting or approving a poison pill
or similar plan or device in these and other circumstances is unavailable.
Because we do not expect to pay dividends in the foreseeable future, you must rely on stock
appreciation for any return on your investment.
We have paid no cash dividends on any of our capital stock to date, and we currently intend to
retain our future earnings, if any, to fund the development and growth of our business. As a
result, we do not expect to pay any cash dividends in the foreseeable future, and payment of cash
dividends, if any, will also depend on our financial condition, results of operations, capital
requirements and other factors and will be at the discretion of our board of directors.
Furthermore, we are subject to various laws and regulations that may restrict our ability to pay
dividends and we may in the future become subject to contractual restrictions on, or prohibitions
against, the payment of dividends. Accordingly, the success of your investment in our capital stock
will likely depend entirely upon any future appreciation and there is no guarantee that our capital
stock will appreciate in value.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate herein by reference, includes
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical fact, are statements that could be deemed forward-looking statements,
including, but not limited to, statements regarding business strategy, expectations and plans, our
objectives for future operations, including product development, and our future financial position.
When used in this report, the words believe, may, could, will, estimate, continue,
anticipate, intend, expect, indicate and similar expressions are intended to identify
forward-looking statements.
We base these forward-looking statements on our current expectations and projections about
future events and trends that we believe may affect our financial condition, results of operations,
business strategy, short-term and long-term business operations and objectives, and financial
needs, including our ability to consummate a strategic transaction or otherwise satisfy our
immediate need for additional capital. These forward-looking statements are subject to risks and
uncertainties that could cause our actual results to differ materially from those reflected in the
forward-looking statements. Factors that could cause or contribute to such differences include, but
are not limited to: the risk that we will liquidate our assets, entirely wind-down our operations
and dissolve; the risk that, based on our current working capital, and the estimated costs
associated with seeking approval for and implementing a plan of liquidation, our remaining capital
available for distribution to our stockholders, if any, will be insignificant; the risk that we
will be unable to consummate a strategic or partnering transaction or otherwise raise sufficient
capital on a timely basis, or at all, to continue as a going concern, including as a result of
negative perceptions of the data from our bioequivalence study of ANX-514; the risk that our recent
cost-containment measures, including the discontinuation of substantially all of our development
activities and fundamental business operations and reduction in force to a small, select number of
full-time employees, will negatively impact our ability to consummate a strategic transaction; the
potential for regulatory authorities to require additional preclinical work and/or clinical
activities to support regulatory filings, including prior to the submission or the approval of a
New Drug Application for ANX-530 and ANX-514, and the impact of increased uncertainty regarding the
need for such activities on strategic, partnering and capital-raising transactions; the risk that
our significantly reduced workforce and leadership by officers who do not have substantial previous
experience in executive leadership roles will negatively impact our ability to attract a strategic
or other partner, raise capital or maintain effective disclosure controls and procedures or
internal control over financial reporting; the risk the FDA will determine that ANX-530 and
Navelbine and/or ANX-514 and Taxotere are not bioequivalent, including as a result of performing
pharmacokinetic equivalence analysis based on a patient population other than the population on
which we based our analysis or determining that increased docetaxel blood-levels during and
immediately following infusion are clinically relevant; the risk of investigator bias in reporting
adverse events as a result of the open-label nature of the ANX-530 bioequivalence study, including
bias that increased the reporting of adverse events associated with Navelbine and/or that decreased
the reporting of adverse events associated with ANX-530; difficulties or delays in manufacturing,
obtaining regulatory approval for and marketing ANX-530 and ANX-514, including validating
commercial manufacturers and suppliers and the potential for automatic injunctions regarding FDA
approval of ANX-514; the risk that the performance of third parties on whom we rely to conduct our
studies or evaluate the data, including clinical investigators, expert data monitoring committees,
contract laboratories and contract research organizations, may be substandard, or they may fail to
perform as expected; the risk that our common stock will be delisted by the NYSE Amex (formerly,
the American Stock Exchange), including as a result of failing to maintain sufficient stockholders
equity or a sufficient stock price; the risk that we are unable to file timely required reports
with the SEC; the risk that we will trigger a maint
enance failure under that certain Rights
Agreement, dated July 27, 2005, as amended, and be required to pay liquidated damages, including as
a result of losing our eligibility to use Form S-3 if our common stock is delisted from the NYSE
Amex or we are not timely in our filings with the SEC; and other risks and uncertainties discussed
under the heading Risk Factors in this prospectus and in other reports and documents we file with
the SEC.
Any forward-looking statement speaks only as of the date on which it is made and, except as
required by law, we do not intend to update any forward-looking statements publicly to reflect
events or circumstances after the date on which such statement is made or to update the reasons
actual results could differ materially from those anticipated in the forward-looking statements,
even if new information becomes available in the future. You should not place undue reliance on
any forward-looking statement.
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USE OF PROCEEDS
Except as described in any prospectus supplement and any free writing prospectus in connection
with a specific offering, we currently intend to use the net proceeds from the sale of the
securities offered under this prospectus for general corporate purposes, including working capital.
We may also use the net proceeds to repay any debts and/or invest in or acquire complementary
businesses, products or technologies, although we have no current commitments or agreements with
respect to any such investments or acquisitions as of the date of this prospectus. We have not
determined the amount of net proceeds to be used specifically for the foregoing purposes. As a
result, our management will have broad discretion in the allocation of the net proceeds and
investors will be relying on the judgment of our management regarding the application of the
proceeds of any sale of the securities. Pending use of the net proceeds, we intend to invest the
proceeds in short-term, investment-grade, interest-bearing instruments.
When we offer a particular series of securities, we will describe the intended use of the net
proceeds from that offering in a prospectus supplement. The actual amount of net proceeds we spend
on a particular use will depend on many factors, including, our future capital expenditures, the
amount of cash required by our operations, and our future revenue growth, if any. Therefore, we
will retain broad discretion in the use of the net proceeds.
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DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
The following description of our common stock and preferred stock, together with any
additional information we include in any applicable prospectus supplement or any related free
writing prospectus, summarizes the material terms and provisions of our common stock and the
preferred stock that we may offer under this prospectus. While the terms we have summarized below
will apply generally to any future common stock or preferred stock that we may offer, we will
describe the particular terms of any class or series of these securities in more detail in the
applicable prospectus supplement. For the complete terms of our common stock and preferred stock,
please refer to our amended and restated certificate of incorporation and our amended and restated
bylaws that are incorporated by reference into the registration statement of which this prospectus
is a part or may be incorporated by reference in this prospectus or any applicable prospectus
supplement. The terms of these securities may also be affected by Delaware General Corporation
Law. The summary below and that contained in any applicable prospectus supplement or any related
free writing prospectus are qualified in their entirety by reference to our amended and restated
certificate of incorporation and our amended and restated amended and restated bylaws.
Common Stock
We are authorized to issue 200,000,000 shares of common stock, par value $0.001 per share, of
which 90,252,572 shares were issued and outstanding as of May 20, 2009. Additional shares of
authorized common stock may be issued, as authorized by our board of directors from time to time,
without stockholder approval, except as may be required by applicable securities exchange
requirements. The holders of common stock possess exclusive voting rights in us, except to the
extent our board of directors specifies voting power with respect to any other class of securities
issued in the future. Each holder of our common stock is entitled to one vote for each share held
of record on each matter submitted to a vote of stockholders, including the election of directors.
Stockholders do not have any right to cumulate votes in the election of directors.
Subject to preferences that may be granted to the holders of preferred stock, each holder of
our common stock is entitled to share ratably in distributions to stockholders and to receive
ratably such dividends as may be declared by our board of directors out of funds legally available
therefor. In the event of our liquidation, dissolution or winding up, the holders of our common
stock will be entitled to receive, after payment of all of our debts and liabilities and of all
sums to which holders of any preferred stock may be entitled, the distribution of any of our
remaining assets. Holders of our common stock have no conversion, exchange, sinking fund,
redemption or appraisal rights (other than such as may be determined by our board of directors in
its sole discretion) and have no preemptive rights to subscribe for any of our securities.
All of the outstanding shares of our common stock are, and the shares of common stock issued
upon the conversion of any securities convertible into our common stock will be, fully paid and
non-assessable. The shares of common stock offered by this prospectus or upon the conversion of
any preferred stock or debt securities or exercise of any warrants offered pursuant to this
prospectus, when issued and paid for, will also be, fully paid and non-assessable.
Securities Exchange Listing
Our common stock is listed on the NYSE Amex under the symbol ANX.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock Transfer & Trust
Company.
Preferred Stock
We are authorized to issue 1,000,000 shares of preferred stock, par value $0.001 per share,
none of which are issued and outstanding as of the date of this prospectus. Our board of directors
is authorized to classify or reclassify any unissued portion of our authorized shares of preferred
stock to provide for the issuance of shares of other classes or series, including preferred stock
in one or more series. We may issue preferred stock from time to time in one or more class or
series, with the exact terms of each class or series established by our board of directors. Our
board of directors may issue preferred stock with voting and other rights that could adversely
affect the voting
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power of the holders of our common stock without seeking stockholder approval. Additionally,
the issuance of preferred stock may have the effect of decreasing the market price of the common
stock and may adversely affect the voting power of holders of common stock and reduce the
likelihood that common stockholders will receive dividend payments and payments upon liquidation.
The rights, preferences, privileges and restrictions of the preferred stock of each series
will be fixed by the certificate of designation relating to each series. We will incorporate by
reference into the registration statement of which this prospectus is a part the form of any
certificate of designation that describes the terms of the series of preferred stock we are
offering before the issuance of the related series of preferred stock. The applicable prospectus
supplement will specify the terms of the series of preferred stock we are offering, including, but
not limited to:
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the distinctive designation and the maximum number of shares in the series; |
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the number of shares we are offering and purchase price per share; |
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the liquidation preference, if any; |
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the terms on which dividends, if any, will be paid; |
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the voting rights, if any, on the shares of the series; |
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the terms and conditions, if any, on which the shares of the series shall be convertible
into, or exchangeable for, shares of any other class or classes of capital stock; |
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the terms on which the shares may be redeemed, if at all; |
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any listing of the preferred stock on any securities exchange or market; |
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a discussion of any material or special United States federal income tax considerations
applicable to the preferred stock; and |
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any or all other preferences, rights, restrictions, including restrictions on
transferability, and qualifications of shares of the series. |
The issuance of preferred stock may delay, deter or prevent a change in control.
The description of preferred stock above and the description of the terms of a particular
series of preferred stock in any applicable prospectus supplement are not complete. You should
refer to the applicable certificate of designation for complete information.
The General Corporation Law of the State of Delaware, the state of our incorporation, provides
that the holders of preferred stock will have the right to vote separately as a class on any
proposal involving fundamental changes in the rights of holders of that preferred stock. This right
is in addition to any voting rights that may be provided for in the applicable certificate of
designation.
Anti-Takeover Effects of Provisions of our Charter Documents and Delaware Law
The following is a summary of certain provisions of Delaware law, our amended and restated
certificate of incorporation and our amended and restated bylaws. This summary does not purport to
be complete and is qualified in its entirety by reference to the corporate law of Delaware and our
amended and restated certificate of incorporation and amended and restated bylaws.
Certificate of Incorporation and Bylaws
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Preferred Stock. Under our amended and restated certificate of incorporation, our board of
directors has the power to authorize the issuance of up to 1,000,000 shares of preferred stock, all
of which are currently undesignated, and to determine the price, rights, preferences, privileges
and restrictions, including voting rights, of those shares without further vote or action by our
stockholders. The issuance of preferred stock may:
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delay, defer or prevent a change in control; |
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discourage bids for our common stock at a premium over the market price of our
common stock; |
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adversely affect the voting and other rights of the holders of our common stock; and |
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discourage acquisition proposals or tender offers for our shares and, as a
consequence, inhibit fluctuations in the market price of our shares that could result
from actual or rumored takeover attempts. |
Advance Notice Requirement. Stockholder nominations of individuals for election to our board
of directors and stockholder proposals of other matters to be brought before an annual meeting of
our stockholders must comply with the advance notice procedures set forth in our amended and
restated bylaws. Generally, to be timely, such notice must be received at our principal executive
offices no later than the date specified in our proxy statement released to stockholders in
connection with the preceding years annual meeting of stockholders, which date shall be not
earlier than the 120th day, nor later than the close of business on the 90th day, prior to the
first anniversary of the date of the preceding years annual meeting of stockholders.
Special Meeting Requirements. Our amended and restated bylaws provide that special meetings
of our stockholders may only be called at the request of our board of directors, president (unless
there is a chief executive officer who is not the president, in which case a special meeting may be
called at any time by the chief executive officer and not the president) or chair of the board of
directors. Only such business shall be considered at a special meeting as shall have been stated
in the notice for such meeting.
No Cumulative Voting. Our amended and restated certificate of incorporation does not include
a provision for cumulative voting for directors.
Indemnification. Our amended and restated certificate of incorporation and our bylaws, as
amended, provide that we will indemnify our officers and directors against losses as they incur in
investigations and legal proceedings resulting from their services to us, which may include service
in connection with takeover defense measures.
Delaware Anti-Takeover Statute.
We are subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law.
In general, Section 203 prohibits, with some exceptions, a publicly held Delaware corporation from
engaging in a business combination with any interested stockholder for a period of three years
following the date that stockholder became an interested stockholder, unless:
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prior to that date, the board of directors of the corporation approved either the
business combination or the transaction that resulted in the stockholder becoming an
interested stockholder; |
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upon consummation of the transaction that resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares of voting stock outstanding (but not
the voting stock owned by the interested stockholder) those shares owned by persons who
are directors and officers and by excluding employee stock plans in which employee
participants do not have the right to determine whether shares held subject to the plan
will be tendered in a tender or exchange offer; or |
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on or subsequent to that date, the business combination is approved by the board of
directors of the corporation and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least 66-2/3%
of the outstanding voting stock that is not owned by the interested stockholder. |
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Section 203 defines business combination to include any of the following:
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any merger or consolidation involving the corporation and the interested
stockholder; |
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any sale, transfer, pledge or other disposition of 10% or more of the assets of the
corporation involving the interested stockholder; |
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subject to certain exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the interested
stockholder; |
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any transaction involving the corporation that has the effect of increasing the
proportionate share of the stock of any class or series of the corporation beneficially
owned by the interested stockholder; or |
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the receipt by the interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203 defines an interested stockholder as any person who, together with
the persons affiliates and associates, beneficially owns, or within three years prior to the
determination of interested stockholder status did beneficially own, 15% or more of the outstanding
voting stock of the corporation.
The above provisions may deter a hostile takeover or delay a change in control of management
or us.
DESCRIPTION OF DEBT SECURITIES
General
The debt securities that we may issue may constitute debentures, notes, bonds or other
evidences of indebtedness of ADVENTRX Pharmaceuticals, Inc., to be issued in one or more series,
which may include senior debt securities, subordinated debt securities and senior subordinated debt
securities. The particular terms of any series of debt securities we may offer, including the
extent to which the general terms set forth below may be applicable to a particular series, will be
described in a prospectus supplement relating to such series.
Debt securities that we may issue may be issued under a senior indenture between us and a
trustee, or a subordinated indenture between us and a trustee (collectively, the indenture). We
have filed forms of the indentures as exhibits to the registration statement of which this
prospectus is a part. If we enter into any revised indenture or indenture supplement, we will file
a copy of that supplement with the SEC.
THE FOLLOWING DESCRIPTION IS A SUMMARY OF THE MATERIAL PROVISIONS OF THE INDENTURE. IT DOES
NOT RESTATE THE INDENTURE IN ITS ENTIRETY. THE INDENTURE IS GOVERNED BY THE TRUST INDENTURE ACT OF
1939. THE TERMS OF THE DEBT SECURITIES INCLUDE THOSE STATED IN THE INDENTURE AND THOSE MADE PART
OF THE INDENTURE BY REFERENCE TO THE TRUST INDENTURE ACT. WE URGE YOU TO READ THE INDENTURE BECAUSE
IT, AND NOT THIS DESCRIPTION, DEFINES YOUR RIGHTS AS A HOLDER OF THE DEBT SECURITIES.
The indenture contains no covenant or provision which affords debt holders protection in the
event of a highly leveraged transaction.
Information You Will Find in the Prospectus Supplement
The indenture provides that we may issue debt securities from time to time in one or more
series by resolution of our board of directors or by means of a supplemental indenture, and that we
may denominate the debt securities and make them payable in foreign currencies. The indenture does
not limit the aggregate principal amount of debt securities that can be issued thereunder. The
prospectus supplement for a series of debt securities will provide information relating to the
terms of the series of debt securities being offered, which may include:
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the title and denominations of the debt securities of the series; |
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any limit on the aggregate principal amount of the debt securities of the series;
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the date or dates on which the principal and premium, if any, with
respect to the debt securities of the series are payable or the
method of determination thereof; |
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the rate or rates, which may be fixed or variable, at which the
debt securities of the series shall bear interest, if any, or the
method of calculating and/or resetting such rate or rates of
interest; |
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the dates from which such interest shall accrue or the method by
which such dates shall be determined and the basis upon which
interest shall be calculated; |
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the interest payment dates for the series of debt securities or
the method by which such dates will be determined, the terms of
any deferral of interest and any right of ours to extend the
interest payments periods; |
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the place or places where the principal and interest on the series of debt securities will be payable; |
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the terms and conditions upon which debt securities of the series
may be redeemed, in whole or in part, at our option or otherwise; |
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our obligation, if any, to redeem, purchase, or repay debt
securities of the series pursuant to any sinking fund or other
specified event or at the option of the holders and the terms of
any such redemption, purchase, or repayment; |
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the terms, if any, upon which the debt securities of the series
may be convertible into or exchanged for other securities,
including, among other things, the initial conversion or exchange
price or rate and the conversion or exchange period; |
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if the amount of principal, premium, if any, or interest with
respect to the debt securities of the series may be determined
with reference to an index or formula, the manner in which such
amounts will be determined; |
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if any payments on the debt securities of the series are to be
made in a currency or currencies (or by reference to an index or
formula) other than that in which such securities are denominated
or designated to be payable, the currency or currencies (or index
or formula) in which such payments are to be made and the terms
and conditions of such payments; |
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any changes or additions to the provisions of the indenture
dealing with defeasance, including any additional covenants that
may be subject to our covenant defeasance option; |
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the currency or currencies in which payment of the principal and
premium, if any, and interest with respect to debt securities of
the series will be payable, or in which the debt securities of the
series shall be denominated, and the particular provisions
applicable thereto in accordance with the indenture; |
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the portion of the principal amount of debt securities of the
series which will be payable upon declaration of acceleration or
provable in bankruptcy or the method by which such portion or
amount shall be determined; |
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whether the debt securities of the series will be secured or guaranteed and, if so, on what terms; |
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any addition to or change in the events of default with respect to the debt securities of the series; |
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the identity of any trustees, authenticating or paying agents, transfer agents or registrars; |
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the applicability of, and any addition to or change in, the
covenants currently set forth in the indenture;
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the subordination, if any, of the debt securities of the series and terms of the subordination; |
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any other terms of the debt securities of the series; and |
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whether securities of the series shall be issuable as registered
securities or bearer securities (with or without interest
coupons), and any restrictions applicable to the offering, sale or
delivery of such bearer securities and the terms upon which such
bearer securities of a series may be exchanged for registered
securities, and vice versa. |
Holders of debt securities may present debt securities for exchange in the manner, at the
places, and subject to the restrictions set forth in the debt securities, the indenture, and the
prospectus supplement. We will provide these services without charge, other than any tax or other
governmental charge payable in connection therewith, but subject to the limitations provided in the
indenture, any board resolution establishing such debt securities and any applicable indenture
supplement. Debt securities in bearer form and the coupons, if any, appertaining thereto will be
transferable by delivery.
Senior Debt
We may issue senior debt securities under the indenture and any coupons that will constitute
part of our senior debt. Unless otherwise set forth in the applicable indenture supplement or in
any board resolution establishing such debt securities and described in a prospectus supplement,
the senior debt securities will be senior unsecured obligations, ranking equally with all of our
existing and future senior unsecured debt. The senior debt securities will be senior to all of our
subordinated debt and junior to any secured debt we may incur as to the assets securing such debt.
Subordinated Debt
We may issue subordinated debt securities under the indenture and any coupons that will
constitute part of such subordinated debt. These subordinated debt securities will be subordinate
and junior in right of payment, to the extent and in the manner set forth in the indenture and any
applicable indenture supplement, to all of our senior indebtedness.
If this prospectus is being delivered in connection with a series of subordinated debt
securities, the accompanying prospectus supplement or the information incorporated by reference
will set forth the approximate amount of senior indebtedness, if any, outstanding as of the end of
our most recent fiscal quarter.
Senior Subordinated Debt
We may issue senior subordinated debt securities under the indenture and any coupons that will
constitute part of our senior subordinated debt. These senior subordinated debt securities will be,
to the extent and in the manner set forth in the indenture, subordinate and junior in right of
payment to all of our senior indebtedness and senior to our other subordinated debt. See the
discussions above under Senior Debt and Subordinated Debt for a more detailed explanation
of our senior and subordinated indebtedness.
Interest Rate
Debt securities that bear interest will do so at a fixed rate or a floating rate. We may
sell, at a discount below the stated principal amount, any debt securities which bear no interest
or which bear interest at a rate that at the time of issuance is below the prevailing market rate.
The relevant prospectus supplement will describe the special United States federal income tax
considerations applicable to:
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any discounted debt securities; and |
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any debt securities issued at par which are treated as having been
issued at a discount for United States federal income tax
purposes. |
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Registered Global Securities
We may issue registered debt securities of a series in the form of one or more fully
registered global securities. We will deposit the registered global security with a depositary or
with a nominee for a depositary identified in the prospectus supplement relating to such series.
The global security or global securities will represent and will be in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of outstanding registered debt
securities of the series to be represented by the registered global security or securities. Unless
it is exchanged in whole or in part for debt securities in definitive registered form, a registered
global security may not be transferred, except as a whole in three cases:
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by the depositary for the registered global security to a nominee of the depositary; |
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by a nominee of the depositary to the depositary or another nominee of the depositary; and |
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by the depositary or any nominee to a successor of the depositary or a nominee of the successor. |
The prospectus supplement relating to a series of debt securities will describe the specific
terms of the depositary arrangement concerning any portion of that series of debt securities to be
represented by a registered global security. We anticipate that the following provisions will
generally apply to all depositary arrangements.
Upon the issuance of a registered global security, the depositary will credit, on its
book-entry registration and transfer system, the principal amounts of the debt securities
represented by the registered global security to the accounts of persons that have accounts with
the depositary. These persons are referred to as participants. Any underwriters, agents or
debtors participating in the distribution of debt securities represented by the registered global
security will designate the accounts to be credited. Only participants or persons that hold
interests through participants will be able to beneficially own interests in a registered global
security. The depositary for a global security will maintain records of beneficial ownership
interests in a registered global security for participants. Participants or persons that hold
through participants will maintain records of beneficial ownership interests in a global security
for persons other than participants. These records will be the only means to transfer beneficial
ownership in a registered global security.
The laws of some states may require that specified purchasers of securities take physical
delivery of the securities in definitive form. These laws may limit the ability of those persons to
own, transfer or pledge beneficial interests in global securities.
So long as the depositary, or its nominee, is the registered owner of a registered global
security, the depositary or its nominee will be considered the sole owner or holder of the debt
securities represented by the registered global security for all purposes under the indenture.
Except as set forth below, owners of beneficial interests in a registered global security:
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may not have the debt securities represented by a registered
global security registered in their names; |
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will not receive or be entitled to receive physical delivery of
debt securities represented by a registered global security in
definitive form; and |
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will not be considered the owners or holders of debt securities
represented by a registered global security under the indenture. |
Accordingly, each person owning a beneficial interest in a registered global security must
rely on the procedures of the depositary for the registered global security and, if the person is
not a participant, on the procedures of the participant through which the person owns its
interests, to exercise any rights of a holder under the indenture applicable to the registered
global security.
We understand that, under existing industry practices, if we request any action of holders, or
if an owner of a beneficial interest in a registered global security desires to give or take any
action which a holder is entitled to give or take under the indenture, the depositary for the
registered global security would authorize the participants holding
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the relevant beneficial interests to give or take the action, and the participants would
authorize beneficial owners owning through the participants to give or take the action or would
otherwise act upon the instructions of beneficial owners holding through them.
Payment of Interest on and Principal of Registered Global Securities
We will make principal, premium, if any, and interest payments on debt securities represented
by a registered global security registered in the name of a depositary or its nominee to the
depositary or its nominee as the registered owner of the registered global security. None of
ADVENTRX, the trustee, or any paying agent for debt securities represented by a registered global
security will have any responsibility or liability for:
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any aspect of the records relating to, or payments made on account
of, beneficial ownership interests in such registered global
security; |
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maintaining, supervising, or reviewing any records relating to beneficial ownership interests; |
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the payments to beneficial owners of the global security of
amounts paid to the depositary or its nominee; or |
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any other matter relating to the actions and practices of the
depositary, its nominee or any of its participants. |
We expect that the depositary, upon receipt of any payment of principal, premium or interest
in respect of the global security, will immediately credit participants accounts with payments in
amounts proportionate to their beneficial interests in the principal amount of a registered global
security as shown on the depositarys records. We also expect that payments by participants to
owners of beneficial interests in a registered global security held through participants will be
governed by standing instructions and customary practices. This is currently the case with the
securities held for the accounts of customers registered in street name. Such payments will be
the responsibility of participants.
Exchange of Registered Global Securities
We may issue debt securities in definitive form in exchange for the registered global security
if both of the following occur:
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the depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as
depositary or ceases to be a clearing agency registered under the
Exchange Act; and |
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we do not appoint a successor depositary within 90 days. |
In addition, we may, at any time, determine not to have any of the debt securities of a series
represented by one or more registered global securities. In this event, we will issue debt
securities of that series in definitive form in exchange for all of the registered global security
or securities representing those debt securities.
Our Covenants
The indenture includes covenants by us, including among other things that we will make all
payments of principal and interest at the times and places required. The board resolution or
supplemental indenture establishing each series of debt securities may contain additional
covenants, including covenants which could restrict our right to incur additional indebtedness or
liens and to take certain actions with respect to our businesses and assets.
