sv3
As
filed with the Securities and Exchange Commission on November 26, 2008.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AASTROM BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
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Michigan
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94-3096597 |
(State or other jurisdiction of
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(I.R.S. Employer Identification |
incorporation or organization)
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Number) |
24 Frank Lloyd Wright Drive
P.O. Box 376
Ann Arbor, Michigan 48106
(734) 930-5555
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
George W. Dunbar, Jr.
President and Chief Executive Officer
Aastrom Biosciences, Inc.
P.O. Box 376
Ann Arbor, Michigan 48106
(734) 930-5555
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With a copy to:
Allan J. Reich
Seyfarth Shaw
131 South Dearborn Street
Suite 2400
Chicago, Illinois 60603
Telephone: (312) 460-5650
Facsimile: (312) 460-7650
Approximate date of commencement of proposed sale to the public: From time to time after this
Registration Statement becomes effective.
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 the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer o
(Do not check if a smaller reporting company) |
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Smaller reporting company
þ |
CALCULATION OF REGISTRATION FEE
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Proposed |
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Amount to |
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Proposed Maximum |
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Maximum |
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Title of Each Class of |
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be |
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Offering Price Per |
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Aggregate |
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Amount of |
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Securities To be Registered(1) |
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Registered |
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Share(2) |
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Offering Price(2) |
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Registration Fee |
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Debt Securities (3) |
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Common Stock, $0 par value per share (4) |
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Preferred Stock, $0 par value per share (5) |
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Warrants (6) |
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Units (7) |
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Total |
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$50,000,000 |
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$50,000,000 |
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$1,965 |
(8) |
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(1) |
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This Registration Statement also covers contracts that may be issued by the Registrant
under which the counterparty may be required to purchase Debt Securities, Common Stock,
Preferred Stock or Warrants. |
(2) |
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Not specified as to each class of securities to be registered hereunder pursuant to
General Instruction II.D. of Form S-3. In no event will the aggregate maximum offering
price of all securities registered under this Registration Statement exceed $50,000,000.
Any securities registered hereunder may be sold separately or as units with other
securities registered hereunder. |
(3) |
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Subject to footnote (2), there are being registered hereunder an indeterminate number
of Debt Securities as may be sold from time to time by Aastrom Biosciences, Inc. |
(4) |
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Subject to footnote (2), there are being registered hereunder an indeterminate number
of shares of Common Stock as may be sold, from time to time, by Aastrom Biosciences, Inc.
There is also being registered hereunder an indeterminate number of shares of Common Stock
that may be issued upon conversion, as applicable, of Preferred Stock or Debt Securities
registered hereunder or upon exercise of Warrants registered hereunder, as the case may be. |
(5) |
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Subject to footnote (2), there are being registered hereunder an indeterminate number
of shares of Preferred Stock, as may be sold, from time to time, by Aastrom Biosciences,
Inc. or as may be issued upon conversion of Debt Securities registered hereunder or upon
the exercise of Warrants registered hereunder, as the case may be. |
(6) |
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Subject to footnote (2), there are being registered hereunder an indeterminate number
of Warrants representing rights to purchase Debt Securities, Preferred Stock or Common
Stock (as shall be designated by the Company at the time of any such offering) registered
hereunder. |
(7) |
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Units may consist of two or more of the securities listed in this table offered and
sold together. |
(8) |
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Calculated pursuant to Rule 457(o) of the rules and regulations under the Securities
Act of 1933, as amended. |
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE
NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT HAS FILED A FURTHER AMENDMENT THAT
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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 we are not soliciting
offers to buy these securities in any state where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED NOVEMBER 26, 2008.
PROSPECTUS
$50,000,000
AASTROM BIOSCIENCES, INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
We may from time to time issue, in one or more series or classes, up to $50,000,000 in
aggregate principal amount of our common stock, preferred stock, debt securities and/or warrants.
We may offer these securities separately or together. We will specify in the accompanying
prospectus supplement the terms of the securities being offered. We may sell these securities to or
through underwriters and also to other purchasers or through agents. We will set forth the names of
any underwriters or agents, and any fees, conversions, or discount arrangements, in the
accompanying prospectus supplement. We may not sell any securities under this prospectus without
delivery of the applicable prospectus supplement.
You should read this document and any prospectus supplement or amendment carefully before you
invest.
Our common stock is traded on the Nasdaq Capital Market under the symbol ASTM. On November
25, 2008, the last reported sale price for our common
stock was $ 0.40 per share.
Investing in the common stock involves certain risks. See Risk Factors beginning on page 3
for a discussion of these risks.
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 November 26, 2008.
TABLE OF CONTENTS
You may rely only on the information provided or incorporated by reference in this Prospectus.
We have not authorized anyone to provide information different from that contained in this
Prospectus. Neither the delivery of this Prospectus nor the sale of the securities means that the
information contained in this Prospectus is correct after the date of this Prospectus. This
Prospectus is not an offer to sell or solicitation to buy the securities in any circumstances under
which the offer or solicitation is unlawful.
PROSPECTUS SUMMARY
The following summary highlights information contained elsewhere in this Prospectus. It may
not contain all of the information that is important to you. You should read the entire Prospectus
carefully, especially the discussion regarding the risks of investing in our common stock under the
heading Risk Factors, before investing in our common stock. In this Prospectus, Aastrom, we,
us, and our refer to Aastrom Biosciences, Inc.
Business
We are a regenerative medicine company (a medical area that focuses on developing therapies
that regenerate damaged or diseased tissues or organs) that incorporated in 1989 and focuses on the
clinical development of autologous cell products (cells collected from a patient and returned to
that same patient) for the repair or regeneration of multiple human tissues, based on our
proprietary Tissue Repair Cell (TRC) technology. Our preclinical and clinical product development
programs utilize patient-derived bone marrow stem and early progenitor cell populations, and are
being investigated for their ability to aid in the regeneration of tissues such as cardiac,
vascular, bone and neural. TRC-based products have been used in over 290 patients, and are
currently in the following stages of development:
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Cardiac regeneration Cardiac Repair Cells (CRCs): |
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Dilated cardiomyopathy (DCM) (severe chronic disease of the heart): |
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U.S.: IMPACT-DCM Phase II clinical trial open for patient enrollment at three
clinical sites (The Methodist Hospital, Houston, TX, Baylor University Medical Center,
Dallas, TX and The University of Utah School of Medicine, Salt Lake City, UT);
initiating two other clinical sites; patient treatments expected during the 4th
quarter of calendar year 2008; Orphan Drug Designation from the FDA for use in
treatment of DCM |
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Germany: Encouraging data reported April 2008 from compassionate use
treatment in patients |
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Vascular regeneration Vascular Repair Cells (VRCs): |
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Critical limb ischemia (CLI): |
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U.S.: RESTORE-CLI Phase IIb clinical trial treated first 30 patients;
12-month interim data analyzed after the 30th patient followed for 12 months (expected
to occur during the 4th quarter of calendar year 2009); patient enrollment continues |
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Germany: Phase I/II investigator-sponsored clinical trial completed
enrollment and patient follow-up ongoing; positive interim data reported October 2007 |
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Bone regeneration Bone Repair Cells (BRCs): |
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Osteonecrosis of the femoral head: |
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U.S.: ON-CORE Phase III clinical trial active; not enrolling additional
patients; Orphan Drug Designation from the FDA for use in treatment of osteonecrosis
of the femoral head |
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Spain: Clinical trial enrolling patients |
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Germany: Positive data reported October 2007 from compassionate use treatment
cases |
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U.S.: Positive 12-month results from Phase I/II clinical trial reported by
investigator October 2007 |
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Spain: 24-month follow-up continuing on fully-enrolled 10-patient
investigator-sponsored Phase II clinical trial |
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Neural regeneration Neural Repair Cells (NRCs): |
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Plans for clinical program on hold |
Our platform TRC technology is based on 1) autologous cell products which are a unique cell
mixture containing large numbers of stem and early progenitor cells produced outside of the body
from a small amount of bone marrow taken from the patient, and 2) the ability to produce these
products in an automated process that meets Good Manufacturing Practice (GMP) requirements.
1
We have developed a manufacturing system to produce human cells for clinical use. This
automated cell manufacturing system enables the single-pass perfusion cell culture process.
Single-pass perfusion is our patented manufacturing technology for growing large numbers of human
cells. The cell component of TRC-based products include adult stem and early progenitor cell
populations, which are capable of forming tissues such as cardiac, vascular, bone, neural, and the
hematopoietic and immune system.
All TRC-based products are produced using our cell manufacturing system in centralized
manufacturing facilities. We have one manufacturing site in the U.S. located in Ann Arbor, MI and
three contract facilities in the EU located in Stuttgart, Germany (Fraunhofer Institute for
Interfacial Engineering and Biotechnology), Bad Oeynhausen, Germany (Institute of Laboratory and
Transfusion Medicine at the Heart Center) and Barcelona, Spain (Tissue and Cell Therapy Center at
the Blood and Tissue Bank).
Since our inception, we have been in the development stage and engaged in research and product
development, conducted principally on our own behalf. Our initial business plan was to pursue our
targeted markets by commercializing our cell manufacturing system and supplies. Since 2004 we have
phased out our marketing efforts promoting the cell manufacturing system as a commercial product.
Currently, we have minimal product sales consisting of manufacturing supplies to academic
collaborators in the U.S. and cell-based products to EU-based physicians.
Our current focus is on utilizing our TRC technology to produce autologous cell-based products
for use in regenerative medicine applications. At such time as we satisfy applicable regulatory
approval requirements, we expect the sales of our TRC-based products to constitute nearly all of
our product sales revenues.
We do not expect to generate positive cash flows from our consolidated operations for at least
the next several years and then only if significant TRC-based cell product sales commence. Until
that time, we expect that our revenue sources from our current activities will consist of only
minor sales of our cell products and manufacturing supplies to our academic collaborators, grant
revenue, research funding and potential licensing fees or other financial support from potential
future corporate collaborators.
In May 2008, we reprioritized our clinical development programs to primarily focus on
cardiovascular applications, including dilated cardiomyopathy, and critical limb ischemia. We have
discontinued further patient enrollment into our Phase III ON-CORE (osteonecrosis) bone
regeneration trial. We do not anticipate initiating new clinical bone activity, reactivating the
Phase III ON-CORE trial or initiating formal clinical trials in the neural area without additional
financial resources. While the decision to reprioritize was driven by economic factors, the
clinical programs were prioritized based on anticipated time to market and the relative clinical
and market potential. We are also exploring the possibility of entering into complementary
regenerative medicine business activities, whether through acquisition or otherwise. In addition to
the reprioritizing our development and clinical programs, we also made reductions in our staff and
reduced our overhead expenses.
We expect that we will need to raise significant additional funds or pursue strategic
transactions or other strategic alternatives in order to complete our product development programs,
complete clinical trials needed to market our products, and commercialize our products. To date, we
have financed our operations primarily through public and private sales of our equity securities,
and we expect to continue obtaining required capital in a similar manner. As a development stage
company, we have never been profitable and do not anticipate having net income unless and until
significant product sales commence. With respect to our current activities, this is not likely to
occur until we obtain significant additional funding, complete the required clinical trials for
regulatory approvals, and receive the necessary approvals to market our products. Through September
30, 2008, we have accumulated a net loss of approximately $183 million. We cannot provide any
assurance that we will be able to achieve profitability on a sustained basis, if at all, obtain the
required funding, obtain the required regulatory approvals, or complete additional corporate
partnering or acquisition transactions.
Corporate Information
Aastrom is incorporated under the laws of the State of Michigan. Our principal executive
offices are located at 24 Frank Lloyd Wright Drive, P.O. Box 376, Ann Arbor, Michigan 48106. Our
telephone number is (734) 930-5555. The address of our website is www.aastrom.com. Information on
our website is not part of this Prospectus.
Our Common Stock
Our common stock trades on the Nasdaq Capital Market under the symbol ASTM.
The Prospectus
This prospectus is part of a registration statement that we filed with the SEC utilizing a
shelf registration process. Under this shelf process, we may sell the securities described in
this prospectus in one or more offerings up to a total dollar amount of $50.0 million. We have
provided in this prospectus a general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific information about
the terms of that offering. We may also add, update or change in the prospectus supplement any of
the information contained in this prospectus. This prospectus, together with applicable prospectus
supplements, includes all material information relating to this offering. You should read both this
prospectus and any prospectus supplement together with the additional information described under
the heading Where You Can Find More Information.
2
RISK FACTORS
You should carefully consider the risks described below before purchasing our common stock.
Our most significant risks and uncertainties are described below; however, they are not the only
risks we face. If any of the following risks actually occur, our business, financial condition, or
results or operations could be materially adversely affected, the business of our common stock
could decline, and you may lose all or part of your investment therein. You should acquire shares
of our common stock only if you can afford to lose your entire investment.
The risk factors described below are not all inclusive. All risk factors should be considered
carefully when evaluating our business, results of operations, and financial position. We undertake
no obligation to update forward-looking statements or risk factors. There may be other risks and
uncertainties not highlighted herein that may become material factors affecting our financial
condition and business operations.
Our past losses and expected future losses cast doubt on our ability to operate profitably.
We were incorporated in 1989 and have experienced substantial operating losses since
inception. As of September 30, 2008, we have incurred a cumulative net loss totaling approximately
$183 million, and we have continued to incur losses since that date. These losses have resulted
principally from costs incurred in the research and development of our cell culture technologies
and our cell manufacturing system, general and administrative expenses, and the prosecution of
patent applications. We expect to continue to incur significant operating losses over the next
several years and at least until, and probably after, product sales increase, primarily owing to
our research and development programs, including preclinical studies and clinical trials, and the
establishment of marketing and distribution capabilities necessary to support commercialization
efforts for our products. We cannot predict with any certainty the amount of future losses. Our
ability to achieve profitability will depend, among other things, on successfully completing the
development of our product candidates, timely initiation and completion of clinical trials,
obtaining regulatory approvals, establishing manufacturing, sales and marketing arrangements with
third parties, maintaining supplies of key manufacturing components, acquisition and development of
complementary activities and raising sufficient cash to fund our operating activities. In addition,
we may not be able to achieve or sustain profitability.
The current global economy and capital markets have been challenging for any issuer to raise
capital through public offerings or private placements of its securities, and especially so with
respect to the small cap biotech sector. This situation makes the timing and potential for future
equity financings uncertain. As a result, we have taken actions intended to reduce our estimated
average cash utilization to approximately $1.2 million per month for fiscal year ending June 30,
2009, through a combination of development and clinical program reprioritizations and adjustments
focusing on our cardiac regeneration program, along with reductions in overhead and staff which
occurred in May 2008. We expect that our available cash and expected interest income will be
sufficient to finance current planned activities at least until October 31, 2009, in part due to
the fact that many of our expenditures are discretionary in nature and could, if necessary, be
delayed.
Our stock may be delisted from Nasdaq, which could affect its market price and liquidity.
We are required to meet certain qualitative and financial tests (including a minimum bid price
for our common stock of $1.00 per share) to maintain the listing of our common stock on the Nasdaq
Capital Market. On December 20, 2007, we received a deficiency letter from the Nasdaq Stock Market
indicating that for 30 consecutive trading days our common stock had a closing bid price below the
$1.00 per share minimum closing bid as required for continued listing set forth in Nasdaq
Marketplace Rule 4310(c)(4). In accordance with Nasdaq Marketplace Rule 4310(c)(8)(D), we were
provided a compliance period of 180 calendar days, or until June 17, 2008, to regain compliance
with this requirement. On June 17, 2008, we had not yet regained compliance with the requirement
and were granted an additional 180-day compliance period, or until December 15, 2008 to regain
compliance. On October 22, 2008, we received notice from Nasdaq that the period during which we
were granted to gain compliance with the bid price requirement had been suspended and that, upon
completion of the suspension period, we would have until March 20, 2009 to regain compliance with
the requirement. We can regain compliance with the minimum closing bid price rule if the bid price
of our common stock closes at $1.00 per share or higher for a minimum of ten consecutive business
days during the 180-day compliance period, although Nasdaq may, in its discretion, require us to
maintain a minimum closing bid price of at least $1.00 per share for a period in excess of ten
consecutive business days (but generally no more than 20 consecutive business days) before
determining that we have demonstrated the ability to maintain long-term compliance. If we do not
regain compliance during the additional compliance period, Nasdaq will provide written notice that
our securities will be delisted from the Nasdaq Capital Market. At such time, we would be able to
appeal the delisting determination to a Nasdaq Listing Qualifications Panel.
3
We cannot provide any assurance that our stock price will again recover within the permitted
grace period. If our common stock were delisted, it could be more difficult to buy or sell our
common stock and to obtain accurate quotations, and the price of our stock could suffer a material
decline. Delisting may also impair our ability to raise capital.
We may not be able to raise the required capital to conduct our operations and develop and
commercialize our products.
In addition to our financing with Fusion, we will require substantial additional capital
resources in order to conduct our operations and develop and commercialize our products and cell
manufacturing facilities. In order to grow and expand our business, to introduce our new product
candidates into the marketplace and to acquire or develop complementary business activities, we
will need to raise a significant amount of additional funds. We will also need significant
additional funds or a collaborative partner, or both, to finance the research and development
activities of our cell product candidates for additional indications. Accordingly, we are
continuing to pursue additional sources of financing.
Our future capital requirements will depend upon many factors, including:
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continued scientific progress in our research, clinical and development programs; |
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costs and timing of conducting clinical trials and seeking regulatory approvals; |
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competing technological and market developments; |
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our ability to establish additional collaborative relationships; |
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the effect of commercialization activities and facility expansions, if and as required;
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complementary business acquisition or development opportunities. |
Because of our long-term funding requirements, we intend to try to access the public or
private equity markets if conditions are favorable to complete a financing, even if we do not have
an immediate need for additional capital at that time, or whenever we require additional operating
capital. This additional funding may not be available to us on reasonable terms, or at all. If
adequate funds are not available in the future, we may be required to further delay or terminate
research and development programs, curtail capital expenditures, and reduce business development
and other operating activities.
The transaction with Fusion may provide us with some of the required capital to conduct our
operations; however, we expect that we will need additional capital. In addition, under certain
conditions, Fusion will not be required to purchase our shares, including if the market price of
our common stock is less than $0.10, if we are not listed on a national exchange or the OTC
Bulletin Board or if there is a material adverse change to our business, properties, operations,
financial condition or results of operations. In addition, our ability to raise the entire $15
million will be dependent on the stock price of our common stock as we will not be able to sell
greater than 19.99% of our outstanding shares of common stock as of the date of the Purchase
Agreement without obtaining shareholder approval.
We only have the right to receive $60,000 every two business days under the Purchase Agreement
unless our stock price equals or exceeds $0.25, in which case we can sell greater amounts to Fusion
Capital as the price of our common stock increases. Since we will be limited to 22,692,665 shares
sold to Fusion Capital, the selling price of our common stock to Fusion Capital will have to
average at least $0.66 per share for us to receive the maximum proceeds of $15.0 million. Assuming
a purchase price of $0.63 per share (the closing sale price of the common stock on November 3,
2008) and the purchase by Fusion Capital of the full 22,692,665 shares under the Purchase
Agreement, proceeds to us would only be $9,077,066 unless we choose to register more than
22,692,665 shares, which we have the right, but not the obligation, to do. Subject to approval by
our board of directors, we have the right but not the obligation to sell more than 22,692,665
shares to Fusion Capital. In the event we elect to sell more than 22,692,665 shares offered hereby,
we will be required to file a new registration statement and have it declared effective by the U.S.
Securities & Exchange Commission. In addition, in the event that we decide to issue more than
26,565,299, i.e. greater than 19.99% of our outstanding shares of common stock as of the date of
the Purchase Agreement, we would first be required to seek shareholder approval in order to be in
compliance with the Nasdaq Capital Market rules.
4
The extent we rely on Fusion Capital as a source of funding will depend on a number of factors
including, the prevailing market price of our common stock and the extent to which we are able to
secure working capital from other sources. Specifically, Fusion
Capital shall not have the right nor the obligation to purchase any shares of our common stock
on any business days that the market price of our common stock is less than $0.10. Even if we are
able to access the full $15.0 million under the Purchase Agreement with Fusion Capital, we will
need additional capital to fully implement our business, operating and development plans. Should
the financing we require to sustain our working capital needs be unavailable or prohibitively
expensive when we require it, the consequences could be a material adverse effect on our business,
operating results, financial condition and prospects.
We have experienced significant management turnover, and if we cannot attract and retain key
personnel, then our business will suffer.
Our success depends in large part upon our ability to attract and retain highly qualified
scientific and management personnel. We face competition for such personnel from other companies,
research and academic institutions and other entities. Further, in an effort to conserve financial
resources, we have implemented reductions in our work force on three previous occasions. As a
result of these and other factors, we may not be successful in hiring or retaining key personnel.
Our inability to replace any key employee could harm our operations.
Failure to obtain and maintain required regulatory approvals would severely limit our ability to
sell our products.
We must obtain the approval of the FDA before commercial sales of our cell product candidates
may commence in the U.S., which we believe will ultimately be the largest market for our products.