Events of Default
Unless otherwise indicated in the applicable prospectus supplement, the following will be
events of default under the indenture with respect to each series of debt securities issued under
the indenture:
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failure to pay when due any interest on any debt security of that series that continues for 30 days; |
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failure to pay when due the principal of, or premium, if any, on, any debt security of that series; |
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default in the payment of any sinking fund installment with
respect to any debt security of that series when due and payable; |
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failure to perform any other covenant or agreement of ours under
the indenture or the supplemental indenture with respect to that
series or the debt securities of that series, continued for 90
days after written notice to us by the trustee or holders of at
least 25% in aggregate principal amount of the outstanding debt
securities of the series to which the covenant or agreement
relates; |
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certain events of bankruptcy, insolvency or similar proceedings
affecting us and our subsidiaries; and |
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any other event of default specified in any supplemental indenture
under which such series of debt securities is issued. |
Except as to certain events of bankruptcy, insolvency or similar proceedings affecting us and
except as provided in the applicable prospectus supplement, if any event of default shall occur and
be continuing with respect to any series of debt securities under the indenture, either the trustee
or the holders of at least 25% in aggregate principal amount of outstanding debt securities of such
series may accelerate the maturity of all debt securities of such series. Upon certain events of
bankruptcy, insolvency or similar proceedings affecting us, the principal, premium, if any, and
interest on all debt securities of each series shall be immediately due and payable.
After any such acceleration, but before a judgment or decree based on acceleration has been
obtained by the trustee, the holders of a majority in aggregate principal amount of each affected
series of debt securities may waive all defaults with respect to such series and rescind and annul
such acceleration if all events of default, other than the non-payment of accelerated principal,
have been cured, waived or otherwise remedied.
No holder of any debt securities will have any right to institute any proceeding with respect
to the indenture or for any remedy under the indenture, unless such holder shall have previously
given to the trustee written notice of a continuing event of default and the holders of at least
25% in aggregate principal amount of the outstanding debt securities of the relevant series shall
have made written request and offered indemnity satisfactory to the trustee to institute such
proceeding as trustee, and the trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding debt securities of such series a direction
inconsistent with such request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a holder of a debt security for
enforcement of payment of the principal of and premium, if any, or interest on such debt security
on or after the respective due dates expressed in such debt security.
Supplemental Indentures
We and the trustee may, at any time and from time to time, without prior notice to or consent of
any holders of debt securities after issuance of such debt securities, enter into one or more
supplemental indentures to, among other things:
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add guarantees to or secure any series of debt securities; |
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add any additional Events of Default; |
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provide for the succession of another person pursuant to the provisions of the
indenture relating to consolidations, mergers and sales of assets and the assumption by
such successor of our covenants, agreements, and obligations, or to otherwise comply
with the provisions of the indenture relating to consolidations, mergers, and sales of
assets; |
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surrender any right or power conferred upon us under the indenture or to add to our
covenants further covenants, restrictions, conditions or provisions for the protection
of the holders of all or any series of debt securities; |
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cure any ambiguity or to correct or supplement any provision contained in the
indenture, in any supplemental indenture or in any debt securities that may be
defective or inconsistent with any other provision contained therein, , so long as any
such action does not adversely affect the interests of the holders of debt securities
of any series in any material respect; |
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add or change or eliminate any of the provisions of the indenture to extent as shall
be necessary to permit or facilitate the issuance of debt securities in bear form,
registrable or not registrable as to principal, and with or without interest coupons; |
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add to or change any of the provisions of the indenture to permit the defeasance and
discharge of any series of debt securities pursuant to the indenture; |
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change, or eliminate any of the provisions of the indenture provided that any such
change or elimination shall become effective only when there are no debt securities
outstanding of any series created prior to the execution of such supplemental
indenture; |
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evidence and provide for the acceptance of appointment by a successor or separate
trustee; and |
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establish the form or terms of debt securities of any series and to make any change
that does not adversely affect the interests of the holders of debt securities. |
With the consent of the holders of at least a majority in principal amount of debt securities
of each series affected by such supplemental indenture (each series voting as one class), we and
the trustee may enter into one or more supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of the indenture or
modifying in any manner the rights of the holders of debt securities of each such series.
Notwithstanding our rights and the rights of the trustee to enter into one or more
supplemental indentures with the consent of the holders of debt securities of the affected series
as described above, no such supplemental indenture to be entered into after issuance of the debt
securities shall, without the consent of the holder of each outstanding debt security of the
affected series, among other things:
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change the final maturity of the principal of, or any installment of interest on, any debt securities; |
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reduce the principal amount of any debt securities or the rate of interest on any debt securities; |
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change the currency in which any debt securities are payable; |
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release any security interest that may have been granted with respect to such debt securities; |
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impair the right of the holders to conduct a proceeding for any remedy available to the trustee; |
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reduce the percentage in principal amount of any series of debt
securities whose holders must consent to an amendment or
supplemental indenture; |
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modify the ranking or priority of the securities; |
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reduce any premium payable upon the redemption of any debt
securities or change the time at which any debt security may be
redeemed; or |
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make any change that adversely affects the relative rights of
holders of subordinated debt securities with respect to senior
debt securities. |
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Satisfaction and Discharge of the Indenture; Defeasance
Except to the extent set forth in a supplemental indenture with respect to any series of debt
securities, we, at our election, may discharge the indenture and the indenture shall generally
cease to be of any further effect with respect to that series of debt securities if (a) we have
delivered to the trustee for cancellation all debt securities of that series (with certain limited
exceptions) or (b) all debt securities of that series not previously delivered to the trustee for
cancellation shall have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year, and we have deposited with the
trustee the entire amount sufficient to pay at maturity or upon redemption all such debt
securities.
In addition, we have a legal defeasance option (pursuant to which we may terminate, with
respect to the debt securities of a particular series, all of our obligations under such debt
securities and the indenture with respect to such debt securities) and a covenant defeasance
option (pursuant to which we may terminate, with respect to the debt securities of a particular
series, our obligations with respect to such debt securities under certain specified covenants
contained in the indenture). If we exercise our legal defeasance option with respect to a series
of debt securities, payment of such debt securities may not be accelerated because of an event of
default. If we exercise our covenant defeasance option with respect to a series of debt
securities, payment of such debt securities may not be accelerated because of an event of default
related to the specified covenants.
We may exercise our legal defeasance option or our covenant defeasance option with respect to
the debt securities of a series only if we irrevocably deposit in trust with the trustee cash or
U.S. government obligations (as defined in the indenture) for the payment of principal, premium, if
any, and interest with respect to such debt securities to maturity or redemption, as the case may
be. In addition, to exercise either of our defeasance options, we must comply with certain other
conditions, including the delivery to the trustee of an opinion of counsel to the effect that the
holders of debt securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the case if such
defeasance had not occurred (and, in the case of legal defeasance only, such opinion of counsel
must be based on a ruling from the Internal Revenue Service or other change in applicable Federal
income tax law).
The trustee will hold in trust the cash or U.S. government obligations deposited with it as
described above and will apply the deposited cash and the proceeds from deposited U.S. government
obligations to the payment of principal, premium, if any, and interest with respect to the debt
securities of the defeased series. In the case of subordinated debt securities, the money and U.S.
government obligations held in trust will not be subject to the subordination provisions of the
indenture.
Mergers, Consolidations and Certain Sales of Assets
Under the proposed form of indenture, we may not (1) consolidate with or merge into any other
person or entity or permit any other person or entity to consolidate with or merge into us in a
transaction in which we are not the surviving entity, or (2) transfer, lease or dispose of all or
substantially all of our assets to any other person or entity unless:
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the resulting, surviving or transferee entity shall be a
corporation organized and existing under the laws of the United
States or any state thereof and such resulting, surviving or
transferee entity shall expressly assume, by supplemental
indenture, all of our obligations under the debt securities and
the indenture; |
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immediately after giving effect to such transaction (and treating
any indebtedness which becomes an obligation of the resulting,
surviving or transferee entity as a result of such transaction as
having been incurred by such entity at the time of such
transaction), no default or event of default would occur or be
continuing; and |
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we shall have delivered to the trustee an officers certificate
and an opinion of counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply
with the indenture. |
38
Governing Law
The indenture and the debt securities will be governed by the laws of the State of New York.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, incorporator or stockholder of ADVENTRX , as such, shall have any
liability for any obligations of ADVENTRX under the debt securities or the indenture or for any
claim based on, in respect of, or by reason of, such obligations or their creation, solely by
reason of his, her, or its status as director, officer, incorporator or stockholder of ADVENTRX. By
accepting a debt security, each holder waives and releases all such liability, but only such
liability. The waiver and release are part of the consideration for issuance of the debt
securities. Nevertheless, such waiver may not be effective to waive liabilities under the federal
securities laws and it has been the view of the SEC that such a waiver is against public policy.
Conversion or Exchange Rights
Any debt securities issued under the indenture may be convertible into or exchangeable for
shares of our equity securities. The terms and conditions of such conversion or exchange will be
set forth in the applicable prospectus supplement. Such terms may include, among others, the
following:
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the conversion or exchange price; |
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the conversion or exchange period; |
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provisions regarding our ability or that of the holder to convert or exchange the debt securities; |
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events requiring adjustment to the conversion or exchange price; and |
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provisions affecting conversion or exchange in the event of our redemption of such debt securities. |
Concerning the Trustee
The indenture provides that there may be more than one trustee with respect to one or more
series of debt securities. If there are different trustees for different series of debt
securities, each trustee will be a trustee of a trust under a supplemental indenture separate and
apart from the trust administered by any other trustee under such indenture. Except as otherwise
indicated in this prospectus or any prospectus supplement, any action permitted to be taken by a
trustee may be taken by the trustee only with respect to the one or more series of debt securities
for which it is the trustee under an indenture. Any trustee under the indenture or a supplemental
indenture may resign or be removed with respect to one or more series of debt securities. All
payments of principal of, premium, if any, and interest on, and all registration, transfer,
exchange, authentication and delivery of (including authentication and delivery on original
issuance of the debt securities), the debt securities of a series will be effected by the trustee
with respect to such series at an office designated by the trustee.
The indenture contains limitations on the right of the trustee, should it become a creditor of
ADVENTRX, to obtain payment of claims in certain cases or to realize on certain property received
in respect of any such claim as security or otherwise. If the trustee acquires an interest that
conflicts with any duties with respect to the debt securities, the trustee is required to either
resign or eliminate such conflicting interest to the extent and in the manner provided by the
indenture.
Limitations on Issuance of Bearer Debt Securities
Debt securities in bearer form are subject to special U.S. tax requirements and may not be
offered, sold, or delivered within the United States or its possessions or to a U.S. person, except
in certain transactions permitted by U.S. tax regulations. Investors should consult the relevant
prospectus supplement, in the event that bearer debt securities are issued for special procedures
and restrictions that will apply to such an offering.
39
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of common stock, preferred stock or debt securities.
Warrants may be offered independently or together with common stock, preferred stock or debt
securities offered by any prospectus supplement and may be attached to or separate from those
securities. While the terms we have summarized below will apply generally to any warrants that we
may offer under this prospectus, we will describe in particular the terms of any series of warrants
that we may offer in more detail in the applicable prospectus supplement and any applicable free
writing prospectus. The terms of any warrants offered under a prospectus supplement may differ
from the terms described below.
We will file as exhibits to the registration statement of which this prospectus is a part, or
will incorporate by reference from another report that we file with the SEC, the form of warrant
agreement, which may include a form of warrant certificate, that describes the terms of the of the
particular series of warrants we are offering before the issuance of the related series of
warrants. We may issue the warrants under a warrant agreement that we will enter into with a
warrant agent to be selected by us. The warrant agent will act solely as our agent in connection
with the warrants and will not assume any obligation or relationship of agency or trust for or with
any registered holders of warrants or beneficial owners of warrants. The following summary of
material provisions of the warrants and warrant agreements are subject to, and qualified in their
entirety by reference to, all the provisions of the warrant agreement and warrant certificate
applicable to a particular series of warrants. We urge you to read the applicable prospectus
supplement and any applicable free writing prospectus related to the particular series of warrants
that we sell under this prospectus, as well as the complete warrant agreements and warrant
certificates that contain the terms of the warrants.
The particular terms of any issue of warrants will be described in the prospectus supplement
relating to the issue. Those terms may include:
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the title of such warrants; |
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the aggregate number of such warrants; |
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the price or prices at which such warrants will be issued; |
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the currency or currencies (including composite currencies) in which the price of
such warrants may be payable; |
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the terms of the securities purchasable upon exercise of such warrants and the
procedures and conditions relating to the exercise of such warrants; |
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the price at which the securities purchasable upon exercise of such warrants may be
purchased; |
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the date on which the right to exercise such warrants will commence and the date on
which such right shall expire; |
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any provisions for adjustment of the number or amount of securities receivable upon
exercise of the warrants or the exercise price of the warrants; |
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if applicable, the minimum or maximum amount of such warrants that may be exercised
at any one time; |
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if applicable, the designation and terms of the securities with which such warrants
are issued and the number of such warrants issued with each such security; |
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if applicable, the date on and after which such warrants and the related securities
will be separately transferable; |
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information with respect to book-entry procedures, if any; |
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the terms of any rights to redeem or call the warrants; |
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United States federal income tax consequences of holding or exercising the warrants,
if material; and |
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any other terms of such warrants, including terms, procedures and limitations
relating to the exchange or exercise of such warrants. |
40
Each warrant will entitle its holder to purchase the principal amount of debt securities or
the number of shares of preferred stock or common stock at the exercise price set forth in, or
calculable as set forth in, the applicable prospectus supplement. Unless we otherwise specify in
the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time
up to the specified time on the expiration date that we set forth in the applicable prospectus
supplement. After the close of business on the expiration date, unexercised warrants will become
void.
We will specify the place or places where, and the manner in which, warrants may be exercised
in the warrant agreement or warrant certificate and applicable prospectus supplement. Upon receipt
of payment and the warrant certificate properly completed and duly executed at the corporate trust
office of the warrant agent or any other office indicated in the applicable prospectus supplement,
we will, as soon as practicable, issue and deliver the purchased securities. If less than all of
the warrants represented by the warrant certificate are exercised, a new warrant certificate will
be issued for the remaining amount of warrants. If we so indicate in the applicable prospectus
supplement, holders of the warrants may surrender securities as all or part of the exercise price
for warrants.
Prior to the exercise of any warrants to purchase common stock, preferred stock or debt
securities, holders of the warrants will not have any of the rights of holders of the common stock,
preferred stock or debt securities purchasable upon exercise, including (i) in the case of warrants
for the purchase of common stock or preferred stock, the right to vote or to receive any payments
of dividends or payments upon our liquidation, dissolution or winding up on the common stock or
preferred stock purchasable upon exercise, if any; or (ii) in the case of warrants for the purchase
of debt securities, the right to receive payments of principal of, any premium or interest on the
debt securities purchasable upon exercise or to enforce covenants in the applicable indenture.
DESCRIPTION OF UNITS
The following description, together with the additional information we may include in any
applicable prospectus supplement, summarizes the material terms and provisions of the units that we
may offer under this prospectus. While the terms we have summarized below will apply generally to
any units that we may offer under this prospectus, we will describe the particular terms of any
series of units in more detail in the applicable prospectus supplement. The terms of any units
offered under a prospectus supplement may differ from the terms described below. However, no
prospectus supplement will fundamentally change the terms that are set forth in this prospectus or
offer a security that is not registered and described in this prospectus at the time of its
effectiveness.
We will file with the SEC, the form of unit agreement that describes the terms of the series
of units we are offering, and any supplemental agreements, before the issuance of the related
series of units. The following summaries of material terms and provisions of the units are subject
to, and qualified in their entirety by reference to, all the provisions of the unit agreement and
any supplemental agreements applicable to a particular series of units. We urge you to read the
applicable prospectus supplements related to the particular series of units that we sell under this
prospectus, as well as the complete unit agreement and any supplemental agreements that contain the
terms of the units.
General
We may issue units comprised of one or more debt securities, shares of common stock, shares of
preferred stock and warrants in any combination. Each unit will be issued so that the holder of
the unit is also the holder of each security included in the unit. Thus, the holder of a unit will
have the rights and obligations of a holder of each included security. The unit agreement under
which a unit is issued may provide that the securities included in the unit may not be held or
transferred separately, at any time or at any time before a specified date.
We will describe in the applicable prospectus supplement the terms of the series of units,
including, but not limited to:
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the designation and terms of the units and of the securities comprising
the units, including whether and under what circumstances those securities
may be held or transferred separately; |
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any provisions of the governing unit agreement that differ from those
described below; and |
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any provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities comprising the units. |
The provisions described in this section, as well as those described under Description of
Common Stock and Preferred Stock, Description of Debt Securities and Description of Warrants
will apply to each unit and to any common stock, preferred stock, debt security or warrant included
in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit agreement and will not
assume any obligation or relationship of agency or trust with any holder of any unit. A single
bank or trust company may act as unit agent for more than one series of units. A unit agent will
have no duty or responsibility in case of any default by us under the applicable unit agreement or
unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to
make any demand upon us. Any holder of a unit may, without the consent of the related unit agent
or the holder of any other unit, enforce by appropriate legal action its rights as holder under any
security included in the unit.
We, the unit agents and any of their agents may treat the registered holder of any unit
certificate as an absolute owner of the units evidenced by that certificate for any purpose and as
the person entitled to exercise the rights attaching to the units so requested, despite any notice
to the contrary.
42
PLAN OF DISTRIBUTION
We may sell the securities to or through underwriters or dealers, through agents, or directly
to one or more purchasers. A prospectus supplement or supplements (and any related free writing
prospectus that we may authorize to be provided to you) will describe the terms of the offering of
the securities, including, to the extent applicable
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the name or names of any agents or underwriters; |
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the purchase price of the securities being offered and the proceeds we will receive
from the sale; |
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any over-allotment options under which underwriters may purchase additional
securities from us; |
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any agency fees or underwriting discounts and other items constituting agents or
underwriters compensation; |
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any public offering price; |
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any discounts or concessions allowed or reallowed or paid to dealers; and |
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any securities exchanges or markets on which such securities may be listed. |
We may distribute the securities from time to time in one or more transactions at:
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fixed price or prices, which may be changed from time to time; |
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market prices prevailing at the time of sale; |
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prices related to such prevailing market prices; or |
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negotiated prices. |
Agents
We may designate agents who agree to use their reasonable efforts to solicit purchases of our
securities for the period of their appointment or to sell our securities on a continuing basis. We
will name any agent involved in the offering and sale of securities and we will describe any
commissions we will pay the agent in the applicable prospectus supplement.
Underwriters
If we use underwriters for a sale of securities, the underwriters will acquire the securities
for their own account. The underwriters may resell the securities in one or more transactions,
including negotiated transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the securities will be
subject to the conditions set forth in the applicable underwriting agreement. Subject to certain
conditions, the underwriters will be obligated to purchase all the securities of the series offered
if they purchase any of the securities of that series. We may change from time to time any public
offering price and any discounts or concessions the underwriters allow or reallow or pay to
dealers. We may use underwriters with whom we have a material relationship. We will describe the
nature of any such relationship in any applicable prospectus supplement naming any such
underwriter. Only underwriters we name in the prospectus supplement are underwriters of the
securities offered by the prospectus supplement.
We may provide agents and underwriters with indemnification against civil liabilities related
to offerings under this prospectus, including liabilities under the Securities Act, or contribution
with respect to payments that the agents or underwriters may make with respect to these
liabilities.
Direct Sales
We may also sell securities directly to one or more purchasers without using underwriters or
agents. Underwriters, dealers and agents that participate in the distribution of the securities
may be underwriters as defined in the Securities Act, and any discounts or commissions they receive
from us and any profit on their resale of the securities may be treated as underwriting discounts
and commissions under the Securities Act. We will identify in
43
the applicable prospectus supplement any underwriters, dealers or agents and will describe their
compensation. We may have agreements with the underwriters, dealers and agents to indemnify them
against specified civil liabilities, including liabilities under the Securities Act. Underwriters,
dealers and agents may engage in transactions with or perform services for us in the ordinary
course of their businesses.
Trading Markets and Listing of Securities
Unless otherwise specified in the applicable prospectus supplement, each class or series of
securities will be a new issue with no established trading market, other than our common stock,
which is currently listed on the NYSE Amex. We may elect to list any other class or series of
securities on any exchange or market, but we are not obligated to do so. It is possible that one
or more underwriters may make a market in a class or series of securities, but the underwriters
will not be obligated to do so and may discontinue any market making at any time without notice.
We cannot give any assurance as to the liquidity of the trading market for any of the securities.
Stabilization Activities
Any underwriter may engage in overallotment, stabilizing transactions, short covering
transactions and penalty bids in accordance with Regulation M under the Exchange Act.
Overallotment involves sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing
bids do not exceed a specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short positions.
Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the
securities originally sold by the dealer are purchased in a covering transaction to cover short
positions. Those activities may cause the price of the securities to be higher than it would
otherwise be. If commenced, the underwriters may discontinue any of these activities at any time.
Passive Market Making
Any underwriters who are qualified market makers on the NYSE Amex may engage in passive market
making transactions in the securities on the NYSE Amex in accordance with Rule 103 of Regulation M,
during the business day prior to the pricing of the offering, before the commencement of offers or
sales of the securities. Passive market makers must comply with applicable volume and price
limitations and must be identified as passive market makers. In general, a passive market maker
must display its bid at a price not in excess of the highest independent bid for such security. If
all independent bids are lowered below the passive market makers bid, however, the passive market
makers bid must then be lowered when certain purchase limits are exceeded.
44
LEGAL MATTERS
The validity of the securities being offered by this prospectus will be passed upon for us by
DLA Piper LLP (US), San Diego, California. If the validity of any securities is also passed upon
by counsel any underwriters, dealers or agents, that counsel will be named in the prospectus
supplement relating to that specific offering.
EXPERTS
The consolidated financial statements and schedule of ADVENTRX Pharmaceuticals, Inc. as of
December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders
equity (deficit) and comprehensive loss and cash flows for the years then ended and for the period
from January 1, 2002 through December 31, 2008 have been incorporated by reference herein and in
the registration statement in reliance upon the report of J.H. Cohn LLP, independent registered
public accounting firm, incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information
electronically with the SEC. You may read and copy these reports, proxy statements and other
information at the SECs public reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public
reference room. You can request copies of these documents by writing to the SEC and paying a fee
for the copying costs. The SEC also maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file electronically with the
SEC, including us. The SECs Internet site can be found at http://www.sec.gov. In addition, we
make available on or through our Internet site copies of these reports as soon as reasonably
practicable after we electronically file or furnish them to the SEC. Our Internet site can be
found at http://www.adventrx.com.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are allowed to incorporate by reference information contained in documents that we file
with the SEC. This means that we can disclose important information to you by referring you to
those documents and that the information in this prospectus is not complete. You should read the
information incorporated by reference for more detail. We incorporate by reference in two ways.
First, we list below certain documents that we have already filed with the SEC. The information in
these documents is considered part of this prospectus. Second, the information in documents that we
file in the future will update and supersede the current information in, and be incorporated by
reference in, this prospectus.
We incorporate by reference into this prospectus the documents listed below, any filings we
make with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of the initial registration statement of which this prospectus is a part and prior to the
effectiveness of the registration statement, and any filings we make with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from the date of this prospectus until the
termination of this offering (in each case, except for the information furnished under Item 2.02 or
Item 7.01 in any current report on Form 8-K and Form 8-K/A):
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our annual report on Form 10-K for the year ended December 31, 2008 filed with the
SEC on March 27, 2009 (File No. 001-32157- 09708145); |
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the information specifically incorporated by reference into our annual report on
Form 10-K for the year ended December 31, 2008 from our definitive proxy statement on
Schedule 14A filed with the SEC on April 30, 2009 (File No. 001-32157-09781242); |
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our quarterly report on Form 10-Q for the quarterly period
ended March 31, 2009
filed with the SEC on May 15, 2009 (File No. 001-32157-09829059); |
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our current report on Form 8-K filed with the SEC on January 2, 2009 (File No.
001-32157-09501628); |
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our current report on Form 8-K filed with the SEC on January 5, 2009 (File No.
001-32157-09505346); |
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our current report on Form 8-K filed with the SEC on January 8, 2009 (File No.
001-32157-09516181); |
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our current report on Form 8-K filed with the SEC on February 2, 2009 (File No.
001-32157-09561715); |
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our current report on Form 8-K filed with the SEC on February 5, 2009 (File No.
001-32157-09573163); |
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our current report on Form 8-K filed with the SEC on February 10, 2009 (File No.
001-32157-09583495); |
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our current report on Form 8-K filed with the SEC on March 20, 2009 (File No.
001-32157-09696365); |
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our current report on Form 8-K filed with the SEC on March 25, 2009 (File No.
001-32157-09702853); |
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our current report on Form 8-K filed with the SEC on March 25, 2009 (File No.
001-32157-09702857); |
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our current report on Form 8-K filed with the SEC on May 7, 2009 (File No.
001-32157-09806033); and |
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the description of our common stock contained in our registration statement on Form
8-A filed with the SEC on April 27, 2004 (File No. 001-32157-041020580). |
We will provide each person, including any beneficial owner, to whom a prospectus is
delivered, a copy of any or all of the information that has been incorporated by reference into
this prospectus but not delivered with this prospectus upon written or oral request at no cost to
the requester. Requests should be directed to: ADVENTRX Pharmaceuticals, Inc., 6725 Mesa Ridge
Road, Suite 100, San Diego, California 92121, Attn: Investor Relations, telephone: (858) 552-0866.
This prospectus is part of a registration statement on Form S-3 that we filed with the SEC.
That registration statement contains more information than this prospectus regarding us and our
common stock, including certain exhibits and schedules. You can obtain a copy of the registration
statement from the SEC at the address listed above or from the SECs Internet website.
You should rely only on the information provided in and incorporated by reference into this
prospectus or any prospectus supplement. We have not authorized anyone else to provide you with
different information. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the front cover of these
documents.
46
ADVENTRX PHARMACEUTICALS, INC.
$25,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
PROSPECTUS
, 2009
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the fees and expenses incurred or expected to be incurred by
ADVENTRX Pharmaceuticals, Inc. in connection with the issuance and distribution of the securities
being registered hereby, other than underwriting discounts and commissions. All of the amounts
shown are estimated except the SEC registration fee. Estimated fees and expenses can only reflect
information that is known at the time of filing this registration statement and are subject to
future contingencies, including additional expenses for future offerings.