We will also be required to obtain additional approvals from various foreign regulatory authorities
to initiate sales activities of cell products in those jurisdictions, including the EU under
regulations of the EMEA. If we cannot demonstrate the safety and efficacy of our cell product
candidates, or of the cells produced in our manufacturing system, we may not be able to obtain
required regulatory approvals. If we cannot demonstrate the safety and efficacy of our product
candidates, the FDA or other regulatory authorities could delay or withhold regulatory approval of
our product candidates.
Finally, even if we obtain regulatory approval of a product, that approval may be subject to
limitations on the indicated uses for which it may be marketed. Even after granting regulatory
approval, the FDA and regulatory agencies in other countries continue to review and inspect
marketed products, manufacturers and manufacturing facilities, which may create additional
regulatory burdens. Later discovery of previously unknown problems with a product, manufacturer or
facility, may result in restrictions on the product or manufacturer, including a withdrawal of the
product from the market. Further, regulatory agencies may establish additional regulations that
could prevent or delay regulatory approval of our products.
Any changes in the governmental regulatory classifications of our products could prevent, limit or
delay our ability to market or develop our products.
The FDA establishes regulatory requirements based on the classification of a product. Because
our product development programs are designed to satisfy the standards applicable to biological
licensure for our cellular products, any change in the regulatory classification or designation
would affect our ability to obtain FDA approval of our products. Each of these cell mixtures (such
as our TRC-based products) is, under current regulations, regulated as a biologic product, which
requires a Biological License Application (BLA).
EU Directives and regulations (laws) have become effective, and have influenced the
requirements for manufacturing cell products and the conduct of clinical trials. Recent changes to
the EU Medicinal Products Prime Directive (including added annexes and new regulations) shifted
patient-derived cells to the medicinal products category, which will require Marketing
Authorizations in order to market and sell these products. These new requirements will require
clinical trials with data submission and review by one or more European regulatory bodies. There is
uncertainty about which clinical trial activities and data are required, and because of the recent
nature of these new directives, laws and regulations, there is no established precedent to
understand the timeline or other requirements for Marketing Authorization.
Our inability to complete our product development activities successfully would severely limit our
ability to operate or finance operations.
In order to commercialize our cell product candidates in the U.S. and the EU we must complete
substantial clinical trials, and obtain sufficient safety and efficacy results to support required
registration approval and market acceptance of our cell product candidates. We may not be able to
successfully complete the development of our product candidates, or successfully market our
technologies or product candidates. We, and any of our potential collaborators, may encounter
problems and delays relating to research and development, regulatory approval and intellectual
property rights of our technologies and product candidates. Our
5
research and development programs may not be successful, and our cell culture technologies and
product candidates may not facilitate the production of cells outside the human body with the
expected result. Our technologies and cell product candidates may not prove to be safe and
efficacious in clinical trials, and we may not obtain the requisite regulatory approvals for our
technologies or product candidates and the cells produced in such products. If any of these events
occur, we may not have adequate resources to continue operations for the period required to resolve
the issue delaying commercialization and we may not be able to raise capital to finance our
continued operation during the period required for resolution of that issue.
We must successfully complete our clinical trials to be able to market certain of our products.
To be able to market therapeutic cell products in the U.S. and across the EU, we must
demonstrate, through extensive preclinical studies and clinical trials, the safety and efficacy of
our processes and product candidates. If our clinical trials are not successful, our products may
not be marketable.
Our ability to complete our clinical trials in a timely manner depends on many factors,
including the rate of patient enrollment. Patient enrollment can vary with the size of the patient
population, the proximity of suitable patients to clinical sites, perceptions of the utility of
cell therapy for the treatment of certain diseases and the eligibility criteria for the study. We
have experienced delays in patient accrual in our previous and current clinical trials. If we
experience future delays in patient accrual, we could experience increased costs and delays
associated with clinical trials, which would impair our product development programs and our
ability to market our products. Furthermore, the FDA monitors the progress of clinical trials and
it may suspend or terminate clinical trials at any time due to patient safety or other
considerations.
Our research programs are currently directed at improving TRC-based product functionality for
certain clinical indications, improving product shelf life, and decreasing the cost of
manufacturing our TRC-based products. These production process changes may alter the functionality
of our cells, and require various additional levels of experimental and clinical testing and
evaluation. Any such testing could lengthen the time before these products would be commercially
available.
Even if successful clinical results are reported for a product from a completed clinical
trial, this does not mean that the results will be sustained over time, or will be sufficient for a
marketable or regulatory approvable product.
Failure of third parties to manufacture component parts or provide limited source supplies, or the
imposition of additional regulation, would impair our new product development and our sales
activities.
We rely solely on third parties such as Astro, Ethox, Moll and Lonza to manufacture or supply
certain of our devices/manufacturing equipment, as well as component parts and other materials used
in the cell product manufacturing process. We would not be able to obtain alternate sources of
supply for many of these items on a short-term basis. If any of our key manufacturers or suppliers
fails to perform their respective obligations or if our supply of components or other materials is
limited or interrupted, we would not be able to conduct clinical trials or market our product
candidates on a timely and cost-competitive basis, if at all.
Finally, we may not be able to continue our present arrangements with our suppliers,
supplement existing relationships, establish new relationships or be able to identify and obtain
the ancillary materials that are necessary to develop our product candidates in the future. Our
dependence upon third parties for the supply and manufacture of these items could adversely affect
our ability to develop and deliver commercially feasible products on a timely and competitive
basis.
Manufacturing our cell products in centralized facilities may increase the risk that we will not
have adequate quantities of our cell products for clinical programs.
We rely on third party manufacturers, Fraunhofer Institute for Interfacial Engineering and
Biotechnology in Stuttgart, Germany, the Institute of Laboratory and Transfusion Medicine at the
Heart Center in Bad Oeynhausen, Germany, and the Tissue and Cell Therapy Center at the Blood and
Tissue Bank in Barcelona, Spain, to supply our TRC-based cell products for certain EU clinical
activities. Reliance on third party manufacturers entails risks including regulatory compliance and
quality assurance and the possible breach of the manufacturing agreement by the third party. We are
subject to similar regulatory and compliance risks at our site in Ann Arbor, Michigan. All sites
could be subject to ongoing, periodic, unannounced inspection by regulatory agencies to ensure
strict compliance with GMP regulations and other governmental regulations and corresponding foreign
standards. Our present and future manufacturers might not be able to comply with these regulatory
requirements. We do not have redundant cell manufacturing sites in the U.S. In the event our cell
manufacturing facilities are damaged or destroyed or are subject to regulatory restrictions, our
clinical trial programs and other business prospects would be adversely affected.
6
Even if we obtain regulatory approvals to sell our products, lack of commercial acceptance could
impair our business.
We will be seeking to obtain regulatory approvals to market our TRC-based cell products for
tissue repair and regeneration treatments. Even if we obtain all required regulatory approvals, we
cannot be certain that our products and processes will be accepted in the marketplace at a level
that would allow us to operate profitably. Our products may be unable to achieve commercial
acceptance for a number of reasons, such as the availability of alternatives that are less
expensive, more effective, or easier to use, the perception of a low cost-benefit ratio for the
product amongst physicians and hospitals, or an inadequate level of product support from ourselves
or a commercial partner. Our technologies or product candidates may not be employed in all
potential applications being investigated, and any reduction in applications would limit the market
acceptance of our technologies and product candidates, and our potential revenues.
The market for our products will be heavily dependent on third party reimbursement policies.
Our ability to successfully commercialize our product candidates will depend on the extent to
which government healthcare programs, such as Medicare and Medicaid, as well as private health
insurers, health maintenance organizations and other third party payors will pay for our products
and related treatments. Reimbursement by third party payors depends on a number of factors,
including the payors determination that use of the product is safe and effective, not experimental
or investigational, medically necessary, appropriate for the specific patient and cost-effective.
Reimbursement in the U.S. or foreign countries may not be available or maintained for any of our
product candidates. If we do not obtain approvals for adequate third party reimbursements, we may
not be able to establish or maintain price levels sufficient to realize an appropriate return on
our investment in product development. Any limits on reimbursement from third party payors may
reduce the demand for, or negatively affect the price of, our products. For example, in the past,
published studies suggested that stem cell transplantation for breast cancer, which constituted a
significant portion of the overall stem cell therapy market at the time, may have limited clinical
benefit. The lack of reimbursement for these procedures by insurance payors has negatively affected
the marketability of our products in this indication in the past.
Use of animal-derived materials could harm our product development and commercialization efforts.
Some of the manufacturing materials and/or components we use in, and are critical to,
implementation of our TRC technology involve the use of animal-derived products, including fetal
bovine serum. Suppliers or regulatory changes may limit or restrict the availability of such
materials for clinical and commercial use. We currently purchase all of our fetal bovine sera from
protected herds in Australia and New Zealand. These sources are considered to be the safest and
raise the least amount of concern from the global regulatory agencies. If, for example, the
so-called mad cow disease occurs in New Zealand or in Australia, it may lead to a restricted
supply of the serum currently required for the TRC-based product manufacturing processes. Any
restrictions on these materials would impose a potential competitive disadvantage for our products
or prevent our ability to manufacture TRC-based cell products. Regulatory authorities in the EU are
reviewing the safety issues related to the use of animal-derived materials, which we currently use
in our production process. The FDA has issued draft regulations for controls over bovine materials.
These proposed regulations do not appear to affect our ability to purchase the manufacturing
materials we currently use. However, the FDA may issue final regulations that could affect our
operations. We do not know what actions, if any, the authorities may take as to animal derived
materials specific to medicinal products distributed in the EU. Our inability to develop or obtain
alternative compounds would harm our product development and commercialization efforts. There are
certain limitations in the supply of certain animal-derived materials, which may lead to delays in
our ability to complete clinical trials or eventually to meet the anticipated market demand for our
cell products.
Given our limited internal manufacturing, sales, marketing and distribution capabilities, we need
to develop increased internal capability or collaborative relationships to manufacture, sell,
market and distribute our products.
We have only limited internal manufacturing, sales, marketing and distribution capabilities.
As market needs develop, we intend to establish and operate commercial-scale manufacturing
facilities, which will need to comply with all applicable regulatory requirements. We will also
need to develop new configurations of our cell manufacturing system for these facilities to enable
processes and cost efficiencies associated with large-scale manufacturing. Establishing these
facilities will require significant capital and expertise. We may need to make such expenditures
when there are significant uncertainties as to the market opportunity. Any delay in establishing,
or difficulties in operating, these facilities will limit our ability to meet the anticipated
market demand for our cell products. We intend to get assistance to market some of our future cell
products through collaborative relationships with companies with established sales, marketing and
distribution capabilities. Our inability to develop and maintain those relationships would limit
our ability to market, sell and distribute our products. Our inability to enter into successful,
long-term relationships could require us to develop alternate arrangements at a time when we need
sales, marketing or distribution capabilities to meet existing
demand. We may market one or more of our TRC-based products through our own sales force. Our
inability to develop and retain a qualified sales force could limit our ability to market, sell and
distribute our cell products.
7
The issuance of additional common stock for funding has the potential for substantial dilution.
As noted above, we will need significant additional equity funding, in addition to the
transaction with Fusion, to provide us with the capital to reach our objectives. We may enter into
financing transactions at prices which are at a substantial discount to market. Such an equity
issuance would cause a substantially larger number of shares to be outstanding and would dilute the
ownership interest of existing stockholders.
Our stock price has been volatile and future sales of substantial numbers of our shares could have
an adverse affect on the market price of our shares.
The market price of shares of our common stock has been volatile, ranging in closing price
between $0.16 and $1.04 during the twelve month period ended October 31, 2008. The price of our
common stock may continue to fluctuate in response to a number of events and factors, such as:
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clinical trial results; |
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the amount of our cash resources and our ability to obtain additional funding; |
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announcements of research activities, business developments, technological innovations or
new products by us or our competitors; |
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entering into or terminating strategic relationships; |
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changes in government regulation; |
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disputes concerning patents or proprietary rights; |
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changes in our revenues or expense levels; |
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public concern regarding the safety, efficacy or other aspects of the products or
methodologies we are developing; |
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news or reports from other stem cell, cell therapy or regenerative medicine companies; |
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reports by securities analysts; |
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status of the investment markets; |
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concerns related to management transitions; and |
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delisting from the Nasdaq Capital Market. |
Any of these events may cause the price of our shares to fall, which may adversely affect our
business and financing opportunities. In addition, the stock market in general and the market
prices for biotechnology companies in particular have experienced significant volatility recently
that often has been unrelated to the operating performance or financial conditions of such
companies. These broad market and industry fluctuations may adversely affect the trading price of
our stock, regardless of our operating performance or prospects.
If we do not keep pace with our competitors and with technological and market changes, our products
will become obsolete and our business may suffer.
The markets for our products are very competitive, subject to rapid technological changes, and
vary for different candidates and processes that directly compete with our products. Our
competitors may have developed, or could in the future develop, new technologies that compete with
our products or even render our products obsolete. As an example, in the past, published studies
have suggested that hematopoietic stem cell therapy use for bone marrow transplantation, following
marrow ablation due to chemotherapy, may have limited clinical benefit in the treatment of breast
cancer, which was a significant portion of the overall hematopoietic stem cell transplant market.
This resulted in the practical elimination of this market for our cell-based product for this
application.
Our cell manufacturing system is designed to improve and automate the processes for producing
cells used in therapeutic procedures. Even if we are able to demonstrate improved or equivalent
results, the cost or process of treatment and other factors may cause researchers and practitioners
to not use our products and we could suffer a competitive disadvantage. Finally, to the extent that
others develop new technologies that address the targeted application for our products, our
business will suffer.
8
If our patents and proprietary rights do not provide substantial protection, then our business and
competitive position will suffer.
Our success depends in large part on our ability to develop or license and protect proprietary
products and technologies. However, patents may not be granted on any of our pending or future
patent applications. Also, the scope of any of our issued patents may not be sufficiently broad to
offer meaningful protection. In addition, our issued patents or patents licensed to us could be
successfully challenged, invalidated or circumvented so that our patent rights would not create an
effective competitive barrier. Certain patent equivalents to the U.S. patents have also been issued
in other jurisdictions including Australia, Japan, the Republic of Korea, Canada and under the
European Convention. Certain of these foreign patents are due expire beginning in 2008.
Furthermore, we rely on exclusive, world-wide licenses relating to the production of human cells
granted to us by the University of Michigan for certain of our patent rights. If we materially
breach such agreements or otherwise fail to materially comply with such agreements, or if such
agreements expire or are otherwise terminated by us, we may lose our rights under the patents held
by the University of Michigan. At the latest, each of these licenses will terminate when the patent
underlying the license expires. The first of these underlying patents will expire on March 21,
2012. We also rely on trade secrets and unpatentable know-how that we seek to protect, in part, by
confidentiality agreements with our employees, consultants, suppliers and licensees. These
agreements may be breached, and we might not have adequate remedies for any breach. If this were to
occur, our business and competitive position would suffer.
Intellectual property litigation could harm our business.
Our success will also depend in part on our ability to develop commercially viable products
without infringing the proprietary rights of others. Although we have not been subject to any filed
infringement claims, other patents could exist or could be filed which would prohibit or limit our
ability to market our products or maintain our competitive position. In the event of an
intellectual property dispute, we may be forced to litigate. Intellectual property litigation would
divert managements attention from developing our products and would force us to incur substantial
costs regardless of whether we are successful. An adverse outcome could subject us to significant
liabilities to third parties, and force us to curtail or cease the development and sale of our
products and processes.
The government maintains certain rights in technology that we develop using government grant money
and we may lose the revenues from such technology if we do not commercialize and utilize the
technology pursuant to established government guidelines.
Certain of our and our licensors research have been or are being funded in part by government
grants. As a result of such funding, the U.S. Government has established guidelines and have
certain rights in the technology developed with the grant. If we fail to meet these guidelines, we
would lose our exclusive rights to these products, and we would lose potential revenue derived from
the sale of these products.
Potential product liability claims could affect our earnings and financial condition.
We face an inherent business risk of exposure to product liability claims in the event that
the manufacture and/or use of TRC-based products during clinical trials, or after
commercialization, results in adverse events. As a result, we may incur significant product
liability exposure, which could exceed existing insurance coverage. We may not be able to maintain
adequate levels of insurance at reasonable cost and/or reasonable terms. Excessive insurance costs
or uninsured claims would increase our operating loss and affect our financial condition.
Our corporate documents and Michigan law contain provisions that may make it more difficult for us
to be acquired.
Our Board of Directors has the authority, without shareholder approval, to issue additional
shares of preferred stock and to fix the rights, preferences, privileges and restrictions of these
shares without any further vote or action by our shareholders. This authority
may have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire control of our Company. This effect could
occur even if our shareholders consider the change in control to be in their best interest. In
addition, we are subject to certain anti-takeover provisions of Michigan law that could delay or
make more difficult a merger or tender offer involving our company.
We are required to evaluate our internal control over financial reporting under Section 404 of the
Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could have a negative
market reaction.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (Section 404), we are required to
furnish a report by our management on our internal control over financial reporting. That report
must contain, among other matters, an assessment of the design and operating effectiveness of our
internal controls over financial reporting as of the end of the fiscal year. This assessment must
include disclosure of any material weaknesses in our internal control over financial reporting
identified by management. That report must also contain a statement that our independent registered
public accounting firm has issued an attestation report on the design and operating effectiveness
of our system of internal accounting controls over financial reporting. If in the future we are
unable to assert that our internal control over financial reporting is effective as of the end of
the then current fiscal year (or, if our independent registered public accounting firm is unable to
express an unqualified opinion on the design and operating effectiveness of our internal controls),
we could lose investor confidence in the accuracy and completeness of our financial reports, which
would have a negative effect on our stock price and our ability to raise capital.
9
RATIO OF EARNINGS TO FIXED CHARGES (1)
The following table sets forth ratios of earnings to fixed charges for the periods shown.
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Twelve Months Ended |
June 30, 2008 |
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June 30, 2005 |
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June 30, 2004 |
N/A (2) |
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N/A |
(2) |
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N/A |
(2) |
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N/A |
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The ratio of earnings to fixed charges was computed by dividing earnings by fixed
charges. For this purpose, earnings consist of net loss before fixed charges. Fixed charges
consist of interest expense plus the interest factor in lease expenses. During the fiscal
years covered by this table, we did not have any material fixed charges or preferred stock
dividends. However, our total lease expenses, which comprised most of our total
commitments, were $1,107,000, $679,000, $626,000, $626,000 and $616,000 for the twelve
months ended June 30, 2008, 2007, 2006, 2005, and 2004. |
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Earnings have been inadequate to cover fixed charges and total commitments. The dollar
amount of the coverage deficiency was approximately $20.1 million, $17.6 million, $16.5
million, $11.8 million and $10.5 million for the twelve months ended June 30, 2008, 2007,
2006, 2005 and 2004, respectively. |
10
INCORPORATION BY REFERENCE
This prospectus incorporates by reference important business and financial information that we
file with the Securities and Exchange Commission and that we are not including in or delivering
with this prospectus. As the SEC allows, incorporated documents are considered part of this
prospectus, and we can disclose important information to you by referring you to those documents.
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our annual report on Form 10-K for the fiscal year ended June 30, 2008, filed with the SEC on
August 29, 2008; |
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portions of our definitive Proxy Statement for the Annual Meeting of Shareholders held on
October 17, 2008 that have been incorporated by reference into the Form 10-K; |
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our quarterly report on Form 10-Q for the quarter ended September 30, 2008, filed with the
SEC on November 7, 2008; and |
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our current reports on Form 8-K filed with the SEC on August 27, 2008, October 23, 2008 and
October 29, 2008. |
We also incorporate by reference all documents filed with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and prior to
the completion or termination of this offering. Information in this prospectus supersedes related
information in the documents listed above, and information in subsequently filed documents
supersedes related information in both this prospectus and the incorporated documents.
You may request a copy of any or all of these filings, at no cost, by writing or telephoning
us at: Aastrom Biosciences, Inc., 24 Frank Lloyd Wright Drive, P.O. Box 276, Ann Arbor, Michigan
48106, attention: Investor Relations. These filings may also be obtained through the Companys
website located at http://www.aastrom.com.
You should rely only on the information incorporated by reference or provided in this
prospectus or any supplement. We have not authorized anyone else to provide you with different
information. You should not assume that information in this prospectus or any supplement is
accurate as of any date other than the date on the front of these documents.
In accordance with these rules, we have incorporated by reference the description of our
business, our securities, our properties, any legal proceedings, market price of and dividends
with respect to our common stock, our financial statements and our managements discussion and
analysis of our financial condition and results of operations. We have also incorporated by
reference disclosure with respect to our officers and directors, their compensation structure, any
related transactions with our officers and directors and our shareholders
The Company advises that there have been no material changes in the Companys affairs that
have occurred since the end of the latest fiscal year for which audited financial statements were
included in the latest Form 10-K and that have not been described in a Form 10-Q or Form 8-K filed
under the Exchange Act.
11
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate by reference, contain
forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E
of the Securities Exchange Act. Any statements about our expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts and may be forward-looking.
These statements are often, but are not always, made through the use of words or phrases such as
anticipates, estimates, plans, projects, trends, opportunity, comfortable, current,
intention, position, assume, potential, outlook, remain, continue, maintain,
sustain, seek, achieve, continuing, ongoing, expects, management believes, we
believe, we intend and similar words or phrases, or future or conditional verbs such as will,
would, should, could, may, or similar expressions. Accordingly, these statements involve
estimates, assumptions and uncertainties which could cause actual results to differ materially from
those expressed in them. Any forward-looking statements are qualified in their entirety by
reference to the factors discussed throughout this report, and in particular those factors listed
under the section Risk Factors.
Because the factors referred to in the preceding paragraph could cause actual results or
outcomes to differ materially from those expressed in any forward-looking statements we make, you
should not place undue reliance on any such forward-looking statements. Further, any
forward-looking statement speaks only as of the date on which it is made, and we undertake no
obligation to update any forward-looking statement or statements to reflect events or circumstances
after the date on which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for us to predict which
factors will arise. In addition, we cannot assess the impact of each factor on our business or the
extent to which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. These forward-looking statements
include statements regarding:
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potential strategic collaborations with others; |
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future capital needs; |
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adequacy of existing capital to support operations for a specified time; |
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product development and marketing plan; |
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clinical trial plans and anticipated results; |
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anticipation of future losses; |
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replacement of manufacturing sources; |
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commercialization plans; and |
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revenue expectations and operating results. |
The information contained in this Prospectus, as well as in our SEC filings, identifies
important factors that could adversely affect actual results and performance. Prospective investors
are urged to carefully consider such factors.
All forward-looking statements attributable to us are expressly qualified in their entirety by
the foregoing cautionary statements.
12
USE OF PROCEEDS
We cannot guarantee that we will receive any proceeds in connection with this offering because
we may be unable choose not to issue and sell any securities covered by this prospectus.
Unless otherwise provided in a supplement or amendment to this prospectus, we intend to use
any net proceeds from this offering, together with other available funds, for operating costs,
including continuing to conduct our clinical development programs, capital expenditures and working
capital needs and for other general corporate purposes.
We have not specifically identified the precise amounts we will spend on each of these areas
or the timing of these expenditures. The amounts actually expended for each purpose may vary
significantly depending upon numerous factors, including the amount and timing of the proceeds from
this offering, progress with clinical product development and other cell therapy application
programs. In addition, expenditures may also depend on the establishment of new collaborative
arrangements with other companies, the availability of other financing, and other factors.
We anticipate that we will be required to raise substantial additional capital to continue to
fund the clinical development of our cell therapy applications. We may raise additional capital
through additional public or private financings, as well as collaborative relationships, incurring
debt and other available sources.
THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus, together with the applicable
prospectus supplements, summarize all the material terms and provisions of the various types of
securities that we may offer. We will describe in the applicable prospectus supplement the
particular terms of the securities offered by that prospectus supplement. If we so indicate in the
applicable prospectus supplement, the terms of the securities may differ from the terms we have
summarized below. We will also include in the prospectus supplement information, where applicable,
about material United States federal income tax considerations relating to the securities and the
securities exchange, if any, on which the securities will be listed.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock and certain provisions of our articles of
incorporation and bylaws is a summary and is qualified in its entirety by the provisions of our
articles of incorporation and bylaws.
Our authorized capital stock consists of 250,000,000 shares of common stock, no par value per
share, and 5,000,000 shares of preferred stock, no par value per share.
Common Stock
Holders of our common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of shareholders and do not have cumulative voting rights. Holders of
common stock have no preemptive, redemption or conversion rights and are not subject to future
calls or assessments. No sinking fund provisions apply to our common stock. All outstanding shares
are fully-paid and non-assessable. In the event of our liquidation, dissolution or winding up,
holders of common stock are entitled to share ratably in assets available for distribution, subject
to prior distribution rights of any preferred stock then outstanding. Holders of common stock are
entitled to receive proportionately any such dividends declared by the board of directors, out of
legally available funds for dividends, subject to any preferences that may be applicable to any
shares of preferred stock that may be outstanding at that time. The rights, preferences and
privileges of holders of common stock are set forth in our restated articles of incorporation,
which may be amended by the holders of a majority of the outstanding shares of common stock.
Preferred Stock
Our Board of Directors is authorized to issue up to 5,000,000 shares of preferred stock in one
or more series without shareholder approval. Our Board of Directors may determine the rights,
preferences, privileges and restrictions, including voting rights, dividend rights, conversion
rights, redemption privileges and liquidation preferences, of each series of preferred stock.
13
The purpose of authorizing our Board of Directors to issue preferred stock in one or more
series and determine the number of shares in the series and its rights and preferences is to
eliminate delays associated with a shareholder vote on specific issuances. Examples of rights and
preferences that the Board of Directors may fix are:
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dividend rights, |
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dividend rates, |
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conversion rights, |
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voting rights, |
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terms of redemption, and |
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liquidation preferences. |
The issuance of preferred stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could make it more difficult for a third party to
acquire, or could discourage a third party from acquiring, a majority of our outstanding voting
stock. The rights of holders of our common stock described above, will be subject to, and may be
adversely affected by, the rights of any preferred stock that we may designate and issue in the
future.
We will incorporate by reference as an exhibit to the registration statement, which includes
this prospectus, the form of any certificate of designation that describes the terms of the series
of preferred stock we are offering. This description and the applicable prospectus supplement will
include:
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the title and stated value; |
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the number of shares authorized; |
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the liquidation preference per share; |
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the purchase price; |
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the dividend rate, period and payment date, and method of calculation for dividends; |
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whether dividends will be cumulative or non-cumulative and, if cumulative, the date
from which dividends will accumulate; |
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the procedures for any auction and remarketing, if any; |
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the provisions for a sinking fund, if any; |
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the provisions for redemption or repurchase, if applicable, and any restrictions on our
ability to exercise those redemption and repurchase rights; |
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any listing of the preferred stock on any securities exchange or market; |
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whether the preferred stock will be convertible into our common stock, and, if
applicable, the conversion price, or how it will be calculated, and the conversion period; |
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whether the preferred stock will be exchangeable into debt securities, and, if
applicable, the exchange price, or how it will be calculated, and the exchange period; |
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voting rights, if any, of the preferred stock; |
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preemptive rights, if any; |
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restrictions on transfer, sale or other assignment, if any; |
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whether interests in the preferred stock will be represented by depositary shares; |
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a discussion of any material United States federal income tax considerations applicable
to the preferred stock; |
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the relative ranking and preferences of the preferred stock as to dividend rights and
rights if we liquidate, dissolve or wind up our affairs; |
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any limitations on issuance of any class or series of preferred stock ranking senior to
or on a parity with the series of preferred stock as to dividend rights and rights if we
liquidate, dissolve or wind up our affairs; and |
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any other specific terms, preferences, rights or limitations of, or restrictions on,
the preferred stock. |
When we issue shares of preferred stock under this prospectus, the shares will fully be paid
and nonassessable and will not have, or be subject to, any preemptive or similar rights.
The Michigan Business Corporation Act provides that the holders of preferred stock will have
the right to vote separately as a class on any proposal involving an increase or decrease in the
authorized number of shares of that class, or changes in the powers, preferences or special rights
of holders of that preferred stock so as to affect the class adversely. This right is in addition
to any voting rights that may be provided for in the applicable certificate of designation.
Michigan Law and Certain Charter and By-Law Provisions
We are subject to certain anti-takeover provisions of the Michigan Business Corporation Act
(the MBCA) that could delay or make more difficult a merger or tender offer involving Aastrom.
Chapter 7A of the MBCA prevents, in general, an interested shareholder (defined generally as a
person owning 10% or more of a corporations outstanding voting shares) from engaging in a
business combination (as defined therein) with a Michigan corporation unless: (a) the Board of
Directors issues an advisory statement, holders of 90% of the shares of each class of stock
entitled to vote approve the transaction, and holders of two-thirds of the disinterested shares
of each class of stock approve the transaction; or (b) the interested shareholder has been an
interested shareholder for at least five years and has not acquired beneficial ownership of any
additional shares of the corporation subsequent to the transaction which resulted in such
shareholder being classified as an interested shareholder, and meets certain requirements,
including provisions relating to the fairness of the price and the form of consideration paid; or
(c) the Board of Directors, by resolution, exempts a particular interested shareholder from these
provisions prior to the interested shareholder becoming an interested shareholder. The MBCA also
contains certain other provisions that could have anti-takeover effects.
Our restated articles of incorporation eliminate the right of shareholders to act without a
meeting and do not provide for cumulative voting in the election of directors. The amendment of any
of these provisions would require approval by holders of at least a majority of the shares of our
outstanding common stock.
These and other provisions of our restated articles of incorporation could have the effect of
deterring certain takeovers or delaying or preventing certain changes in control or management of
Aastrom, including transactions in which shareholders might otherwise receive a premium for their
shares over then-current market prices.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Continental Stock Transfer & Trust
Company.
DESCRIPTION OF DEBT SECURITIES
The following description, together with the additional information we include in any
applicable prospectus supplements, summarizes the material terms and provisions of the debt
securities that we may offer under this prospectus. While the terms we have summarized below will
apply generally to any future debt securities we may offer, we will describe the particular terms
of any debt securities that we may offer in more detail in the applicable prospectus supplement. If
we indicate in a prospectus supplement, the terms of any debt securities we offer under that
prospectus supplement may differ from the terms we describe below. Specific
agreements related to any debt securities offered will contain additional important terms and
provisions and will be incorporated by reference as an exhibit to the registration statement, which
includes this prospectus.
15
We will issue any senior notes under the senior indenture that we will enter into with a
trustee to be named in the senior indenture. We will issue any subordinated notes under the
subordinated indenture that we will enter into with a trustee to be named in the subordinated
indenture. We have filed forms of these documents as exhibits to the registration statement, which
includes this prospectus. We use the term indentures to refer to both the senior indenture and
the subordinated indenture. The indentures will be qualified under the Trust Indenture Act. We use
the term debenture trustee to refer to either the senior trustee or the subordinated trustee, as
applicable.
The following summaries of material provisions of the senior notes, the subordinated notes and
the indentures are subject to, and qualified in their entirety by reference to, all the provisions
of the indenture applicable to a particular series of debt securities. Except as we may otherwise
indicate, the terms of the senior indenture and the subordinated indenture are identical.
We conduct some of our operations through subsidiaries formed under the laws of Germany,
Ireland and Spain, respectively. Our rights and the rights of our creditors, including holders of
debt securities, to the assets of any subsidiary of ours upon that subsidiarys liquidation or
reorganization or otherwise would be subject to the prior claims of that subsidiarys creditors,
except to the extent that we may be a creditor with recognized claims against the subsidiary. Our
subsidiarys creditors would include trade creditors, debt holders, secured creditors and taxing
authorities. Except as we may provide in a prospectus supplement, neither the debt securities nor
the indentures restrict us or our subsidiary from incurring indebtedness.
General
We will describe in each prospectus supplement the following terms relating to a series of
notes:
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the title; |
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any limit on the amount that may be issued; |
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whether or not we will issue the series of notes in global form, the terms and who the
depository will be; |
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the maturity date; |
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the annual interest rate, which may be fixed or variable, or the method for determining
the rate; |
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the date interest will begin to accrue, the dates interest will be payable and the
regular record dates for interest payment dates or the method for determining such dates; |
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whether or not the notes will be secured or unsecured, and the terms of any security; |
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the terms of the subordination of any series of subordinated debt; |
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the place where payments will be payable; |
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our right, if any, to defer payment of interest and the maximum length of any such
deferral period; |
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the date, if any, after which, and the price at which, we may, at our option, redeem
the series of notes pursuant to any optional redemption provisions; |
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the date, if any, on which, and the price at which we are obligated, pursuant to any
mandatory sinking fund provisions or otherwise, to redeem, or at the holders option to
purchase, all or a portion of the series of notes; |
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whether the indenture will restrict our ability to pay dividends, or will require us to
maintain any asset ratios or reserves; |
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whether we will be restricted from incurring any additional indebtedness; |
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a discussion of any material United States federal income tax considerations applicable
to the notes; |
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the denominations in which we will issue the series of notes, if other than
denominations of $1,000 and any integral multiple thereof; and |
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any other specific terms, preferences, rights or limitations of, or restrictions on,
the debt securities. |
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Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms on which a series of notes may be
convertible into or exchangeable for common stock or other securities of ours. We will include in
that prospectus supplement provisions as to whether conversion or exchange is mandatory, at the
option of the holder or at our option. We may include provisions pursuant to which the number of
shares of common stock or other securities of ours that the holders of the series of notes receive
would be subject to adjustment.
Consolidation, Merger or Sale
The indentures do not contain any covenant that restricts our ability to merge or consolidate,
or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However,
any successor to or acquirer of such assets must assume all of our obligations under the indentures
or the notes, as appropriate.
Events of Default Under the Indenture
The following are events of default under the indentures with respect to any series of notes
that we may issue:
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if we fail to pay interest when due and our failure continues for 60 days and the time
for payment has not been extended or deferred; |
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if we fail to pay the principal, or premium, if any, when due and the time for payment
has not been extended or delayed; |
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if we fail to observe or perform any other covenant contained in the notes or the
indentures, other than a covenant specifically relating to another series of notes, and our
failure continues for 60 days after we receive notice from the debenture trustee or holders
of at least 50% in aggregate principal amount of the outstanding notes of the applicable
series; and |
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if specified events of bankruptcy, insolvency or reorganization occur as to us. |
If an event of default with respect to notes of any series occurs and is continuing, the
debenture trustee or the holders of at least 50% in aggregate principal amount of the outstanding
notes of that series, by notice to us in writing, and to the debenture trustee if notice is given
by such holders, may declare the unpaid principal of, premium, if any, and accrued interest, if
any, due and payable immediately.
The holders of a majority in principal amount of the outstanding notes of an affected series
may waive any default or event of default with respect to the series and its consequences, except
defaults or events of default regarding payment of principal, premium, if any, or interest, unless
we have cured the default or event of default in accordance with the indenture. Any waiver shall
cure the default or event of default.
Subject to the terms of the indentures, if an event of default under an indenture shall occur
and be continuing, the debenture trustee will be under no obligation to exercise any of its rights
or powers under such indenture at the request or direction of any of the holders of the applicable
series of notes, unless such holders have offered the debenture trustee reasonable indemnity. The
holders of a majority in principal amount of the outstanding notes of any series will have the
right to direct the time, method and place of conducting any proceeding for any remedy available to
the debenture trustee, or exercising any trust or power conferred on the debenture trustee, with
respect to the notes of that series, provided that:
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the direction so given by the holder is not in conflict with any law or the applicable
indenture; and |
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subject to its duties under the Trust Indenture Act, the debenture trustee need not
take any action that might involve it in personal liability or might be unduly prejudicial
to the holders not involved in the proceeding. |
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a holder of the notes of any series will only have the right to institute a proceeding
under the indentures or to appoint a receiver or trustee, or to seek other remedies if: |
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the holder has given written notice to the debenture trustee of a continuing
event of default with respect to that series; |
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the holders of at least 50% in aggregate principal amount of the outstanding
notes of that series have made written request, and such holders have offered reasonable
indemnity to the debenture trustee to institute the proceeding as trustee; and |
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the debenture trustee does not institute the proceeding, and does not receive
from the holders of a majority in aggregate principal amount of the outstanding notes of
that series other conflicting directions within 60 days after the notice, request and
offer. |
These limitations do not apply to a suit instituted by a holder of notes if we default in the
payment of the principal, premium, if any, or interest on, the notes.
We will periodically file statements with the debenture trustee regarding our compliance with
specified covenants in the indentures.
Modification of Indenture; Waiver
We and the debenture trustee may change an indenture without the consent of any holders with
respect to specific matters, including:
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to fix any ambiguity, defect or inconsistency in the indenture; and |
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to change anything that does not materially adversely affect the interests of any
holder of notes of any series. |
In addition, under the indentures, the rights of holders of a series of notes may be changed
by us and the debenture trustee with the written consent of the holders of at least a majority in
aggregate principal amount of the outstanding notes of each series that is affected. However, we
and the debenture trustee may only make the following changes with the consent of each holder of
any outstanding notes affected:
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extending the fixed maturity of the series of notes; |
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reducing the principal amount, reducing the rate of or extending the time of payment of
interest, or any premium payable upon the redemption of any notes; or |
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reducing the percentage of notes, the holders of which are required to consent to any
amendment. |
Discharge
Each indenture provides that we can elect to be discharged from our obligations with respect
to one or more series of debt securities, except for obligations to:
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register the transfer or exchange of debt securities of the series; |
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replace stolen, lost or mutilated debt securities of the series; |
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maintain paying agencies; |
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hold monies for payment in trust; |
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compensate and indemnify the trustee; and |
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appoint any successor trustee. |
In order to exercise our rights to be discharged, we must deposit with the debenture trustee
money or government obligations sufficient to pay all the principal of, any premium, if any, and
interest on, the debt securities of the series on the dates payments are due.
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Form, Exchange, and Transfer
We will issue the notes of each series only in fully registered form without coupons and,
unless we otherwise specify in the applicable prospectus supplement, in denominations of $1,000 and
any integral multiple thereof. The indentures provide that we may issue notes of a series in
temporary or permanent global form and as book-entry securities that will be deposited with, or on
behalf of, The Depository Trust Company or another depository named by us and identified in a
prospectus supplement with respect to that series. See Legal Ownership of Securities for a
further description of the terms relating to any book-entry securities.
At the option of the holder, subject to the terms of the indentures and the limitations
applicable to global securities described in the applicable prospectus supplement, the holder of
the notes of any series can exchange the notes for other notes of the same series, in any
authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to global securities set
forth in the applicable prospectus supplement, holders of the notes may present the notes for
exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed if so required by us or the security registrar, at the office of the security
registrar or at the office of any transfer agent designated by us for this purpose. Unless
otherwise provided in the notes that the holder presents for transfer or exchange, we will make no
service charge for any registration of transfer or exchange, but we may require payment of any
taxes or other governmental charges.
We will name in the applicable prospectus supplement the security registrar, and any transfer
agent in addition to the security registrar, that we initially designate for any notes. We may at
any time designate additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except that we will be
required to maintain a transfer agent in each place of payment for the notes of each series.
If we elect to redeem the notes of any series, we will not be required to:
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issue, register the transfer of or exchange any notes of that series during a period
beginning at the opening of business 15 days before the day of mailing of a notice of
redemption of any notes that may be selected for redemption and ending at the close of
business on the day of the mailing; or |
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register the transfer of or exchange any notes so selected for redemption, in whole or
in part, except the unredeemed portion of any notes we are redeeming in part. |
Information Concerning the Debenture Trustee
The debenture trustee, other than during the occurrence and continuance of an event of default
under an indenture, undertakes to perform only those duties as are specifically set forth in the
applicable indenture. Upon an event of default under an indenture, the debenture trustee must use
the same degree of care as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the debenture trustee is under no obligation to exercise any of
the powers given it by the indentures at the request of any holder of notes unless it is offered
reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of
the interest on any notes on any interest payment date to the person in whose name the notes, or
one or more predecessor securities, are registered at the close of business on the regular record
date for the interest.
We will pay principal of and any premium and interest on the notes of a particular series at
the office of the paying agents designated by us, except that unless we otherwise indicate in the
applicable prospectus supplement, we will make interest payments by
check, which we will mail to the holder. Unless we otherwise indicate in a prospectus
supplement, we will designate the corporate trust office of the debenture trustee in the City of
New York as our sole paying agent for payments with respect to notes of each series. We will name
in the applicable prospectus supplement any other paying agents that we initially designate for the
notes of a particular series. We will maintain a paying agent in each place of payment for the
notes of a particular series.
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All money we pay to a paying agent or the debenture trustee for the payment of the principal
of or any premium or interest on any notes that remains unclaimed at the end of two years after
such principal, premium or interest has become due and payable will be repaid to us, and the holder
of the security thereafter may look only to us for payment of those amounts.
Governing Law
The indentures and the notes will be governed by and construed in accordance with the laws of
the State of New York, except to the extent that the Trust Indenture Act is applicable.
Subordination of Subordinated Notes
The subordinated notes will be unsecured and will be subordinate and junior in priority of
payment to some or all of our other indebtedness to the extent described in a prospectus
supplement. The subordinated indenture does not limit the amount of subordinated notes which we may
issue. It also does not limit us from issuing any other secured or unsecured debt.
DESCRIPTION OF WARRANTS
The following description, together with the additional information we may include in any
applicable prospectus supplements, summarizes the material terms and provisions of the warrants
that we may offer under this prospectus and the related warrant agreements and warrant
certificates. While the terms summarized below will apply generally to any warrants that we may
offer, we will describe the particular terms of any series of warrants in more detail in the
applicable prospectus supplement. If we indicate in the prospectus supplement, the terms of any
warrants offered under that prospectus supplement may differ from the terms described below.
Specific warrant agreements will contain additional important terms and provisions and will be
incorporated by reference as an exhibit to the registration statement, which includes this
prospectus.
General
We may issue warrants for the purchase of common stock, preferred stock and/or debt securities
in one or more series. We may issue warrants independently or together with common stock, preferred
stock and/or debt securities, and the warrants may be attached to or separate from these
securities.
We will evidence each series of warrants by warrant certificates that we will issue under a
separate warrant agreement. We will enter into the warrant agreement with a warrant agent. Each
warrant agent will be a bank that we select that has its principal office in the United States and
a combined capital and surplus of at least $50,000,000. We will indicate the name and address of
the warrant agent in the applicable prospectus supplement relating to a particular series of
warrants.