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Securities and Exchange Commission registration fee |
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$ |
1,395 |
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Transfer agents and trustees fees and expenses |
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10,000 |
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Printing and engraving expenses |
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10,000 |
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Legal fees and expenses |
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45,000 |
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Accounting fees and expenses |
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15,000 |
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Miscellaneous expenses |
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3,605 |
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Total |
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$ |
85,000 |
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Item 15. Indemnification of Officers and Directors
Section 145 of the Delaware General Corporation Law authorizes a corporation to indemnify its
directors and officers against liabilities arising out of actions, suits and proceedings to which
they are made or threatened to be made a party by reason of the fact of their prior or current
service to the Company as a director or officer, in accordance with the provisions of Section 145,
which are sufficiently broad to permit indemnification under certain circumstances for liabilities
arising under the Securities Act of 1933, as amended (the Securities Act). The indemnity may
cover expenses (including attorneys fees) judgments, fines and amounts paid in settlement actually
and reasonably incurred by the director or officer in connection with any such action, suit or
proceeding. Section 145 permits corporations to pay expenses (including attorneys fees) incurred
by directors and officers in advance of the final disposition of such action, suit or proceeding.
In addition, Section 145 provides that a corporation has the power to purchase and maintain
insurance on behalf of its directors and officers against any liability asserted against them and
incurred by them in their capacity as a director or officer, or arising out of their status as
such, whether or not the corporation would have the power to indemnify the director or officer
against such liability under Section 145.
Our amended and restated certificate of incorporation provides that, to the fullest extent
permitted by the Delaware General Corporation Law, (1) a director shall not be personally liable to
ADVENTRX or its stockholders for monetary damages for breach of fiduciary duty as a director, and
(2) we shall indemnify any director or officer made a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact of such persons current or
prior service as a director or officer of ADVENTRX, any predecessor of ADVENTRX or any other
enterprise per ADVENTRXs or any predecessor to ADVENTRXs request.
Our amended and restated bylaws provide that (a) we shall indemnify our directors and officers
to the maximum extent and in the manner permitted by the Delaware General Corporation Law against
expenses (including attorneys fees), judgments, fines, ERISA excise taxes, settlements and other
amounts actually and reasonably incurred in connection with any proceeding, whether civil,
criminal, administrative or investigative, arising by reason of the fact that such person is or was
an agent of the corporation, subject to certain limited exceptions, (b) we shall advance expenses
incurred by any director or officer prior to the final disposition of any proceeding to which the
director or officer was or is or is threatened to be made a party promptly following a request
therefore, subject to certain limited exceptions, and (c) the rights conferred in our bylaws are
not exclusive.
We have entered into indemnification agreements with each of our directors and executive
officers to give such directors and officers additional contractual assurances regarding the scope
of the indemnification set forth in our certificate of incorporation and bylaws and to provide
additional procedural protections. These agreements,
II-1
among other things, provide that we will indemnify our directors and executive officers for
expenses (including attorneys fees), judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in connection therewith)
actually and reasonably incurred by a director or executive officer in connection with any action
or proceeding to which such person was, is or is threatened to be made a party, a witness or other
participant by reason of such persons services as a director or executive officer of ADVENTRX, any
of ADVENTRXs subsidiaries or any other company or enterprise to which the person provides services
at ADVENTRXs request, and any federal, state, local or foreign taxes imposed on the director or
executive officer as a result of the actual or deemed receipt of any payments under the
indemnification agreements.
In addition, the indemnification agreements provide that, upon the request of a director or
executive officer, we shall advance expenses (including attorneys fees) to the director or
officer. We intend to enter into indemnification agreements with any new directors and executive
officers in the future.
In addition, Alexander J. Denner, a director of ADVENTRX, is further indemnified against
liabilities arising in connection with his services as a director of ADVENTRX through his
employment arrangement with entities controlled by Mr. Carl C. Icahn. Such indemnification may be
broader than the indemnification provided by the Delaware General Corporation Law and includes
indemnification for expenses (including attorneys fees), judgments and fines incurred and amounts
paid in settlement by Dr. Denner in connection with any action or proceeding to which Dr. Denner
was, is or is threatened to be made a party or participant by reason of his services as a director
of ADVENTRX.
We have also obtained an insurance policy covering our directors and officers with respect to
certain liabilities, including liabilities arising under the Securities Act.
Item 16. Exhibits
A list of exhibits filed herewith is contained in the exhibit index that immediately precedes
such exhibits and is incorporated herein by reference.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the Calculation of Registration Fee table in the effective
registration statement; and
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such information in
the registration statement;
Provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the
information required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with
II-2
or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is
part of the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering;
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be
part of the registration statement as of the date the filed prospectus was deemed part of and
included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part
of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a)
of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness
or the date of the first contract of sale of securities in the offering described in prospectus.
As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which the prospectus relates, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such effective date; and
(5) That, for the purpose of determining liability of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the
offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the
undersigned Registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided by or on behalf of
an undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrants annual report pursuant
to section 13(a) or section 15(d) of
II-3
the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plans annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to supplement the prospectus, after the
expiration of the subscription period, to set forth the results of the subscription offer, the
transactions by the underwriters during the subscription period, the amount of unsubscribed
securities to be purchased by the underwriters, and the terms of any subsequent reoffering thereof.
If any public offering by the underwriters is to be made on terms differing from those set forth
on the cover page of the prospectus, a post-effective amendment will be filed to set forth the
terms of such offering.
(d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(f) The undersigned registrant hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of San Diego, State of California, on May 21, 2009.
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ADVENTRX PHARMACEUTICALS, INC.
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By: |
/s/ Brian M. Culley
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Brian M. Culley |
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Chief Business Officer and
Senior Vice President |
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Brian M. Culley and Patrick L. Keran, and each of them acting individually, as his or her
true and lawful attorneys-in-fact and agent, with full power of each to act alone, with full powers
of substitution and resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments to this registration statement (including
post-effective amendments and any related registration statements filed pursuant to Rule 462 and
otherwise), and to file the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and full power and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully for all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and
agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature |
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Title |
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Date |
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/s/ Brian M. Culley
Brian M. Culley
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Chief Business Officer and Senior Vice
President
(Principal Executive Officer)
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May 21, 2009 |
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/s/ Mark N.K. Bagnall
Mark N.K. Bagnall
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Director
(Principal Financial and Accounting Officer)
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May 21, 2009 |
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Chair of the Board
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May 21, 2009 |
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Director
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/s/ Michael M. Goldberg
Michael M. Goldberg
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Director
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May 21, 2009 |
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/s/ Mark J. Pykett
Mark J. Pykett
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Director
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May 21, 2009 |
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/s/ Eric K. Rowinsky
Eric K. Rowinsky
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Director
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May 21, 2009 |
II-5
Exhibit Index
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Exhibit |
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Number |
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Description |
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1.1
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Form of Underwriting Agreement (to be
filed by amendment or as an exhibit to a
report pursuant to Section 13(a), 13(c)
or 15(d) of the Exchange Act) |
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3.1
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Amended and Restated Certificate of
Incorporation (filed with our Annual
Report on Form 10-K on March 16, 2006
(SEC file number 001-32157-06693266) and
incorporated by reference herein) |
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3.2
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Amended and Restated Bylaws of ADVENTRX
Pharmaceuticals, Inc. (formerly known as
Biokeys Pharmaceuticals, Inc.) (filed
with our Current Report on Form 8-K on
December 15, 2008 (SEC file number
001-32157-081249921) and incorporated by
reference herein) |
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4.1*
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Form of Senior Indenture |
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4.2*
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Form of Subordinated Indenture |
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4.3
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Form of Warrant (to be filed by
amendment or as an exhibit to a report
pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act) |
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4.4
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Form of Unit Agreement (to be filed by
amendment or as an exhibit to a report
pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act) |
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4.5
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Form of Common Stock Certificate (to be
filed by amendment or as an exhibit to a
report pursuant to Section 13(a), 13(c)
or 15(d) of the Exchange Act) |
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4.6
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Form of Preferred Stock Certificate (to
be filed by amendment or as an exhibit
to a report pursuant to Section 13(a),
13(c) or 15(d) of the Exchange Act) |
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4.7
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Form of Certificate of Designation with
respect to Preferred Stock (to be filed
by amendment or as an exhibit to a
report pursuant to Section 13(a), 13(c)
or 15(d) of the Exchange Act) |
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5.1*
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Opinion of DLA Piper LLP (US) |
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23.1*
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Consent of J.H. Cohn LLP, independent registered public accounting firm |
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23.2*
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Consent of DLA Piper LLP (US) (included in Exhibit 5.1). |
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24.1*
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Power of attorney (included on the signature page to the registration statement). |
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25.1
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Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended
(to be filed by amendment or as an exhibit to a report pursuant to Section 13(a), 13(c)
or 15(d) of the Exchange Act) |
exv4w1
EXHIBIT 4.1
FORM OF SENIOR INDENTURE
ADVENTRX PHARMACEUTICALS, INC.
and
[ ]
TRUSTEE
INDENTURE
DATED AS OF [ ], [ ]
SENIOR DEBT SECURITIES
TABLE OF CONTENTS
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Page |
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION |
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SECTION 101. Definitions |
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1 |
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Act |
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1 |
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Affiliate |
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1 |
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Authenticating Agent |
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1 |
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Beneficial Owner |
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1 |
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Board of Directors |
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1 |
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Board Resolution |
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1 |
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Business Day |
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1 |
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Commission |
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2 |
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Company |
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2 |
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Company Request or Company Order |
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2 |
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Corporate Trust Office |
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2 |
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Corporation |
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2 |
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Defaulted Interest |
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2 |
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Depositary |
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2 |
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Dollar or $ |
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2 |
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Euro |
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2 |
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Event of Default |
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2 |
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Extension Notice |
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2 |
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Extension Period |
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2 |
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Final Maturity |
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2 |
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Fixed Rate Security |
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2 |
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Floating Rate Security |
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2 |
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Foreign Currency |
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2 |
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Global Security |
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2 |
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Holder |
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2 |
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Indenture |
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2 |
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Interest |
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2 |
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Interest Payment Date |
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3 |
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Journal |
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3 |
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Lien |
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3 |
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Market Exchange Rate |
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3 |
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Maturity |
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3 |
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Officers Certificate |
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3 |
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Opinion of Counsel |
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3 |
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Optional Reset Date |
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3 |
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Original Issue Discount Security |
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3 |
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Original Stated Maturity |
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3 |
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Outstanding |
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3 |
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Paying Agent |
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3 |
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Person |
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3 |
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Place of Payment |
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4 |
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Predecessor Security |
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4 |
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i
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Page |
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Property |
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4 |
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Redemption Date |
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4 |
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Redemption Price |
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4 |
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Regular Record Date |
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4 |
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Reset Notice |
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4 |
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Responsible Officer |
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4 |
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Securities |
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4 |
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Security Register and Security Registrar |
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4 |
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Special Record Date |
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4 |
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Stated Maturity |
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4 |
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Subsequent Interest Period |
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4 |
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Subsidiary |
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4 |
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Trustee |
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4 |
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Trust Indenture Act |
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4 |
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Vice President |
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4 |
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SECTION 102. Compliance Certificates and Opinions |
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4 |
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SECTION 103. Form of Documents Delivered to Trustee |
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5 |
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SECTION 104. Acts of Holders |
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5 |
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SECTION 105. Notices, Etc., to Trustee and Company |
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6 |
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SECTION 106. Notice to Holders; Waiver |
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6 |
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SECTION 107. Conflict with Trust Indenture Act |
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6 |
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SECTION 108. Effect of Headings and Table of Contents |
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6 |
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SECTION 109. Successors and Assigns |
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6 |
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SECTION 110. Separability Clause |
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7 |
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SECTION 111. Benefits of Indenture |
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7 |
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SECTION 112. Governing Law |
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7 |
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SECTION 113. Legal Holidays |
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7 |
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SECTION 114. Indenture and Securities Solely Corporate Obligations |
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7 |
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SECTION 115. Consent of Holders of Securities in a Foreign Currency or Euros |
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7 |
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SECTION 116. Payment Currency |
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7 |
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ARTICLE TWO
SECURITY FORMS |
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SECTION 201. Forms Generally |
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8 |
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SECTION 202. Form of Trustees Certificate of Authentication |
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8 |
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ARTICLE THREE
THE SECURITIES |
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SECTION 301. Amount Unlimited; Issuable in Series |
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8 |
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SECTION 302. Denominations |
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10 |
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SECTION 303. Execution, Authentication, Delivery and Dating |
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10 |
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SECTION 304. Temporary Securities |
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11 |
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SECTION 305. Registration, Registration of Transfer and Exchange |
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11 |
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SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities |
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11 |
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SECTION 307. Payment of Interest; Interest Rights Preserved; Optional Interest Reset |
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12 |
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SECTION 308. Persons Deemed Owners |
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13 |
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SECTION 309. Cancellation |
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13 |
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SECTION 310. Computation of Interest |
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13 |
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SECTION 311. Global Securities |
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13 |
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SECTION 312. Optional Extension of Maturity |
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15 |
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SECTION 313. CUSIP and ISIN Numbers |
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15 |
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ARTICLE FOUR
SATISFACTION AND DISCHARGE |
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SECTION 401. Satisfaction and Discharge of Securities of any Series |
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15 |
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SECTION 402. Satisfaction and Discharge of Indenture |
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16 |
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SECTION 403. Application of Trust Money |
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17 |
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ii
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Page |
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ARTICLE FIVE
REMEDIES |
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SECTION 501. Events of Default |
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17 |
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SECTION 502. Acceleration of Maturity; Rescission and Annulment |
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18 |
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee |
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18 |
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SECTION 504. Trustee May File Proofs of Claim |
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19 |
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities |
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19 |
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SECTION 506. Application of Money Collected |
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19 |
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SECTION 507. Limitation on Suits |
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19 |
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SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest |
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20 |
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SECTION 509. Restoration of Rights and Remedies |
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20 |
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SECTION 510. Rights and Remedies Cumulative |
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20 |
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SECTION 511. Delay or Omission Not Waiver |
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20 |
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SECTION 512. Control by Holders |
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20 |
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SECTION 513. Waiver of Past Defaults |
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20 |
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SECTION 514. Undertaking for Costs |
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21 |
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ARTICLE SIX
THE TRUSTEE |
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SECTION 601. Certain Duties and Responsibilities |
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21 |
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SECTION 602. Notice of Defaults |
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22 |
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SECTION 603. Certain Rights of Trustee |
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22 |
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SECTION 604. Not Responsible for Recitals or Issuance of Securities |
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22 |
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SECTION 605. May Hold Securities |
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23 |
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SECTION 606. Money Held in Trust |
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23 |
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SECTION 607. Compensation and Reimbursement |
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23 |
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SECTION 608. Corporate Trustee Required; Eligibility; Conflicting Interests |
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23 |
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SECTION 609. Resignation and Removal; Appointment of Successor |
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23 |
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SECTION 610. Acceptance of Appointment by Successor |
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24 |
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SECTION 611. Merger, Conversion, Consolidation or Succession to Business |
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25 |
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SECTION 612. Preferential Collection of Claims Against Company |
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25 |
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SECTION 613. Appointment of Authenticating Agent |
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25 |
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY |
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|
SECTION 701. Holder Lists |
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26 |
|
SECTION 702. Communications by Holders with Other Holders |
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26 |
|
SECTION 703. Reports by Trustee |
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26 |
|
SECTION 704. Reports by Company |
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26 |
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|
ARTICLE
EIGHT
SUCCESSOR CORPORATION |
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|
SECTION 801. Limitation on Consolidation, Merger and Sale of Assets |
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27 |
|
SECTION 802. Successor Person Substituted |
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27 |
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|
ARTICLE NINE
SUPPLEMENTAL INDENTURES |
|
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|
SECTION 901. Supplemental Indentures Without Consent of Holders |
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27 |
|
SECTION 902. Supplemental Indentures with Consent of Holders |
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28 |
|
SECTION 903. Execution of Supplemental Indentures |
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29 |
|
SECTION 904. Effect of Supplemental Indentures |
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29 |
|
SECTION 905. Conformity with Trust Indenture Act |
|
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29 |
|
SECTION 906. Reference in Securities to Supplemental Indentures |
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29 |
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|
|
ARTICLE TEN
COVENANTS |
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|
SECTION 1001. Payment of Principal, Premium and Interest |
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29 |
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iii
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Page |
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SECTION 1002. Maintenance of Office or Agency |
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29 |
|
SECTION 1003. Money for Securities Payments to Be Held in Trust |
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30 |
|
SECTION 1004. Corporate Existence |
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30 |
|
SECTION 1005. Statement as to Compliance |
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31 |
|
SECTION 1006. Waiver of Certain Covenants |
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31 |
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES |
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SECTION 1101. Applicability of Article |
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SECTION 1102. Election to Redeem; Notice to Trustee |
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SECTION 1103. Selection by Trustee of Securities to be Redeemed |
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SECTION 1104. Notice of Redemption |
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SECTION 1105. Deposit of Redemption Price |
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SECTION 1106. Securities Payable on Redemption Date |
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SECTION 1107. Securities Redeemed in Part |
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ARTICLE TWELVE
SINKING FUNDS |
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SECTION 1201. Applicability of Article |
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SECTION 1202. Satisfaction of Sinking Fund Payments with Securities |
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SECTION 1203. Redemption of Securities for Sinking Fund |
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ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS |
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SECTION 1301. Applicability of Article |
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iv
INDENTURE, dated as of [ ], [ ], between ADVENTRX
Pharmaceuticals, Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the Company), and [ ], 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 unsecured or secured and unsubordinated debentures, notes or
other evidences of senior indebtedness (herein called the Securities), to be issued in one or
more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the securities by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all
holders of the Securities or of any 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 and, except as otherwise herein expressly
provided, the term generally accepted accounting principles with respect to any computation
required or permitted hereunder shall mean such accounting principles as are generally accepted in
the United States of America at the date of such computation; and
(4) 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.
Affiliate of any specified person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, control when used with respect to any specified Person means the
power to direct the management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms controlling and
controlled have meanings correlative to the foregoing.
Authenticating Agent means any Person authorized by the Trustee to act on behalf of the
Trustee to authenticate and deliver one or more series of Securities.
Beneficial Owner means, with respect to Global Securities, the Person who is the beneficial
owner of such Securities as effected on the books of the Depositary for such Securities or on the
books of a Person maintaining an account with such Depositary (directly or as an indirect
participant, in accordance with the rules of such Depositary).
Board of Directors means either the board of directors of the Company or any duly authorized
committee of that board.
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the Trustee.
Business Day, when used with respect to any Place of Payment, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of
Payment, and (i) with respect to Securities denominated in a
1
Foreign Currency, the capital city of the country of the Foreign Currency, or (ii) with
respect to Securities denominated in Euros, Luxembourg, are authorized or obligated by it to close.
Commission means the Securities and Exchange Commission, as from time to time constituted,
created under the Securities Exchange Act of 1934, as amended, or, if at any time after the
execution of this instrument such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties at such time.
Company means the Person named as the Company in the first paragraph of this Indenture
until a successor corporation shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Company shall mean such successor corporation.
Company Request or Company Order means a written request or order signed in the name of
the Company by its Chairman, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Controller, an Assistant Controller, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
Corporate Trust Office means the principal corporate trust office of the Trustee at which at
any particular time its corporate trust business shall be principally administered. At the date of
this Indenture, the Corporate Trust Office of the Trustee is located at [ ], except that whenever a provision herein refers to an office or agency of the
Trustee in the Borough of Manhattan, City of New York, New York, such office is located, at the
date hereof, at [ ].
Corporation includes corporations, associations, companies and business trusts.
Defaulted Interest has the meaning specified in Section 307.
Depositary means a clearing agency registered as such under the Securities Exchange Act of
1934, as amended, or any successor thereto, which shall in either case be designated by the Company
pursuant to Section 301 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter Depositary shall mean or include each
Person who is then a Depositary hereunder, and if at any time there is more than one such Person,
such Persons. Depositary as used with respect to the Securities of any series shall mean the
Depositary with respect to the Securities of that series.
Dollar or $ or any similar reference means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and private debts.
Euro means the single currency of participating member states of the economic and monetary
union as contemplated in the Treaty on European Union.
Event of Default has the meaning specified in Section 501.
Extension Notice has the meaning specified in Section 312.
Extension Period has the meaning specified in Section 312.
Final Maturity has the meaning specified in Section 312.
Fixed Rate Security means a Security which provides for the payment of interest at a fixed
rate.
Floating Rate Security means a Security which provides for the payment of interest at a
variable rate determined periodically by reference to an interest rate index or other index
specified pursuant to Section 301.
Foreign Currency means a currency, other than the Euro, issued by the government of a
country other than the United States of America.
Global Security means a Security evidencing all or part of a series of Securities which is
executed by the Company and authenticated and delivered to the Depositary for such series or its
nominee, all in accordance with this Indenture and pursuant to a Company Order, which shall be
registered in the name of the Depositary or its nominee and which shall represent the amount of
uncertificated securities as specified therein.
Holder means a Person in whose name a Security is registered in the Security Register.
Indenture means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include any Officers Certificates setting forth the form
and terms of particular series of Securities as contemplated by Sections 201 and 301.
2
Interest, when used with respect to an Original Issue Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
Interest Payment Date, when used with respect to any Security, means the Stated Maturity of
an installment of interest on such Security.
Journal means the official Journal of the European Union or successor publication thereto.
Lien means any mortgage, pledge, lien, security interest or encumbrance.
Market Exchange Rate means on a given date, the noon Dollar buying rate in New York City for
cable transfers of a currency as published by the Federal Reserve Bank of New York; provided that,
in the case of the Euro, Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Union (or any successor thereto) as published in the Journal.
Maturity, when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
Officers Certificate means a certificate signed by the Chairman, the President, a Vice
President or the Treasurer, and by an Assistant Treasurer, the Controller, an Assistant Controller,
the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.
Opinion of Counsel means a written opinion of counsel, who may be an employee of or counsel
for the Company or the Trustee, and who shall be acceptable to the Trustee, which opinion is
delivered to the Trustee.
Optional Reset Date has the meaning specified in Section 307.
Original Issue Discount Security means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.
Original Stated Maturity has the meaning specified in Section 312.
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 cancelled by the Trustee or delivered to the Trustee for
cancellation;
(ii) Securities or portions thereof for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company)
in trust or set aside and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such Securities or portions
thereof are to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, 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 or waiver, only Securities which
the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgees 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. In determining the requisite principal amount of any Original Issue Discount
Security, such principal amount that shall be deemed to be Outstanding shall be equal to the amount
of the principal thereof that could be declared to be due and payable upon an Event of Default
pursuant to the terms of such Original Issue Discount Security at the time of such determination.
Paying Agent means any Person, which may include the Company, authorized by the Company to
pay the principal of (and premium, if any) or interest, if any, on any Security on behalf of the
Company.
3
Person means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Place of Payment, when used with respect to the Securities of any series, means the place or
places where the principal of (and premium, if any) and interest, if any, on the Securities of that
series are payable as specified as contemplated in Section 301 or, if not so specified, as
specified in Section 1002.
Predecessor Security of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in 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.
Property means any kind of property or asset, whether real, personal or mixed, tangible or
intangible.
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.
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.
Reset Notice has the meaning specified in Section 307.
Responsible Officer, when used with respect to the Trustee, means any officer of the Trustee
assigned to administer corporate trust matters and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
Securities has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.
Security Register and Security Registrar have the respective meanings specified in Section
305.
Special Record Date for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.
Stated Maturity, when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable.
Subsequent Interest Period has the meaning specified in Section 307.
Subsidiary means with respect to any Person, any corporation, association, joint venture,
partnership, limited liability company or other business entity of which at least a majority of the
voting stock or other ownership interests having voting power for the election of directors,
managers or trustees (or the equivalent) is, at the time as of which any determination is being
made, owned or controlled by such Person or one or more Subsidiaries of such Person, or by such
Person and one or more Subsidiaries of such Person, other than shares, interests, participations or
other equivalents having such power by reason of the occurrence of any contingency.
Trustee means the Person named as the Trustee in the first paragraph of this instrument
until a successor trustee shall have become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and thereafter Trustee shall mean or
include each Person who is then a Trustee hereunder; provided, however, that if at any time there
is more than one such Person, Trustee as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
Trust Indenture Act means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in force at the date on the date of this Indenture, except as provided in Section
905.
Vice President, when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
vice president.
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 an Officers Certificate
stating that all conditions precedent, if any, provided for in this Indenture
4
relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion has read such
condition or covenant and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.
SECTION 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.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders (or Holders of any series) 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 and
any agent of the Trustee or 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 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; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in this Section.
(c) The ownership of Securities and the principal amount held by any Person and the date of
holding the same shall be proved by the Security Register.
(d) If the Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its option, by Board
Resolution, fix in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
5
before or after such record date, but only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date, provided that no such
authorization, agreement or consent by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provision of this Indenture not later than six
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Except as otherwise specifically provided herein, any request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate
Trust Office; 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 the attention of its Treasurer at [ ] or any
other address subsequently 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, and not earlier than the earliest date,
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. Any notice mailed
in the manner prescribed by this Indenture shall be conclusively presumed to have been duly given
whether or not received by any particular Holder. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of 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.
In the case of Global Securities, notices or communications to be given to Holders shall be
given to the Depository, in accordance with its applicable policies from time to time.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
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. All agreements of the Trustee, any additional trustee and any
Paying Agents in this Indenture shall bind their respective successors and assigns.
6
SECTION 110. Separability Clause.
In case any provision of this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and a Holder shall have no claim therefor against any
party hereto.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto, any Paying Agent, any Security Registrar, or any Authenticating
Agent and their respective successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed and construed by and in accordance with
the laws of the State of New York, as applied to contracts made and performed within the State of
New York without regard to principles of conflicts of laws.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, the Stated Maturity of any
Security or any date upon which any Defaulted Interest is proposed to be paid shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture
or of the Securities) payment of interest, if any, or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest Payment Date,
Redemption Date, at the Stated Maturity, or on the date for payment of Defaulted Interest, provided
that no interest shall accrue for the period from and after such Interest Payment Date, Redemption
Date, Stated Maturity or date for the payment of Defaulted Interest, as the case may be, to the
date of payment.
SECTION 114. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of (or premium, if any) or interest on any
Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental
indenture, or in any Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or through the Company or
any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a consideration for,
the execution of this Indenture and the issuance of the Securities.
SECTION 115. Consent of Holders of Securities in a Foreign Currency or Euros.