We will describe in the applicable prospectus supplement the terms of the series of warrants,
including:
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the offering price and aggregate number of warrants offered; |
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the currency for which the warrants may be purchased; |
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if applicable, the designation and terms of the securities with which the warrants are
issued and the number of warrants issued with each such security or each principal amount
of such security; |
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if applicable, the date on and after which the warrants and the related securities will
be separately transferable; |
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in the case of warrants to purchase debt securities, the principal amount of debt
securities purchasable upon exercise of one warrant and the price at, and currency in
which, this principal amount of debt securities may be purchased upon such exercise; |
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in the case of warrants to purchase common stock or preferred stock, the number of
shares of common stock or preferred stock, as the case may be, purchasable upon the
exercise of one warrant and the price at which these shares may be purchased upon such
exercise; |
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the effect of any merger, consolidation, sale or other disposition of our business on
the warrant agreement and the warrants; |
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the terms of any rights to redeem or call the warrants; |
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any provisions for changes to or adjustments in the exercise price or number of
securities issuable upon exercise of the warrants; |
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the dates on which the right to exercise the warrants will commence and expire; |
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the manner in which the warrant agreement and warrants may be modified; |
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federal income tax consequences of holding or exercising the warrants; |
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the terms of the securities issuable upon exercise of the warrants; and |
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any other specific terms, preferences, rights or limitations of or restrictions on the
warrants. |
Before exercising their warrants, holders of warrants will not have any of the rights of holders of
the securities purchasable upon such exercise, including:
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in the case of warrants to purchase debt securities, the right to receive payments of
principal of, or any premium or interest on, the debt securities purchasable upon exercise
or to enforce covenants in the applicable indenture; or |
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in the case of warrants to purchase common stock or preferred stock, the right to
receive any dividends or payments upon our liquidation, dissolution or winding up or to
exercise any voting rights. |
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the
applicable prospectus supplement at the exercise price that we describe 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 5:00 P.M. New York 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.
Holders of the warrants may exercise the warrants by delivering the warrant certificate
representing the warrants to be exercised together with specified information, and paying the
required amount to the warrant agent in immediately available funds, as provided in the applicable
prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the
applicable prospectus supplement the information that the holder of the warrant will be required to
deliver to the warrant agent upon exercise.
Upon receipt of the required 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 issue and deliver the securities purchasable upon such
exercise. If fewer than all of the warrants represented by the warrant certificate are exercised,
then we will issue a new warrant certificate 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.
Enforceability of Rights By Holders of Warrants
Each warrant agent will act solely as our agent under the applicable warrant agreement and
will not assume any obligation or relationship of agency or trust with any holder of any warrant. A
single bank or trust company may act as warrant agent for more than one issue or series of
warrants. A warrant agent will have no duty or responsibility in case of any default by us under
the applicable warrant agreement or warrant, including any duty or responsibility to initiate any
proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may,
without the consent of the related warrant agent or the holder of any other warrant, enforce by
appropriate legal action its right to exercise, and receive the securities purchasable upon
exercise of, its warrants.
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PLAN OF DISTRIBUTION
The securities being offered may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at prices related to the prevailing market prices, at
varying prices determined at the time of sale, or at negotiated prices. These sales may be effected
at various times in one or more of the following transactions, or in other kinds of transactions:
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through underwriters for resale to the public or investors: |
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transactions on the Nasdaq Stock Market or on any national securities exchange or U.S.
inter-dealer system of a registered national securities association on which our common
stock may be listed or quoted at the time of sale; |
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in the over-the-counter market; |
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in private transactions and transactions otherwise than on these exchanges or systems
or in the over-the-counter market; |
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in connection with short sales of the shares; |
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by pledge to secure debt and other obligations; |
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through the writing of options, whether the options are listed on an options exchange
or otherwise; |
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in connection with the writing of non-traded and exchange-traded call options, in hedge
transactions and in settlement of other transactions in standardized or over-the-counter
options; |
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through a combination of any of the above transactions; or |
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any other method permitted by law. |
We may sell our securities directly to one or more purchasers, or to or through underwriters,
dealers or agents or through a combination of those methods. The related prospectus supplement will
set forth the terms of each offering, including:
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the name or names of any agents, dealers, underwriters or investors who purchase the
securities; |
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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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the amount of any compensation, discounts commissions or fees to be received by the
underwriters, dealer or agents; |
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any over-allotment options under which underwriters may purchase additional securities
from us; |
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any discounts or concessions allowed or reallowed or paid to dealers; |
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any securities exchanges on which such securities may be listed; |
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the terms of any indemnification provisions, including indemnification from liabilities
under the federal securities laws; and |
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the nature of any transaction by an underwriter, dealer or agent during the offering
that is intended to stabilize or maintain the market price of the securities. |
In addition, any securities covered by this prospectus that qualify for sale pursuant to
Regulation S may be sold pursuant to Regulation S rather than pursuant to this prospectus.
In connection with the sale of our common stock, underwriters may receive compensation from us
or from purchasers of our common stock in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of our common stock may be
deemed to be underwriters. Discounts or commissions they receive and any profit on their resale of
our common stock may be considered underwriting discounts and commissions under the Securities Act
of 1933.
We may agree to indemnify underwriters, dealers and agents who participate in the distribution
of our common stock against various liabilities, including liabilities under the Securities Act of
1933. We may also agree to contribute to payments that the underwriters, dealers or agents may be
required to make in respect of these liabilities. We may authorize dealers or other persons who act
as our agents to solicit offers by various institutions to purchase our common stock from us under
contracts that provide for payment and delivery on a future date. We may enter into these contracts
with commercial and savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others. If we enter into these agreements concerning
any series of our common stock, we will indicate that in the prospectus supplement or amendment.
In connection with an offering of our common stock, underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of our common stock. Specifically,
underwriters may over-allot in connection with the offering, creating a syndicate short position in
our common stock for their own account. In addition, underwriters may bid for, and purchase, our
common stock in the open market to cover short positions or to stabilize the price of our common
stock. Finally, underwriters may reclaim selling concessions allowed for distributing our common
stock in the offering if the underwriters repurchase previously distributed common stock in
transactions to cover short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of our common stock above independent market
levels. Underwriters are not required to engage in any of these activities and may end any of these
activities at any time. Agents and underwriters may engage in transactions with, or perform
services for, us and our affiliates in the ordinary course of business.
22
LEGAL MATTERS
The validity of the common stock offered by this Prospectus will be passed upon for us by
Dykema Gossett PLLC, Ann Arbor, Michigan, acting as special counsel to the Company.
EXPERTS
The financial statements and managements assessment of the effectiveness of internal control
over financial reporting (which is included in Managements Report on Internal Control over
Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended June 30, 2008 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration statement on Form S-3
under the Securities Act of 1933, relating to the shares of our common stock being offered by this
prospectus. For further information pertaining to our common stock and the shares of common stock
being offering by this prospectus, reference is made to such registration statement. This
prospectus constitutes the prospectus we filed as a part of the registration statement and it does
not contain all information in the registration statement, certain portions of which have been
omitted in accordance with the rules and regulations of the Securities and Exchange Commission and
certain portions of which have been incorporated by reference to our reports filed with the
Securities and Exchange Commission.
In addition, we are subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, and, in accordance with such requirements, we file reports, proxy statements
and other information with the Securities and Exchange Commission relating to our business,
financial statements and other matters.
Reports and proxy and information statements filed under Section 14(a) and 14(c) of the
Securities Exchange Act of 1934 and other information filed with the Securities and Exchange
Commission as well as copies of the registration statement can be inspected and copied at the
public reference facilities maintained by the Securities and Exchange Commission at Room 1024,
Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the Securities and Exchange
Commission at its principal office at Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549.
Please call the Securities and Exchange Commission at 1.800.SEC.0330 for further information on the
operation of the public reference room. Such material may also be obtained electronically by
visiting the SECs web site on the Internet at http://www.sec.gov. Our common stock is traded on
the Nasdaq Capital Market under the symbol ASTM.
Copies of our filings with the Securities and Exchange Commission are also available, free of
charge, on our corporate website at http://www.aastrom.com. The other information found on our
website is not incorporated by reference into this prospectus.
You should rely only on the information contained in this Prospectus or the documents
incorporated by reference. We have not authorized anyone to provide you with any information that
is different from that contained in this Prospectus. The information contained in this Prospectus
is accurate as of the date of this Prospectus. You should not assume that there have been no
changes in the affairs of the Company since the date of this Prospectus or that the information in
this Prospectus is correct as of any time after the date of this Prospectus, regardless of the time
that this Prospectus is delivered or any sale of the common stock offered by this Prospectus is
made. This Prospectus is not an offer to sell or a solicitation of an offer to buy the shares
covered by this Prospectus in any jurisdiction where the offer or solicitation is unlawful.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
As permitted by the Michigan Business Corporation Act, our Bylaws contain provisions that
permit us to indemnify our directors and officers to the full extent permitted by Michigan law and
our Restated Articles of Incorporation, as amended, contain provisions that eliminate the personal
liability of our directors in each case for monetary damages to us or our shareholders for breach
of their fiduciary duties, except to the extent that Michigan law prohibits indemnification or
elimination of liability. These provisions do not limit or eliminate our rights or the rights of
any shareholder to seek an injunction or any other non-monetary relief in the event of a breach of
a directors or officers fiduciary duty. In addition, these provisions apply only to claims
against a director or officer arising
out of his or her role as a director or officer and do not relieve a director or officer from
liability if he or she engaged in willful misconduct or a knowing violation of the criminal law or
any federal or state securities law.
The rights of indemnification provided in our Bylaws are not exclusive of any other rights
that may be available under any insurance or other agreement, by vote of shareholders or
disinterested directors or otherwise.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as
amended (the Securities Act), may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities
and Exchange Commission this type of indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
23
Part IIINFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses payable by the Registrant in connection with the issuance and distribution of the
securities being registered (other than underwriting discounts and commissions, if any) are set
forth below. Each item listed is estimated, except for the Securities and Exchange Commission
registration fee.
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Securities and Exchange Commission registration fee |
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$ |
1,965 |
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Accounting fees and expenses |
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7,000 |
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Legal fees and expenses
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10,000 |
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Printing and engraving expenses |
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3,000 |
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Miscellaneous
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3,035 |
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Total expenses |
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$ |
25,000 |
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Item 15. Indemnification of Directors and Officers
Sections 1561 through 1571 of the Michigan Business Corporation Act (the MBCA) authorize a
corporation to grant or a court to award, indemnity to directors, officers, employees and agents in
terms sufficiently broad to permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities Act of 1933.
The Bylaws of the Company provide that the Company shall, to the fullest extent authorized or
permitted by the MBCA, or other applicable law, indemnify a director or officer who was or is a
party or is threatened to be made a party to any proceeding by or in the right of the Company to
procure a judgment in its favor by reason of the fact that such person is or was a director,
officer, employee or agent of the Company, against expenses, including actual and reasonable
attorneys fees, and amounts paid in settlement incurred in connection with the action or suit, if
the indemnitee acted in good faith and in a manner the person reasonably believed to be in, or not
opposed to, the best interests of the Company or its shareholders. This section also authorizes the
Company to advance expenses incurred by any agent of the Company in defending any proceeding prior
to the final disposition of such proceeding upon receipt of an undertaking by or on behalf of the
agent to repay such amount unless it shall be determined ultimately that the agent is entitled to
be indemnified.
The Bylaws also authorize the Company to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Company against any liability
asserted against or incurred by such person in such capacity or arising out of such persons status
as such, regardless of whether the Company would have the power to indemnify such person against
such liability under the provisions of the MBCA.
The Company has entered into indemnification agreements with certain individuals which contain
provisions that may in some respects be broader than the specific indemnification provisions
contained under applicable law. The indemnification agreement may require the Company, among other
things, to indemnify such directors, officers and key personnel against certain liabilities that
may arise by reason of their status or service as directors, officers or employees of the Company,
to advance the expenses incurred by such parties as a result of any threatened claims or
proceedings brought against them as to which they could be indemnified, and to the maximum extent
that insurance coverage of such directors, officers and key employees under the Companys
directors and officers liability insurance policies is maintained.
Section 1209 of the MBCA permits a Michigan corporation to include in its Articles of
Incorporation a provision eliminating or limiting a directors liability to a corporation or its
shareholders for monetary damages for breaches of fiduciary duty. The enabling statute provides,
however, that liability for breaches of the duty of loyalty, acts or omissions not in good faith or
involving intentional misconduct or knowing violations of the law, or the receipt of improper
personal benefits cannot be eliminated or limited in this manner. The Companys Restated Articles
of Incorporation include a provision which eliminates, to the fullest extent permitted by the MBCA,
director liability for monetary damages for breaches of fiduciary duty.
II-1
Item 16. Exhibits
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Exhibit |
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No. |
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Description |
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3.1
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Restated Articles of Incorporation of Aastrom, as amended,
attached as Exhibit 3.1 to Aastroms Current Report on Form 8-K
filed on October 23, 2008, incorporated herein by reference. |
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3.2
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Bylaws, as amended, attached as Exhibit 3.2 to Aastroms Current
Report on Form 8-K filed on October 23, 2008, incorporated herein
by reference. |
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4.1
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Form of Senior Indenture to be entered into with a trustee to be named |
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4.2
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Form of Subordinated Indenture to be entered into with a trustee to be named |
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5 |
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Opinion of Dykema Gossett PLLC. |
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21
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Subsidiaries of Registrant. |
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23
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Consent of Independent Registered Public Accounting Firm. |
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24
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Powers of Attorney (included on signature page). |
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# |
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Management contract or compensatory plan or arrangement covering executive officers or
directors of Aastrom. |
II-2
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) (§ 230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in
the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such information in
the registration statement;
Provided, however, That:
(A) Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration
statement is on Form S-8 (§ 230. 16b of this chapter), and the information required to be included
in a post-effective amendment by those paragraphs is contained in reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that are incorporated by reference in this
registration statement; and
(B) Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the
registration statement is on Form S-3 (§ 239.13 of this chapter) or Form F-3 (§ 239.33 of this
chapter) and the information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with 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) (§ 230.424(b) of this chapter) that is part of the registration
statement.
(C) Provided further, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is for an offering of asset-backed securities on Form S-1 (§ 239.11 of this
chapter) or Form S-3 (§ 239.13 of this chapter), and the information required to be included in a
post-effective amendment is provided pursuant to Item 1100(c) of Regulation AB (§ 229.1100(c)).
(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.
(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 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 this 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) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Ann Arbor, Michigan on November 26, 2008.
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AASTROM BIOSCIENCES, INC.
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By |
/s/ George W. Dunbar, Jr. |
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George W. Dunbar, Jr. |
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President and Chief Executive Officer |
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Each person whose signature appears below hereby constitutes and appoints George W. Dunbar,
Jr. his true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or
all amendments (including, without limitation, post-effective amendments) to this Registration
Statement and any subsequent registration statement filed by the Registrant pursuant to Rule 462(b)
of the Securities Act of 1933, which relates to this Registration Statement, and to file the same,
with all exhibits thereto, and all documents in connection herewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates indicated.
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Signature |
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Title |
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Date |
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/s/ George W. Dunbar, Jr.
George
W. Dunbar, Jr.
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President and CEO (Principal
Executive,
Financial and Accounting
Officer)
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November 26, 2008 |
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/s/ Nelson
M. Sims
Nelson
M. Sims
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Chairman of the Board
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November 26, 2008 |
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/s/ Timothy
M. Mayleben
Timothy
M. Mayleben
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Director
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November 26, 2008 |
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/s/ Alan
L. Rubino
Alan
L. Rubino
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Director
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November 26, 2008 |
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/s/ Stephen G. Sudovar
Stephen
G. Sudovar
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Director
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November 26, 2008 |
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/s/ Robert
L. Zerbe, M.D.
Robert
L. Zerbe, M.D.
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Director
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November 26, 2008 |
II-4
exv4w1
EXHIBIT 4.1
AASTROM BIOSCIENCES, INC.
ISSUER
AND
[ ],
TRUSTEE
INDENTURE
DATED AS OF [ ], 20
SENIOR DEBT SECURITIES
This INDENTURE, dated as of [ ], 20 , is entered into between Aastrom Biosciences,
Inc., a Michigan corporation (the Company), and [ ], as trustee (the Trustee),
with respect to the following facts:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of unsecured debt securities (hereinafter
referred to as the Securities), in an unlimited aggregate principal amount to be issued from time
to time in one or more series as provided in this Indenture, as registered Securities without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered, the Company has duly authorized the execution of this
Indenture.
NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the
holders thereof, the parties agree as follows for the equal and ratable benefit of the holders of
Securities:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions of Terms.
The terms defined in this Section (except as otherwise expressly provided in this Indenture or
unless the context otherwise requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this Section and shall include
the plural as well as the singular. All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the
Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms in the Trust Indenture
Act and in the Securities Act as in force at the date of the execution of this instrument.
Authenticating Agent means an authenticating agent with respect to all or any of the series
of Securities appointed with respect to all or any series of the Securities by the Trustee pursuant
to Section 2.10.
Bankruptcy Law means Title 11, U.S. Code, or any similar federal or state law for the relief
of debtors.
Board of Directors means the Board of Directors of the Company or any duly authorized
committee of such 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.
2
Business Day means, with respect to any series of Securities, any day other than a day on
which Federal or State banking institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law, executive order or regulation to close.
Certificate means a certificate signed by the principal executive officer, the principal
financial officer or the principal accounting officer of the Company. The Certificate need not
comply with the provisions of Section 13.07.
Company means Aastrom Biosciences, Inc., a corporation duly organized and existing under the
laws of the State of Michigan, and, subject to the provisions of Article Ten, shall also include
its successors and assigns.
Corporate Trust Office means the office of the Trustee at which, at any particular time, its
corporate trust business shall be principally administered, which office at the date hereof is
located at [_], except that whenever a provision herein refers to an office or agency of the
Trustee in the Borough of Manhattan, The City of New York, such office is located, at the date
hereof, at [_].
Custodian means any receiver, trustee, assignee, liquidator, or similar official under any
Bankruptcy Law.
Default means any event, act or condition that with notice or lapse of time, or both, would
constitute an Event of Default.
Depositary means, with respect to Securities of any series, for which the Company shall
determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under
the Securities and Exchange Act of 1934, as amended (the Exchange Act), or other applicable
statute or regulation, which, in each case, shall be designated by the Company pursuant to either
Section 2.01 or 2.11.
Event of Default means, with respect to Securities of a particular series any event
specified in Section 6.01, continued for the period of time, if any, therein designated.
Global Security means, with respect to any series of Securities, a Security executed by the
Company and delivered by the Trustee to the Depositary or pursuant to the Depositarys instruction,
all in accordance with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
Governmental Obligations means securities that are (i) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as
3
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such Governmental Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
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.
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 in accordance
with the terms hereof.
Interest Payment Date, when used with respect to any installment of interest on a Security
of a particular series, means the date specified in such Security or in a Board Resolution or in an
indenture supplemental hereto with respect to such series as the fixed date on which an installment
of interest with respect to Securities of that series is due and payable.
Officers Certificate means a certificate signed by the President or a Vice President and by
the Treasurer or an Assistant Treasurer or the Controller or an Assistant Controller or the
Secretary or an Assistant Secretary of the Company that is delivered to the Trustee in accordance
with the terms hereof. Each such certificate shall include the statements provided for in Section
13.07, if and to the extent required by the provisions thereof.
Opinion of Counsel means an opinion in writing of legal counsel, who may be an employee of
or counsel for the Company, that is delivered to the Trustee in accordance with the terms hereof.
Each such opinion shall include the statements provided for in Section 13.07, if and to the extent
required by the provisions thereof.
Outstanding, when used with reference to Securities of any series, means, subject to the
provisions of Section 8.04, as of any particular time, all Securities of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions thereof for the
payment or redemption of which moneys or Governmental Obligations in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Securities or portions of such Securities are to
be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in
Article Three provided, or provision satisfactory to the Trustee shall have been made for giving
such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.07.
4
Person means any individual, corporation, partnership, joint-venture, joint- stock company,
unincorporated organization or government or any agency or political subdivision thereof.
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 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or
stolen Security.
Responsible Officer when used with respect to the Trustee means the Chairman of the Board of
Directors, the President, any Vice President, the Secretary, the Treasurer, any trust officer, any
corporate trust officer or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
Securities means the debt Securities authenticated and delivered under this Indenture.
Securityholder, holder of Securities, registered holder, or other similar term, means
the Person or Persons in whose name or names a particular Security shall be registered on the books
of the Company kept for that purpose in accordance with the terms of this Indenture.
Subsidiary means, with respect to any Person, (i) any corporation at least a majority of
whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii)
any general partnership, joint venture or similar entity, at least a majority of whose outstanding
partnership or similar interests shall at the time be owned by such Person, or by one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general partner.
Trustee means [_], and, subject to the provisions of Article Seven, shall also include its
successors and assigns, and, if at any time there is more than one Person acting in such capacity
hereunder, Trustee shall mean each such Person. The term Trustee as used with respect to a
particular series of the Securities shall mean the trustee with respect to that series.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended, subject to the
provisions of Sections 9.01, 9.02, and 10.01, as in effect at the date of execution of this
instrument.
Voting Stock, as applied to stock of any Person, means shares, interests, participations or
other equivalents in the equity interest (however designated)in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of such Person, other
than shares, interests, participations or other equivalents having such power only by reason of the
occurrence of a contingency.