Unless otherwise specified in a certificate delivered pursuant to Section 301 of this
Indenture with respect to a particular series of Securities, whenever for purposes of this
Indenture any action may be taken by the Holders of a specified percentage in aggregate principal
amount of Securities of all series or all series affected by a particular action at the time
Outstanding and, at such time, there are Outstanding Securities of any series which are denominated
in a coin, currency or currency unit other than Dollars, then the principal amount of Securities of
such series which shall be deemed to be Outstanding for the purpose of taking such action shall be
that amount of Dollars that could be obtained for the stated Foreign Currency or Euro principal
amount of such Outstanding Securities at the Market Exchange Rate on the record date for the
purpose of taking such action. If the appropriate Market Exchange Rate is not available for any
reason with respect to such currency, the Trustee shall use, in its sole discretion and without
liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of
Euros, the rate of exchange as published in Journal, as of the most recent available date, or
quotations or, in the case of Euros, rates of exchange from one or more major banks in The City of
New York or in the country of issue of the currency in question or, in the case of Euros, in
Luxembourg, or such other quotations or, in the case of Euros, rates of exchange as the Trustee,
upon consultation with the Company, shall deem appropriate. All decisions and determinations of the
Trustee regarding the Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and irrevocably binding upon the Company and all Holders.
SECTION 116. Payment Currency.
If the principal of and/or interest on (or premium, if any, on) any Securities is payable in a
Foreign Currency or Euros and such Foreign Currency or Euros is not available for payment due to
the imposition of exchange controls or other circumstances beyond the control of the Company, then
the Company shall be entitled to satisfy its obligations to Holders under this Indenture by making
such payment in Dollars on the basis of the Market Exchange Rate for such Foreign Currency or Euros
on the latest date for which such
7
rate was established on or before the date on which payment is
due. Any payment made under this Section in Dollars where the required payment is in a Foreign
Currency or Euros shall not constitute an Event of Default.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form of Securities of any
series is established by action taken pursuant to a Board Resolution, an appropriate Officers
Certificate setting forth such form together with a copy of the Board Resolution shall be 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, typed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Trustees Certificate of Authentication.
The Trustees certificate of authentication shall be in substantially the form set forth
below:
This is one of the Securities of the series designated herein issued under the
within-mentioned Indenture.
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[ ], as Trustee
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By: |
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Authorized Officer |
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture may not exceed $[ ].
The Securities may be issued in one or more series. There shall be established in or pursuant
to a procedure established in a Board Resolution, and set forth in an Officers Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance of Securities of
any series:
(1) the title of the Securities of the series (which shall distinguish the Securities of the
series from the Securities of all other series) and the form of the Securities of the 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, 306, 906 or 1107);
(3) the date or dates on which the principal of (and premium, if any, on) the Securities of
the series is payable, or the manner in which such dates are determined;
(4) the price or prices (expressed as a percentage of the principal amount thereof) at which
the Securities of the series will be issued;
(5) the rate or rates at which the Securities of the series shall bear interest, if any, or,
if applicable, the method used to determine such rate or rates (including, but not limited to, any
commodity, commodity index, stock exchange index or financial index)
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at which the Securities of the series shall bear interest, if any, the date or dates on which such interest, if any, shall
commence, the date or dates from which any such interest shall accrue, or the manner in which such
dates are determined, the Interest Payment Dates on which any such interest shall be payable, the
Regular Record Dates, if any, for the payment of interest on any Interest Payment Date and the rate
or rates of interest, if any, payable on overdue installments of interest on or principal of (or
premium, if any, on) the Securities of the series, and whether the interest rate may be reset upon
certain designated events and, in the case of Floating Rate Securities, the notice, if any, to
Holders regarding the determination of interest and the manner of giving such notice, and the
extent to which, or the manner in which, any interest payable on any Global Security on an Interest
Payment Date will be paid or calculated if other than in the manner provided in Section 307 or
Section 310 if other than calculated on the basis of a 360-day year of twelve 30-day months;
(6) if other than the Trustee, the identity of the Security Registrar and, if other than as
specified in Section 1002, the place or places where the principal of (and premium, if any) and
interest, if any, on Securities of the series shall be payable, or the method of such payment, if
by wire transfer, mail or other means;
(7) if the Securities of such series are redeemable, 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 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;
(11) additional covenants of the Company, if any, for the benefit of the Holders of Securities
of such series;
(12) if the provisions of Section 401(4) relating to satisfaction and discharge of Securities
more than one year prior to their Stated Maturity or redemption shall apply to Securities of the
series, a statement of such fact;
(13) if other than Dollars, the coin or currency in which the Securities of that series are
denominated (including, but not limited to any Foreign Currency or Euros) if payments of principal
of, or interest or premium, if any, on, the Securities of the series are to be made in one or more
currencies or currency units other than that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such payments will be determined;
(14) if the amount of payments of principal (and premium, if any) or interest, if any, on the
Securities of the series may be determined with reference to an index based on a currency or
currencies or by reference to a commodity, commodity index, stock exchange index or financial
index, the manner in which such amounts shall be determined;
(15) provisions, if any, for the defeasance of Securities of the series;
(16) the date as of which any Global Security representing any Outstanding Debt Securities of
the series shall be dated if other than the date of original issuance of the first Security of the
series to be issued;
(17) whether the Securities of the series shall be issued in whole or in part in the form of
one or more Global Securities and, in such case, the Depositary for such Global Security or
Securities;
(18) the provisions, if any, relating to any collateral provided for the Securities of the
series;
(19) any addition to or change in the Events of Default which applies to any Securities of the
series, and any change in the right of the Trustee or the requisite Holders of such Securities to
declare the principal amount thereof due and payable pursuant to Section 502;
(20) the terms and conditions, if any, for conversion of the Securities into or exchange of
the Securities for shares of common stock or preferred stock of the Company that apply to
Securities of the series;
(21) the right, if any, to extend the maturity of the Securities of the series and the
duration of such extension;
(22) any depositories, interest rate calculation agents, exchange rate calculation agents or
other agents with respect to Securities of such series if other than those appointed herein; and
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(23) any other terms, conditions, rights and preferences (or limitations on such rights and
preferences) relating to the Securities of such series.
All Securities of any one series shall be substantially identical except as to denomination
and the rate or rates of interest, if any, the date or dates from which interest shall accrue and
maturity and except as may otherwise be provided in or pursuant to such Board Resolution and set
forth in such Officers Certificate 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 Officers Certificate setting forth the terms of the series.
All Securities of any one series need not be issued at the same time, and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the
Board Resolution, supplemental indenture or Officers Certificate referred to above. However, the
authorized principal amount of any series may not be increased to provide for issuances of
additional Securities of such series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers Certificate.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without coupons in such
denominations as shall be specified as contemplated by Section 301. In the absence of any such
provisions with respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by any two of its Chairman of the
Board, its President, any Vice President, its Treasurer or its Secretary, under its corporate seal
reproduced thereon. The signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver to the Trustee or an Authenticating Agent for authentication Securities of any
series executed by the Company, together with a Company Order for the authentication and delivery
of such Securities, and the Trustee or such Authenticating Agent in accordance with the Company
Order shall authenticate and deliver such Securities. If all the Securities of any series are not
to be issued at one time, and if the Board Resolution, Officers Certificate or supplemental
indenture establishing such series shall so permit, such Company Order may set forth procedures
acceptable to the Trustee for the issuance of such Securities and the determination of the terms of
particular Securities of such series such as interest rate, maturity date, date of issuance and
date from which interest shall accrue. If the form or terms of the Securities of the series have
been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and
301, in authenticating such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall receive, and (subject to Section 601)
shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to Board Resolution as
permitted by Section 201, that such form has been established in conformity with the provisions of
this Indenture; and
(b) if the terms of such Securities have been established by or pursuant to Board Resolution
as permitted by Section 301, that such terms have been established in conformity with the
provisions of this Indenture.
If all the Securities of any series are not to be issued at one time, it shall not be
necessary to deliver an Opinion of Counsel at the time of issuance of each Security, but such
Opinion of Counsel, with appropriate modifications, may instead be delivered at or prior to the
time of issuance of the first Security of such series.
The Trustee or any Authenticating Agent shall have the right to authenticate and deliver any
of such Securities if it, being advised by counsel, determines that such action may not lawfully be
taken, or if it, its board of directors, trustees, executive committee, or a trust committee of
directors or trustees and/or vice presidents shall determine in good faith that such action would
expose it to personal liability to existing Holders or if the issue of such Securities pursuant to
this Indenture will affect the Trustees own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
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No Security shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of authentication substantially
in the form provided for herein executed by the Trustee or an Authenticating Agent 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 and is entitled to
the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
upon Company Order the Trustee or an Authenticating Agent shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
Until so exchanged the temporary Securities of any series shall in all respects be entitled to
the same benefits under this Indenture as definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
With respect to each series of Securities, the Company shall cause to be kept at one of the
offices or agencies maintained pursuant to Section 1002 a register (the register maintained in such
office and in any other office or agency established by the Company in a Place of Payment 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 of that series and of transfers of Securities of that series. Pursuant to Section 301,
the Company shall appoint, with respect to Securities of each series, a Security Registrar for
the purpose of registering such Securities and transfers and exchanges of such Securities as herein
provided. In the event the Trustee shall not be Security Registrar, it shall have the right to
examine the Security Register at all reasonable times.
Upon surrender for registration of transfer of any Security of any series at the designated
office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee
or an Authenticating Agent shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of the same series, of any authorized denominations and
of a like tenor, aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series (except Global Securities) may be
exchanged for other Securities of the same series, of any authorized denominations and of a like
tenor, aggregate principal amount and Stated Maturity, upon surrender of the Securities to be
exchanged at such office or agency and upon payment, if the Company shall so require, of the
charges hereinafter provided. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee or an Authenticating Agent 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 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 exchange shall (if so
required by the Company or the Trustee or the Security Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar (and, if so required by the Trustee, to the Trustee) 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 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15 days before the
day of selection for redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of the mailing of notice of redemption, or (ii)
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.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If there shall be delivered to the Company and the Trustee (i) a mutilated Security or
evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity bond as may be determined in the reasonable judgment of the Company or the
Trustee, as the case may be, to protect the Company, the Trustee and any agent of either of them
from any loss which any of them may suffer if a Security is replaced, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Trustee or an Authenticating Agent
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shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Security, a new Security of the same series and of like tenor, principal amount and Stated
Maturity 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 307. Payment of Interest; Interest Rights Preserved; Optional Interest Reset.
(a) Except as otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, 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.
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 registered 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 l0 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.
(b) The provisions of this Section 307(b) may be made applicable to any series of Securities
pursuant to Section 301 (with such modifications, additional or substitutions as may be specified
pursuant to Section 301). The interest rate on any Security of such series may be reset by the
Company on the date or dates specified on the face of such Security (each an Optional Reset
Date). The Company may exercise such option with respect to a Security by notifying the Trustee of
all of the relevant information relating to such exercise at least 50 but not more than 60 days
prior to an Optional Reset Date, the Trustee shall transmit, in the manner provided for in Section
106, to the Holder of any such Security a notice (the Reset Notice) indicating whether the
Company has elected to reset the interest rate, and if so (i) such new interest rate and (ii) the
provisions, if any, for redemption during the period from such
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Optional Reset Date to the next Optional Reset Date or if there is no such next Optional Reset Date, to the Stated Maturity Date of
such Security (each such period a Subsequent Interest Period), including the date or dates on
which or the period or periods during which and the price or prices at which such redemption may
occur during the Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the
Company may, at its option, revoke the interest rate provided for in the Reset Notice and establish
a higher interest rate for the Subsequent Interest Period by causing the Trustee to transmit, in
the manner provided for in Section 106, notice of such higher interest rate to the Holder of such
Security. Such notice shall be irrevocable. All Securities with respect to which the interest rate
is reset on an Optional Reset Date will bear such higher interest rate.
The Holder of any such Security will have the option to elect repayment by the Company of the
principal of such Security on each Optional Reset Date at a price equal to the principal amount
thereof plus interest accrued to such Optional Reset Date. In order to obtain repayment on an
Optional Reset Date, the Holder must follow the procedures set forth in Article Thirteen for
repayment at the option of Holders, as such apply to such Security, except that the period for
delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to
such Optional Reset Date and except that, if the holder has tendered any Security for repayment
pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender
or repayment until the close of business on the tenth day before such Optional Reset Date.
Subject to the foregoing provisions of this Section and Section 305, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in lieu of any other
Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried
by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee,
any Paying Agent, any Authenticating Agent and any other 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 307)
interest, if any, on such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee, any Paying Agent, any Authenticating
Agent nor any other agent of the Company or the Trustee shall be affected by notice to the
contrary.
None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests. Notwithstanding the foregoing, with
respect to any Global Security, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any Depositary, as a Holder, with respect to such Global Security or
impair, as between such Depositary and owners of beneficial interests in such Global Security, the
operation of customary practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Global Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled 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 cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities shall be destroyed by the Trustee and the
Trustee shall deliver a certificate of such destruction to the Company, unless the Company by
Company Order shall direct that such cancelled Securities be returned to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 311. Global Securities.
If the Company shall establish pursuant to Section 301 that the Securities of a series are to
be issued in whole or in part in the form of one or more Global Securities, then the Company shall
execute and the Trustee shall, in accordance with Section 303 and the Company Order with respect to
such series, authenticate and deliver one or more Global Securities in temporary or permanent form
that (i) shall represent and shall be denominated in an amount equal to the aggregate principal
amount of the outstanding Securities of such series to be represented by one or more Global
Securities, (ii) shall be registered in the name of the Depositary for such Global Security or
Securities or the nominee of such depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such
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Depositarys instruction, and (iv) shall bear a legend substantially
to the following effect: This Security is a Global Security within the meaning of the Indenture
hereinafter referred to, and is registered in the name of the Depository or a nominee of the
Depository. This Security is exchangeable for Securities registered in the name of a Person other
than the Depository or its nominee only in the limited circumstances described in the Indenture,
and may be transferred except as a whole by the Depositary to a nominee of the Depositary, 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. The Trustee shall deal with the Depositary and its participants as representatives of
the Beneficial Owners of the Global Securities for purposes of exercising the rights of the Holders
hereunder and the rights of the Beneficial Owners of the Global Securities shall be limited to
those established by law and agreements between such Beneficial Owners and the Depositary and its
participants. Beneficial Owners shall not be entitled to certificates for Global Securities as to which they are the Beneficial Owners. Requests and directions from,
and votes of, such representatives shall not be deemed to be inconsistent if they are made with
respect to different Beneficial Owners.
Notwithstanding any other provision of this Section or Section 305, unless and until it is
exchanged in whole or in part for Securities in definitive form, a Global Security representing all
or a portion of the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary, by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor depositary. The Beneficial
Owners ownership of Securities shall be recorded on the records of a participant of the Depositary
that maintains such Beneficial Owners account for such purpose and the participants record
ownership of such Securities shall be recorded on the records of the Depositary.
If at any time the Depositary for the Securities of a series notifies the Company that it is
unwilling or unable to continue as Depositary for the Securities of such series or if at any time
the Depositary for Securities of a series ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to the Securities of such series. If a successor
Depositary for the Securities of such series is not appointed by the Company within 90 days after
the Company receives written notice or becomes aware of such condition, the Company will execute,
and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such series, with like
tenor and terms, in definitive form in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such series in exchange for such Global Security
or Securities.
The Company may at any time and in its sole discretion determine that the Securities of any
series issued in the form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event, the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive Securities of such
series, will authenticate and deliver, Securities of such series, with like tenor and terms, in
definitive form and in an aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such series in exchange for such Global Security or Securities.
If specified by the Company pursuant to Section 301 with respect to Securities of a series,
the Depositary for such series of Securities may surrender a Global Security for such series of
Securities in exchange in whole or in part for Securities of such series in definitive form on such
terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute
and the Trustee shall authenticate and deliver, without charge,
(i) to each Person specified by the Depositary a new Security or Securities of the same series
of like tenor and terms, of any authorized denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such Persons beneficial interest in the Global
Security; and
(ii) to the Depositary a new Global Security in a denomination equal to the difference, if
any, between the principal amount of the surrendered Global Security and the aggregate principal
amount of Securities delivered to Holders thereof.
Upon the exchange of a Global Security for Securities in definitive form, such Global Security
shall be cancelled by the Trustee. Securities issued in exchange for a Global Security pursuant to
this Section shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to
the persons in whose names such Securities are so registered.
The Depository, as a Holder, may appoint agents and otherwise authorize participants to give
or take any request, demand, authorization, direction, notice, consent, waiver or other action
which a Holder is entitled to give or take under this Indenture.
Notwithstanding the other provisions of this Indenture, unless otherwise specified as
contemplated by Section 301, payment of the principal of, and interest and premium, if any, on, any
Global Security shall be made to the Depository or its nominee in its capacity as the Holder
thereof. Further, the Company, the Trustee and any Authentication Agent shall treat a Person as the
Holder of such principal amount of outstanding Securities of any series represented by a Global
Security as shall be specified in a written statement of the Depository (which may be in the form
of a participants list for such series) with respect to such Global Security, for
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purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders
pursuant to this Indenture, provided, that until the Trustee is so provided with a written
statement, it may treat the Depository or any other Person in whose name a Global Security is
registered as the owner of such Global Security for all purposes, and none of the Company, the
Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 312. Optional Extension of Maturity.
The provisions of this Section may be made applicable to any series of Securities pursuant to
Section 301 (with such modifications, additions or substitutions as may be specified pursuant to
Section 301). The Stated Maturity of any Security of such series may be extended at the option of
the Company for the period or periods specified on the face of such Security (each an Extension
Period) up to but not beyond the date (the Final Maturity) set forth on the face of such
Security. The Company may exercise such option with respect to any Security by notifying the Trustee of such exercise at
least 50 but not more than 60 days prior to the Stated Maturity of such Security in effect prior to
the exercise of such (the Original Stated Maturity). If the Company exercises such option, the
Trustee shall transmit, in the manner provided for in Section 106, to the Holder of such Security
not later than 40 days prior to the Original Stated Maturity a notice (the Extension Notice)
indicating (i) the election of the Company to extend the Maturity, (ii) the new Stated Maturity
Date, (iii) the interest rate applicable to the Extension Period and (iv) the provisions, if any,
for redemption during such Extension Period. Upon the Trustees transmittal of the Extension
Notice, the Stated Maturity Date of such Security shall be extended automatically and, except as
modified by the Extension Notice and as described in the next paragraph, such Security will have
the same terms as prior to the transmittal of such Notice.
Notwithstanding the foregoing, not later than 20 days before the Original Stated Maturity of
such Security, the Company may, at its option, revoke the interest rate provided for in the
Extension Notice and establish a higher interest rate for the Extension Period by causing the
Trustee to transmit, in the manner provided for in Section 106, notice of such higher interest rate
to the Holder of such Security. Such notice shall be irrevocable. All Securities with respect to
which the Stated Maturity is extended will bear such higher interest rate.
If the Company extends the Maturity of any Security, the Holder will have the option to elect
repayment of such Security by the Company on the Original Stated Maturity at a price equal to the
outstanding principal amount thereof, plus interest accrued to such date. In order to obtain
repayment on the Original Stated Maturity once the Company has extended the Maturity thereof, the
Holder of an Outstanding Security must follow the procedures set forth in Article Thirteen for
repayment at the option of Holders, as such applies to the Securities of such series, except that
the period for delivery or notification to the Trustee shall be at least 25 but not more than 35
days prior to the Original Stated Maturity and except that, if the Holder has tendered any Security
for repayment pursuant to an Extension Notice, the Holder may by written notice to the Trustee
revoke such tender for repayment until the close of business on the tenth day before the Original
Stated Maturity unless the Trustee has previously delivered repayment of such Security to such
Holder.
SECTION 313. CUSIP and ISIN Numbers.
The Company in issuing the Securities may use one or more CUSIP and ISIN numbers (if then
generally in use), and, if the Company does so, the Trustee shall use the CUSIP number(s) and ISIN
numbers in notices of redemption or exchange as a convenience to Holders, provided that any such
notice may state that no representation is made as to the correctness or accuracy of the CUSIP and
ISIN number(s) printed in the notice or on the Securities, and that reliance may be placed only on
the other identification numbers printed on the Securities, and that any such redemption or
exchange shall not be affected by any defect in or omission of any such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Securities of any Series.
The Company shall be deemed to have satisfied and discharged the entire indebtedness on all
the Securities of any particular series and the Trustee, upon Company request and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and discharge of such
indebtedness, when
(1) either:
(A) all Securities of such series theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in the last paragraph of Section 1003) have been delivered
to the Trustee for cancellation; or
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(B) with respect to all Outstanding Securities of such series described in (A) above not
theretofore delivered to the Trustee for cancellation,
(i) The Company has deposited or caused to be deposited with the Trustee as trust funds in
trust an amount sufficient to pay and discharge the entire indebtedness on all such Outstanding
Securities of such series for principal (and premium, if any) and interest to the Stated Maturity
or any Redemption Date as contemplated by Section 403, as the case may be; or
(ii) The Company has deposited or caused to be deposited with the Trustee as obligations in
trust such amount of direct obligations of, or obligations the principal of and interest on which
are fully guaranteed by, the United States of America (other than obligations subject to
prepayment, redemption or call prior to their stated maturity) as will, together with the
predetermined and certain income to accrue thereon (without consideration of any reinvestment
thereof), be sufficient to pay and discharge when due the entire indebtedness on all such Outstanding Securities of such series for principal (and
premium, if any) and interest to the Stated Maturity or any Redemption Date as contemplated by
Section 403, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable with respect to the
Securities of such series;
(3) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of the entire indebtedness on all Securities of such series have been
complied with; and
(4) if the entire indebtedness on the Outstanding Securities of such series is to be satisfied
and discharged pursuant to Section 401(l)(B) above, then (i) the Company shall have specified the
applicability (as provided in Section 301) of this Section 401(4) to the Securities of such series,
(ii) the Company shall have given, not later than the date of such deposit, notice of such deposit
to the Holders of Securities of such series and (iii) the Trustee shall have received an Opinion of
Counsel (which Counsel shall be recognized tax counsel) stating that, (x) the Company has received
from the Internal Revenue Service a ruling or (y) since the date of this Indenture, there has been
a change in the applicable federal income tax law, including by means of a Revenue Ruling published
by the Internal Revenue Service, in either case to the effect that, and based thereon such Opinion
of Counsel will confirm that the deposit of funds or obligations and the satisfaction and discharge
of indebtedness on the Securities of such series pursuant to this Section will not result in
recognition by the Holders of income, gain or loss for federal income tax purposes (other than
income, gain or loss which would have been recognized in like amount and at a like time absent such
deposit, satisfaction and discharge), provided that the Company will be discharged from the
requirements of Article Eight if (i) it has satisfied all of the requirements for satisfaction and
discharge of the indebtedness on the Outstanding Securities pursuant to Section 401(1)(B) except
for the delivery of the Opinion of Counsel described above, and (ii) the Trustee shall have
received an Opinion of Counsel stating that the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of the deposit of such funds or obligations and will be
subject to federal tax in the same amounts, in the same manner and at the same times as would have
been the case if such deposit of funds or obligations had not occurred.
Upon the satisfaction of the conditions set forth in this Section with respect to all the
Securities of any series, the terms and conditions of such series, including the terms and
conditions with respect thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company, and the Holders of the Securities of such series shall look for payment
only to the funds or obligations deposited with the Trustee pursuant to Section 401(l)(B);
provided, however, that, in no event shall the Company be discharged (a) from any payment
obligations in respect of Securities of such series which are deemed not to be Outstanding under
clause (iii) of the definition thereof if such obligations continue to be valid obligations of the
Company under applicable law, (b) from any obligations under Section 607 or the last paragraph of
Section 1003, and (c) from any obligations under Section 305 and 306 (except that Securities of
such series issued upon registration of transfer or exchange or in lieu of mutilated, lost,
destroyed or stolen Securities shall not be obligations of the Company), and Section 701.
SECTION 402. Satisfaction and Discharge of Indenture.
Upon compliance by the Company with the provisions of Section 401 as to the satisfaction and
discharge of each series of Securities issued hereunder, this Indenture shall cease to be of any
further effect (except as otherwise provided herein). Upon Company Request (and at the expense of
the Company), the Trustee shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture. In the event there are two or more Trustees hereunder, then the effectiveness of
any such instrument shall be conditioned upon receipt of such instruments from all Trustees
hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, any obligations of the
Company under Sections 305, 306, 607 and 701 and the last paragraph of Section 1003, and of the
Trustee under Sections 403 and 613 and the last two paragraphs of Section 1003, shall survive.
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SECTION 403. Application of Trust Money.
Subject to the provisions of the last two paragraphs of Section 1003, all money and
obligations deposited with the Trustee pursuant to Section 401 shall be held irrevocably in trust
and shall be made under the terms of an escrow trust agreement in form and substance satisfactory
to the Trustee. Such money and obligations shall be applied by the Trustee, in accordance with the
provisions of the Securities, this Indenture and such escrow trust agreement, 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 of (and premium, if
any) and interest, if any, on the Securities for the payment of which such money and obligations
have been deposited with the Trustee (but such money need not be segregated from other funds except
to the extent required by law). If Securities of any series are to be redeemed prior to their
Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the Company shall make such arrangements as are satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense,
of the Company.
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 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 of (or premium, if any, on) any Security of that
series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a
Security of that series; or
(4) default in the performance, or breach, of any covenant or agreement of the Company in this
Indenture (other than a covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that series), and continuance
of such default or breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and stating that such notice is a
Notice of Default hereunder; or
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Custodian of it or for all or substantially all of its
property, or
(D) makes a general assignment for the benefit of its creditors; or
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case;
(B) appoints a Custodian of the Company or for all or substantially all of its property, or
(C) orders the liquidation of the Company, and the order or decree remains unstayed and in
effect for 60 days.
The term Bankruptcy Law means Title 11 of the U.S. Code or any similar Federal or State law
for the relief of debtors. The term Custodian means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
(7) any other Event of Default provided with respect to the Securities of that series pursuant
to Section 301 or in a supplemental indenture.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time Outstanding occurs
and is continuing, then in every such case the Trustee or the Holders of not less than 25% in
principal amount of the outstanding Securities of that series may declare the principal amount (or,
if the Securities of that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all of the Securities of that
series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or specified portion)
shall become immediately due and payable.
Upon payment of such amount, all obligations of the Company in respect of the payment of
principal of the Securities of such series shall terminate.