5
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
Section 2.01 Designation and Terms of Securities.
(a) The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate
principal amount of Securities of that series from time to time authorized by or pursuant to a
Board Resolution of the Company or pursuant to one or more indentures supplemental hereto. Prior to
the initial issuance of Securities of any series, there shall be established in or pursuant to a
Board Resolution of the Company, and set forth in an Officers Certificate of the Company, or
established in one or more indentures supplemental hereto:
(1) the title of the Security of the series (which shall distinguish the Securities of the
series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of that series that may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that
series);
(3) the date or dates on which the principal of the Securities of the series is payable and
the place(s) of payment;
(4) the rate or rates at which the Securities of the series shall bear interest or the manner
of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the Interest Payment Dates on
which such interest will be payable or the manner of determination of such Interest Payment Dates,
the place(s) of payment, and the record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(6) the right, if any, to extend the interest payment periods and the duration of such
extension;
(7) the period or periods within which, the price or prices at which and the terms and
conditions upon which, Securities of the series may be redeemed, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities of the series
pursuant to any sinking fund or analogous provisions (including payments made in cash in
satisfaction of future sinking fund obligations) 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;
6
(9) the form of the Securities of the series including the form of the Certificate of
Authentication for such series;
(10) if other than denominations of one thousand U.S. dollars ($1,000)or any integral multiple
thereof, the denominations in which the Securities of the series shall be issuable;
(11) any and all other terms with respect to such series (which terms shall not be
inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including
any terms which may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities of that series;
(12) whether the Securities are issuable as a Global Security and, in such case, the identity
of the Depositary for such series;
(13) whether the Securities will be convertible into shares of common stock or other
securities of the Company and, if so, the terms and conditions upon which such Securities will be
so convertible, including the conversion price and the conversion period;
(14) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01; and
(15) any additional or different Events of Default or restrictive covenants provided for with
respect to the Securities of the series.
All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to any such Board Resolution or in any
indentures supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board
Resolution of the Company, 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 of the Company setting forth the terms of the series.
Securities of any particular series may be issued at various times, with different dates on
which the principal or any installment of principal is payable, with different rates of interest,
if any, or different methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different redemption dates.
Section 2.02 Form of Securities and Trustees Certificate.
The Securities of any series and the Trustees certificate of authentication to be borne by
such Securities shall be substantially of the tenor as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution of the Company and as set forth in an
Officers Certificate of the Company. The Securities may have such letters, numbers or other marks
of
7
identification or designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which Securities of that
series may be listed, or to conform to usage.
Section 2.03 Denominations: Provisions for Payment.
The Securities shall be issuable as registered Securities and in the denominations of one
thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(10). The
Securities of a particular series shall bear interest payable on the dates and at the rate
specified with respect to that series. The principal of and the interest on the Securities of any
series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be
payable in the coin or currency of the United States of America that at the time is legal tender
for public and private debt, at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, the City and State of New York. Each Security shall be dated the date of
its authentication. Interest on the Securities shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The interest installment on any Security that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date for Securities of that series shall be paid to the
Person in whose name said Security (or one or more Predecessor Securities) is registered at the
close of business on the regular record date for such interest installment. In the event that any
Security of a particular series or portion thereof is called for redemption and the redemption date
is subsequent to a regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Security will be paid upon presentation and surrender of
such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date for Securities of the same series (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 shall be paid by the Company, at its
election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on Securities to the Persons in
whose names such Securities (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 such Security 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.
8
Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor 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 Securityholder
at his or her address as it appears in the Security Register (as hereinafter defined), not less
than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered on such special record date.
(2) The Company may make payment of any Defaulted Interest on any Securities 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.
Unless otherwise set forth in a Board Resolution of the Company or one or more indentures
supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01
hereof, the term regular record date as used in this Section with respect to a series of
Securities with respect to any Interest Payment Date for such series shall mean either the
fifteenth day of the month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the first day of a month, or the last day of the month immediately preceding the month in
which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall
occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a
Business Day.
Subject to the foregoing provisions of this Section, each Security of a series delivered under
this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series
shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.
Section 2.04 Execution and Authentications.
The Securities shall be signed on behalf of the Company by its President or one of its Vice
Presidents, or its Treasurer, or one of its Assistant Treasurers, or its Secretary, or one of its
Assistant Secretaries, under its corporate seal attested by its Secretary or one of its Assistant
Secretaries. Signatures may be in the form of a manual or facsimile signature. The Company may use
the facsimile signature of any Person who shall have been a President or Vice President thereof, or
of any Person who shall have been a Secretary or Assistant Secretary thereof, notwithstanding the
fact that at the time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be the President or a Vice President, or the Secretary or an Assistant
Secretary, of the Company. The seal of the Company may be in the form of a facsimile of such seal
and may be impressed, affixed, imprinted or otherwise
9
reproduced on the Securities. The Securities may contain such notations, legends or endorsements
required by law, stock exchange rule or usage. Each Security shall be dated the date of its
authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized signatory of the
Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder and that the holder
is entitled to the benefits of this Indenture. At any time and from time to time after the
execution and delivery of this Indenture, the Company may deliver Securities of any series executed
by the Company to the Trustee for authentication, together with a written order of the Company for
the authentication and delivery of such Securities, signed by its President or any Vice President
and its Secretary or any Assistant Secretary, and the Trustee in accordance with such written order
shall authenticate and deliver such Securities.
In authenticating such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to
Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities 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 that is not reasonably acceptable
to the Trustee.
Section 2.05 Registration of Transfer and Exchange.
(a) Securities of any series may be exchanged upon presentation thereof at the office or
agency of the Company designated for such purpose in the Borough of Manhattan, the City and State
of New York, for other Securities of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section. In respect of any Securities so
surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office
or agency shall deliver in exchange therefore the Security or Securities of the same series that
the Securityholder making the exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or agency designated for such
purpose in the Borough of Manhattan, the City and State of New York, or such other location
designated by the Company a register or registers (herein referred to as the Security Register)
in which, subject to such reasonable regulations as it may prescribe, the Company shall register
the Securities and the transfers of Securities as in this Article provided and which at all
reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of
registering Securities and transfer of Securities as herein provided shall be appointed as
authorized by Board Resolution (the Security Registrar).
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Upon surrender for transfer of any Security at the office or agency of the Company designated
for such purpose, the Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees a new Security or Securities of
the same series as the Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or registration of transfer, as provided
in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by
a written instrument or instruments of transfer, in form satisfactory to the Company or the
Security Registrar, duly executed by the registered holder or by such holders duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or registration of transfer of
Securities, or issue of new Securities in case of partial redemption of any series, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not
involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or register the transfer of any
Securities during a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the Outstanding Securities of the same series
and ending at the close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for redemption.
The provisions of this Section 2.05 are, with respect to any Global Security, subject to
Section 2.11 hereof.
Section 2.06 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or
typewritten) of any authorized denomination. Such temporary Securities shall be substantially in
the form of the definitive Securities in lieu of which they are issued, but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every temporary Security of any series shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities of such series. Without unnecessary delay the
Company will execute and will furnish definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in exchange therefor (without charge to the
holders), at the office or agency of the Company designated for the purpose in the Borough of
Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or
agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount
of definitive Securities of such series, unless the Company advises the Trustee to the effect that
definitive Securities need not be executed and furnished until further notice from the Company.
Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series authenticated and delivered hereunder.
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Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated or be destroyed, lost or
stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Companys
request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the
same series, bearing a number not contemporaneously outstanding, in exchange and substitution for
the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or
stolen. In every case the applicant for a substituted Security shall furnish to the Company and the
Trustee such security or indemnity as may be required by them to save each of them harmless, and,
in every case of destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicants
Security and of the ownership thereof. The Trustee may authenticate any such substituted Security
and deliver the same upon the written request or authorization of any officer of the Company. Upon
the issuance of any substituted Security, 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. In case any Security
that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Security) if the applicant for such
payment shall furnish to the Company and the Trustee such security or indemnity as they may require
to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of
the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership
thereof.
Every replacement Security issued pursuant to the provisions of this Section shall constitute
an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost
or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Securities
of the same series duly issued hereunder. All Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and
all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
Section 2.08 Cancellation.
All Securities surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall
be issued in lieu thereof except as expressly required or permitted by any of the provisions of
this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver
to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee
may dispose of canceled Securities in accordance with its standard procedures and deliver a
certificate of disposition to the Company. If the Company shall otherwise acquire any of the
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Securities, however, such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are delivered to the Trustee
for cancellation.
Section 2.09 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give or be construed
to give to any Person, other than the parties hereto and the holders of the Securities any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants, conditions and provisions being for
the sole benefit of the parties hereto and of the holders of the Securities.
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there may be an
Authenticating Agent for any or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and
shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All
references in this Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall
be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the laws of any jurisdiction under
which it is organized or in which it is doing business to conduct a trust business, and that is
otherwise authorized under such laws to conduct such business and is subject to supervision or
examination by Federal or State authorities. If at any time any Authenticating Agent shall cease to
be eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall)
terminate the agency of any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility
of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder
as if originally named as an Authenticating Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If the Company shall establish pursuant to Section 2.01 that the Securities of a
particular series are to be issued as a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that
(i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount
of, all
13
of the Outstanding Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositarys instruction and (iv) shall bear a legend substantially to the following effect:
Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred,
in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary.
(b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be
transferred, in whole but not in part and in the manner provided in Section 2.05, only to another
nominee of the Depositary for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Securities notifies the Company that it
is unwilling or unable to continue as Depositary for such series or if at any time the Depositary
for such series shall no longer be registered or in good standing under the Exchange Act, or other
applicable statute or regulation, and a successor Depositary for such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, this Section 2.11 shall no longer be applicable to the Securities of
such series and the Company will execute, and subject to Section 2.05, the Trustee will
authenticate and deliver the Securities of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global Security. In addition, the
Company may at any time determine that the Securities of any series shall no longer be represented
by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the
Securities of such series. In such event the Company will execute and subject to Section 2.05, the
Trustee, upon receipt of an Officers Certificate evidencing such determination by the Company,
will authenticate and deliver the Securities of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global Security. Upon the
exchange of the Global Security for such Securities in definitive registered form without coupons,
in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities
in definitive registered form issued in exchange for the Global Security pursuant to this Section
2.11(c) shall be registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in
whose names such Securities are so registered.
ARTICLE III
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.01 Redemption.
The Company may redeem the Securities of any series issued hereunder on and after the dates
and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
14
Section 3.02 Notice of Redemption.
(a) In case the Company shall desire to exercise such right to redeem all or, as the case may
be, a portion of the Securities of any series in accordance with the right reserved so to do, the
Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the
Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 90 days before the date fixed for redemption of
that series to such holders at their last addresses as they shall appear upon the Security Register
unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly given, whether or not
the registered holder receives the notice. In any case, failure duly to give such notice to the
holder of any Security of any series designated for redemption in whole or in part, or any defect
in the notice, shall not affect the validity of the proceedings for the redemption of any other
Securities of such series or any other series. 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 any such restriction.
Each such notice of redemption shall specify the date fixed for redemption and the redemption
price at which Securities of that series are to be redeemed, and shall state that payment of the
redemption price of such Securities to be redeemed will be made at the office or agency of the
Company in the Borough of Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, that from and after said date interest will cease to accrue and that
the redemption is for a sinking fund, if such is the case. If less than all the Securities of a
series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in
whole or in part shall specify the particular Securities to be so redeemed. In case any Security is
to be redeemed in part only, the notice that relates to such Security shall state the portion of
the principal amount thereof to be redeemed, and shall state that on and after the redemption date,
upon surrender of such Security, a new Security or Securities of such series in principal amount
equal to the unredeemed portion thereof will be issued.
(b) If less than all the Securities of a series are to be redeemed, the Company shall give the
Trustee at least 45 days notice in advance of the date fixed for redemption as to the aggregate
principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall
select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and
that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars
($1,000) or any integral multiple thereof) of the principal amount of such Securities of a
denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify
the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The
Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by
its President or any Vice President, instruct the Trustee or any paying agent to call all or any
part of the Securities of a particular series for redemption and to give notice of redemption in
the manner set forth in this Section, such notice to be in the name of the Company or its own name
as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption
is to be given by the Trustee or any such paying agent, the Company shall
15
deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as
the case may be, such Security Register, transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by
mail that may be required under the provisions of this Section.
Section 3.03 Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been completed as above provided, the
Securities or portions of Securities of the series to be redeemed specified in such notice shall
become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption and interest on
such Securities or portions of Securities shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such redemption price and accrued
interest with respect to any such Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the place of payment specified in the
notice, said Securities shall be paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed for redemption (but if the date
fixed for redemption is an interest payment date, the interest installment payable on such date
shall be payable to the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Security of such series that is to be redeemed in part only, the
Company shall execute and the Trustee shall authenticate and the office or agency where the
Security is presented shall deliver to the holder thereof, at the expense of the Company, a new
Security of the same series of authorized denominations in principal amount equal to the unredeemed
portion of the Security so presented.
Section 3.04 Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the
retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01
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 3.05.
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 3.05 Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series (other than any Securities
previously called for redemption) and (ii) may apply as a credit Securities of a series that have
been redeemed either at the election of the Company pursuant to the terms of such Securities or
16
through the application of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series, provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the
Trustee at the redemption price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 3.06 Redemption of Securities for Sinking Fund.
Not less than 45 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 the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 3.05 and the basis for such credit and will, together with such Officers
Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before
each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 3.02 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 3.02. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid the principal of (and premium, if
any) and interest on the Securities of that series at the time and place and in the manner provided
herein and established with respect to such Securities.
Section 4.02 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company agrees to maintain an
office or agency in the Borough of Manhattan, the City and State of New York, with respect to each
such series and at such other location or locations as may be designated as provided in this
Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of
that series may be presented as herein above authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of the Securities of that series
and this Indenture may be given or served, such designation to continue with respect to such office
or agency until the Company shall, by written notice signed by its President or a Vice President
and delivered to the trustee, designate some other office or agency for such purposes or any of
them. 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, notices and demands may
be made or served at the Corporate Trust Office of the Trustee, and the
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Company hereby appoints the Trustee as its agent to receive all such presentations, notices and
demands.
Section 4.03 Paying Agents.
(a) If the Company shall appoint one or more paying agents for all or any series of the
Securities, other than the Trustee, the Company will cause each such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section:
(1) that it will hold all sums held by it as such agent for the payment of the principal of
(and premium, if any) or interest on the Securities of that series (whether such sums have been
paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of
the Persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the Company (or by any other
obligor of such Securities) to make any payment of the principal of (and premium, if any) or
interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure referred to in the
preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to any series of the
Securities, it will on or before each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or
any failure (by it or any other obligor on such Securities) to take such action. Whenever the
Company shall have one or more paying agents for any series of Securities, it will, prior to each
due date of the principal of (and premium, if any) or interest on any Securities of that series,
deposit with the paying agent a sum sufficient to pay the principal (an premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums
in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) 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 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 terms and conditions as those upon which such sums were held by the Company or such
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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.
Section 4.04 Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
Section 4.05 Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain Outstanding, consolidate with or
merge into any other Person, in either case where the Company is not the survivor of such
transaction, or sell or convey all or substantially all of its property to any other company unless
the provisions of Article Ten hereof are complied with.
ARTICLE V
SECURITYHOLDERS LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a) on each regular record
date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of
the names and addresses of the holders of each series of Securities as of such regular record date,
provided that the Company shall not be obligated to furnish or cause to furnish such list at any
time that the list shall not differ in any respect from the most recent list furnished to the
Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30
days after the receipt by the Company of any such request, a list of similar form and content as of
a date not more than 15 days prior to the time such list is furnished; provided, however, that, in
either case, no such list need be furnished for any series for which the Trustee shall be the
Security Registrar.
Section 5.02 Preservation Of Information; Communications With Securityholders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Securities contained in the most recent
list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt
of a new list so furnished.
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(c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act
with other Securityholders with respect to their rights under this Indenture or under the
Securities.
Section 5.03 Reports by the Company.
(a) The Company covenants and agrees to file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act;
or, if the Company is not required to file information, documents or reports pursuant to either of
such sections, then to file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the supplementary and periodic
information, documents and reports that may be required pursuant to Section 13 of the Exchange Act,
in respect of a security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from to time by the Commission, such
additional information, documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.
(c) The Company covenants and agrees to transmit by mail, first class postage prepaid, or
reputable over-night delivery service that provides for evidence of receipt, to the
Securityholders, as their names and addresses appear upon the Security Register, within 30 days
after the filing thereof with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time by the Commission.
Section 5.04 Reports by the Trustee.
(a) On or before [_] in each year in which any of the Securities are Outstanding, the Trustee
shall transmit by mail, first class postage prepaid, to the Securityholders, as their names and
addresses appear upon the Security Register, a brief report dated as of the preceding [___], if and
to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to Securityholders, be
filed by the Trustee with the Company, with each stock exchange upon which any Securities are
listed (if so listed) and also with the Commission. The Company agrees to notify the Trustee when
any Securities become listed on any stock exchange.
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ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 6.01 Events of Default.
(a) Whenever used herein with respect to Securities of a particular series, Event of Default
means any one or more of the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any installment of interest upon any of the
Securities of that series, as and when the same shall become due and payable, and continuance of
such default for a period of 90 days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of any indenture supplemental hereto
shall not constitute a default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the principal of (or premium, if any, on) any of
the Securities of that series as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking
or analogous fund established with respect to that series; provided, however, that a valid
extension of the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform any other of its covenants or agreements with
respect to that series contained in this Indenture or otherwise established with respect to that
series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has
been expressly included in this Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied and stating that such notice is a Notice of
Default hereunder, shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the
Securities of that series at the time Outstanding;
(4) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a
voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its creditors; or (5) a court of
competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the
Company in an involuntary case, (ii) appoints a Custodian of the Company for all or substantially
all of its property, or (iii) orders the liquidation of the Company, and the order or decree
remains unstayed and in effect for 90 days.
(b) In each and every such case, unless the principal of all the Securities of that series
shall have already become due and payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Securities of that series then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare
the
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principal of all the Securities of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable.
(c) At any time after the principal of the Securities of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of the moneys due shall
have been obtained or entered as hereinafter provided, the holders of a majority in aggregate
principal amount of the Securities of that series then Outstanding hereunder, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i)
the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments
of interest upon all the Securities of that series and the principal of (and premium, if any, on)
any and all Securities of that series that shall have become due otherwise than by acceleration
(with interest upon such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Securities of that series to the date of such payment or deposit) and the amount
payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the
Indenture with respect to such series, other than the nonpayment of principal on Securities of that
series that shall not have become due by their terms, shall have been remedied or waived as
provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any subsequent default or
impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with respect to Securities
of that series under this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case, subject to any determination in such
proceedings, the Company, and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall
continue as though no such proceedings had been taken.
Section 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants that (1) in case it shall default in the payment of any installment
of interest on any of the Securities of a series, or any payment required by any sinking or
analogous fund established with respect to that series as and when the same shall have become due
and payable, and such default shall have continued for a period of 90 Business Days, or (2) in case
it shall default in the payment of the principal of (or premium, if any, on) any of the Securities
of a series when the same shall have become due and payable, whether upon maturity of the
Securities of a series or upon redemption or upon declaration or otherwise, then, upon demand of
the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities
of that series, the whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the case may be, with
interest upon the overdue principal (and premium, if any) and (to the extent that payment of such
interest is enforceable under applicable law) upon overdue installments of interest at the rate per
annum expressed in the Securities of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the amount payable to the
Trustee under Section 7.06.
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(b) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Securities of that series
and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
readjustment, arrangement, composition or judicial proceedings affected the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any
action therein that may be permitted by the court and shall (except as may be otherwise provided by
law) be entitled to file such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of Securities of such
series allowed for the entire amount due and payable by the Company under the Indenture at the date
of institution of such proceedings and for any additional amount that may become due and payable by
the Company after such date, and to collect and receive any moneys or other property payable or
deliverable on any such claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Securities of such series to make
such payments to the Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to such Securityholders, to pay to the Trustee any amount due it under
Section 7.06.
(d) All rights of action and of asserting claims under this Indenture, or under any of the
terms established with respect to Securities of that series, may be enforced by the Trustee without
the possession of any of such Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable
benefit of the holders of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in the Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.
Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of that series or the rights of any holder
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thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any
such proceeding.
Section 6.03 Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this Article with respect to a particular
series of Securities shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal (or premium, if
any) or interest, upon presentation of the Securities of that series, and notation thereon the
payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all amounts payable to the
Trustee under Section 7.06; and
SECOND: To the payment of the amounts then due and unpaid upon Securities of such series for
principal (and premium, if any) and interest, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if any) and interest,
respectively.
Section 6.04 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or
under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the Securities of such
series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less
than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or proceeding in its own name
as trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v)
during such 60 day period, the holders of a majority in principal amount of the Securities of that
series do not give the Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary, any other provisions of this
Indenture, the right of any holder of any Security to receive payment of the principal of (and
premium, if any) and interest on such Security, as therein provided, on or after the respective due
dates expressed in such Security (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such respective dates or
redemption date, shall not be impaired or affected without the consent of such holder and by
accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right in any
24
manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and common benefit of all holders
of Securities of such series. For the protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.