At any time after such a declaration of acceleration with respect to Securities of any series
has been made and before a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest, if any, on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which have become
due otherwise than by such declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at
the rate or rates, if any, prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series 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 on any Security of any series 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 of (or premium, if any, on) any Security
of any series at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of Securities of such series, the whole amount then due and payable on
Securities of such series for principal (and premium, if any) and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue principal (and
premium, if any) and on any overdue interest, at the rate or rates, if any, prescribed therefor in
such Securities; and, in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
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SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration of acceleration or otherwise
and irrespective of whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (or with respect to Original
Issue Discount Securities, such portion of the principal amount as may be specified in the terms of
such Securities), and premium, if any and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any 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. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
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 premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if
any) and interest, if any, on the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if any) and interest, if
any, respectively; and
THIRD: The balance, if any, to the Company, its successor or assigns or to whoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:
(1) An Event of Default shall have occurred and be continuing with respect to the Securities
of that series and such Holder shall have previously given written notice thereof to the Trustee;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that
series shall have made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;
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(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 Holder or to obtain or to seek to obtain priority or
preference over any other Holder or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all Holders of Securities of such series.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 307) interest, if any, on such Security on the Stated
Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding 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 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any 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;
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction;
(3) such direction is not unduly prejudicial to the rights of other Holders;and
(4) such direction would not involve the Trustee in personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities of
any series may on behalf of the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or interest, if any (subject to
the provisions of Section 502), on any Security of such series, or
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(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 the Securities of such series
under this Indenture; but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys fees at trial and on appeal, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of (or premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificate or opinion which by any provision hereof is specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not it conforms to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that:
(1) this Subsection shall not be construed to limit the effect of Subsection (a) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken, suffered or omitted to
be taken by it in good faith in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series, as provided in Section 512, relating
to the time, method and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to
the Securities of such series; and
(4) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not herein expressly so provided, every provision of this Indenture relating to
the conduct of or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
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SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect to the Securities of
any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as
their names and addresses appear in the Security Register, notice of such default hereunder
actually known to a Responsible Officer of the Trustee, unless such default shall have been cured
or waived; provided, however, that except in the case of a default in the payment of the principal of (or
premium, if any) or interest, if any, on any Security of such series, in the payment of any sinking
fund installment with respect to Securities of such series or in the payment of the Redemption
Price of any Securities as to which notice of redemption has been given, the Trustee shall be
protected in withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given
until at least 60 days after the occurrence thereof. For the purpose of this Section, the term
default means any event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties;
(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 Officers Certificate;
(d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(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, including any
Authenticating Agent, appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or powers conferred upon it by
this Indenture; and
(i) the Trustee shall not be charged with knowledge of any Event of Default with respect to
the Securities of any series for which it is acting as Trustee unless either (1) a Responsible
Officer of the Trustee assigned to the Corporate Trust Office of the Trustee (or any successor
division or department of the Trustee) shall have actual knowledge of the Event of Default or (2)
written notice of such Event of Default shall have been given to the Trustee by the Company, any
other obligor on such Securities or by any Holder of such Securities.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except certificates of authentication,
shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the Company of Securities
or the proceeds thereof.
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SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, the Security Registrar or any other
agent of the Company or the Trustee, in their individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 608 and 612, 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 or any Paying Agent in trust hereunder need not be segregated from
other funds except to the extent required by law. Neither the Trustee nor any paying Agent shall be
subject to any liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for all services rendered
by it hereunder (which compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on their 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 themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the Company under this Section, the
Trustee shall have a lien prior to the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the payment of principal (or premium, if any)
or interest, if any, on Securities.
The provisions of this Section shall survive the resignation or removal of the Trustee or the
discharge of this Indenture. When the Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 501(5) or (6) the expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 608. Corporate Trustee Required; Eligibility; Conflicting Interests.
This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture
Act Sections 310(a)(1), (2) and (5) in every respect. The Trustee (or in the case of a Trustee that
is a Person included in a bank holding company system, the related bank holding company) shall have
a combined capital and surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with Trust Indenture Act Section 310(b),
including the provision in Section 310(b)(1). In addition, if the Trustee is a Person included in a
bank holding company system, the Trustee, independently of such bank holding company, shall meet
the capital requirements of Trust Indenture Act Section 310(a)(2). If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee or
Trustees pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee or Trustees in accordance with the applicable requirements of Section 610.
(b) The Trustee may resign at any time with respect to the Securities of one or more series by
notifying the Company in writing at least 90 days in advance of such resignation. If the instrument
of acceptance by a successor Trustee required by Section 610 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.
(c) The Trustee may be removed at any time with respect to the Securities of any series by Act
of the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
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(d) If at any time 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, the Company by a Board Resolution may remove the Trustee with respect to the Securities
of such series or, subject to Section 514, 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 removal of the Trustee with respect to the
Securities of such series and the appointment of a successor Trustee.
(e) If at any time:
(1) the Trustee shall cease to be eligible under Section 608 and shall fail to resign after
written request therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect
to all Securities, or (ii) subject to Section 514, any holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(f) 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 610. 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 610, become the successor
Trustee with respect to the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company with respect to such series. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or the Holders of the
Securities of such series and accepted appointment in the manner required by Section 610, 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.
(g) The Company shall give notice of each resignation and each removal of the Trustee with
respect to the Securities of any series and each appointment of a successor Trustee with respect to
the Securities of any series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect to all series of
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 due pursuant to Section 607,
execute and deliver an instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder subject to the lien provided
in Section 607.
(b) In case of the appointment hereunder of a successor Trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all series of
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 or
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
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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 these series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may
be.
(d) No successor Trustee shall accept its appointment unless at the time of such acceptance
such successor Trustee shall be qualified and eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the parties hereto. In
case any Securities shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the same effect as if
such successor Trustee had itself authenticated such Securities.
SECTION 612. Preferential Collection of Claims Against Company.
The Trustee shall comply with Trust Indenture Act Section 311(a), excluding any creditor
relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or been
removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated therein.
SECTION 613. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate and deliver Securities of such series
with respect to which it has been so designated, and Securities so authenticated and delivered
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 Trustees certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times be a bank or trust
company or corporation organized and doing business and in good standing under the laws of the
United States, 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 $100,000,000 and
subject to supervision or examination by Federal, State or District of Columbia 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 with respect to one or more series of Securities 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 with respect to one or more series of
Securities 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
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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 of Securities of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the provisions of this
Section.
The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section. The provisions of Sections 104, 111, 603, 604 and
605 shall be applicable to any Authenticating Agent.
Pursuant to each appointment made under this Section, the Securities of each series covered by
such appointment may have endorsed thereon, in lieu of the Trustees certificate of authentication,
an alternate certificate of authentication in substantially the following form:
This is one of the Securities, of the series designated herein, issued under the
within-mentioned Indenture.
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Holder Lists.
The Trustee shall preserve, in as current a form as is reasonably practicable, the most recent
list available to it of the names and addresses of Holders of each series of Securities. If the
Trustee is not the Securities Registrar, the Company shall furnish to the Trustee as of each
regular record date for the payment of interest on the Securities of a series and before each
related Interest Payment Date, and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of each series of Securities.
SECTION 702. Communications by Holders with Other Holders.
Holders of any series may communicate pursuant to Trust Indenture Act Section 312(b) with
other Holders of that series or any other series with respect to their rights under this Indenture
or the Securities of that series or any other series. The Company, the Trustee, the Securities
Registrar and any other Person shall have the protection of Trust Indenture Act Section 312(c).
SECTION 703. Reports by Trustee.
(a) If and to the extent required by the Trust Indenture Act, within 60 days after May 1 of
each year commencing with the May 1 following the date of this Indenture, if and so long as any
Securities are Outstanding hereunder, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Security Register, a brief report dated as of such May 1 that
complies with Trust Indenture Act Section 313(a). The Trustee shall also comply with Trust
Indenture Act Sections 313(b) and 313(c).
(b) A copy of any such report required to be sent under Section 703(a) shall, at the time of
such transmission to Holders, be filed by the Trustee, with each securities exchange upon which any
Securities of that series are listed, with the Commission and with the Company. The Company will
notify the Trustee when any Securities of any series are listed on any securities exchange or any
delisting thereof, and the Trustee shall comply with Trust Indenture Act Section 313(d).
SECTION 704. Reports by Company.
The Company will deliver to the Trustee within 15 days after the filing of the same with the
Commission, copies of the quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended. Notwithstanding that the Company may
not be subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended, the Company will file with the Commission, to the extent permitted, and
provide the Trustee with, such supplementary and periodic information, documents and reports which
may be required under Section 13 of the Securities Exchange Act of 1934, as amended. The
26
Company will also comply with the other provisions of Trust Indenture Act Section 314(a). All information,
documents and reports to be provided pursuant to this Section will be deemed to be so delivered to
the Trustee when the Company files such information, documents and reports with the Commission
through the Commissions EDGAR database.
ARTICLE EIGHT
SUCCESSOR CORPORATION
SECTION 801. Limitation on Consolidation, Merger and Sale of Assets.
(a) The Company will not, in any transaction or series of transactions, merge or consolidate
with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially
all of its properties and assets (as an entirety or substantially as an entirety in one transaction
or a series of related transactions), to any Person or Persons, unless at the time of and after
giving effect thereto (i) either (A) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving Person of such merger or consolidation, or (B)
the Person formed by such consolidation or into which the Company is merged or to which the
properties and assets of the Company are transferred (any such surviving Person or transferee
Person being the Surviving Entity) shall be a corporation organized and existing under the laws
of the United States of America, any state thereof or the District of Columbia, and shall expressly
assume by a supplemental indenture executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all of the obligations of the Company (including, without limitation,
the obligation to pay the principal of, and premium and interest, if any, on, the Securities and
the performance of the other covenants) under the Securities of each Series and this Indenture, and
in each case, this Indenture shall remain in full force and effect; and (ii) immediately before and
immediately after giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions), no default or Event
of Default shall have occurred and be continuing.
(b) In connection with any consolidation, merger or transfer of assets contemplated by this
Section, the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an Officers Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer, and the supplemental indenture in respect
thereto, comply with this Section, and that all conditions precedent herein provided for relating
to such transaction or transactions have been complied with.
(c) For the avoidance of doubt, the foregoing provisions shall not be deemed to require the
assumption of Securities of a series if the terms thereof established in accordance with Section
301 provide for their redemption or purchase in the event of a transaction described in this
Section 801.
SECTION 802. Successor Person Substituted.
Upon any consolidation, merger or transfer of all or substantially all of the assets of the
Company in accordance with Section 801, the successor corporation formed by such consolidation, or
into which the Company is merged or to which such transfer 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 corporation had been named as the Company herein, and
thereafter (except with respect to any such transfer which is a lease) the predecessor corporation
shall be relieved of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, 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 corporation 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; provided, however,
that in respect of any such additional covenant, such supplemental indenture may provide for a
particular period of grace after default in the
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performance of such covenant (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee upon such default;
or
(3) to add any additional Events of Default; or
(4) to add to or change or eliminate any of the provisions of this Indenture to 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
(5) to change or eliminate any of the provisions of this Indenture, provided that any such
change or elimination shall become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture which is entitled to the
benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series 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 610(b); or
(9) to cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided such action 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 (each such series voting as a separate class) 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 modify the manner of determination of the
rate of interest thereon so as to affect adversely the interest of such Holder or reduce the amount
of the principal of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of 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 1006, 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 1006, or the deletion of this proviso, in accordance with the requirements of
Sections 610(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Trustee may in its discretion determine whether or not any Securities would be affected by
any supplemental indenture and any such determination shall he conclusive upon the Holders of all
Securities of any series. The Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
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SECTION 903. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be provided, 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 and that such supplemental indenture, when executed and delivered by
the Company, will constitute a valid and binding obligation of the Company in accordance with its
terms. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustees own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions of this Article,
this Indenture shall, with respect to such series, be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the Holders of Securities of the
series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and conditions of any such
supplemental indenture, with respect to such series, shall be and be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
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 of 1939, as amended, in effect on such date.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series, affected by a supplemental indenture, 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 Board of Directors, to any such
supplemental indenture may be prepared and executed by the Company and authenticated and delivered
by the Trustee or any Authenticating Agent in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay the principal of (and
premium, if any) and interest, if any, on the Securities of each series in accordance with the
terms of the Securities of such series and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will cause to be maintained in each Place of Payment for any series of Securities
an office or agency where Securities of that series may be presented or surrendered for payment,
where Securities of that series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. With respect to the Securities
of any series such office or agency and each place of Payment shall be as specified as contemplated
in Section 301. In the absence of any such provisions with respect to the Securities of any series
(i) the place of payment for such securities shall be the Borough of Manhattan, City of New York,
New York, and (ii) such office or agency in such Place of Payment shall be the Corporate Trust
Office of the Trustee therein. 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, City of New York, New York) where the Securities of one or more
series may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in each place of
Payment for Securities of any series for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the location of any such
office or agency.
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SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of (and premium, if any) or
interest, if any, on any of the Securities of that series, segregate and hold in trust for the
benefit of the persons entitled thereto a sum sufficient to pay the principal (and premium, if any)
or interest, if any, so becoming due until such sums shall be paid to such persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, on or before each due date of the principal of (and premium, if any) or interest, if any, on
any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the
benefit of the persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent other than the Trustee for any series of Securities
to execute and deliver to the Trustee an instrument in which such paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it as agent for the payment of the principal of (and premium, if
any) or interest, if any, on Securities of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee written notice within three Business Days of any default by the Company
(or any other obligor upon the Securities of that series) in the making of any payment of principal
(and premium, if any) or interest, if any, on the Securities of that series; and
(3) at any time during the continuance of any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which 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. Upon the satisfaction and discharge
of the indebtedness in respect of all Outstanding Securities of any series all sums then held by
any Paying Agent (other than the Trustee) in respect thereof shall, upon demand of the Company, be
repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all
further liability with respect to such money.
The Trustee and any Paying Agent shall promptly pay to the Company upon Company Request any
money or securities held by them at any time in excess of amounts necessary to satisfy amounts
payable to the Holders, the Trustee and the Paying Agent.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest, if any, on any
Security of any series and remaining unclaimed for two years after such principal (and premium, if
any) or interest, if any, has become due and payable shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, 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 each Place of Payment with respect to Securities of such series, 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,
unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence.
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SECTION 1005. Statement as to Compliance.
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 Officers Certificate which complies with Trust
Indenture Act Section 314(a)(4) and need not comply with Section 102, stating as to each signer
thereof that:
(1) a review of the activities of the Company during such year and of performance under this
Indenture has been made under his supervision, and
(2) as of the end of such year and at the date of the certificate to the best of his
knowledge, based on such review, (a) the Company is not in default in the fulfillment of any of its
obligations under this Indenture, or specifying each such default known to him and the nature and
status thereof and (b) no event has occurred and is continuing which is or after notice or lapse of
time or both would become an Event of Default, or, if such an event has occurred and is continuing,
specifying each such event known to him and the nature and status thereof.
SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant or condition set
forth in Sections 1002 to 1005, each inclusive, or a supplemental indenture with respect to the
Securities of any series if before the time for such compliance the Holders of at least a majority
in principal amount of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee with respect to any such covenant or condition shall remain
in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 301
for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of less than all the Securities of any
series, the Company shall, at least 45 days (unless a shorter notice shall be satisfactory to the
Trustee) prior to the Redemption Date fixed by the Company (unless a shorter notice, but not less
than 30 days, shall be satisfactory to the Trustee), notify the Trustee in writing of such
Redemption Date and of the principal amount of Securities of such series to be redeemed. In the
case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish
the Trustee with an Officers Certificate evidencing compliance with such restriction. Any such
notice may be canceled at any time prior to notice of such redemption being mailed to any Holder,
and shall thereby be void and of no effect.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the particular Securities to
be redeemed shall be selected by the Trustee not more than 45 days prior to the Redemption Date,
from the Outstanding Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for Securities of that series
or any integral multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of that series. In any
case where Securities of such series are registered in the same name, the Trustee in its discretion
may treat the aggregate principal amount so registered as if it were represented by one Security of
such series. If the Securities of any series to be redeemed consist of Securities having different
Stated Maturities or different rates of interest (or methods of computing interest), then the
Company may, by written notice to the Trustee, direct that the Securities of such series to be
redeemed shall be selected from among groups of such Securities having specified Stated Maturities
or rates of interest (or methods or computing interest) and the Trustee shall thereafter select the
particular Securities to be redeemed in the manner set forth above from among the groups of such
Securities so specified.
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The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Security redeemed or to
be redeemed only in part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 1104. 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,
(3) if less than all the Outstanding Securities of any series are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice which relates to such
Security shall state that on and after the Redemption Date, upon surrender of such Security, the
Holder will receive, without charge, a new Security or Securities of authorized denominations for
the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date, the Redemption Price will become due and payable upon each
such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and
after said date unless the Company defaults in making the redemption payment,
(6) the place or places where such Securities are to be surrendered for payment of the
Redemption Price,
(7) that the redemption is for a sinking fund, if such is the case,
(8) the CUSIP number, if any, printed on the Securities being redeemed, and
(9) that no representation is made as to the correctness or accuracy of the CUSIP number, if
any, listed in such notice or printed on the Securities.
Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Companys request, by the Trustee in the name and at the expense of
the Company. In the case of redemptions by the Company of Global Securities, the Company shall, at
least 30 days prior to the Redemption Date, notify the Depositary (with a copy to the Trustee) of
such redemption.
SECTION 1105. 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.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with 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 Regular Record Date according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.
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SECTION 1107. 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 written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new
Security or Securities of the same series, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered; provided, however, that the Depositary need not surrender
Global Securities for a partial redemption and may be authorized to make a notation on such Global
Security of such partial redemption. In the case of a partial redemption of the Global Securities,
the Depositary, and in turn, the participants in the Depositary, shall have the responsibility to
select any Securities to be redeemed by random lot.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section 301 for Securities
of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a mandatory sinking fund payment, and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an optional sinking fund payment. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of any series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series (1) deliver Outstanding Securities of such series (other
than any previously called for redemption) and (2) apply as a credit Securities of such series
which have been redeemed either at the election of the Company pursuant to the terms of such series
of Securities or through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case, provided that such Securities have not been previously
so credited. Such Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation of the sinking fund
and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers Certificate specifying the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202,
and the amount of any optional sinking fund payment to be added to the next ensuing sinking fund
payment, and will also deliver to the Trustee any Securities to be so delivered. If such Officers
Certificate shall specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and at the expense of
the Company in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Securities of any series which are repayable at the option of the Holders thereof before their
Stated Maturity shall be repaid in accordance with the terms of the Securities of such series. The
repayment of any principal amount of Securities pursuant to such
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option of the Holder to require
repayment of Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the indebtedness represented by such Securities
unless and until the Company, at its option, shall deliver or surrender the same to the Trustee
with a directive that such Securities be cancelled. Notwithstanding anything to the contrary
contained in this Section 1301, in connection with any repayment of Securities, the Company may
arrange for the purchase of any Securities by an agreement with one or more investment bankers or
other purchasers to purchase such Securities by paying to the Holders of such Securities on or
before the close of business on the repayment date an amount not less than the repayment price
payable by the Company on repayment of such Securities, and the obligation of the Company to pay
the repayment price of such Securities shall be satisfied and discharged to the extent such payment
is so paid by such purchasers to the respective Holders thereof.
* * *
This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and
their respective corporate seals to be hereunto affixed and attested, all as of the day and year
first above written.
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ADVENTRX PHARMACEUTICALS, INC.
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(SEAL) |
By: |
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Name: |
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Title: |
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Attest:
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(SEAL) |
By: |
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Name: |
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Title: |
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Attest:
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exv4w2
EXHIBIT 4.2
FORM OF SUBORDINATED INDENTURE
ADVENTRX PHARMACEUTICALS, INC.
and
[ ]
TRUSTEE
INDENTURE
DATED AS OF [ ], [ ]
SUBORDINATED DEBT SECURITIES
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION |
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SECTION 101. Definitions |
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1 |
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Act |
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1 |
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Affiliate |
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1 |
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Authenticating Agent |
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1 |
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Beneficial Owner |
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1 |
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Board of Directors |
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1 |
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Board Resolution |
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1 |
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Business Day |
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1 |
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Commission |
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2 |
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Company |
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2 |
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Company Request or Company Order |
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2 |
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Corporate Trust Office |
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2 |
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Corporation |
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2 |
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Defaulted Interest |
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2 |
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Depositary |
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2 |
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Dollar or $ |
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2 |
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Euro |
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2 |
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Event of Default |
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2 |
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Extension Notice |
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2 |
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Extension Period |
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2 |
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Final Maturity |
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2 |
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Fixed Rate Security |
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2 |
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Floating Rate Security |
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2 |
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Foreign Currency |
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2 |
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Global Security |
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2 |
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Holder |
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2 |
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Indenture |
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2 |
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Interest |
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2 |
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Interest Payment Date |
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2 |
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Journal |
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3 |
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Lien |
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3 |
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Market Exchange Rate |
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3 |
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Maturity |
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3 |
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Officers Certificate |
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3 |
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Opinion of Counsel |
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3 |
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Optional Reset Date |
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3 |
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Original Issue Discount Security |
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3 |
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Original Stated Maturity |
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3 |
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Outstanding |
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3 |
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Paying Agent |
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3 |
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Person |
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3 |
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Place of Payment |
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Predecessor Security |
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4 |
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Property |
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4 |
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Redemption Date |
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4 |
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Redemption Price |
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4 |
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Regular Record Date |
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4 |
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Reset Notice |
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Responsible Officer |
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Securities |
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Security Register and Security Registrar |
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Senior Indebtedness |
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4 |
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Special Record Date |
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4 |
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Stated Maturity |
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4 |
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Subordinated Indebtedness |
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4 |
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Subsequent Interest Period |
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Subsidiary |
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Trustee |
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Trust Indenture Act |
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Vice President |
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4 |
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SECTION 102. Compliance Certificates and Opinions |
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SECTION 103. Form of Documents Delivered to Trustee |
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5 |
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SECTION 104. Acts of Holders |
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SECTION 105. Notices, Etc., to Trustee and Company |
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SECTION 106. Notice to Holders; Waiver |
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SECTION 107. Conflict with Trust Indenture Act |
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SECTION 108. Effect of Headings and Table of Contents |
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SECTION 109. Successors and Assigns |
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SECTION 110. Separability Clause |
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SECTION 111. Benefits of Indenture |
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SECTION 112. Governing Law |
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SECTION 113. Legal Holidays |
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SECTION 114. Indenture and Securities Solely Corporate Obligations |
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SECTION 115. Consent of Holders of Securities in a Foreign Currency or Euros |
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SECTION 116. Payment Currency |
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ARTICLE TWO
SECURITY FORMS |
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SECTION 201. Forms Generally |
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SECTION 202. Form of Trustees Certificate of Authentication |
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ARTICLE THREE
THE SECURITIES |
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SECTION 301. Amount; Issuable in Series |
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SECTION 302. Denominations |
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SECTION 303. Execution, Authentication, Delivery and Dating |
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SECTION 304. Temporary Securities |
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11 |
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SECTION 305. Registration, Registration of Transfer and Exchange |
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11 |
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SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities |
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SECTION 307. Payment of Interest; Interest Rights Preserved; Optional Interest Reset |
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12 |
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SECTION 308. Persons Deemed Owners |
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13 |
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SECTION 309. Cancellation |
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13 |
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SECTION 310. Computation of Interest |
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13 |
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SECTION 311. Global Securities |
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14 |
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SECTION 312. Optional Extension of Maturity |
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15 |
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SECTION 313. CUSIP and ISIN Numbers |
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15 |
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ARTICLE FOUR
SATISFACTION AND DISCHARGE |
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SECTION 401. Satisfaction and Discharge of Securities of any Series |
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15 |
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SECTION 402. Satisfaction and Discharge of Indenture |
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16 |
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SECTION 403. Application of Trust Money |
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17 |
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ii
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Page |
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ARTICLE FIVE
REMEDIES |
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SECTION 501. Events of Default |
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SECTION 502. Acceleration of Maturity; Rescission and Annulment |
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee |
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SECTION 504. Trustee May File Proofs of Claim |
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19 |
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities |
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19 |
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SECTION 506. Application of Money Collected |
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SECTION 507. Limitation on Suits |
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19 |
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SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest |
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20 |
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SECTION 509. Restoration of Rights and Remedies |
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20 |
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SECTION 510. Rights and Remedies Cumulative |
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20 |
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SECTION 511. Delay or Omission Not Waiver |
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20 |
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SECTION 512. Control by Holders |
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20 |
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SECTION 513. Waiver of Past Defaults |
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20 |
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SECTION 514. Undertaking for Costs |
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21 |
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ARTICLE SIX
THE TRUSTEE |
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SECTION 601. Certain Duties and Responsibilities |
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SECTION 602. Notice of Defaults |
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22 |
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SECTION 603. Certain Rights of Trustee |
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22 |
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SECTION 604. Not Responsible for Recitals or Issuance of Securities |
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22 |
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SECTION 605. May Hold Securities |
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23 |
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SECTION 606. Money Held in Trust |
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23 |
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SECTION 607. Compensation and Reimbursement |
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23 |
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SECTION 608. Corporate Trustee Required; Eligibility; Conflicting Interests |
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23 |
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SECTION 609. Resignation and Removal; Appointment of Successor |
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23 |
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SECTION 610. Acceptance of Appointment by Successor |
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24 |
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SECTION 611. Merger, Conversion, Consolidation or Succession to Business |
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25 |
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SECTION 612. Preferential Collection of Claims Against Company |
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25 |
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SECTION 613. Appointment of Authenticating Agent |
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25 |
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY |
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SECTION 701. Holder Lists |
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SECTION 702. Communications by Holders with Other Holders |
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26 |
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SECTION 703. Reports by Trustee |
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26 |
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SECTION 704. Reports by Company |
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26 |
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ARTICLE EIGHT
SUCCESSOR CORPORATION |
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SECTION 801. Limitation on Consolidation, Merger and Sale of Assets |
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SECTION 802. Successor Person Substituted. |
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27 |
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ARTICLE NINE
SUPPLEMENTAL INDENTURES |
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SECTION 901. Supplemental Indentures Without Consent of Holders |
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SECTION 902. Supplemental Indentures with Consent of Holders |
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28 |
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SECTION 903. Execution of Supplemental Indentures |
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29 |
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SECTION 904. Effect of Supplemental Indentures |
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29 |
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SECTION 905. Conformity with Trust Indenture Act |
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29 |
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SECTION 906. Reference in Securities to Supplemental Indentures |
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29 |
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ARTICLE TEN
COVENANTS |
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SECTION 1001. Payment of Principal, Premium and Interest |
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SECTION 1002. Maintenance of Office or Agency |
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SECTION 1003. Money for Securities Payments to Be Held in Trust |
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30 |
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iii
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Page |
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SECTION 1004. Corporate Existence |
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SECTION 1005. Statement as to Compliance |
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SECTION 1006. Waiver of Certain Covenants |
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31 |
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES |
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SECTION 1101. Applicability of Article |
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SECTION 1102. Election to Redeem; Notice to Trustee |
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31 |
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SECTION 1103. Selection by Trustee of Securities to be Redeemed |
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31 |
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SECTION 1104. Notice of Redemption |
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32 |
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SECTION 1105. Deposit of Redemption Price |
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32 |
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SECTION 1106. Securities Payable on Redemption Date |
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32 |
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SECTION 1107. Securities Redeemed in Part |
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32 |
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ARTICLE TWELVE
SINKING FUNDS |
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SECTION 1201. Applicability of Article |
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33 |
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SECTION 1202. Satisfaction of Sinking Fund Payments with Securities |
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33 |
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SECTION 1203. Redemption of Securities for Sinking Fund |
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33 |
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ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS |
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SECTION 1301. Applicability of Article |
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33 |
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ARTICLE FOURTEEN
SUBORDINATION |
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SECTION 1401. Securities Subordinated to Senior Indebtedness |
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34 |
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SECTION 1402. Effectuation of Subordination by Trustee |
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35 |
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SECTION 1403. Knowledge of Trustee |
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35 |
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SECTION 1404. Trustees Relation to Senior Indebtedness |
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36 |
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SECTION 1405. Rights of Holders of Senior Indebtedness Not Impaired |
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36 |
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iv
INDENTURE,
dated as of [___], [___], between ADVENTRX Pharmaceuticals, Inc., a
corporation duly organized and existing under the laws of the State of Delaware (herein called the
Company), and [ ], 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 unsecured or secured and subordinated debentures, notes or
other evidences of senior indebtedness (herein called the Securities), to be issued in one or
more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the securities by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all
holders of the Securities or of any 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 and, except as otherwise herein expressly
provided, the term generally accepted accounting principles with respect to any computation
required or permitted hereunder shall mean such accounting principles as are generally accepted in
the United States of America at the date of such computation; and
(4) 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.