(a) Except as otherwise provided in Section 2.07, all powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or otherwise established
with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such default or on
acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given
by this Article or by law to the Trustee or the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 6.06 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities of any series at the
time Outstanding, determined in accordance with Section 8.01, 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 such series; provided,
however, that such direction shall not be in conflict with any rule of law or with this Indenture
or be unduly prejudicial to the rights of holders of Securities of any other series at the time
Outstanding determined in accordance with Section 8.01. Subject to the provisions of Section 7.01,
the Trustee shall have the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding affected thereby,
determined in accordance with Section 8.01, may on behalf of the holders of all of the Securities
of such series waive any past default in the performance of any of the covenants contained herein
or established pursuant to Section 2.01 with respect to such series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities
otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal and any premium has been deposited with the Trustee
(in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be
deemed to be cured for all purposes of this Indenture and the
25
Company, the Trustee and the holders of the Securities of such series shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 6.07 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities by such holders
acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys fees, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security of such series, on or after
the respective due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities
of a series and after the curing of all Events of Default with respect to the Securities of that
series that may have occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this Indenture, and no
implied covenants shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Securities of a series has occurred (that has not been cured or
waived), the Trustee shall exercise with respect to Securities of that series 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.
(b) 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:
(c) prior to the occurrence of an Event of Default with respect to the Securities of a series
and after the curing or waiving of all such Events of Default with respect to that series that may
have occurred:
(i) the duties and obligations of the Trustee shall with respect to the Securities of such
series be determined solely by the express provisions of this Indenture, and the Trustee shall not
26
be liable with respect to the Securities of such series except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee;and
(ii) in the absence of bad faith on the part of the Trustee, the Trustee may with respect to
the Securities of such series conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions that by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they
conform to the requirement of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee, was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the holders of not less than a majority in
principal amount of the Securities of any series at the time Outstanding 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 that series; and
(4) None of the provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.
Section 7.02 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(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, consent, order,
approval, bond, security or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company, by
the President or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);
27
(c) 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
or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to
the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a series of the Securities (that has not
been cured or waived) to exercise with respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and to 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;
(e) The Trustee shall not be liable for any action taken or omitted to be taken 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;
(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, consent,
order, approval, bond, security, or other papers or documents, unless requested in writing so to do
by the holders of not less than a majority in principal amount of the Outstanding Securities of the
particular series affected thereby (determined as provided in Section 8.04); provided, however,
that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities
as a condition to so proceeding. The reasonable expense of every such examination shall be paid by
the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities.
(a) The recitals contained herein and in the Securities shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency of this Indenture
or of the Securities.
(c) The Trustee shall not be accountable for the use or application by the Company of any of
the Securities or of the proceeds of such Securities, or for the use or application of any moneys
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paid over by the Trustee in accordance with any provision of this Indenture or established pursuant
to Section 2.01, or for the use or application of any moneys received by any paying agent other
than the Trustee.
Section 7.04 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it
were not Trustee, paying agent or Security Registrar.
Section 7.05 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by law. The Trustee shall
be under no liability for interest on any moneys received by it hereunder except such as it may
agree with the Company to pay thereon.
Section 7.06 Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled
to, such reasonable compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), as the Company, and the Trustee may from time
to time agree in writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties hereunder of the
Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from its negligence or
bad faith. The Company also covenants to indemnify the Trustee (and its officers, agents, directors
and employees) for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Securities upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular Securities.
Section 7.07 Reliance on Officers Certificate.
Except as otherwise provided in Section 7.01, whenever in the administration of the provisions
of this Indenture the Trustee shall deem it necessary or desirable that a matter be
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proved or established prior to taking or suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
Section 7.08 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
Section 7.09 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Securities issued hereunder which
shall at all times be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of Columbia, or a
corporation or other Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State,
Territorial, or District of Columbia authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as Trustee. In case at
any time the Trustee shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may at any time resign with respect to
the Securities of one or more series by giving written notice thereof to the Company and by
transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of
such series, as their names and addresses appear upon the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee with respect to
Securities of such series by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a successor trustee with
respect to Securities of such series, or any Securityholder of that series who has been a bona fide
holder of a Security or Securities for at least six months may on behalf of himself and all others
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similarly situated, petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section 7.08 after written request
therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or
Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09
and shall fail to resign after written request therefor by the Company or by any such
Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its
property shall be appointed or consented to, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Company may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument, in duplicate, executed by order
of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, unless the Trustees duty to resign is stayed as
provided herein, any Securityholder who has been a bona fide holder of a Security or Securities for
at least six months may, on behalf of that holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Securities of any series at
the time Outstanding may at any time remove the Trustee with respect to such series by so notifying
the Trustee and the Company and may appoint a successor Trustee for such series with the consent of
the Company.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee with
respect to the Securities of a series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as provided in Section
7.11.
(e) Any successor trustee appointed pursuant to this Section may be appointed with respect to
the Securities of one or more series or all of such series, and at any time there shall be only one
Trustee with respect to the Securities of any particular series.
Section 7.11 Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor trustee with respect to all
Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon
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the resignation or removal of the retiring Trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
trustee relates, (2) shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust, 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 that no Trustee shall be responsible for any
act or failure to act on the part of any other Trustee hereunder; 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, such retiring Trustee shall with respect to the
Securities of that or those series to which the appointment of such successor trustee relates have
no further responsibility for the exercise of rights and powers or for the performance of the
duties and obligations vested in the Trustee under this Indenture, 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, to the extent contemplated by such supplemental indenture, the property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those series to which the
appointment of such successor trustee relates.
(c) Upon request of any such successor trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may
be.
(d) No successor trustee shall accept its appointment unless at the time of such acceptance
such successor trustee shall be qualified and eligible under this Article.
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(e) Upon acceptance of appointment by a successor trustee as provided in this Section, the
Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
Section 7.12 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 the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. In case 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 7.13 Preferential Collection of Claims Against the Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent included therein.
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
Section 8.01 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority or specified
percentage in aggregate principal amount of the Securities of a particular series may take any
action (including the making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that at the time of taking any such action the holders
of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of
that series in Person or by agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company may, at its option,
as evidenced by an Officers Certificate, fix in advance a record date for such series for the
determination of Securityholders entitled to give such request, demand, authorization, direction,
33
notice, consent, waiver or other action, 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 action may be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be Securityholders for the purposes
of determining whether Securityholders of the requisite proportion of Outstanding Securities of
that series have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities
of that series shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
Section 8.02 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution of any instrument by a
Securityholder (such proof will not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Securities shall be sufficient if made in the following manner:
(1) The fact and date of the execution by any such Person of any instrument may be proved in
any reasonable manner acceptable to the Trustee.
(2) The ownership of Securities shall be proved by the Security Register of such Securities or
by a certificate of the Security Registrar thereof.
(3) The Trustee may require such additional proof of any matter referred to in this Section as
it shall deem necessary.
Section 8.03 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security, the Company, the
Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name
such Security shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03)
interest on such Security and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to the contrary.
Section 8.04 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal amount of Securities
of a particular series have concurred in any direction, consent of waiver under this Indenture, the
Securities of that series that are owned by the Company or any other obligor on the Securities of
that series or by any Person directly or indirectly controlling or controlled by or under common
34
control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgees right so to act with respect to such Securities and that
the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
Section 8.05 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the holders of the majority or percentage in aggregate
principal amount of the Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Security. Except as aforesaid any such action taken by the holder of
any Security shall be conclusive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto
is made upon such Security. Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the Trustee and the
holders of all the Securities of that series.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without the Consent of Securityholders.
In addition to any supplemental indenture otherwise authorized by this Indenture, the Company
and the Trustee may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in
effect), without the consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities in addition to or in place of certificated
Securities;
35
(d) 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;
(e) to add to, delete from, or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as
herein set forth;
(f) to make any change that does not adversely affect the rights of any Securityholder in any
material respect; or
(g) to provide for the issuance of and establish the form and terms and conditions of the
Securities of any series as provided in Section 2.01, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to
add to the rights of the holders of any series of Securities.
The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustees own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section may be executed by the
Company and the Trustee without the consent of the holders of any of the Securities at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.
Section 9.02 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the holders of not less than a
majority in aggregate principal amount of the Securities of each series affected by such
supplemental indenture or indentures at the time Outstanding, the Company, when authorized by Board
Resolutions, and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of
such series under this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and affected thereby, (i)
extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof or (ii) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture.
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It shall not be necessary for the consent of the Securityholders of any series affected
thereby under this Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
Section 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions of this Article or
of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be
modified and amended in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the 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 shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.04 Securities Affected by Supplemental Indentures.
Securities of any series affected by a supplemental indenture, authenticated and delivered
after the execution of such supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, may bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities of that series so
modified as to conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the Securities of that series
then Outstanding.
Section 9.05 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions authorizing the
execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join
with the Company in the execution of such supplemental indenture unless such supplemental indenture
affects the Trustees own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that it is proper for
the Trustee under the provisions of this Article to join in the execution thereof; provided,
however, that such Opinion of Counsel need not be provided in connection with the execution of a
supplemental indenture that establishes the terms of a series of Securities pursuant to Section
2.01 hereof.
Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to
37
the Securityholders of all series affected thereby as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental indenture.
ARTICLE X
SUCCESSOR ENTITY
Section 10.01 Company May Consolidate, Etc.
Nothing contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of the Company with or into any other Person (whether or not affiliated
with the Company) or successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other
disposition of the property of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not affiliated with the Company
or its successor or successors) authorized to acquire and operate the same; provided, however, the
Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if
the Company is not the survivor of such transaction), sale, conveyance, transfer or other
disposition, the due and punctual payment of the principal of (premium, if any) and interest on all
of the Securities of all series in accordance with the terms of each series, according to their
tenor and the due and punctual performance and observance of all the covenants and conditions of
this Indenture with respect to each series or established with respect to such series pursuant to
Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by
such consolidation, or into which the Company shall have been merged, or by the entity which shall
have acquired such property.
Section 10.02 Successor Entity Substituted.
(a) In case of any such consolidation, merger, sale, conveyance, transferor other disposition
and upon the assumption by the successor entity by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Securities of all series Outstanding and
the due and punctual performance of all of the covenants and conditions of this Indenture or
established with respect to each series of the Securities pursuant to Section 2.01 to be performed
by the Company with respect to each series, such successor entity shall succeed to and be
substituted for the Company with the same effect as if it had been named as the Company herein, and
thereupon the predecessor corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
(b) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition
such changes in phraseology and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.
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(c) Nothing contained in this Article shall require any action by the Company in the case of a
consolidation or merger of any Person into the Company where the Company is the survivor of such
transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).
Section 10.03 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or other
disposition, and any such assumption, comply with the provisions of this Article.
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee for cancellation all
Securities of a series theretofore authenticated (other than any Securities that shall have been
destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07)
and Securities for whose payment money or Governmental Obligations have theretofore been deposited
in trust or segregated and held in trust by the Company (and thereupon repaid to the Company or
discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a
particular series not theretofore delivered to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as
trust funds the entire amount in moneys or Governmental Obligations sufficient or a combination
thereof, sufficient in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Trustee, to pay at
maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if the Company shall
also pay or cause to be paid all other sums payable hereunder with respect to such series by the
Company then this Indenture shall thereupon cease to be of further effect with respect to such
series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that
shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06
and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture with respect to such series.
Section 11.02 Discharge of Obligations.
If at any time all such Securities of a particular series not heretofore delivered to the
Trustee for cancellation or that have not become due and payable as described in Section 11.01
shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds
39
moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption
all such Securities of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company with respect to such series, then
after the date such moneys or Governmental Obligations, as the case may be, are deposited with the
Trustee the obligations of the Company under this Indenture with respect to such series shall cease
to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03,
7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.03 Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01
or 11.02 shall be held in trust and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own paying agent), to the holders of
the particular series of Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.
Section 11.04 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand
of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such moneys or Governmental Obligations.
Section 11.05 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then
held by the Company, in trust for payment of principal of or premium or interest on the Securities
of a particular series that are not applied but remain unclaimed by the holders of such Securities
for at least two years after the date upon which the principal of (and premium, if any) or interest
on such Securities shall have respectively become due and payable, shall be repaid to the Company
on May 31 of each year or (if then held by the Company) shall be discharged from such trust; and
thereupon the paying agent and the Trustee shall be released from all further liability with
respect to such moneys or Governmental Obligations, and the holder of any of the Securities
entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to
the Company for the payment thereof.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 12.01 No Recourse.
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No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any
Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as such, of the Company or
of any predecessor or successor corporation, either directly or through the Company or any such
predecessor or 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 this Indenture and the obligations issued hereunder are solely corporate obligations, and that
no such personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such incorporator, stockholder,
officer or director as such, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issuance of such
Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture contained by or on
behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.02 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be done and performed
with like force and effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful successor of the Company.
Section 13.03 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon
such power so surrendered shall terminate both as to the Company and as to any successor
corporation.
Section 13.04 Notices.
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Except as otherwise expressly provided herein any notice or demand that by any provision of
this Indenture is required or permitted to be given or served by the Trustee or by the holders of
Securities to or on the Company may be given or served by being deposited first class postage
prepaid in a post-office letterbox addressed (until another address is filed in writing by the
Company with the Trustee), as follows: [_]. Any notice, election, request or demand by the Company
or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or
made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.05 Governing Law.
This Indenture and each Security shall be deemed to be a contract made under the internal laws
of the State of New York, and for all purposes shall be construed in accordance with the laws of
said State.
Section 13.06 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness and not as equity for
federal income tax purposes. The provisions of this Indenture shall be interpreted to further this
intention.
Section 13.07 Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company, shall furnish to the Trustee an Officers
Certificate stating that all conditions precedent provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee
with respect to compliance with a condition or covenant in this Indenture shall include (1) a
statement that the Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based; (3) a statement that, in
the opinion of such Person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 13.08 Payments on Business Days.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth
in an Officers Certificate, or established in one or more indentures supplemental to this
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Indenture, in any case where the date of maturity of interest or principal of any Security or the
date of redemption of any Security shall not be a Business Day, then payment of interest or
principal (and premium, if any) may be made on the next succeeding Business Day with the same force
and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue
for the period after such nominal date.
Section 13.09 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
Section 13.10 Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the same instrument.
Section 13.11 Separability.
In case any one or more of the provisions contained in this Indenture or in the Securities of
any series shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.12 Assignment.
The Company will have the right at all times to assign any of its rights or obligations under
this Indenture to a direct or indirect wholly-owned Subsidiary of the Company, provided that, in
the event of any such assignment, the Company, will remain liable for all such obligations. Subject
to the foregoing, the Indenture is binding upon and inures to the benefit of the parties thereto
and their respective successors and assigns. This Indenture may not otherwise be assigned by the
parties thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as
of the day and year first above written.
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as Trustee
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exv4w2
EXHIBIT 4.2
AASTROM BIOSCIENCES, INC.
ISSUER
AND
[ ],
TRUSTEE
INDENTURE
DATED AS OF [ ], 20___
SUBORDINATED DEBT SECURITIES
This INDENTURE, dated as of [ ], 20___, is entered into between Aastrom
Biosciences, Inc., a Michigan corporation (the Company), and [ ], as trustee (the
Trustee) with respect to the following facts:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of unsecured subordinated debt securities
(hereinafter referred to as the Securities), in an unlimited aggregate principal amount to be
issued from time to time in one or more series as provided in this Indenture, as registered
Securities without coupons, to be authenticated by the certificate of the Trustee; and
WHEREAS, to provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered, the Company has duly authorized the execution of this
Indenture.
NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the
holders thereof, the parties agree as follows for the equal and ratable benefit of the holders of
Securities:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions of Terms.
The terms defined in this Section (except as otherwise expressly provided in this Indenture or
unless the context otherwise requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this Section and shall include
the plural as well as the singular. All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the
Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms in the Trust Indenture
Act and in the Securities Act as in force at the date of the execution of this instrument.
Authenticating Agent means an authenticating agent with respect to all or any of the series
of Securities appointed with respect to all or any series of the Securities by the Trustee pursuant
to Section 2.10.
Bankruptcy Law means Title 11, U.S. Code, or any similar federal or state law for the relief
of debtors.
Board of Directors means the Board of Directors of the Company or any duly authorized
committee of such 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.
Business Day means, with respect to any series of Securities, any day other than a day on
which Federal or State banking institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law, executive order or regulation to close.
Certificate means a certificate signed by the principal executive officer, the principal
financial officer or the principal accounting officer of the Company. The Certificate need not
comply with the provisions of Section 13.07.
Company means Aastrom Biosciences, Inc., a corporation duly organized and existing under the
laws of the State of Michigan, and, subject to the provisions of Article Ten, shall also include
its successors and assigns. Corporate Trust Office means the office of the Trustee at
which, at any particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at [_], except that whenever a provision herein refers
to an office or agency of the Trustee in the Borough of Manhattan, The City of New York, such
office is located, at the date hereof, at [_].
Custodian means any receiver, trustee, assignee, liquidator, or similar official under any
Bankruptcy Law.
Default means any event, act or condition that with notice or lapse of time, or both, would
constitute an Event of Default.
Depositary means, with respect to Securities of any series, for which the Company shall
determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under
the Securities and Exchange Act of 1934, as amended (the Exchange Act), or other applicable
statute or regulation, which, in each case, shall be designated by the Company pursuant to either
Section 2.01 or 2.11.
Event of Default means, with respect to Securities of a particular series any event
specified in Section 6.01, continued for the period of time, if any, therein designated.
Global Security means, with respect to any series of Securities, a Security executed by the
Company and delivered by the Trustee to the Depositary or pursuant to the Depositarys instruction,
all in accordance with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
Governmental Obligations means securities that are (i) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such Governmental Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the Governmental Obligation or the specific
payment of principal of or interest on the Governmental Obligation evidenced by such depositary
receipt. 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.
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 in accordance
with the terms hereof.
Interest Payment Date, when used with respect to any installment of
interest on a Security of a particular series, means the date specified in such Security or in a
Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed
date on which an installment of interest with respect to Securities of that series is due and
payable.
Officers Certificate means a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Controller or an Assistant
Controller or the Secretary or an Assistant Secretary of the Company that is delivered to the
Trustee in accordance with the terms hereof. Each such certificate shall include the statements
provided for in Section 13.07, if and to the extent required by the provisions thereof.
Opinion of Counsel means an opinion in writing of legal counsel, who may be an employee of
or counsel for the Company, that is delivered to the Trustee in accordance with the terms hereof.
Each such opinion shall include the statements provided for in Section 13.07, if and to the extent
required by the provisions thereof.
Outstanding, when used with reference to Securities of any series, means, subject to the
provisions of Section 8.04, as of any particular time, all Securities of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions thereof for the
payment or redemption of which moneys or Governmental Obligations in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Securities or portions of such Securities are to
be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in
Article Three provided, or provision satisfactory to the Trustee shall have been made for giving
such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.07.
Person means any individual, corporation, partnership, joint-venture, joint-stock company,
unincorporated organization or government or any agency or political subdivision thereof.
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 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or
stolen Security.
Responsible Officer when used with respect to the Trustee means the Chairman of the Board of
Directors, the President, any Vice President, the Secretary, the Treasurer, any trust officer, any
corporate trust officer or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
Securities means the debt Securities authenticated and delivered under this Indenture.
Securityholder, holder of Securities, registered holder, or other similar term, means
the Person or Persons in whose name or names a particular Security shall be registered on the books
of the Company kept for that purpose in accordance with the terms of this Indenture.
Subsidiary means, with respect to any Person, (i) any corporation at least a majority of
whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii)
any general partnership, joint venture or similar entity, at least a majority of whose outstanding
partnership or similar interests shall at the time be owned by such Person, or by one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general partner.
Trustee means [_], and, subject to the provisions of Article Seven, shall also include its
successors and assigns, and, if at any time there is more than one Person acting in such capacity
hereunder, Trustee shall mean each such Person. The term Trustee as used with respect to a
particular series of the Securities shall mean the trustee with respect to that series.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended, subject to the provisions
of Sections 9.01, 9.02, and 10.01, as in effect at the date of execution of this instrument.
Voting Stock, as applied to stock of any Person, means shares, interests, participations or
other equivalents in the equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of such Person, other
than shares, interests, participations or other equivalents having such power only by reason of the
occurrence of a contingency.