Affiliate of any specified person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, control when used with respect to any specified Person means the
power to direct the management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms controlling and
controlled have meanings correlative to the foregoing.
Authenticating Agent means any Person authorized by the Trustee to act on behalf of the
Trustee to authenticate and deliver one or more series of Securities.
Beneficial Owner means, with respect to Global Securities, the Person who is the beneficial
owner of such Securities as effected on the books of the Depositary for such Securities or on the
books of a Person maintaining an account with such Depositary (directly or as an indirect
participant, in accordance with the rules of such Depositary).
Board of Directors means either the board of directors of the Company or any duly authorized
committee of that board.
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the Trustee.
Business Day, when used with respect to any Place of Payment, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of
Payment, and (i) with respect to Securities denominated in a
1
Foreign Currency, the capital city of the country of the Foreign Currency, or (ii) with
respect to Securities denominated in Euros, Luxembourg, are authorized or obligated by it to close.
Commission means the Securities and Exchange Commission, as from time to time constituted,
created under the Securities Exchange Act of 1934, as amended, or, if at any time after the
execution of this instrument such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties at such time.
Company means the Person named as the Company in the first paragraph of this Indenture
until a successor corporation shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Company shall mean such successor corporation.
Company Request or Company Order means a written request or order signed in the name of
the Company by its Chairman, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Controller, an Assistant Controller, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
Corporate Trust Office means the principal corporate trust office of the Trustee at which at
any particular time its corporate trust business shall be principally administered. At the date of
this Indenture, the Corporate Trust Office of the Trustee is located, at [ ], except that
whenever a provision herein refers to an office or agency of the Trustee in the Borough of
Manhattan, City of New York, New York, such office is located, at the date hereof, at [ ].
Corporation includes corporations, associations, companies and business trusts.
Defaulted Interest has the meaning specified in Section 307.
Depositary means a clearing agency registered as such under the Securities Exchange Act of
1934, as amended, or any successor thereto, which shall in either case be designated by the Company
pursuant to Section 301 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter Depositary shall mean or include each
Person who is then a Depositary hereunder, and if at any time there is more than one such Person,
such Persons, Depositary as used with respect to the Securities of any series shall mean the
Depositary with respect to the Securities of that series.
Dollar or $ or any similar reference means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and private debts.
Euro means the single currency of participating member states of the economic and monetary
union as contemplated in the Treaty on European Union.
Event of Default has the meaning specified in Section 501.
Extension Notice has the meaning specified in Section 312.
Extension Period has the meaning specified in Section 312.
Final Maturity has the meaning specified in Section 312.
Fixed Rate Security means a Security which provides for the payment of interest at a fixed
rate.
Floating Rate Security means a Security which provides for the payment of interest at a
variable rate determined periodically by reference to an interest rate index or other index
specified pursuant to Section 301.
Foreign Currency means a currency, other than the Euro, issued by the government of a
country other than the United States of America.
Global Security means a Security evidencing all or part of a series of Securities which is
executed by the Company and authenticated and delivered to the Depositary for such series or its
nominee, all in accordance with this Indenture and pursuant to a Company Order, which shall be
registered in the name of the Depositary or its nominee and which shall represent the amount of
uncertificated securities as specified therein.
Holder means a Person in whose name a Security is registered in the Security Register.
Indenture means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include any Officers Certificates setting forth the form
and terms of particular series of Securities as contemplated by Sections 201 and 301.
2
Interest, when used with respect to an Original Issue Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
Interest Payment Date, when used with respect to any Security, means the Stated Maturity of
an installment of interest on such Security.
Journal means the official Journal of the European Union or successor publication thereto.
Lien means any mortgage, pledge, lien, security interest or encumbrance.
Market Exchange Rate means on a given date, the noon Dollar buying rate in New York City for
cable transfers of a currency as published by the Federal Reserve Bank of New York; provided that,
in the case of the Euro, Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Union (or any successor thereto) as published in the Journal.
Maturity, when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
Officers Certificate means a certificate signed by the Chairman, the President, a Vice
President or the Treasurer, and by an Assistant Treasurer, the Controller, an Assistant Controller,
the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.
Opinion of Counsel means a written opinion of counsel, who may be an employee of or counsel
for the Company or the Trustee, and who shall be acceptable to the Trustee, which opinion is
delivered to the Trustee.
Optional Reset Date has the meaning specified in Section 307.
Original Issue Discount Security means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.
Original Stated Maturity has the meaning specified in Section 312.
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 cancelled by the Trustee or delivered to the Trustee for
cancellation;
(ii) Securities or portions thereof for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company)
in trust or set aside and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such Securities or portions
thereof are to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, 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 or waiver, only Securities which
the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgees 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. In determining the requisite principal amount of any Original Issue Discount
Security, such principal amount that shall be deemed to be Outstanding shall be equal to the amount
of the principal thereof that could be declared to be due and payable upon an Event of Default
pursuant to the terms of such Original Issue Discount Security at the time of such determination.
Paying Agent means any Person, which may include the Company, authorized by the Company to
pay the principal of (and premium, if any) or interest, if any, on any Security on behalf of the
Company.
3
Person means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Place of Payment, when used with respect to the Securities of any series, means the place or
places where the principal of (and premium, if any) and interest, if any, on the Securities of that
series are payable as specified as contemplated in Section 301 or, if not so specified, as
specified in Section 1002.
Predecessor Security of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in 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.
Property means any kind of property or asset, whether real, personal or mixed, tangible or
intangible.
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.
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.
Reset Notice has the meaning specified in Section 307.
Responsible Officer, when used with respect to the Trustee, means any officer of the Trustee
assigned to administer corporate trust matters and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
Securities has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.
Security Register and Security Registrar have the respective meanings specified in Section
305.
Senior Indebtedness means all of the indebtedness of, or indebtedness guaranteed by, the
Company for borrowed money (including the principal of, premium, if any, or interest on any such
borrowed money and any commitment fees for unborrowed amounts which, if borrowed, would constitute
Senior Indebtedness), whether currently outstanding or hereafter incurred, unless, under the
instrument evidencing the same or under which the same is outstanding, it is expressly provided
that such indebtedness is subordinate to other indebtedness and obligations of the Company.
Special Record Date for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.
Stated Maturity, when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable.
Subordinated Indebtedness shall mean the Securities and all other indebtedness of, or
guaranteed by, the Company whether or not outstanding as of the date of this Indenture, which is by
its terms made subordinate and junior in right of payment to all Senior Indebtedness.
Subsequent Interest Period has the meaning specified in Section 307.
Subsidiary means with respect to any Person, any corporation, association, joint venture,
partnership, limited liability company or other business entity of which at least a majority of the
voting stock or other ownership interests having voting power for the election of directors,
managers or trustees (or the equivalent) is, at the time as of which any determination is being
made, owned or controlled by such Person or one or more Subsidiaries of such Person, or by such
Person and one or more Subsidiaries of such Person, other than shares, interests, participations or
other equivalents having such power by reason of the occurrence of any contingency.
Trustee means the Person named as the Trustee in the first paragraph of this instrument
until a successor trustee shall have become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and thereafter Trustee shall mean or
include each Person who is then a Trustee hereunder, provided, however, that if at any time there
is more than one such Person, Trustee as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
4
Trust Indenture Act means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in force at the date on the date of this Indenture, except as provided in Section
905.
Vice President, when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
vice president.
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 an Officers Certificate
stating that all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion has read such
condition or covenant and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.
SECTION 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.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders (or Holders of any series) 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 and
any agent of the Trustee or 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 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,
5
may
also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in this Section.
(c) The ownership of Securities and the principal amount held by any Person and the date of
holding the same shall be proved by the Security Register.
(d) If the Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its option, by Board
Resolution, fix in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such record date, provided that no such
authorization, agreement or consent by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provision of this Indenture not later than six
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Except as otherwise specifically provided herein, any request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate
Trust Office, 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 the attention of its Treasurer at [___] or any other
address subsequently 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, and not earlier than the earliest date,
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. Any notice mailed
in the manner prescribed by this Indenture shall be conclusively presumed to have been duly given
whether or not received by any particular Holder. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of 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.
In the case of Global Securities, notices or communications to be given to Holders shall be
given to the Depository, in accordance with its applicable policies from time to time.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
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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. All agreements of the Trustee, any additional trustee and any
Paying Agents in this Indenture shall bind their respective successors and assigns.
SECTION 110. Separability Clause.
In case any provision of this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and a Holder shall have no claim therefor against any
party hereto.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto, any Paying Agent, any Security Registrar, or any Authenticating
Agent and their respective successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed and construed by and in accordance with
the laws of the State of New York, as applied to contracts made and performed within the State of
New York without regard to principles of conflicts of laws.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, the Stated Maturity of any
Security or any date upon which any Defaulted Interest is proposed to be paid shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture
or of the Securities) payment of interest, if any, or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest Payment Date,
Redemption Date, at the Stated Maturity, or on the date for payment of Defaulted Interest, provided
that no interest shall accrue for the period from and after such Interest Payment Date, Redemption
Date, Stated Maturity or date for the payment of Defaulted Interest, as the case may be, to the
date of payment.
SECTION 114. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of (or premium, if any) or interest on any
Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental
indenture, or in any Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or through the Company or
any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a consideration for,
the execution of this Indenture and the issuance of the Securities.
SECTION 115. Consent of Holders of Securities in a Foreign Currency or Euros.
Unless otherwise specified in a certificate delivered pursuant to Section 301 of this
Indenture with respect to a particular series of Securities, whenever for purposes of this
Indenture any action may be taken by the Holders of a specified percentage in aggregate principal
amount of Securities of all series or all series affected by a particular action at the time
Outstanding and, at such time, there are Outstanding Securities of any series which are denominated
in a coin, currency or currency unit other than Dollars, then the principal amount of Securities of
such series which shall be deemed to be Outstanding for the purpose of taking such action shall be
that amount of Dollars that could be obtained for the stated Foreign Currency or Euro principal
amount of such Outstanding Securities at the Market Exchange Rate on the record date for the
purpose of taking such action. If the appropriate Market Exchange Rate is not available for any
reason with respect to such currency, the Trustee shall use, in its sole discretion and without
liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of
Euros, the rate of exchange as published in Journal, as of the most recent available date, or
quotations or, in the case of Euros, rates of exchange from one or more major banks in The City of
New York or in the country of issue of the currency in question or, in the case of Euros, in
Luxembourg or such other quotations or, in the case of Euros, rates of exchange as the Trustee,
upon consultation with the Company, shall deem appropriate. All decisions and
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determinations of the
Trustee regarding the Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and irrevocably binding upon the Company and all Holders.
SECTION 116. Payment Currency.
If the principal of and/or interest on (or premium, if any, on) any Securities is payable in a
Foreign Currency or Euros and such Foreign Currency or Euros is not available for payment due to
the imposition of exchange controls or other circumstances beyond the control of the Company, then
the Company shall be entitled to satisfy its obligations to Holders under this Indenture by making
such payment in Dollars on the basis of the Market Exchange Rate for such Foreign Currency or Euros
on the latest date for which such rate was established on or before the date on which payment is
due. Any payment made under this Section in Dollars where the required payment is in a Foreign
Currency or Euros shall not constitute an Event of Default.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form of Securities of any
series is established by action taken pursuant to a Board Resolution, an appropriate Officers
Certificate setting forth such form together with a copy of the Board Resolution shall be 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, typed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Trustees Certificate of Authentication.
The Trustees certificate of authentication shall be in substantially the form set forth
below:
This is one of the Securities of the series designated herein issued under the
within-mentioned Indenture.
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[ ], as Trustee
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By: |
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Authorized Officer |
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture may not exceed $[ ].
The Securities may be issued in one or more series. There shall be established in or pursuant
to a procedure established in a Board Resolution, and set forth in an Officers Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance of Securities of
any series:
(1) the title of the Securities of the series (which shall distinguish the Securities of the
series from the Securities of all other series and the form of the Securities of the series);
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(2) any limit upon the aggregate principal amount of the Securities of the series which may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series
pursuant to Section 304, 305, 306, 906 or 1107);
(3) the date or dates on which the principal of (and premium, if any, on) the Securities of
the series is payable, or the manner in which such dates are determined;
(4) the price or prices (expressed as a percentage of the principal amount thereof) at which
the Securities of the series will be issued;
(5) the rate or rates at which the Securities of the series shall bear interest, if any, or,
if applicable, the method used to determine such rate or rates (including, but not limited to, any
commodity, commodity index, stock exchange index or financial index) at which the Securities of the
series shall bear interest, if any, the date or dates on which such interest, if any, shall
commence, the date or dates from which any such interest shall accrue, or the manner in which such
dates are determined, the Interest Payment Dates on which any such interest shall be payable, the
Regular Record Dates, if any, for the payment of interest on any Interest Payment Date and the rate
or rates of interest, if any, payable on overdue installments of interest on or principal of (or
premium, if any, on) the Securities of the series, and whether the interest rate may be reset upon
certain designated events and, in the case of Floating Rate Securities, the notice, if any, to
Holders regarding the determination of interest and the manner of giving such notice, and the
extent to which, or the manner in which, any interest payable on any Global Security on an Interest
Payment Date will be paid or calculated if other than in the manner provided in Section 307 or
Section 310 if other than calculated on the basis of a 360-day year of twelve 30-day months;
(6) if other than the Trustee, the identity of the Security Registrar and, if other than as
specified in Section 1002, the place or places where the principal of (and premium, if any) and
interest, if any, on Securities of the series shall be payable, or the method of such payment, if
by wire transfer, mail or other means;
(7) if the Securities of such series are redeemable, 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 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;
(11) additional covenants of the Company, if any, for the benefit of the Holders of Securities
of such series;
(12) if the provisions of Section 401(4) relating to satisfaction and discharge of Securities
more than one year prior to their Stated Maturity or redemption shall apply to Securities of the
series, a statement of such fact;
(13) if other than Dollars, the coin or currency in which the Securities of that series are
denominated (including, but not limited to any Foreign Currency or Euros) if payments of principal
of, or interest or premium, if any, on, the Securities of the series are to be made in one or more
currencies or currency units other than that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such payments will be determined;
(14) if the amount of payments of principal (and premium, if any) or interest, if any, on the
Securities of the series may be determined with reference to an index based on a currency or
currencies or by reference to a commodity, commodity index, stock exchange index or financial
index, the manner in which such amounts shall be determined;
(15) provisions, if any, for the defeasance of Securities of the series;
(16) the date as of which any Global Security representing any Outstanding Debt Securities of
the series shall be dated if other than the date of original issuance of the first Security of the
series to be issued;
(17) whether the Securities of the series shall be issued in whole or in part in the form of
one or more Global Securities and, in such case, the Depositary for such Global Security or
Securities;
(18) the provisions, if any, relating to any collateral provided for the Securities of the
series;
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(19) any addition to or change in the Events of Default which applies to any Securities of the
series, and any change in the right of the Trustee or the requisite Holders of such Securities to
declare the principal amount thereof due and payable pursuant to Section 502;
(20) the terms and conditions, if any, for conversion of the Securities into or exchange of
the Securities for shares of common stock or preferred stock of the Company that apply to
Securities of the series;
(21) the right, if any, to extend the maturity of the Securities of the series and the
duration of such extension;
(22) any depositories, interest rate calculation agents, exchange rate calculation agents or
other agents with respect to Securities of such series if other than those appointed herein; and
(23) any additional or different subordination terms applicable to Securities of the series;
and
(24) any other terms, conditions, rights and preferences (or limitations on such rights and
preferences) relating to the Securities of such series.
All Securities of any one series shall be substantially identical except as to denomination
and the rate or rates of interest, if any, the date or dates from which interest shall accrue and
maturity and except as may otherwise be provided in or pursuant to such Board Resolution and set
forth in such Officers Certificate 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 Officers Certificate setting forth the terms of the series.
All Securities of any one series need not be issued at the same time, and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the
Board Resolution, supplemental indenture or Officers Certificate referred to above. However, the
authorized principal amount of any series may not be increased to provide for issuances of
additional Securities of such series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers Certificate.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without coupons in such
denominations as shall be specified as contemplated by Section 301. In the absence of any such
provisions with respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by any two of its Chairman of the
Board, its President, any Vice President, its Treasurer or its Secretary, under its corporate seal
reproduced thereon. The signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver to the Trustee or an Authenticating Agent for authentication Securities of any
series executed by the Company, together with a Company Order for the authentication and delivery
of such Securities, and the Trustee or such Authenticating Agent in accordance with the Company
Order shall authenticate and deliver such Securities. If all the Securities of any series are not
to be issued at one time, and if the Board Resolution, Officers Certificate or supplemental
indenture establishing such series shall so permit, such Company Order may set forth procedures
acceptable to the Trustee for the issuance of such Securities and the determination of the terms of
particular Securities of such series such as interest rate, maturity date, date of issuance and
date from which interest shall accrue. If the form or terms of the Securities of the series have
been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and
301, in authenticating such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall receive, and (subject to Section 601)
shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to Board Resolution as
permitted by Section 201, that such form has been established in conformity with the provisions of
this Indenture; and
(b) if the terms of such Securities have been established by or pursuant to Board Resolution
as permitted by Section 301, that such terms have been established in conformity with the
provisions of this Indenture.
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If all the Securities of any series are not to be issued at one time, it shall not be
necessary to deliver an Opinion of Counsel at the time of issuance of each Security, but such
Opinion of Counsel, with appropriate modifications, may instead be delivered at or prior to the
time of issuance of the first Security of such series.
The Trustee or any Authenticating Agent shall have the right to authenticate and deliver any
of such Securities if it, being advised by counsel, determines that such action may not lawfully be
taken, or if it, its board of directors, trustees, executive committee, or a trust committee of
directors or trustees and/or vice presidents shall determine in good faith that such action would
expose it to personal liability to existing Holders or if the issue of such Securities pursuant to
this Indenture will affect the Trustees own rights, duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Each 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 or an Authenticating Agent 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 and is entitled to
the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
upon Company Order the Trustee or an Authenticating Agent shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as evidenced by their execution of such
Securities.
Until so exchanged the temporary Securities of any series shall in all respects be entitled to
the same benefits under this Indenture as definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
With respect to each series of Securities, the Company shall cause to be kept at one of the
offices or agencies maintained pursuant to Section 1002 a register (the register maintained in such
office and in any other office or agency established by the Company in a Place of Payment 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 of that series and of transfers of Securities of that series. Pursuant to Section 301,
the Company shall appoint, with respect to Securities of each series, a Security Registrar for
the purpose of registering such Securities and transfers and exchanges of such Securities as herein
provided. In the event the Trustee shall not be Security Registrar, it shall have the right to
examine the Security Register at all reasonable times.
Upon surrender for registration of transfer of any Security of any series at the designated
office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee
or an Authenticating Agent shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of the same series, of any authorized denominations and
of a like tenor, aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series (except Global Securities) may be
exchanged for other Securities of the same series, of any authorized denominations and of a like
tenor, aggregate principal amount and Stated Maturity, upon surrender of the Securities to be
exchanged at such office or agency and upon payment, if the Company shall so require, of the
charges hereinafter provided. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee or an Authenticating Agent 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 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 exchange shall (if so
required by the Company or the Trustee or the Security Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar (and, if so required by the Trustee, to the Trustee) 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 304, 906 or 1107 not involving any transfer.
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The Company shall not be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15 days before the
day of selection for redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of the mailing of notice of redemption, or (ii)
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.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If there shall be delivered to the Company and the Trustee (i) a mutilated Security or
evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity bond as may be determined in the reasonable judgment of the Company or the
Trustee, as the case may be, to protect the Company, the Trustee and any agent of either of them
from any loss which any of them may suffer if a Security is replaced, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Trustee or an Authenticating Agent shall
authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Security, a new Security of the same series and of like tenor, principal amount and Stated
Maturity 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 307. Payment of Interest; Interest Rights Preserved; Optional Interest Reset.
(a) Except as otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, 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.
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 registered 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 l0 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
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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.
(b) The provisions of this Section 307(b) may be made applicable to any series of Securities
pursuant to Section 301 (with such modifications, additional or substitutions as may be specified
pursuant to such Section 301). The interest rate on any Security of such series may be reset by the
Company on the date or dates specified on the face of such Security (each an Optional Reset
Date). The Company may exercise such option with respect to a Security by notifying the Trustee of
all of the relevant information relating to such exercise at least 50 but not more than 60 days
prior to an Optional Reset Date, the Trustee shall transmit, in the manner provided for in Section
106, to the Holder of any such Security a notice (the Reset Notice) indicating whether the
Company has elected to reset the interest rate, and if so (i) such new interest rate and (ii) the
provisions, if any, for redemption during the period from such Optional Reset Date to the next
Optional Reset Date or if there is no such next Optional Reset Date, to the Stated Maturity Date of
such Security (each such period a Subsequent Interest Period), including the date or dates on
which or the period or periods during which and the price or prices at which such redemption may
occur during the Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the
Company may, at its option, revoke the interest rate provided for in the Reset Notice and establish
a higher interest rate for the Subsequent Interest Period by causing the Trustee to transmit, in
the manner provided for in Section 106, notice of such higher interest rate to the Holder of such
Security. Such notice shall be irrevocable. All Securities with respect to which the interest rate
is reset on an Optional Reset Date will bear such higher interest rate.
The Holder of any such Security will have the option to elect repayment by the Company of the
principal of such Security on each Optional Reset Date at a price equal to the principal amount
thereof plus interest accrued to such Optional Reset Date. In order to obtain repayment on an
Optional Reset Date, the Holder must follow the procedures set forth in Article Thirteen for
repayment at the option of Holders, as such apply to such Security, except that the period for
delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to
such Optional Reset Date and except that, if the holder has tendered any Security for repayment
pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender
or repayment until the close of business on the tenth day before such Optional Reset Date.
Subject to the foregoing provisions of this Section and Section 305, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in lieu of any other
Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried
by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee,
any Paying Agent, any Authenticating Agent and any other 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 307)
interest, if any, on such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee, any Paying Agent, any Authenticating
Agent nor any other agent of the Company or the Trustee shall be affected by notice to the
contrary.
None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests. Notwithstanding the foregoing, with
respect to any Global Security, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any Depositary, as a Holder, with respect to such Global Security or
impair, as between such Depositary and owners of beneficial interests in such Global Security, the
operation of customary practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Global Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled 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 cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities shall be destroyed by the Trustee and the
Trustee shall deliver a
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certificate of such destruction to the Company, unless the Company by
Company Order shall direct that such cancelled Securities be returned to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 311. Global Securities.
If the Company shall establish pursuant to Section 301 that the Securities of a series are to
be issued in whole or in part in the form of one or more Global Securities, then the Company shall
execute and the Trustee shall, in accordance with Section 303 and the Company Order with respect to
such series, authenticate and deliver one or more Global Securities in temporary or permanent form
that (i) shall represent and shall be denominated in an amount equal to the aggregate principal
amount of the outstanding Securities of such series to be represented by one or more Global
Securities, (ii) shall be registered in the name of the Depositary for such Global Security or
Securities or the nominee of such depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositarys instruction, and (iv) shall bear a legend substantially
to the following effect: This Security is a Global Security within the meaning of the Indenture
hereinafter referred to, and is registered in the name of the Depository or a nominee of the
Depository. This Security is exchangeable for Securities registered in the name of a Person other
than the Depository or its nominee only in the limited circumstances described in the Indenture,
and may be transferred except as a whole by the Depositary to a nominee of the Depositary, 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. The Trustee shall deal with the Depositary and its participants as representatives of
the Beneficial Owners of the Global Securities for purposes of exercising the rights of the Holders
hereunder and the rights of the Beneficial Owners of the Global Securities shall be limited to
those established by law and agreements between such Beneficial Owners and the Depositary and its
participants. Beneficial Owners shall not be entitled to certificates for Global Securities as to
which they are the Beneficial Owners. Requests and directions from, and votes of, such
representatives shall not be deemed to be inconsistent if they are made with respect to different
Beneficial Owners.
Notwithstanding any other provision of this Section or Section 305, unless and until it is
exchanged in whole or in part for Securities in definitive form, a Global Security representing all
or a portion of the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary, by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor depositary. The Beneficial
Owners ownership of Securities shall be recorded on the records of a participant of the Depositary
that maintains such Beneficial Owners account for such purpose and the participants record
ownership of such Securities shall be recorded on the records of the Depositary.
If at any time the Depositary for the Securities of a series notifies the Company that it is
unwilling or unable to continue as Depositary for the Securities of such series or if at any time
the Depositary for Securities of a series ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to the Securities of such series. If a successor
Depositary for the Securities of such series is not appointed by the Company within 90 days after
the Company receives written notice or becomes aware of such condition, the Company will execute,
and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such series, with like
tenor and terms, in definitive form in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such series in exchange for such Global Security
or Securities.
The Company may at any time and in its sole discretion determine that the Securities of any
series issued in the form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event, the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive Securities of such
series, will authenticate and deliver, Securities of such series, with like tenor and terms, in
definitive form and in an aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such series in exchange for such Global Security or Securities.
If specified by the Company pursuant to Section 301 with respect to Securities of a series,
the Depositary for such series of Securities may surrender a Global Security for such series of
Securities in exchange in whole or in part for Securities of such series in definitive form on such
terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute
and the Trustee shall authenticate and deliver, without charge,
(i) to each Person specified by the Depositary a new Security or Securities of the same series
of like tenor and terms of any authorized denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such Persons beneficial interest in the Global
Security; and
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(ii) to the Depositary a new Global Security in a denomination equal to the difference, if
any, between the principal amount of the surrendered Global Security and the aggregate principal
amount of Securities delivered to Holders thereof.
Upon the exchange of a Global Security for Securities in definitive form, such Global Security
shall be cancelled by the Trustee. Securities issued in exchange for a Global Security pursuant to
this Section shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to
the persons in whose names such Securities are so registered.
The Depository, as a Holder, may appoint agents and otherwise authorize participants to give
or take any request, demand, authorization, direction, notice, consent, waiver or other action
which a Holder is entitled to give or take under this Indenture.
Notwithstanding the other provisions of this Indenture, unless otherwise specified as
contemplated by Section 301, payment of the principal of, and interest and premium, if any, on, any
Global Security shall be made to the Depository or its nominee in its capacity as the Holder
thereof. Further, the Company, the Trustee and any Authentication Agent shall treat a Person as the
Holder of such principal amount of outstanding Securities of any series represented by a Global
Security as shall be specified in a written statement of the Depository (which may be in the form
of a participants list for such series) with respect to such Global Security, for purposes of
obtaining any consents, declarations, waivers or directions required to be given by the Holders
pursuant to this Indenture, provided, that until the Trustee is so provided with a written
statement, it may treat the Depository or any other Person in whose name a Global Security is
registered as the owner of such Global Security for all purposes, and none of the Company, the
Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 312. Optional Extension of Maturity.
The provisions of this Section may be made applicable to any series of Securities pursuant to
Section 301 (with such modifications, additions or substitutions as may be specified pursuant to
such Section 301). The Stated Maturity of any Security of such series may be extended at the option
of the Company for the period or periods specified on the face of such Security (each an Extension
Period) up to but not beyond the date (the Final Maturity) set forth on the face of such
Security. The Company may exercise such option with respect to any Security by notifying the
Trustee of such exercise at least 50 but not more than 60 days prior to the Stated Maturity of such
Security in effect prior to the exercise of such (the Original Stated Maturity). If the Company
exercises such option, the Trustee shall transmit, in the manner provided for in Section 106, to
the Holder of such Security not later than 40 days prior to the Original Stated Maturity a notice
(the Extension Notice) indicating (i) the election of the Company to extend the Maturity, (ii)
the new Stated Maturity Date, (iii) the interest rate applicable to the Extension Period and (iv)
the provisions, if any, for redemption during such Extension Period. Upon the Trustees transmittal
of the Extension Notice, the Stated Maturity Date of such Security shall be extended automatically
and, except as modified by the Extension Notice and as described in the next paragraph, such
Security will have the same terms as prior to the transmittal of such Notice.
Notwithstanding the foregoing, not later than 20 days before the Original Stated Maturity of
such Security, the Company may, at its option, revoke the interest rate provided for in the
Extension Notice and establish a higher interest rate for the Extension Period by causing the
Trustee to transmit, in the manner provided for in Section 106, notice of such higher interest rate
to the Holder of such Security. Such notice shall be irrevocable. All Securities with respect to
which the Stated Maturity is extended will bear such higher interest rate.
If the Company extends the Maturity of any Security, the Holder will have the option to elect
repayment of such Security by the Company on the Original Stated Maturity at a price equal to the
outstanding principal amount thereof, plus interest accrued to such date. In order to obtain
repayment on the Original Stated Maturity once the Company has extended the Maturity thereof, the
Holder of an Outstanding Security must follow the procedures set forth in Article Thirteen for
repayment at the option of Holders, as such applies to the Securities of such series, except that
the period for delivery or notification to the Trustee shall be at least 25 but not more than 35
days prior to the Original Stated Maturity and except that, if the Holder has tendered any Security
for repayment pursuant to an Extension Notice, the Holder may by written notice to the Trustee
revoke such tender for repayment until the close of business on the tenth day before the Original
Stated Maturity unless the Trustee has previously delivered repayment of such Security to such
Holder.
SECTION 313. CUSIP and ISIN Numbers.
The Company in issuing the Securities may use one or more CUSIP and ISIN numbers (if then
generally in use), and, if the Company does so, the Trustee shall use the CUSIP number(s) and ISIN
numbers in notices of redemption or exchange as a convenience to Holders, provided, that any such
notice may state that no representation is made as to the correctness or accuracy of the CUSIP and
ISIN number(s) printed in the notice or on the Securities, and that reliance may be placed only on
the other identification numbers printed on the Securities, and that any such redemption or
exchange shall not be affected by any defect in or omission of any such numbers.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Securities of any Series.
The Company shall be deemed to have satisfied and discharged the entire indebtedness on all
the Securities of any particular series and the Trustee, upon Company request and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and discharge of such
indebtedness, when
(1) either:
(A) all Securities of such series theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in the last paragraph of Section 1003) have been delivered
to the Trustee for cancellation; or
(B) with respect to all Outstanding Securities of such series described in (A) above not
theretofore delivered to the Trustee for cancellation,
(i) The Company has deposited or caused to be deposited with the Trustee as trust funds in
trust an amount sufficient to pay and discharge the entire indebtedness on all such Outstanding
Securities of such series for principal (and premium, if any) and interest to the Stated Maturity
or any Redemption Date as contemplated by Section 403, as the case may be; or
(ii) The Company has deposited or caused to be deposited with the Trustee as obligations in
trust such amount of direct obligations of, or obligations the principal of and interest on which
are fully guaranteed by, the United States of America (other than obligations subject to
prepayment, redemption or call prior to their stated maturity) as will, together with the
predetermined and certain income to accrue thereon (without consideration of any reinvestment
thereof), be sufficient to pay and discharge when due the entire indebtedness on all such
Outstanding Securities of such series for principal (and premium, if any) and interest to the
Stated Maturity or any Redemption Date as contemplated by Section 403, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable with respect to the
Securities of such series;
(3) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of the entire indebtedness on all Securities of such series have been
complied with; and
(4) if the entire indebtedness on the Outstanding Securities of such series is to be satisfied
and discharged pursuant to Section 401(l)(B) above, then (i) the Company shall have specified the
applicability (as provided in Section 301) of this Section 401(4) to the Securities of such series,
(ii) the Company shall have given, not later than the date of such deposit, notice of such deposit
to the Holders of Securities of such series and (iii) the Trustee shall have received an Opinion of
Counsel (which Counsel shall be recognized tax counsel) stating that, (x) the Company has received
from the Internal Revenue Service a ruling or (y) since the date of this Indenture, there has been
a change in the applicable federal income tax law, including by means of a Revenue Ruling published
by the Internal Revenue Service, in either case to the effect that, and based thereon such Opinion
of Counsel will confirm that the deposit of funds or obligations and the satisfaction and discharge
of indebtedness on the Securities of such series pursuant to this Section will not result in
recognition by the Holders of income, gain or loss for federal income tax purposes (other than
income, gain or loss which would have been recognized in like amount and at a like time absent such
deposit, satisfaction and discharge), provided that the Company will be discharged from the
requirements of Article Eight if (i) it has satisfied all of the requirements for satisfaction and
discharge of the indebtedness on the Outstanding Securities pursuant to Section 401(1)(B) except
for the delivery of the Opinion of Counsel described above, and (ii) the Trustee shall have
received an Opinion of Counsel stating that the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of the deposit of such funds or obligations and will be
subject to federal tax in the same amounts, in the same manner and at the same times as would have
been the case if such deposit of funds or obligations had not occurred.
Upon the satisfaction of the conditions set forth in this Section with respect to all the
Securities of any series, the terms and conditions of such series, including the terms and
conditions with respect thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company, and the Holders of the Securities of such series shall look for payment
only to the funds or obligations deposited with the Trustee pursuant to Section 401(l)(B);
provided, however, that, in no event shall the Company be discharged (a) from any payment
obligations in respect of Securities of such series which are deemed not to be Outstanding under
clause (iii) of the definition thereof if such obligations continue to be valid obligations of the
Company under applicable law, (b) from any obligations under Section 607 or the last paragraph of
Section 1003, and (c) from any obligations under Section 305 and 306 (except that Securities of
such series issued upon registration of transfer or exchange or in lieu of mutilated, lost,
destroyed or stolen Securities shall not be obligations of the Company), and Section 701.
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SECTION 402. Satisfaction and Discharge of Indenture.
Upon compliance by the Company with the provisions of Section 401 as to the satisfaction and
discharge of each series of Securities issued hereunder, this Indenture shall cease to be of any
further effect (except as otherwise provided herein). Upon Company Request (and at the expense of
the Company), the Trustee shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture. In the event there are two or more Trustees hereunder, then the effectiveness of
any such instrument shall be conditioned upon receipt of such instruments from all Trustees
hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, any obligations of the
Company under Sections 305, 306, 607 and 701 and the last paragraph of Section 1003, and of the
Trustee under Sections 403 and 613 and the last two paragraphs of Section 1003, shall survive.
SECTION 403. Application of Trust Money.
Subject to the provisions of the last two paragraphs of Section 1003, all money and
obligations deposited with the Trustee pursuant to Section 401 shall be held irrevocably in trust
and shall be made under the terms of an escrow trust agreement in form and substance satisfactory
to the Trustee. Such money and obligations shall be applied by the Trustee, in accordance with the
provisions of the Securities, this Indenture and such escrow trust agreement, 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 of (and premium, if
any) and interest, if any, on the Securities for the payment of which such money and obligations
have been deposited with the Trustee (but such money need not be segregated from other funds except
to the extent required by law). If Securities of any series are to be redeemed prior to their
Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the Company shall make such arrangements as are satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense,
of the Company.
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 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 of (or premium, if any, on) any Security of that
series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a
Security of that series; or
(4) default in the performance, or breach, of any covenant or agreement of the Company in this
Indenture (other than a covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that series), and continuance
of such default or breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and stating that such notice is a
Notice of Default hereunder; or
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Custodian of it or for all or substantially all of its
property, or
(D) makes a general assignment for the benefit of its creditors; or
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
17
(A) is for relief against the Company in an involuntary case;
(B) appoints a Custodian of the Company or for all or substantially all of its property, or
(C) orders the liquidation of the Company, and the order or decree remains unstayed and in
effect for 60 days.
The term Bankruptcy Law means Title 11 of the U.S. Code or any similar Federal or State law
for the relief of debtors. The term Custodian means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
(7) any other Event of Default provided with respect to the Securities of that series pursuant
to Section 301 or in a supplemental indenture.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time Outstanding occurs
and is continuing, then in every such case the Trustee or the Holders of not less than 25% in
principal amount of the outstanding Securities of that series may declare the principal amount (or,
if the Securities of that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all of the Securities of that
series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or specified portion)
shall become immediately due and payable.
Upon payment of such amount, all obligations of the Company in respect of the payment of
principal of the Securities of such series shall terminate.
At any time after such a declaration of acceleration with respect to Securities of any series
has been made and before a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest, if any, on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which have become
due otherwise than by such declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at
the rate or rates, if any, prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series 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 on any Security of any series 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 of (or premium, if any, on) any Security
of any series at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of Securities of such series, the whole amount then due and payable on
Securities of such series for principal (and premium, if any) and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue principal (and
premium, if any) and on any overdue interest, at the rate or rates, if any, prescribed therefor in
such Securities; and, in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
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If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration of acceleration or otherwise
and irrespective of whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (or with respect to Original
Issue Discount Securities, such portion of the principal amount as may be specified in the terms of
such Securities), and premium, if any and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any 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. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
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 premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of all Senior Indebtedness if and to the extent required by Article
Fourteen or other subordination provisions applicable with respect to a series of Securities; and
THIRD: To the payment of the amounts then due and unpaid for principal of (and premium, if
any) and interest, if any, on the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if any) and interest, if
any, respectively; and
FOURTH: The balance, if any, to the Company, its successor or assigns or to whoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
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SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) An Event of Default shall have occurred and be continuing with respect to the Securities
of that series and such Holder shall have previously given written notice thereof to the Trustee;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that
series shall have made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities
of that series;
it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holder or to obtain or to seek to obtain priority or
preference over any other Holder or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all Holders of Securities of such series.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 307) interest, if any, on such Security on the Stated
Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding 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 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any 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,
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(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction,
(3) such direction is not unduly prejudicial to the rights of other Holders, and
(4) such direction would not involve the Trustee in personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities of
any series may on behalf of the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or interest, if any (subject to
the provisions of Section 502), 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 the Securities of such series
under this Indenture; but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys fees at trial and on appeal, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of (or premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificate or opinion which by any provision hereof is specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not it conforms to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that
(1) this Subsection shall not be construed to limit the effect of Subsection (a) of this
Section;
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(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken, suffered or omitted to
be taken by it in good faith in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series, as provided in Section 512, relating
to the time, method and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to
the Securities of such series; and
(4) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not herein expressly so provided, every provision of this Indenture relating to
the conduct of or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect to the Securities of
any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as
their names and addresses appear in the Security Register, notice of such default hereunder
actually known to a Responsible Officer of the Trustee, unless such default shall have been cured
or waived; provided, however, that except in the case of a default in the payment of the principal
of (or premium, if any) or interest, if any, on any Security of such series, in the payment of any
sinking fund installment with respect to Securities of such series or in the payment of the
Redemption Price of any Securities as to which notice of redemption has been given, the Trustee
shall be protected in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interest of the Holders of
Securities of such series; and provided, further, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the purpose of this
Section, the term default means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties;
(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 Officers Certificate;
(d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(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, including any
Authenticating Agent, appointed with due care by it hereunder;
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(h) the Trustee shall not be liable for any action taken or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or powers conferred upon it by
this Indenture; and
(i) the Trustee shall not be charged with knowledge of any Event of Default with respect to
the Securities of any series for which it is acting as Trustee unless either (1) a Responsible
Officer of the Trustee assigned to the Corporate Trust Office of the
Trustee (or any successor division or department of the Trustee) shall have actual knowledge
of the Event of Default or (2) written notice of such Event of Default shall have been given to the
Trustee by the Company, any other obligor on such Securities or by any Holder of such Securities.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except certificates of authentication,
shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the Company of Securities
or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, the Security Registrar or any other
agent of the Company or the Trustee, in their individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 608 and 612, 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 or any Paying Agent in trust hereunder need not be segregated from
other funds except to the extent required by law. Neither the Trustee nor any paying Agent shall be
subject to any liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for all services rendered
by it hereunder (which compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on their 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 themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the Company under this Section, the
Trustee shall have a lien prior to the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the payment of principal (or premium, if any)
or interest, if any, on Securities.
The provisions of this Section shall survive the resignation or removal of the Trustee or the
discharge of this Indenture. When the Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 501(5) or (6) the expenses are intended to constitute expenses of
administration under any Bankruptcy Law. The obligations of the Company under this Section shall
not be subordinated to the payment of Senior Indebtedness.
SECTION 608. Corporate Trustee Required; Eligibility; Conflicting Interests.
This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture
Act Sections 310(a)(1), (2) and (5) in every respect. The Trustee (or in the case of a Trustee that
is a Person included in a bank holding company system, the related bank holding company) shall have
a combined capital and surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with Trust Indenture Act Section 310(b),
including the provision in Section 310(b)(1). In addition, if the Trustee is a Person included in a
bank holding company system, the Trustee, independently of such bank holding company, shall meet
the capital requirements of Trust Indenture Act Section 310(a)(2). If at any time the Trustee shall
cease to be
23
eligible in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee or
Trustees pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee or Trustees in accordance with the applicable requirements of Section 610.
(b) The Trustee may resign at any time with respect to the Securities of one or more series by
notifying the Company in writing at least 90 days in advance of such resignation. If the instrument
of acceptance by a successor Trustee required by Section 610 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.
(c) The Trustee may be removed at any time with respect to the Securities of any series by Act
of the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
(d) If at any time 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, the Company by a Board Resolution may remove the Trustee with respect to the Securities
of such series or, subject to Section 514, 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 removal of the Trustee with respect to the
Securities of such series and the appointment of a successor Trustee.
(e) If at any time:
(1) the Trustee shall cease to be eligible under Section 608 and shall fail to resign after
written request therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect
to all Securities, or (ii) subject to Section 514, any holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(f) 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 610. 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 610, become the successor
Trustee with respect to the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company with respect to such series. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or the Holders of the
Securities of such series and accepted appointment in the manner required by Section 610, 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.
(g) The Company shall give notice of each resignation and each removal of the Trustee with
respect to the Securities of any series and each appointment of a successor Trustee with respect to
the Securities of any series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect to all series of
Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such
24
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 due pursuant to Section 607,
execute and deliver an instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder subject to the lien provided in Section 607.
(b) In case of the appointment hereunder of a successor Trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all series of
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 or
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 these series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may
be.
(d) No successor Trustee shall accept its appointment unless at the time of such acceptance
such successor Trustee shall be qualified and eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the parties hereto. In
case any Securities shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the same effect as if
such successor Trustee had itself authenticated such Securities.
SECTION 612. Preferential Collection of Claims Against Company.
The Trustee shall comply with Trust Indenture Act Section 311(a), excluding any creditor
relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or been
removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated therein.
SECTION 613. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate and deliver Securities of such series
with respect to which it has been so designated, and Securities so authenticated and delivered
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 Trustees certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times be a bank or trust
company or corporation organized and doing business and in good standing under the laws of the
United States, 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 $100,000,000 and
subject to
25
supervision or examination by Federal, State or District of Columbia 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 with respect to one or more series of Securities 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 with respect to one or more series of
Securities 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 of Securities of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the provisions of this
Section.
The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section. The provisions of Sections 104, 111, 603, 604 and
605 shall be applicable to any Authenticating Agent.
Pursuant to each appointment made under this Section, the Securities of each series covered by
such appointment may have endorsed thereon, in lieu of the Trustees certificate of authentication,
an alternate certificate of authentication in substantially the following form:
This is one of the Securities, of the series designated herein, issued under the
within-mentioned Indenture.
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Holder Lists.
The Trustee shall preserve, in as current a form as is reasonably practicable, the most recent
list available to it of the names and addresses of Holders of each series of Securities. If the
Trustee is not the Securities Registrar, the Company shall furnish to the Trustee as of each
regular record date for the payment of interest on the Securities of a series and before each
related Interest Payment Date, and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of each series of Securities.
SECTION 702. Communications by Holders with Other Holders.
Holders of any series may communicate pursuant to Trust Indenture Act Section 312(b) with
other Holders of that series or any other series with respect to their rights under this Indenture
or the Securities of that series or any other series. The Company, the Trustee, the Securities
Registrar and any other Person shall have the protection of Trust Indenture Act Section 312(c).
26
SECTION 703. Reports by Trustee.
(a) If and to the extent required by the Trust Indenture Act, within 60 days after May 1 of
each year commencing with the May 1 following the date of this Indenture, if and so long as any
Securities are Outstanding hereunder, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Security Register, a brief report dated as of such May 1 that
complies with Trust Indenture Act Section 313(a). The Trustee shall also comply with Trust
Indenture Act Sections 313(b) and 313(c).
(b) A copy of any such report required to be sent under Section 703(a) shall, at the time of
such transmission to Holders, be filed by the Trustee, with each securities exchange upon which any
Securities of that series are listed, with the Commission and with the Company. The Company will
notify the Trustee when any Securities of any series are listed on any securities exchange or any
delisting thereof, and the Trustee shall comply with Trust Indenture Act Section 313(d).
SECTION 704. Reports by Company.
The Company will deliver to the Trustee within 15 days after the filing of the same with the
Commission, copies of the quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended. Notwithstanding that the Company may
not be subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended, the Company will file with the Commission, to the extent permitted, and
provide the Trustee with, such supplementary and periodic information, documents and reports which
may be required under Section 13 of the Securities Exchange Act of 1934, as amended. The Company
will also comply with the other provisions of Trust Indenture Act Section 314(a). All information,
documents and reports to be provided pursuant to this Section will be deemed to be so delivered to
the Trustee when the Company files such information, documents and reports with the Commission
through the Commissions EDGAR database.
ARTICLE EIGHT
SUCCESSOR CORPORATION
SECTION 801. Limitation on Consolidation, Merger and Sale of Assets.
(a) The Company will not, in any transaction or series of transactions, merge or consolidate
with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially
all of its properties and assets (as an entirety or substantially as an entirety in one transaction
or a series of related transactions), to any Person or Persons, unless at the time of and after
giving effect thereto (i) either (A) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving Person of such merger or consolidation, or (B)
the Person formed by such consolidation or into which the Company is merged or to which the
properties and assets of the Company are transferred (any such surviving Person or transferee
Person being the Surviving Entity) shall be a corporation organized and existing under the laws
of the United States of America, any state thereof or the District of Columbia, and shall expressly
assume by a supplemental indenture executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all of the obligations of the Company (including, without limitation,
the obligation to pay the principal of, and premium and interest, if any, on, the Securities and
the performance of the other covenants) under the Securities of each Series and this Indenture, and
in each case, this Indenture shall remain in full force and effect; and (ii) immediately before and
immediately after giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions), no default or Event
of Default shall have occurred and be continuing.
(b) In connection with any consolidation, merger or transfer of assets contemplated by this
Section, the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an Officers Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer, and the supplemental indenture in respect
thereto, comply with this Section, and that all conditions precedent herein provided for relating
to such transaction or transactions have been complied with.
(c) For the avoidance of doubt, the foregoing provisions shall not be deemed to require the
assumption of Securities of a series if the terms thereof established in accordance with Section
301 provide for their redemption or purchase in the event of a transaction described in this
Section.
SECTION 802. Successor Person Substituted.
Upon any consolidation, merger or transfer of all or substantially all of the assets of the
Company in accordance with Section 801, the successor corporation formed by such consolidation, or
into which the Company is merged or to which such transfer 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
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effect as if such successor corporation had been named as the Company herein, and
thereafter (except with respect to any such transfer which is a lease) the predecessor corporation
shall be relieved of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, 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 corporation 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; provided, however,
that in respect of any such additional covenant, such supplemental indenture may provide for a
particular period of grace after default in the performance of such covenant (which period may be
shorter or longer than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee upon such default;
or
(3) to add any additional Events of Default; or
(4) add to or change or eliminate any of the provisions of this Indenture to 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
(5) to change or eliminate any of the provisions of this Indenture, provided that any such
change or elimination shall become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture which is entitled to the
benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series 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 610(b); or
(9) to cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided such action 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 (each such series voting as a separate class) 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 modify the manner of determination of the
rate of interest thereon so as to affect adversely the interest of such Holder or reduce the amount
of the principal of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or
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(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 1006, 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 1006, or the deletion of this proviso, in accordance with the requirements of
Sections 610(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Trustee may in its discretion determine whether or not any Securities would be affected by
any supplemental indenture and any such determination shall he conclusive upon the Holders of all
Securities of any series. The Trustee shall not be liable for any such determination made in good
faith.
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 provided, 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 and that such supplemental indenture, when executed and delivered by
the Company, will constitute a valid and binding obligation of the Company in accordance with its
terms. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustees own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions of this Article,
this Indenture shall, with respect to such series, be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the Holders of Securities of the
series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and conditions of any such
supplemental indenture, with respect to such series, shall be and be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
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 of 1939, as amended, in effect on such date.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series, affected by a supplemental indenture, 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 Board of Directors, to any such
supplemental indenture may be prepared and executed by the Company and authenticated and delivered
by the Trustee or any Authenticating Agent in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay the principal of (and
premium, if any) and interest, if any, on the Securities of each series in accordance with the
terms of the Securities of such series and this Indenture.
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SECTION 1002. Maintenance of Office or Agency.
The Company will cause to be maintained in each Place of Payment for any series of Securities
an office or agency where Securities of that series may be presented or surrendered for payment,
where Securities of that series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. With respect to the Securities
of any series such office or agency and each place of Payment shall
be as specified as contemplated in Section 301. In the absence of any such provisions with
respect to the Securities of any series (i) the place of payment for such securities shall be the
Borough of Manhattan, City of New York, New York, and (ii) such office or agency in such Place of
Payment shall be the Corporate Trust Office of the Trustee therein. 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, City of New York, New York) where the Securities of one or more
series may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in each place of
Payment for Securities of any series for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the location of any such
office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of (and premium, if any) or
interest, if any, on any of the Securities of that series, segregate and hold in trust for the
benefit of the persons entitled thereto a sum sufficient to pay the principal (and premium, if any)
or interest, if any, so becoming due until such sums shall be paid to such persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, on or before each due date of the principal of (and premium, if any) or interest, if any, on
any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the
benefit of the persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent other than the Trustee for any series of Securities
to execute and deliver to the Trustee an instrument in which such paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it as agent for the payment of the principal of (and premium, if
any) or interest, if any, on Securities of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee written notice within three Business Days of any default by the Company
(or any other obligor upon the Securities of that series) in the making of any payment of principal
(and premium, if any) or interest, if any, on the Securities of that series; and
(3) at any time during the continuance of any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which 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. Upon the satisfaction and discharge
of the indebtedness in respect of all Outstanding Securities of any series all sums then held by
any Paying Agent (other than the Trustee) in respect thereof shall, upon demand of the Company, be
repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all
further liability with respect to such money.