ARTICLE II
ISSUE, DESCRIPTION, TERMS EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
2.01 Designation and Terms of Securities.
(a) The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate
principal amount of Securities of that series from time to time authorized by or pursuant to a
Board Resolution of the Company or pursuant to one or more indentures supplemental hereto. Prior to
the initial issuance of Securities of any series, there shall be established in or pursuant to a
Board Resolution of the Company, and set forth in an Officers Certificate of the Company, or
established in one or more indentures supplemental hereto:
(1) the title of the Security of the series (which shall distinguish the Securities of the
series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of that series that may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that
series);
(3) the date or dates on which the principal of the Securities of the series is payable and
the place(s) of payment;
(4) the rate or rates at which the Securities of the series shall bear interest or the manner
of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the Interest Payment Dates on
which such interest will be payable or the manner of determination of such Interest Payment Dates,
the place(s) of payment, and the record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(6) the right, if any, to extend the interest payment periods and the duration of such
extension;
(7) the period or periods within which, the price or prices at which and the terms and
conditions upon which, Securities of the series may be redeemed, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities of the series
pursuant to any sinking fund or analogous provisions (including payments made in cash in
satisfaction of future sinking fund obligations) 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) the subordination terms of the Securities of the series;
(10) the form of the Securities of the series including the form of the Certificate of
Authentication for such series;
(11) if other than denominations of one thousand U.S. dollars ($1,000) or any integral
multiple thereof, the denominations in which the Securities of the series shall be issuable;
(12) any and all other terms with respect to such series (which terms shall not be
inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including
any terms which may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities of that series;
(13) whether the Securities are issuable as a Global Security and, in such case, the identity
of the Depositary for such series;
(14) whether the Securities will be convertible into shares of common stock or other
securities of the Company and, if so, the terms and conditions upon which such Securities will be
so convertible, including the conversion price and the conversion period;
(15) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01; and
(16) any additional or different Events of Default or restrictive covenants provided for with
respect to the Securities of the series. All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in or pursuant to any
such Board Resolution or in any indentures supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board
Resolution of the Company, 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 of the Company setting forth the terms of the series.
Securities of any particular series may be issued at various times, with different dates on
which the principal or any installment of principal is payable, with different rates of interest,
if any, or different methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different redemption dates.
Section 2.02 Form of Securities and Trustees Certificate.
The Securities of any series and the Trustees certificate of authentication to be borne by
such Securities shall be substantially of the tenor as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution of the Company and as set forth in an
Officers Certificate of the Company. The Securities may have such letters, numbers or other marks
of identification or designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which Securities of that
series may be listed, or to conform to usage.
Section 2.03 Denominations: Provisions for Payment.
The Securities shall be issuable as registered Securities and in the denominations of one
thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(11). The
Securities of a particular series shall bear interest payable on the dates and at the rate
specified with respect to that series. The principal of and the interest on the Securities of any
series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be
payable in the coin or currency of the United States of America that at the time is legal tender
for public and private debt, at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, the City and State of New York. Each Security shall be dated the date of
its authentication. Interest on the Securities shall be computed on the basis of a 360-day year
composed of twelve 30-day months. The interest installment on any Security that is payable,
and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that
series shall be paid to the Person in whose name said Security (or one or more Predecessor
Securities) is registered at the close of business on the regular record date for such interest
installment. In the event that any Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with respect to any
Interest Payment Date and prior to such Interest Payment Date, interest on such Security will be
paid upon presentation and surrender of such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date for Securities of the same series (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 shall be paid by the Company, at its
election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on Securities to the Persons in
whose names such Securities (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 such Security 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 not be more than 15 nor 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 Securityholder
at his or her address as it appears in the Security Register (as hereinafter defined), not less
than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered on such special record date.
(2) The Company may make payment of any Defaulted Interest on any Securities 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. Unless otherwise set forth in a
Board Resolution of the Company or one or more indentures supplemental hereto establishing the
terms of any series of Securities pursuant to Section 2.01 hereof, the term regular record date
as used in this Section with respect to a series of Securities with respect to any Interest Payment
Date for such series shall mean either the fifteenth day of the month immediately preceding the
month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof
shall occur, if such Interest Payment Date is the first day of a month, or the last day of the
month immediately preceding the month in which an
Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur,
if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a
Business Day.
Subject to the foregoing provisions of this Section, each Security of a series delivered under
this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series
shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.
Section 2.04 Execution and Authentications.
The Securities shall be signed on behalf of the Company by its President, or one of its Vice
Presidents, or its Treasurer, or one of its Assistant Treasurers, or its Secretary, or one of its
Assistant Secretaries, under its corporate seal attested by its Secretary or one of its Assistant
Secretaries. Signatures may be in the form of a manual or facsimile signature. The Company may use
the facsimile signature of any Person who shall have been a President or Vice President thereof, or
of any Person who shall have been a Secretary or Assistant Secretary thereof, notwithstanding the
fact that at the time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be the President or a Vice President, or the Secretary or an Assistant
Secretary, of the Company. The seal of the Company may be in the form of a facsimile of such seal
and may be impressed, affixed, imprinted or otherwise reproduced on the Securities. The Securities
may contain such notations, legends or endorsements required by law, stock exchange rule or usage.
Each Security shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized signatory of the
Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder and that the holder
is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the Trustee for
authentication, together with a written order of the Company for the authentication and delivery of
such Securities, signed by its President or any Vice President and its Secretary or any Assistant
Secretary, and the Trustee in accordance with such written order shall authenticate and deliver
such Securities.
In authenticating such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to
Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities 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 that is not reasonably acceptable
to the Trustee.
Section 2.05 Registration of Transfer and Exchange.
(1) Securities of any series may be exchanged upon presentation thereof at the office or
agency of the Company designated for such purpose in the Borough of Manhattan, the City and State
of New York, for other Securities of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section. In respect of any Securities so
surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office
or agency shall deliver in exchange therefor the Security or Securities of the same series that the
Securityholder making the exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.
(2) The Company shall keep, or cause to be kept, at its office or agency designated for such
purpose in the Borough of Manhattan, the City and State of New York, or such other location
designated by the Company a register or registers (herein referred to as the Security Register)
in which, subject to such reasonable regulations as it may prescribe, the Company shall register
the Securities and the transfers of Securities as in this Article provided and which at all
reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of
registering Securities and transfer of Securities as herein provided shall be appointed as
authorized by Board Resolution (the Security Registrar).
Upon surrender for transfer of any Security at the office or agency of the Company designated
for such purpose, the Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees a new Security or Securities of
the same series as the Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or registration of transfer, as provided
in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by
a written instrument or instruments of transfer, in form satisfactory to the Company or the
Security Registrar, duly executed by the registered holder or by such holders duly authorized
attorney in writing.
(3) No service charge shall be made for any exchange or registration of transfer of Securities,
or issue of new Securities in case of partial redemption of any series, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge in relation thereto,
other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any
transfer.
The Company shall not be required (i) to issue, exchange or register the transfer of any
Securities during a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the Outstanding Securities of the same series
and ending at the close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for redemption. The
provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11
hereof.
Section 2.06 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or
typewritten) of any authorized denomination. Such temporary Securities shall be substantially in
the form of the definitive Securities in lieu of which they are issued, but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every temporary Security of any series shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities of such series. Without unnecessary delay the
Company will execute and will furnish definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in exchange therefor (without charge to the
holders), at the office or agency of the Company designated for the purpose in the Borough of
Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or
agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount
of definitive Securities of such series, unless the Company advises the Trustee to the effect that
definitive Securities need not be executed and furnished until further notice from the Company.
Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series authenticated and delivered hereunder.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated or be destroyed, lost or
stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Companys
request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the
same series, bearing a number not contemporaneously outstanding, in exchange
12 <PAGE> and substitution for the mutilated Security, or in lieu of and
in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a
substituted Security shall furnish to the Company and the Trustee such security or indemnity as may
be required by them to save each of them harmless, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicants Security and of the ownership
thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the
written request or authorization of any officer of the Company. Upon the issuance of any
substituted Security, 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. In case any Security that has matured or
is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead
of issuing a substitute Security, pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish
to the Company and the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company
and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this Section shall constitute
an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost
or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all
other Securities of the same series duly issued hereunder. All Securities shall be held and
owned upon the express condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to
the extent lawful) any and all other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
Section 2.08 Cancellation.
All Securities surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall
be issued in lieu thereof except as expressly required or permitted by any of the provisions of
this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver
to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee
may dispose of canceled Securities in accordance with its standard procedures and deliver a
certificate of disposition to the Company. If the Company shall otherwise acquire any of the
Securities, however, such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are delivered to the Trustee
for cancellation.
Section 2.09 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give or be construed
to give to any Person, other than the parties hereto and the holders of the Securities (and, with
respect to the provisions of Article Fourteen, the holders of Senior Indebtedness) any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants, conditions and provisions being for
the sole benefit of the parties hereto and of the holders of the Securities (and, with respect to
the provisions of Article Fourteen, the holders of Senior Indebtedness).
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there may be an
Authenticating Agent for any or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and
shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All
references in this Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall
be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the laws of any jurisdiction under
which it is organized or in which it is doing business to conduct a trust business, and that is
otherwise authorized under such laws to conduct such business and is subject to supervision or
examination by Federal or State authorities. If at any time any Authenticating Agent shall cease to
be eligible in accordance with these provisions, it shall
resign immediately. Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by
the Company shall) terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor
Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance
of its appointment hereunder, shall become vested with all the rights, powers and duties of its
predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto. Section
2.11 Global Securities.
(a) If the Company shall establish pursuant to Section 2.01 that the Securities of a
particular series are to be issued as a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that
(i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount
of, all of the Outstanding Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositarys instruction and (iv) shall bear a legend substantially to the following effect:
Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred,
in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary.
(b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be
transferred, in whole but not in part and in the manner provided in Section 2.05, only to another
nominee of the Depositary for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Securities notifies the Company that it
is unwilling or unable to continue as Depositary for such series or if at any time the Depositary
for such series shall no longer be registered or in good standing under the Exchange Act, or other
applicable statute or regulation, and a successor Depositary for such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, this Section 2.11 shall no longer be applicable to the Securities of
such series and the Company will execute, and subject to Section 2.05, the Trustee will
authenticate and deliver the Securities of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global Security. In addition, the
Company may at any time determine that the Securities of any series shall no longer be represented
by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the
Securities of such series. In such event the Company will execute and subject to Section 2.05, the
Trustee, upon receipt of an Officers Certificate evidencing such determination by the Company,
will authenticate and deliver the Securities of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global Security. Upon the
exchange of the Global Security for such Securities in definitive registered form without coupons,
in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities
in definitive registered form issued in exchange for the Global Security pursuant to this Section
2.11(c) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Securities to the Depositary for delivery to the Persons in whose names such Securities are so
registered.
ARTICLE III
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.01 Redemption.
The Company may redeem the Securities of any series issued hereunder on and after the dates
and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
Section 3.02 Notice of Redemption. (a) In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Securities of any series in accordance
with the right reserved so to do, the Company shall, or shall cause the Trustee to, give notice of
such redemption to holders of the Securities of such series to be redeemed by mailing, first class
postage prepaid, a notice of such redemption not less than 30 days and not more than 90 days before
the date fixed for redemption of that series to such holders at their last addresses as they shall
appear upon the Security Register unless a shorter period is specified in the Securities to be
redeemed. Any notice that is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the registered holder receives the notice. In any case,
failure duly to give such notice to the holder of any Security of any series designated for
redemption in whole or in part, or any defect in the notice, shall not affect the validity of the
proceedings for the redemption of any other Securities of such series or any other series. 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 any such restriction.
Each such notice of redemption shall specify the date fixed for redemption and the redemption price
at which Securities of that series are to be redeemed, and shall state that payment of the
redemption price of such Securities to be redeemed will be made at the office or agency of the
Company in the Borough of Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, that from and after said date interest will cease to accrue and that
the redemption is for a sinking fund, if such is the case. If less than all the Securities of a
series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in
whole or in part shall specify the particular Securities to be so redeemed. In case any Security is
to be redeemed in part only, the notice that relates to such Security shall state the portion of
the principal amount thereof to be redeemed, and shall state that on and after the redemption date,
upon surrender of such Security, a new Security or Securities of such series in principal amount
equal to the unredeemed portion thereof will be issued.
(b) If less than all the Securities of a series are to be redeemed, the Company shall give the
Trustee at least 45 days notice in advance of the date fixed for redemption as to the aggregate
principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall
select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and
that may provide for the selection of a portion or portions (equal to one thousand U.S.
dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities
of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of instructions signed on its
behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all
or any part of the Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the name of the Company or
its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of
redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or
cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case
may be, such Security Register, transfer books or other records, or suitable copies or extracts
therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that
may be required under the provisions of this Section.
Section 3.03 Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been completed as above provided, the
Securities or portions of Securities of the series to be redeemed specified in such notice shall
become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption and interest on
such Securities or portions of Securities shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such redemption price and accrued
interest with respect to any such Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the place of payment specified in the
notice, said Securities shall be paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed for redemption (but if the date
fixed for redemption is an interest payment date, the interest installment payable on such date
shall be payable to the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Security of such series that is to be redeemed in part only, the
Company shall execute and the Trustee shall authenticate and the office or agency where the
Security is presented shall deliver to the holder thereof, at the expense of the Company, a new
Security of the same series of authorized denominations in principal amount equal to the unredeemed
portion of the Security so presented.
Section 3.04 Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the
retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01
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 3.05. 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 3.05 Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series (other than any Securities
previously called for redemption) and (ii) may apply as a credit Securities of a series that have
been redeemed either at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series, provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the
Trustee at the redemption price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 3.06 Redemption of Securities for Sinking Fund.
Not less than 45 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 the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 3.05 and the basis for such credit and will, together with such Officers
Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before
each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 3.02 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 3.02. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid the principal of (and premium, if
any) and interest on the Securities of that series at the time and place and in the manner provided
herein and established with respect to such Securities.
Section 4.02 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company agrees to maintain an
office or agency in the Borough of Manhattan, the City and State of New York, with respect to each
such series and at such other location or locations as may be designated as provided in this
Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of
that series may be presented as herein above authorized for registration of
transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be given or served, such designation to continue
with respect to such office or agency until the Company shall, by written notice signed by its
President or a Vice President and delivered to the trustee, designate some other office or agency
for such purposes or any of them. 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, 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, notices and demands.
Section 4.03 Paying Agents.
(a) If the Company shall appoint one or more paying agents for all or any series of the
Securities, other than the Trustee, the Company will cause each such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section:
(1) that it will hold all sums held by it as such agent for the payment of the principal of
(and premium, if any) or interest on the Securities of that series (whether such sums have been
paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of
the Persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the Company (or by any other
obligor of such Securities) to make any payment of the principal of (and premium, if any) or
interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure referred to in the
preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to any series of the
Securities, it will on or before each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or
any failure (by it or any other obligor on such Securities) to take such action. Whenever the
Company shall have one or more paying agents for any series of Securities, it will, prior to each
due date of the principal of (and premium, if any) or interest on any Securities of that series,
deposit with the paying agent a sum sufficient to pay the principal (an premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums
in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) 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 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 terms and conditions 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.
Section 4.04 Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
Section 4.05 Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain Outstanding, consolidate with or
merge into any other Person, in either case where the Company is not the survivor of such
transaction, or sell or convey all or substantially all of its property to any other company unless
the provisions of Article Ten hereof are complied with.
ARTICLE V
SECURITYHOLDERS LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a) on each regular record
date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of
the names and addresses of the holders of each series of Securities as of such regular record date,
provided that the Company shall not be obligated to furnish or cause to furnish such list at any
time that the list shall not differ in any respect from the most recent list furnished to the
Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30
days after the receipt by the Company of any such request, a list of similar form and content as of
a date not more than 15 days prior to the time such list is furnished; provided, however, that, in
either case, no such list need be furnished for any series for which the Trustee shall be the
Security Registrar. Section 5.02 Preservation Of Information; Communications With Securityholders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Securities contained in the most recent
list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt
of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act
with other Securityholders with respect to their rights under this Indenture or under the
Securities.
Section 5.03 Reports by the Company.
(a) The Company covenants and agrees to file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act;
or, if the Company is not required to file information, documents or reports pursuant to either of
such sections, then to file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the supplementary and periodic
information, documents and reports that may be required pursuant to Section 13 of the Exchange Act,
in respect of a security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from to time by the Commission, such
additional information, documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.
(c) The Company covenants and agrees to transmit by mail, first class postage prepaid, or
reputable over-night delivery service that provides for evidence of receipt, to the
Securityholders, as their names and addresses appear upon the Security Register, within 30 days
after the filing thereof with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time by the Commission.
Section 5.04 Reports by the Trustee.
(a) On or before [_] in each year in which any of the Securities are Outstanding, the Trustee
shall transmit by mail, first class postage prepaid, to the Securityholders, as their names and
addresses appear upon the Security Register, a brief report dated as of the preceding [_], if and
to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to Securityholders, be
filed by the Trustee with the Company, with each stock exchange upon which any Securities are
listed (if so listed) and also with the Commission. The Company agrees to notify the Trustee when
any Securities become listed on any stock exchange.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
Section 6.01 Events of Default.
(a) Whenever used herein with respect to Securities of a particular series, Event of Default
means any one or more of the following events that has occurred and is continuing: (1)
the Company defaults in the payment of any installment of interest upon any of the Securities of
that series, as and when the same shall become due and payable, and continuance of such default for
a period of 90 days; provided, however, that a valid extension of an interest payment period by the
Company in accordance with the terms of any indenture supplemental hereto shall not constitute a
default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the principal of (or premium, if any, on) any of
the Securities of that series as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking
or analogous fund established with respect to that series; provided, however, that a valid
extension of the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform any other of its covenants or agreements with
respect to that series contained in this Indenture or otherwise established with respect to that
series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has
been expressly included in this Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied and stating that such notice is a Notice of
Default hereunder, shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the
Securities of that series at the time Outstanding;
(4) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a
voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for
relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all
or substantially all of its property, or (iii) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 90 days.
(b) In each and every such case, unless the principal of all the Securities of that series
shall have already become due and payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Securities of that series then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare
the principal of all the Securities of that series to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
notwithstanding anything contained in this Indenture or in the Securities of that series or
established with respect to that series pursuant to Section 2.01 to the contrary.
(c) At any time after the principal of the Securities of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of the moneys due shall
have been obtained or entered as hereinafter provided, the holders of a majority in aggregate
principal amount of the Securities of that series then Outstanding hereunder, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i)
the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments
of interest upon all the Securities of that series and the principal of (and premium, if any, on)
any and all Securities of that series that shall have become due otherwise than by acceleration
(with interest upon such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Securities of that series to the date of such payment or deposit) and the amount
payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the
Indenture with respect to such series, other than the nonpayment of principal on Securities of that
series that shall not have become due by their terms, shall have been remedied or waived as
provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any subsequent default or
impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with respect to Securities
of that series under this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case, subject to any determination in such
proceedings, the Company, and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall
continue as though no such proceedings had been taken.
Section 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants that (1) in case it shall default in the payment of any installment
of interest on any of the Securities of a series, or any payment required by any sinking or
analogous fund established with respect to that series as and when the same shall have become due
and payable, and such default shall have continued for a period of 90 Business Days, or (2) in case
it shall default in the payment of the principal of (or premium, if any, on) any of the Securities
of a series when the same shall have become due and payable, whether upon maturity of the
Securities of a series or upon redemption or upon declaration or otherwise, then, upon demand of
the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities
of that series, the whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the case may be, with
interest upon the overdue principal (and premium, if any) and (to the extent that payment of such
interest is enforceable under applicable law) upon overdue installments of interest at the rate per
annum expressed in the Securities of that series; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Securities of that series
and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
readjustment, arrangement, composition or judicial proceedings affected the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any
action therein that may be permitted by the court and shall (except as may be otherwise provided by
law) be entitled to file such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of Securities of such
series allowed for the entire amount due and payable by the Company under the Indenture at the date
of institution of such proceedings and for any additional amount that may become due and payable by
the Company after such date, and to collect and receive any moneys or other property payable or
deliverable on any such claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Securities of such series to make
such payments to the Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to such Securityholders, to pay to the Trustee any amount due it under
Section 7.06.
(d) All rights of action and of asserting claims under this Indenture, or under any of the
terms established with respect to Securities of that series, may be enforced by the Trustee without
the possession of any of such Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable
benefit of the holders of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in the Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.
Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of that series
or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of
any Securityholder in any such proceeding.
Section 6.03 Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this Article with respect to a particular
series of Securities shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal (or premium, if
any) or interest, upon presentation of the Securities of that series, and notation thereon the
payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all amounts payable to the
Trustee under Section 7.06;
SECOND: To the payment of all Senior Indebtedness of the Company if and to the extent required
by Article Fourteen; and
THIRD: To the payment of the amounts then due and unpaid upon Securities of such series for
principal (and premium, if any) and interest, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if any) and interest,
respectively.
Section 6.04 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or
under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the Securities of such
series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less
than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or proceeding in its own name
as trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v)
during such 60 day period, the holders of a majority in principal amount of the Securities of that
series do not give the Trustee a direction inconsistent with the request. Notwithstanding anything
contained herein to the contrary, any other provisions of this Indenture, the right of any holder
of any Security to receive payment of the principal of (and premium, if any) and interest on such
Security, as therein provided, on or after the respective due dates expressed in such Security (or
in the case of redemption, on the redemption date), or to institute suit for the enforcement of any
such payment on or after such respective dates or redemption date, shall not be impaired or
affected without the consent of such holder and by accepting a Security hereunder it is expressly
understood, intended and covenanted by the taker and holder of every Security of such series with
every other such taker and holder and the Trustee, that no one or more holders of Securities of
such series shall have any right in any manner whatsoever by virtue or by availing of any provision
of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such
Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or
to enforce any right under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities of such series.
For the protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.