The Trustee and any Paying Agent shall promptly pay to the Company upon Company Request any
money or securities held by them at any time in excess of amounts necessary to satisfy amounts
payable to the Holders, the Trustee and the Paying Agent.
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Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest, if any, on any
Security of any series and remaining unclaimed for two years after such principal (and premium, if
any) or interest, if any, has become due and payable shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, 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 each Place of Payment with respect to Securities of such series, 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, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence.
SECTION 1005. Statement as to Compliance.
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 Officers Certificate which complies with Trust
Indenture Act Section 314(a)(4) and need not comply with Section 102, stating as to each signer
thereof that
(1) a review of the activities of the Company during such year and of performance under this
Indenture has been made under his supervision, and
(2) as of the end of such year and at the date of the certificate to the best of his
knowledge, based on such review, (a) the Company is not in default in the fulfillment of any of its
obligations under this Indenture, or specifying each such default known to him and the nature and
status thereof and (b) no event has occurred and is continuing which is or after notice or lapse of
time or both would become an Event of Default, or, if such an event has occurred and is continuing,
specifying each such event known to him and the nature and status thereof.
SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant or condition set
forth in Sections 1002 to 1005, each inclusive, or a supplemental indenture with respect to the
Securities of any series if before the time for such compliance the Holders of at least a majority
in principal amount of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee with respect to any such covenant or condition shall remain
in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 301
for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of less than all the Securities of any
series, the Company shall, at least 45 days (unless a shorter notice shall be satisfactory to the
Trustee) prior to the Redemption Date fixed by the Company (unless a shorter notice, but not less
than 30 days, shall be satisfactory to the Trustee), notify the Trustee in writing of such
Redemption Date and of the principal amount of Securities of such series to be redeemed. In the
case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish
the Trustee with an
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Officers Certificate evidencing compliance with such restriction. Any such
notice may be canceled at any time prior to notice of such redemption being mailed to any Holder,
and shall thereby be void and of no effect.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the particular Securities to
be redeemed shall be selected by the Trustee not more than 45 days prior to the Redemption Date,
from the Outstanding Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for Securities of that series
or any integral multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of that series. In any
case where Securities of such series are registered in the same name, the Trustee in its discretion
may treat the aggregate
principal amount so registered as if it were represented by one Security of such series. If
the Securities of any series to be redeemed consist of Securities having different Stated
Maturities or different rates of interest (or methods of computing interest), then the Company may,
by written notice to the Trustee, direct that the Securities of such series to be redeemed shall be
selected from among groups of such Securities having specified Stated Maturities or rates of
interest (or methods or computing interest) and the Trustee shall thereafter select the particular
Securities to be redeemed in the manner set forth above from among the groups of such Securities so
specified.
The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Security redeemed or to
be redeemed only in part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 1104. 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,
(3) if less than all the Outstanding Securities of any series are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice which relates to such
Security shall state that on and after the Redemption Date, upon surrender of such Security, the
Holder will receive, without charge, a new Security or Securities of authorized denominations for
the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date, the Redemption Price will become due and payable upon each
such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and
after said date unless the Company defaults in making the redemption payment,
(6) the place or places where such Securities are to be surrendered for payment of the
Redemption Price,
(7) that the redemption is for a sinking fund, if such is the case;
(8) the CUSIP number, if any, printed on the Securities being redeemed; and
(9) that no representation is made as to the correctness or accuracy of the CUSIP number, if
any, listed in such notice or printed on the Securities.
Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Companys request, by the Trustee in the name and at the expense of
the Company. In the case of redemptions by the Company of Global Securities, the Company shall, at
least 30 days prior to the Redemption Date, notify the Depositary (with a copy to the Trustee) of
such redemption.
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SECTION 1105. 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.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with 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 Regular Record
Date according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.
SECTION 1107. 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 written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new
Security or Securities of the same series, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered; provided, however, that the Depositary need not surrender
Global Securities for a partial redemption and may be authorized to make a notation on such Global
Security of such partial redemption. In the case of a partial redemption of the Global Securities,
the Depositary, and in turn, the participants in the Depositary, shall have the responsibility to
select any Securities to be redeemed by random lot.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section 301 for Securities
of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a mandatory sinking fund payment, and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an optional sinking fund payment. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of any series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series (1) deliver Outstanding Securities of such series (other
than any previously called for redemption) and (2) apply as a credit Securities of such series
which have been redeemed either at the election of the Company pursuant to the terms of such series
of Securities or through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case, provided that such Securities have not been previously
so credited. Such Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation of the sinking fund
and the amount of such sinking fund payment shall be reduced accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers Certificate specifying the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202,
and the amount of any optional sinking fund payment to be added to the next ensuing sinking fund
payment, and will also deliver to the Trustee any Securities to be so delivered. If such Officers
Certificate shall specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and at the expense of
the Company in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Securities of any series which are repayable at the option of the Holders thereof before their
Stated Maturity shall be repaid in accordance with the terms of the Securities of such series. The
repayment of any principal amount of Securities pursuant to such option of the Holder to require
repayment of Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the indebtedness represented by such Securities
unless and until the Company, at its option, shall deliver or surrender the same to the Trustee
with a directive that such Securities be cancelled. Notwithstanding anything to the contrary
contained in this Section, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment bankers or other
purchasers to purchase such Securities by paying to the Holders of such Securities on or before the
close of business on the repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to pay the repayment
price of such Securities shall be satisfied and discharged to the extent such payment is so paid by
such purchasers to the respective Holders thereof.
ARTICLE FOURTEEN
SUBORDINATION
SECTION 1401. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of Securities by his acceptance thereof,
likewise covenants and agrees, that the indebtedness evidenced by the Securities and the payment of
the principal of (and premium, if any) and interest on each and all of the Securities is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment
to the prior payment in full of Senior Indebtedness.
Anything in this Indenture or in the Securities to the contrary notwithstanding, the
indebtedness evidenced by the Securities shall be subordinate and junior in right of payment, to
the extent and in the manner hereinafter set forth, to all Senior Indebtedness. Senior Indebtedness
shall continue to be Senior Indebtedness and entitled to the benefits of these subordination
provisions irrespective of any amendment, modification or waiver of any term of Senior Indebtedness
or extension or renewal of Senior Indebtedness.
(a) (i) In the event the Company shall default in the payment of any Senior Indebtedness when
the same becomes due and payable, whether at maturity or on a date fixed for prepayment or by
declaration or otherwise, then, unless and until such default shall have been cured or waived or
shall have ceased to exist, no direct or indirect payment (in cash, property or securities or by
set-off or otherwise) shall be made or agreed to be made on account of the principal of, premium,
if any, or interest on the Securities, or as a sinking fund for the Securities, or in respect of
any redemption, retirement, purchase or other acquisition of any of the Securities.
(ii) Upon the happening of an event of default with respect to any Senior Indebtedness,
permitting the holders thereof to accelerate the maturity thereof (other than under circumstances
when the terms of subdivision (a)(i) are applicable), then, unless and until such event of default
shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in
cash, property or securities or by set-off or otherwise) shall be made or agreed to be made on
account of the principal of, or premium, if any, or interest on the Securities, or as a sinking
fund for the Securities, or in respect of any redemption, retirement, purchase or other acquisition
of any of the Securities, during any period:
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(A) of 90 days after written notice of such default shall have been given to the Company by
any holder of Senior Indebtedness; or
(B) in which any judicial proceeding shall be pending in respect of such default and a notice
of acceleration of the maturity of such Senior Indebtedness shall have been transmitted to the
Company in respect of such default.
(b) In the event of
(i) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment,
composition or other similar proceeding relating to the Company, its creditors or its property,
(ii) any proceeding for the liquidation, dissolution or other winding-up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors, or
(iv) any other marshalling of the assets of the Company,
all Senior Indebtedness (including any interest accruing after the commencement of such
proceedings) shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made to any Holder of Securities on account of the
Securities. Any payment or distribution, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent provided in this Article
with respect to the Securities, to the payment of all Senior Indebtedness at the time outstanding
and to any securities issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for the provisions of this Article) be payable or
deliverable in respect of the Securities shall be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the priorities then existing among such holders until all
Senior Indebtedness (including any interest thereon accruing after the commencement of any such
proceedings) shall have been paid in full.
(c) In the event that any Security shall be declared due and payable as the result of the
occurrence of any one or more defaults in respect thereof, under circumstances when the terms of
subparagraph (b) are not applicable, no payment shall be made in respect of any Securities unless
and until all Senior Indebtedness shall have been paid in full or such declaration and its
consequences shall have been rescinded and all such defaults shall have been remedied or waived.
(d) If any payment or distribution of any character or any security, whether in cash,
securities or other property (other than securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in the provisions of this Article with respect to the Securities, to
the payment of all Senior Indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan or reorganization or readjustment), shall be received by any
Holder of Securities in contravention of any terms hereof and before all the Senior Indebtedness
shall have been paid in full, such payment or distribution or security shall be received in trust
for the benefit of, and shall be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding, in accordance with the priorities then existing among
such holders for application to the payment of all Senior Indebtedness remaining unpaid, or, if
applicable, to any trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other Person making payment or distribution of assets of the Company, to the extent necessary to
pay all such Senior Indebtedness in full. In the event of the failure of any Holder of Securities
to endorse or assign any such payment, distribution or security, each holder of Senior Indebtedness
is hereby irrevocably authorized to endorse or assign the same.
(e) Nothing contained herein shall impair, as between the Company and the Holder of any
Securities, the obligation of the Company to pay to the Holder thereof the principal thereof and
interest thereon as and when the same shall become due and payable in accordance with the terms of
such Security, or prevent the Holder of any Securities from exercising all rights, powers and
remedies otherwise permitted by applicable law or pursuant to the terms of this Indenture and the
Security, upon a default or Event of Default under this Indenture, all subject to the rights of the
holders of the Senior Indebtedness to receive cash, securities or other property otherwise payable
or deliverable to the Holders of the Securities.
(f) Senior Indebtedness shall not be deemed to have been paid in full unless the holders
thereof shall have received cash equal to the amount of such Senior Indebtedness then outstanding.
Upon the payment in full of all Senior Indebtedness, the Holders of Securities shall be subrogated
to all rights of any holders of Senior Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness until all amounts owing on the Securities shall
have been paid in full, and such payments or distributions received by the holders of the
Securities by reason of such subrogation, of cash, securities or other property which otherwise
would be paid or distributed to the holders of Senior Indebtedness, shall, as between the Company
and its creditors other than the holders of Senior Indebtedness, on the one hand, and the Holders
of Securities, on the other hand, be deemed to be a payment by the Company on account of Senior
Indebtedness and not on account of Securities.
35
The Company shall give prompt written notice to the Trustee of any insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or other similar proceeding
relating to the Company within the meaning of this Section. Upon any payment or distribution of
assets of the Company referred to in this Article, the Trustee, subject to the provisions of
Section 601, and the Holders of Securities shall be entitled to rely upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent
making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for
the purpose of ascertaining the person entitled to participate in such distribution, the holders of
the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
In the event that the Trustee determines, in good faith, that further evidence is required
with respect to the right of any person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Section, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held
by such person, as to the extent to which such person is entitled to participate in such payment or
distribution, and as to other facts pertinent to the rights of such person under this Section, and
if such evidence is not furnished, the Trustee may defer any payment to such person pending
judicial determination as to the right of such person to receive such payment.
SECTION 1402. Effectuation of Subordination by Trustee.
Each Holder of Securities, by his acceptance thereof, authorizes and directs the Trustee in
his behalf to take such action as may be necessary or appropriate to effectuate, as between the
Holders of the Securities and the holders of Senior Indebtedness, the subordination provided in
this Article and appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 1403. Knowledge of Trustee.
Nothing contained in this Article or elsewhere in this Indenture, shall (a) prevent the
Company from setting aside in trust or depositing with the Trustee or any Paying Agent, at any
time, except during the pendency of any of the proceedings or upon the happening or continuance of
any of the events referred to in Section 1401, moneys for the payment of principal of, or premium,
if any, or interest on, the Securities, or (b) prevent the application by the Trustee or Paying
Agent of any moneys deposited with it hereunder by or on behalf of the Company to the payment of or
on account of the principal of, or the premium, if any, or interest on the Securities, if the
Trustee or the Paying Agent, as the case may be, did not have written notice of any event
prohibiting such application by the close of business on the Business Day immediately prior to the
date of such application.
Notwithstanding the provisions of this Article or any other provisions of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any Senior Indebtedness or of any
default or event of default with respect to any Senior Indebtedness or any fact or facts which
would prohibit the making of any payment of moneys to or by the Trustee, or the taking of any other
action by the Trustee, unless and until the Trustee shall have received written notice thereof from
the Company, any Holder of Securities, any paying or conversion agent of the Company or the holder
or representative of any class of Senior Indebtedness who shall have been certified by the Company
or otherwise established to the reasonable satisfaction of the Trustee to be such holder or
representative or by the trustee under any indenture pursuant to which Senior Indebtedness shall be
outstanding.
SECTION 1404. Trustees Relation to Senior Indebtedness.
The Trustee shall be entitled to all rights set forth in this Article with respect to any
Senior Indebtedness at the time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in Section 612 or elsewhere in this Indenture shall deprive the Trustee
of any of its rights as such holder. Nothing in this Article shall subordinate to Senior
Indebtedness the claims of, or payments to, the Trustee under or pursuant to Section 607.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set forth in this Article
and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be
read into this Indenture against the Trustee and the Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to Holders, the Company or any other Person
monies or assets to which any holder of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
SECTION 1405. Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior Indebtedness to enforce the
subordination herein shall at any time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any non-compliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may
have or be otherwise charged with.
This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and
their respective corporate seals to be hereunto affixed and attested, all as of the day and year
first above written.
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exv5w1
Exhibit 5.1
DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, California 92121-2133
www.dlapiper.com
T 858.677.1400
F 858.677.1401
May 21, 2009
ADVENTRX Pharmaceuticals, Inc.
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
Ladies and Gentlemen:
We have acted as counsel to ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (the Company),
in connection with the filing of a registration statement on Form S-3
filed on May 21, 2009 (the
Registration Statement), under the Securities Act of 1933, as amended (the Securities Act). The
Registration Statement relates to the Companys:
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(i) |
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common stock, $0.001 par value per share (the Common Stock); |
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(ii) |
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preferred stock, $0.001 par value per share (the Preferred Stock); |
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(iii) |
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senior debt securities (the Senior Debt Securities); |
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(iv) |
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subordinated debt securities (the Subordinated Debt Securities and, together with
the Senior Debt Securities, the Debt Securities); |
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(v) |
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warrants representing rights to purchase Common Stock, Preferred Stock, or Debt
Securities (the Warrants); and |
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(vi) |
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units comprised of one or more Debt Securities, shares of Common Stock, shares of
Preferred Stock, or Warrants in any combination (the Units); |
Collectively, the Common Stock, the Preferred Stock, the Debt Securities, the Warrants, and the
Units are referred to herein as the Securities; all of which may be issued from time to time on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act at an aggregate initial
offering price not to exceed $25,000,000.
We have been advised by the Company that:
1. The rights, preferences, privileges and restrictions, including voting rights, dividend rights,
conversion rights, redemption privileges and liquidation privileges of each series of Preferred
Stock will be set forth in a certificate of designation to be approved by the Companys Board of
Directors, or in an amendment to the Companys Amended and Restated Certificate of Incorporation to
be approved by the Companys Board of Directors and stockholders, and that
one or both of these
documents will be filed either as an exhibit to an amendment to the Registration Statement to be
filed after the date of this opinion or as an exhibit to a Current Report on Form 8-K to be filed
after the Registration Statement has become effective;
2. The Senior Debt Securities may be issued pursuant to an indenture between the Company and a
trustee to be named in such indenture, which indenture will be filed either as an exhibit to an
amendment to the Registration Statement to be filed after the date of this opinion or as an exhibit
to a Current Report on Form 8-K to be filed after the Registration Statement has become effective;
3. The Subordinated Debt Securities may be issued pursuant to an indenture between the Company and
a trustee to be named in such indenture, which indenture will be filed either as an exhibit to an
amendment to the Registration Statement to be filed after the date of this opinion or as an exhibit
to a Current Report on Form 8-K to be filed after the Registration Statement has become effective;
4. The particular terms of any Debt Securities will be set forth in a supplement to the prospectus
forming a part of the Registration Statement;
5. Warrants may be issued pursuant to a warrant agreement to be entered into between the Company
and a financial institution as warrant agent or directly issued by the Company to the purchasers of
such Warrants (in each case, the Warrant Agreement). The Warrant Agreement will be filed either
as an exhibit to an amendment to the Registration Statement to be filed after the date of this
opinion or as an exhibit to a Current Report on Form 8-K to be filed after the Registration
Statement has become effective, and the particular terms of any series of Warrants will be set
forth in a supplement to the prospectus forming a part of the Registration Statement; and
6. Units may be issued pursuant to a unit agreement to be entered into between the Company and a
financial institution as unit agent or directly issued by the Company to the purchasers of such
Units (in each case, the Unit Agreement). The Unit Agreement will be filed either as an exhibit
to an amendment to the Registration Statement to be filed after the date of this opinion or as an
exhibit to a Current Report on Form 8-K to be filed after the Registration Statement has become
effective, and the particular terms of any series of Units will be set forth in a supplement to the
prospectus forming a part of the Registration Statement.
In rendering the opinions set forth below, we have assumed that (i) all information contained in
all documents reviewed by us is true and correct; (ii) all signatures on all documents examined
by us are genuine; (iii) all documents submitted to us as originals are authentic and all documents
submitted to us as copies conform to the originals of those documents; (iv) each natural person
signing any document reviewed by us had the legal capacity to do so; (v) the Registration
Statement, and any further amendments thereto (including post-effective amendments) will have
become effective and comply with all applicable laws; (vi) a prospectus
supplement will have been
prepared and filed with the Commission describing the Securities offered thereby; (vii) all
Securities will be issued and sold in compliance with applicable federal and state securities laws
and in the manner stated in the Registration Statement and the applicable prospectus supplement;
(viii) a definitive purchase, underwriting or similar agreement with respect to any Securities
offered will have been duly authorized and validly executed and delivered by the Company and the
other parties thereto; (ix) the Company has reserved from its authorized but unissued and
unreserved shares of stock a number sufficient to issue all Securities; (x) the certificates
representing the Securities will be duly executed and delivered; and (xi) if the holders of the
Debt Securities are granted rights to inspect corporate books and records and to vote in the
election of directors or any matters on which stockholders of the Company may vote, such rights are
set forth in the Companys Amended and Restated Certificate of Incorporation or the Amended and
Restated Certificate of Incorporation grants to the Companys Board of Directors the power to
confer such voting or inspection rights and the Companys Board of Directors has conferred such
rights.
We have examined the Registration Statement, including the exhibits thereto, and such other
documents, corporate records, and instruments and have examined such laws and regulations as we
have deemed necessary for purposes of rendering the opinions set forth herein. Based upon such
examination and subject to the further provisions hereof, we are of the following opinion:
1. The Common Stock will be validly issued, fully paid and nonassessable, provided that (i) the
Companys Board of Directors or an authorized committee thereof has specifically authorized the
issuance of such Common Stock in exchange for consideration that the Board of Directors or such
committee determines as adequate and in excess of the par value of such Common Stock (Common Stock
Authorizing Resolutions), (ii) the terms of the offer, issuance and sale of shares of Common Stock
have been duly established in conformity with the Companys Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws and do not violate any applicable law or result in a
default under or breach of any agreement or instrument binding on the Company and comply with any
requirement or restriction imposed by any court or governmental body having jurisdiction over the
Company and (iii) the Company has received the consideration provided for in the applicable Common
Stock Authorizing Resolutions.
2. The Preferred Stock will be validly issued, fully paid and nonassessable, provided that (i) the
Companys Board of Directors or an authorized committee thereof has specifically authorized the
issuance of such Preferred Stock in exchange for consideration that the Board of Directors or such
committee determines as adequate and in excess of the par value of such
Preferred Stock (Preferred Stock Authorizing Resolutions), (ii) the rights, preferences,
privileges and restrictions of the Preferred Stock have been established in conformity with
applicable law, (iii) an appropriate certificate of designation approved by the Companys Board of
Directors, or an amendment to the Companys Amended and Restated Certificate of Incorporation
approved by the Companys Board of Directors and stockholders, has been duly
filed with the State
of Delaware, (iv) the terms of the offer, issuance and sale of shares of such class or series of
Preferred Stock have been duly established in conformity with the Companys Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws and do not violate any applicable law
or result in a default under or breach of any agreement or instrument binding upon the Company and
comply with any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company, and (v) the Company has received the consideration provided for in
the applicable Preferred Stock Authorizing Resolutions.
3. The Debt Securities will constitute valid and legally binding obligations of the Company,
provided that (i) the Companys Board of Directors or an authorized committee thereof has
specifically authorized the issuance of such Debt Securities in exchange for consideration that the
Board of Directors or such committee determines as adequate (Debt Securities Authorizing
Resolutions), (ii) the applicable indenture conforms with applicable law and is enforceable in
accordance with its terms, (iii) the terms of the Debt Securities and of the offer, issuance and
sale of such Debt Securities have been duly established in conformity with the applicable
indenture, the Companys Amended and Restated Certificate of Incorporation and the applicable Debt
Securities Authorizing Resolutions and do not violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company and comply with any
requirement or restriction imposed by any court or governmental body having jurisdiction over the
Company, (iv) such Debt Securities have been duly executed and authenticated in accordance with the
applicable indenture and offered, issued and sold as contemplated in the Registration Statement,
and (v) the Company has received the consideration provided for in the applicable Debt Securities
Authorizing Resolutions.
4. The Warrants will constitute valid and legally binding obligations of the Company, provided that
(i) the Companys Board of Directors or an authorized committee thereof has specifically authorized
the issuance of such Warrants in exchange for consideration that the Board of Directors or such
committee determines as adequate (Warrant Authorizing Resolutions), which include the terms upon
which the Warrants are to be issued, their form and content and the consideration for which shares
are to be issued upon exercise of the Warrants, (ii) the Warrant Agreement relating to the Warrants
has been duly authorized, executed and delivered and is enforceable in accordance with its terms,
(iii) the terms of the offer, issuance and sale of such Warrants have been duly established in
conformity with the applicable Warrant Agreement and the applicable Warrant Authorizing
Resolutions, (iv) the Warrant Agreement and the offer, issuance and sale of the Warrants do not
violate any applicable law or result in a default under or breach of any agreement or instrument
binding upon the Company and comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Company, (v) such Warrants have been duly executed
and countersigned in accordance with the Warrant Agreement and offered, issued and sold as
contemplated in the Registration Statement, the applicable Warrant Authorizing Resolutions and the
Warrant Agreement, and (vi) the Company has received the consideration provided for in the
applicable Warrant Authorizing Resolutions.
5. Units will constitute valid and legally binding obligations of the Company, provided that (i)
the Companys Board of Directors or an authorized committee thereof has specifically authorized the
issuance of such Units in exchange for consideration that the Board of Directors or such committee
determines as adequate (Unit Authorizing Resolutions), which include the terms upon which the
Units are to be issued, their form and content and the consideration for which the Units and any
securities issuable upon exercise of any warrants included in the Units are to be issued, (ii) the
Unit Agreement relating to the Units has been duly authorized, executed and delivered and is
enforceable in accordance with its terms, (iii) the terms of the offer, issuance and sale of such
Units have been duly established in conformity with the Unit Agreement and the Unit Authorizing
Resolutions, (iv) the Unit Agreement and the offer, issuance and sale of the Units do not violate
any applicable law or result in a default under or breach of any agreement or instrument binding
upon the Company and comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Company, (v) such Units have been duly executed and
countersigned in accordance with the Unit Agreement and offered, issued and sold as contemplated in
the Registration Statement, the applicable Unit Authorizing Resolutions and the Unit Agreement, and
(vi) the Company has received the consideration provided for in the applicable Unit Authorizing
Resolutions.
The foregoing opinions are qualified to the extent that the enforceability of any document,
instrument or the Securities may be limited by or subject to bankruptcy, insolvency, fraudulent
transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting
creditors rights generally, and general equitable or public policy principles.
We express no opinions concerning (i) the validity or enforceability of any provisions contained in
indentures that purport to waive or not give effect to rights to notices, defenses, subrogation or
other rights or benefits that cannot be effectively waived under applicable law; (ii) the validity
or enforceability of any provisions contained in Warrant Agreements or Unit Agreements that purport
to waive or not give effect to rights to notices, defenses, subrogation or other rights or benefits
that cannot be effectively waived under applicable law; or (iii) any securities (other than shares
of common stock) into which the Preferred Stock, the Debt Securities, the Warrants, and the
securities comprising the Units may be convertible or exercisable.
In providing this opinion, we have relied as to certain matters on information obtained from public
officials and officers of the Company.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the
reference to us under the caption Legal Matters in the prospectus included in the
Registration Statement. In giving this consent, we do not admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
This opinion letter is given to you solely for use in connection with the offer and sale of the
Securities while the Registration Statement is in effect and is not to be relied upon for any other
purpose. Our opinion is expressly limited to the matters set forth above, and we render no
opinion, whether by implication or otherwise, as to any other matters relating to the Company, the
Securities or the Registration Statement.
Very truly yours,
/s/ DLA Piper LLP (US)
DLA Piper LLP (US)
exv23w1
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement on Form S-3 of our
report dated March 25, 2009 on our audits of the consolidated financial statements of ADVENTRX
Pharmaceuticals, Inc. and Subsidiaries (a development stage enterprise) as of December 31, 2008 and
2007 and for the years then ended and for the period from January 1, 2002 through December 31,
2008, which report appears in the Annual Report on Form 10-K of ADVENTRX Pharmaceuticals, Inc. for
the year ended December 31, 2008. We also consent to the reference to our firm under the caption
Experts.
Our report dated March 25, 2009 contains explanatory paragraphs that state that effective January
1, 2007, ADVENTRX Pharmaceuticals, Inc. and Subsidiaries (a development stage enterprise) adopted
Financial Accounting Standards Board Staff Position No. EITF 00-19-2, Accounting for Registration
Payment Arrangements, that certain prior year amounts have been restated, and that the Company has
suffered recurring losses from operations and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ J.H. COHN LLP
San Diego, California
May 19, 2009