(a) Except as otherwise provided in Section 2.07, all powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or otherwise established
with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such default or on
acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given
by this Article or by law to the Trustee or the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 6.06 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities of any series at the
time Outstanding, determined in accordance with Section 8.01, 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 such series; provided,
however, that such direction shall not be in conflict with any rule of law or with this Indenture
or be unduly prejudicial to the rights of holders of Securities of any other series at the time
Outstanding determined in accordance with Section 8.01.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers
of the Trustee, determine that the proceeding so directed would involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount of the Securities of any series
at the time Outstanding affected thereby, determined in accordance with Section 8.01, may on behalf
of the holders of all of the Securities of such series waive any past default in the performance of
any of the covenants contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal of, or premium, if
any, or interest on, any of the Securities of that series as and when the same
shall become due by the terms of such Securities otherwise than by acceleration
(unless such default has been cured and a sum sufficient to pay all matured installments of
interest and principal and any premium has been deposited with the Trustee (in accordance with
Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured for
all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of
such series shall be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Section 6.07 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities by such holders
acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys fees, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security of such series, on or after
the respective due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities
of a series and after the curing of all Events of Default with respect to the Securities of that
series that may have occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this Indenture, and no
implied covenants shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Securities of a series has occurred (that has not been cured or
waived), the Trustee shall exercise with respect to Securities of that series 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.
(b) 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) prior to the occurrence of an Event of Default with respect to the Securities of a series
and after the curing or waiving of all such Events of Default with respect to that series that may
have occurred: the duties and obligations of the Trustee shall with respect to the Securities of
such series be determined solely by the express provisions of this Indenture, and the Trustee shall
not be liable with respect to the Securities of such series except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and in the absence of bad faith
on the part of the Trustee, the Trustee may with respect to the Securities of such series
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they conform to the requirement of
this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee, was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the holders of not less than a majority in
principal amount of the Securities of any series at the time Outstanding 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 that series; and
(4) None of the provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.
Section 7.02 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(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, consent, order,
approval, bond, security or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company, by
the President or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) 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
or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to
the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a series of the Securities (that has not
been cured or waived) to exercise with respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and to 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;
(e) The Trustee shall not be liable for any action taken or omitted to be taken 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;
(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, consent,
order, approval, bond, security, or other papers or documents, unless requested in writing so to do
by the holders of not less than a majority in principal amount of the Outstanding Securities of the
particular series affected thereby (determined as provided in Section 8.04); provided, however,
that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities
as a condition to so proceeding. The reasonable expense of every such examination shall be paid by
the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities.
(a) The recitals contained herein and in the Securities shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency of this Indenture
or of the Securities.
(c) The Trustee shall not be accountable for the use or application by the Company of any of
the Securities or of the proceeds of such Securities, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision of
this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys
received by any paying agent other than the Trustee.
Section 7.04 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it
were not Trustee, paying agent or Security Registrar.
Section 7.05 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any moneys received by it hereunder except
such as it may agree with the Company to pay thereon.
Section 7.06 Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled
to, such reasonable compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), as the Company, and the Trustee may from time
to time agree in writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties hereunder of the
Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from its negligence or
bad faith. The Company also covenants to indemnify the Trustee (and its officers, agents, directors
and employees) for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Securities upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular Securities.
Section 7.07 Reliance on Officers Certificate.
Except as otherwise provided in Section 7.01, whenever in the administration of the provisions
of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting to take any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
Section 7.08 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
Section 7.09 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Securities issued hereunder which
shall at all times be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of Columbia, or a
corporation or other Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State,
Territorial, or District of Columbia authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as Trustee. In case at
any time the Trustee shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may at any time resign with respect to
the Securities of one or more series by giving written notice thereof to the Company and by
transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of
such series, as their names and addresses appear upon the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee with respect to
Securities of such series by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a successor trustee with
respect to Securities of such series, or any Securityholder of that series who has been a bona fide
holder of a Security or Securities for at least six months may on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section 7.08 after written request
therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or
Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09
and shall fail to resign after written request therefor by the Company or by any such
Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its
property shall be appointed or consented to, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Company may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument, in duplicate, executed by order
of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, unless the Trustees duty to resign is stayed as
provided herein, any Securityholder who has been a bona fide holder of a Security or Securities for
at least six months may, on behalf of that holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Securities of any series at
the time Outstanding may at any time remove the Trustee with respect to such series by so notifying
the Trustee and the Company and may appoint a successor Trustee for such series with the consent of
the Company.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee with
respect to the Securities of a series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as provided in Section
7.11. (e) Any successor trustee appointed pursuant to this Section may be appointed with
respect to the Securities of one or more series or all of such series, and at any time there shall
be only one Trustee with respect to the Securities of any particular series.
Section 7.11 Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor trustee with respect to all
Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
trustee relates, (2) shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same trust, 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 that no Trustee shall be responsible for any
act or failure to act on the part of any other Trustee hereunder; 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, such retiring Trustee shall with respect to the
Securities of that or those series to which the appointment of such successor trustee relates have
no further responsibility for the exercise of rights and powers or for the performance of the
duties and obligations vested in the Trustee under this Indenture, 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, to the extent contemplated by such supplemental indenture, the property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those series to which the
appointment of such successor trustee relates.
(c) Upon request of any such successor trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may
be.
(d) No successor trustee shall accept its appointment unless at the time of such acceptance
such successor trustee shall be qualified and eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as provided in this Section, the
Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
Section 7.12 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 the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. In case 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 7.13 Preferential Collection of Claims Against the Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent included therein.
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
Section 8.01 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority or specified
percentage in aggregate principal amount of the Securities of a particular series may take any
action (including the making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that at the time of taking any such action the holders
of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of
that series in Person or by agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company may, at its option,
as evidenced by an Officers Certificate, fix in advance a record date for such series for the
determination of Securityholders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, 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 action may be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be Securityholders for the purposes
of determining whether Securityholders of the requisite proportion of Outstanding Securities of
that series have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities
of that series shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
Section 8.02 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution of any instrument by a
Securityholder (such proof will not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any instrument may be proved in
any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the Security Register of such Securities or
by a certificate of the Security Registrar thereof.
(c) The Trustee may require such additional proof of any matter referred to in this Section as
it shall deem necessary.
Section 8.03 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security, the Company, the
Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name
such Security shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03)
interest on such Security and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to the contrary.
Section 8.04 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal amount of Securities
of a particular series have concurred in any direction, consent of waiver under this Indenture, the
Securities of that series that are owned by the Company or any other obligor on the Securities of
that series or by any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgees right so to act with respect to such Securities and that
the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
Section 8.05 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the holders of the majority or percentage in aggregate
principal amount of the Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Security. Except as aforesaid any such action taken by the holder of
any Security shall be conclusive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto
is made upon such Security. Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular series specified in this
Indenture in connection with such action shall be conclusively binding upon the Company, the
Trustee and the holders of all the Securities of that series.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without the Consent of Securityholders.
In addition to any supplemental indenture otherwise authorized by this Indenture, the Company
and the Trustee may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in
effect), without the consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities in addition to or in place of certificated
Securities;
(d) 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;
(e) to add to, delete from, or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as
herein set forth;
(f) to make any change that does not adversely affect the rights of any Securityholder in any
material respect; or
(g) to provide for the issuance of and establish the form and terms and conditions of the
Securities of any series as provided in Section 2.01, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to
add to the rights of the holders of any series of Securities.
The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustees own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section may be executed by the
Company and the Trustee without the consent of the holders of any of the Securities at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.
Section 9.02 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the holders of not less than a
majority in aggregate principal amount of the Securities of each series affected by such
supplemental indenture or indentures at the time Outstanding, the Company, when authorized by Board
Resolutions, and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of
such series under this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and affected thereby, (i)
extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof or (ii) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture. It shall not be necessary
for the consent of the Securityholders of any series affected thereby under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
Section 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions of this Article or
of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be
modified and amended in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the 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 shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.04 Securities Affected by Supplemental Indentures.
Securities of any series, affected by a supplemental indenture, authenticated and delivered
after the execution of such supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, may bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities of that series so
modified as to conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the Securities of that series
then Outstanding.
Section 9.05 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions authorizing the
execution of any such supplemental indenture, and upon the filing with the Trustee of evidence
of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustees own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion but shall not be obligated to enter into such
supplemental indenture. The Trustee, subject to the provisions of Section 7.01, may receive an
Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this
Article is authorized or permitted by, and conforms to, the terms of this Article and that it is
proper for the Trustee under the provisions of this Article to join in the execution thereof;
provided, however, that such Opinion of Counsel need not be provided in connection with the
execution of a supplemental indenture that establishes the terms of a series of Securities pursuant
to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to
the Securityholders of all series affected thereby as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental indenture.
ARTICLE X
SUCCESSOR ENTITY
Section 10.01 Company May Consolidate, Etc.
Nothing contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of the Company with or into any other Person (whether or not affiliated
with the Company) or successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other
disposition of the property of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not affiliated with the Company
or its successor or successors) authorized to acquire and operate the same; provided, however, the
Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if
the Company is not the survivor of such transaction), sale, conveyance, transfer or other
disposition, the due and punctual payment of the principal of (premium, if any) and interest on all
of the Securities of all series in accordance with the terms of each series, according to their
tenor and the due and punctual performance and observance of all the covenants and conditions of
this Indenture with respect to each series or established with respect to such series pursuant to
Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by
such consolidation, or into which the Company shall have been merged, or by the entity which shall
have acquired such property.
Section 10.02 Successor Entity Substituted.
(a) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition
and upon the assumption by the successor entity by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Securities of all series Outstanding and
the due and punctual performance of all of the covenants and conditions of this Indenture or
established with respect to each series of the Securities pursuant to Section 2.01 to be performed
by the Company with respect to each series, such successor entity shall succeed to and be
substituted for the Company with the same effect as if it had been named as the Company herein, and
thereupon the predecessor corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
(b) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition
such changes in phraseology and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.
(c) Nothing contained in this Article shall require any action by the Company in the case of a
consolidation or merger of any Person into the Company where the Company is the survivor of such
transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).
Section 10.03 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or other
disposition, and any such assumption, comply with the provisions of this Article.
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee for cancellation all
Securities of a series theretofore authenticated (other than any Securities that shall have been
destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07)
and Securities for whose payment money or Governmental Obligations have theretofore been deposited
in trust or segregated and held in trust by the Company (and thereupon repaid to the Company or
discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a
particular series not theretofore delivered to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as
trust funds the entire amount in moneys or Governmental Obligations sufficient or a combination
thereof, sufficient in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Trustee, to pay at
maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if the Company shall
also pay or cause to be paid all other sums payable hereunder with respect to such series by
the Company then this Indenture shall thereupon cease to be of further effect with respect to such
series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that
shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06
and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture with respect to such series.
Section 11.02 Discharge of Obligations.
If at any time all such Securities of a particular series not heretofore delivered to the
Trustee for cancellation or that have not become due and payable as described in Section 11.01
shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds
moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption
all such Securities of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company with respect to such series, then
after the date such moneys or Governmental Obligations, as the case may be, are deposited with the
Trustee the obligations of the Company under this Indenture with respect to such series shall cease
to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03,
7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.03 Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01
or 11.02 shall be held in trust and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own paying agent), to the holders of
the particular series of Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.
Section 11.04 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand
of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such moneys or Governmental Obligations.
Section 11.05 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then
held by the Company, in trust for payment of principal of or premium or interest on the Securities
of a particular series that are not applied but remain unclaimed by the holders of such Securities
for at least two years after the date upon which the principal of (and premium, if any) or interest
on such Securities shall have respectively become due and payable, shall be repaid to the Company
on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee shall be released
from all further liability with respect to such moneys or Governmental Obligations, and the holder
of any of the Securities entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.
ARTICLE XII
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 12.01 No Recourse.
No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any
Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as such, of the Company or
of any predecessor or successor corporation, either directly or through the Company or any such
predecessor or 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 this Indenture and the obligations issued hereunder are solely corporate obligations, and that
no such personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such incorporator, stockholder,
officer or director as such, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issuance of such
Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture contained by or on
behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.02 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be done and performed
with like force and effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful successor of the Company.
Section 13.03 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon
such power so surrendered shall terminate both as to the Company and as to any successor
corporation.
Section 13.04 Notices.
Except as otherwise expressly provided herein any notice or demand that by any provision of
this Indenture is required or permitted to be given or served by the Trustee or by the holders of
Securities to or on the Company may be given or served by being deposited first class postage
prepaid in a post-office letterbox addressed (until another address is filed in writing by the
Company with the Trustee), as follows: [ ]. Any notice, election, request or demand by
the Company or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.
Section 13.05 Governing Law.
This Indenture and each Security shall be deemed to be a contract made under the internal laws
of the State of New York, and for all purposes shall be construed in accordance with the laws of
said State.
Section 13.06 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness and not as equity for
federal income tax purposes. The provisions of this Indenture shall be interpreted to further this
intention.
Section 13.07 Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company, shall furnish to the Trustee an Officers
Certificate stating that all conditions precedent provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee
with respect to compliance with a condition or covenant in this Indenture shall include (1) a
statement that the Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based; (3) a statement that, in
the opinion of such Person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 13.08 Payments on Business Days.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth
in an Officers Certificate, or established in one or more indentures supplemental to this
Indenture, in any case where the date of maturity of interest or principal of any Security or the
date of redemption of any Security shall not be a Business Day, then payment of interest or
principal (and premium, if any) may be made on the next succeeding Business Day with the same force
and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue
for the period after such nominal date.
Section 13.09 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
Section 13.10 Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the same instrument.
Section 13.11 Separability.
In case any one or more of the provisions contained in this Indenture or in the Securities of
any series shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.12 Assignment.
The Company will have the right at all times to assign any of its rights or obligations under
this Indenture to a direct or indirect wholly-owned Subsidiary of the Company, provided that, in
the event of any such assignment, the Company, will remain liable for all such obligations. Subject
to the foregoing, the Indenture is binding upon and inures to the benefit of the parties thereto
and their respective successors and assigns. This Indenture may not otherwise be assigned by the
parties thereto.
ARTICLE XIV
SUBORDINATION OF SECURITIES
Section 14.01 Subordination Terms.
The payment by the Company of the principal of, premium, if any, and interest on any series of
Securities issued hereunder shall be subordinated to the extent set forth in an indenture
supplemental hereto relating to such Securities.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as
of the day and year first above written.
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AASTROM BIOSCIENCES, INC. |
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as Trustee
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Name: |
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exv5
Exhibit 5
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Dykema Gossett PLLC
2723 South State Street
Suite 400
Ann Arbor, Michigan 48104
www.dykema.com
Tel: (734) 214-7660
Fax: (734) 214-7696 |
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November 26, 2008
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Aastrom Biosciences, Inc. |
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24 Frank Lloyd Wright Dr. |
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Ann Arbor, Michigan 48105 |
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Re: Aastrom Biosciences, Inc. Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel to Aastrom Biosciences, Inc., a Michigan corporation (the
Company), in connection with the filing with the Securities and Exchange Commission (the
Commission) of a registration statement (the Registration Statement) of the Company on Form S-3
under the Securities Act of 1933, as amended (the Act). The Registration Statement relates to
the Companys:
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common stock, no par value per share (the Common Stock); |
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(ii) |
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preferred stock, no par value per share (the Preferred
Stock); |
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(iii) |
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senior debt securities (the Senior Debt Securities) to be
issued under the senior indenture (the Senior Indenture); |
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subordinated debt securities (the Subordinated Debt
Securities and, together with the Senior Debt Securities, the Debt
Securities) to be issued under the subordinated indenture (the Subordinated
Indenture and, together with the Senior Indenture, the Indentures); and |
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(iv) |
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warrants representing rights to purchase, Common Stock,
Preferred Stock or Debt Securities (the Warrants); |
(collectively, the Common Stock, the Preferred Stock, the Debt Securities and the Warrants 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 Act at an aggregate initial offering price not
to exceed $50,000,000.
We have been advised by the Company that:
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Aastrom Biosciences, Inc.
November 26, 2008
Page 2
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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
Restated Articles of Incorporation to be approved by the Companys Board of Directors
and shareholders, 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; |
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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; |
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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; |
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The particular terms of any Debt Securities will be set forth in a supplement
to the prospectus forming a part of the Registration Statement; and |
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Warrants may be issued pursuant to a warrant agreement to be entered into
between the Company and a bank as warrant agent (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. |
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
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Aastrom Biosciences, Inc.
November 26, 2008
Page 3
natural person signing any document reviewed by us had the legal capacity to do so; (v) the
Registration Statement, and any 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 shareholders of the Company may vote, such rights are
set forth in the Companys Restated Articles of Incorporation or the Restated Articled of
Incorporation grant 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 a properly authorized committee thereof has specifically
authorized the issuance of such Common Stock in exchange for a consideration that the Board of
Directors or such committee determines as adequate (any such specific authorization of Securities
being Authorizing Resolutions), (ii) the terms of the offer and sale of the Common Stock have
been duly established in conformity with the Companys Restated Articles of Incorporation and
By-laws 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, (iii) the Company
has received the consideration provided for in the applicable Authorizing Resolutions, and (iv)
certificates evidencing the shares of Common Stock have been duly executed by the duly authorized
officers of the Company in accordance with applicable law.
2. The Preferred Stock will be validly issued, fully paid and nonassessable, provided that (i)
such Preferred Stock is specifically authorized for issuance by Authorizing Resolutions, (ii) the
rights, preferences, privileges and restrictions of the Preferred Stock have been
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Aastrom Biosciences, Inc.
November 26, 2008
Page 4
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 Restated Articles of
Incorporation approved by the Companys Board of Directors and shareholders, has been filed with
the Department of Labor and Economic Growth, Bureau of Commercial Services, of the State of
Michigan, (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 Restated Articles of
Incorporation and By-laws 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, (v) the
Company has received the consideration provided for in the applicable Authorizing Resolutions, and
(vi) certificates evidencing the shares of Preferred Stock have been duly executed by the duly
authorized officers of the Company in accordance with applicable law.
3. The Debt Securities, when issued and sold in accordance with the applicable Indenture and
any applicable purchase or agency agreement will constitute valid and legally binding obligations
of the Company, provided that (i) such Debt Securities are specifically authorized for issuance by
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 their issue
and sale have been duly established in conformity with the applicable Indenture, the Companys
Restated Articles of Incorporation and 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) the applicable Indenture and any supplemental indenture in
respect of such Debt Securities has been duly authorized, executed and delivered by each party
thereto and 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 Debt Securities have been duly delivered to the purchasers thereof, in consideration
for which the Company has received the consideration provided for in the applicable Authorizing
Resolutions.
4. The Warrants will constitute valid and legally binding obligations of the Company, provided
that (i) such Warrants are specifically authorized for issuance by 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 of the offer, issuance and sale of
such Warrants have been duly established in conformity with the Warrant Agreement, (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
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Aastrom Biosciences, Inc.
November 26, 2008
Page 5
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 Authorizing Resolutions and the
Warrant Agreement, and (vi) the Company has received the consideration provided for in the
applicable Authorizing Resolutions.
The foregoing opinions are qualified to the extent that the enforceability of any document,
instrument or 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 the Warrant Agreement 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 into which
the Preferred Stock, Debt Securities and the Warrants may be convertible or exercisable.
We have relied as to certain matters on information obtained from public officials and
officers of the Company.
It is understood that this opinion is to be used only in connection with the offer and sale of
Common Stock, Preferred Stock, Debt Securities and Warrants while the Registration Statement is in
effect.
Please note that we are opining only as to the matters expressly set forth herein, and no
opinion should be inferred as to any other matters. This opinion is based upon currently existing
statutes, rules, regulations and judicial decisions, and we disclaim any obligation to update this
opinion or otherwise advise you of any change in any of these sources of law or subsequent legal or
factual developments which might affect any matters or opinions set forth herein.
You have informed us that you intend to issue Securities from time to time on a delayed or
continuous basis, and this opinion is limited to the laws as in effect on the date hereof. We
understand that prior to issuing any Securities pursuant to the Registration Statement (i) you will
advise us in writing of the terms thereof and (ii) you will afford us an opportunity to (x) review
the operative documents pursuant to which such Securities are to be issued or sold and (y) file
such supplement or amendment to this opinion (if any) as we may reasonably consider necessary or
appropriate.
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Aastrom Biosciences, Inc.
November 26, 2008
Page 6
The forgoing opinions are limited to the laws of the state of Michigan and the federal laws of
the United States. We express no opinion and make no representation with respect to the law of any
other jurisdiction.
We hereby consent to the reference to our firm under the caption Legal Matters in the
Registration Statement and to the filing of this opinion as an exhibit to the Registration
Statement. Such consent does not constitute a consent under Section 7 of the Act, because we have
not certified any part of such Registration Statement and do not otherwise come within the
categories of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
Dykema Gossett pllc
/s/ Dykema
Gossett PLLC
California | Illinois | Michigan | Texas | Washington D.C.
exv21
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
Aastrom Biosciences, Ltd., Ireland
Aastrom Biosciences GmbH, Germany
Aastrom Biosciences SL, Spain
exv23
EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of
our report dated August 29, 2008 relating to the financial statements and the effectiveness of
internal control over financial reporting, which appears in Aastrom Biosciences, Inc.s Annual
Report on Form 10-K for the year ended June 30, 2008. We also consent to the references to us
under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Detroit, Michigan
November 26, 2008