Document:

exv4w2

 

Exhibit 4.2

Eli Lilly Services, Inc.

Eli Lilly and Company

Officers’ Certificate Pursuant to Section 3.01 of the Indenture

 

          The undersigned, James A. Davlin, Vice President of Eli Lilly Services, Inc., a British Virgin
Islands corporation (the “Issuer”), and Assistant Treasurer of Eli Lilly and Company, an
Indiana corporation (the “Guarantor”), hereby certify as follows, pursuant to Section 3.01
of that certain Indenture (the “Indenture”), dated August 9, 2005, among the Issuer, the
Guarantor and, as trustee (the “Trustee”), Citibank, N.A.:

          (i) There is hereby established a series (the “Series”) of debt securities to be
issued under the Indenture. The title of the debt securities of the Series shall be the “13-Month
Floating Rate Extendible Notes” (the “Notes”).

          (ii) The Notes shall be in the form set forth as Exhibit A attached hereto and shall
have the terms set forth in the form attached hereto as Exhibit A.

          (iii) The Series shall be a Guaranteed Series, and the form and terms of the Parent Guarantee
for the Series shall be as set forth as Exhibit B attached hereto. Except as otherwise
provided herein or in the Notes or such Parent Guarantee, Article XV of the Indenture shall apply
to the Notes.

          (iv) The Notes shall rank equally and pari passu with all other unsecured and unsubordinated
indebtedness of the Issuer.

          (v) The initial limit upon the aggregate principal amount of the Notes of the Series which may
be authenticated and delivered under the Indenture (except for Notes authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Notes of the Series
pursuant to Section 3.04, 3.05, 3.06, 4.03 or 10.04 of the Indenture) is US$1,500,000,000;
provided, however, that additional Notes of the Series may be hereafter issued upon a reopening of
the Series of Notes.

          (vi) The Notes shall not be subject to any sinking fund, and no Holder of the Notes shall have
any right to cause the Company to redeem any Notes.

          (vii) Section 12.02 of the Indenture shall apply to the Notes and the Series.

          (viii) The Events of Default with respect to the Notes and the Series shall be as set forth in
Exhibit A attached hereto.

          (ix) The Series shall be a Rule 144A Series.

          (x) The Issuer will at all times maintain a Place of Payment for the Notes in the Borough of
Manhattan, The City of New York or such other Place of Payment designated by the Issuer. The
Issuer has initially appointed Citibank, N.A., at its office at 111 Wall Street, 15th Floor, New
York, New York 10043, Attention: Agency and Trust Group, for such purpose.

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          (xi) Section 1.11 of the Indenture shall be superceded to the extent that it conflicts with
the terms of the Notes set forth in Exhibit A hereto.

          (xii) The term “Business Day” shall, for purposes of the Indenture as it relates to the
Series, and for purposes of the Notes, have the meaning ascribed to it in the terms of the Notes
set forth in Exhibit A hereto.

          (xiii) The Notes shall not be issued in the form of Bearer Securities.

          (xiv) The Trustee is hereby appointed as the initial Paying Agent and the initial Security
Registrar.

          (xv) The Notes shall be issuable on original issuance in the form of Global Securities
registered in the name of The Depository Trust Company, as Depositary, or its nominee. The Global
Securities may be exchanged for definitive Notes only in the circumstances described in the seventh
or eighth paragraph of Section 3.05 of the Indenture.

          Capitalized terms used herein without definition shall have the respective meanings ascribed
to them in the Indenture.

[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]

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          In Witness Whereof, the Undersigned have hereunto set their hands on this August 9,
2005.

	 	 	 	 	 
	 	Eli Lilly Services, Inc.

 	 
	 	By  	/s/
James A. Davlin	 
	 	 	Name:  	James A. Davlin 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	Eli Lilly and Company

 	 
	 	By:  	/s/
James
A. Davlin	 
	 	 	Name:  	James A. Davlin 	 
	 	 	Title:  	Assistant Treasurer 	 

 

 

	 	 	 	 	 

EXHIBIT A

Form of 13-Month Floating Rate Extendible Notes

 

 

 

Eli Lilly Services, Inc.

13-Month Floating Rate Extendible Note

			
	Certificate No. [___]
	 	CUSIP No. [___]

ISIN No. [___]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES HEREOF MAY BE MADE
ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF THIS SECURITY, THE PURCHASER WILL BE
DEEMED TO REPRESENT THAT (I) IT HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO
THE ISSUER AND THIS SECURITY, (II) IT IS NOT ACQUIRING THIS SECURITY WITH A VIEW TO ANY
DISTRIBUTION HEREOF AND (III) IT IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE
MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT OR FOR ONE
OR MORE ACCOUNTS, EACH OF WHICH ACCOUNTS IS A QIB; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE
THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE
ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF THIS SECURITY, THE PURCHASER HEREOF SHALL ALSO BE
DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER HEREOF WILL BE MADE ONLY (A) IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR THE GUARANTOR OR TO A PLACEMENT
AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THIS SECURITY (COLLECTIVELY, THE
“PLACEMENT AGENTS”), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE THIS SECURITY, (2)
THROUGH A PLACEMENT AGENT TO A QIB, OR (3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF
RULE 144A AND (B) IN ANY SUCH CASE, IN MINIMUM AMOUNTS OF US$250,000 OR INTEGRAL MULTIPLES OF
US$1,000 IN EXCESS THEREOF.

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY OR
A NOMINEE OF A SUCCESSOR DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

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Eli Lilly Services, Inc.

13-Month Floating Rate Extendible Note

			
	Certificate No. [___]
	 	CUSIP No. [___]

ISIN No. [___]

          This Global Security (the “Note”) is issued in accordance with that certain Indenture
(the “Indenture”), dated August 9, 2005, among Eli Lilly Services, Inc., a British Virgin
Islands corporation (the “Issuer”), Eli Lilly and Company, an Indiana corporation (the
“Guarantor”), and, as trustee (the “Trustee”), Citibank, N.A. Capitalized terms
used herein without definition shall have the respective meanings ascribed to them in the
Indenture.

          This Note is issued by the Issuer and guaranteed, to the extent set forth herein, in the
Indenture, and in the Parent Guarantee endorsed hereon, by the Guarantor, and is subject to the
terms and conditions of the Indenture, as if set forth herein; provided, however, that in the event
of any conflict between the provisions of the Indenture and the terms and conditions set forth
herein, the terms and conditions set forth herein shall prevail. Copies of the Indenture are on
file and available for inspection by Holders at the office of the Trustee, as specified in the
Indenture.

          This Note is one of a duly authorized series of Securities of the Issuer, designated as
“13-Month Floating Rate Extendible Notes,” initially issued in an aggregate principal amount of
US$1,500,000,000 on August 9, 2005. Notes of such series shall be issuable in denominations of
US$250,000 in principal amount and any multiples of US$1,000 in excess thereof (an “Authorized
Denomination”). The Issuer shall pay or cause to be paid all amounts payable in respect of
this Note to the Depositary Trust Company (“DTC”) or a single nominee of DTC or, at the
option of the Issuer, to such other persons as DTC may designate, by wire transfer of immediately
available funds on the date such payments are due. Payments of principal of and interest on this
Note shall be made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts (the “Specified
Currency”).

          The principal sum of this Note, together with any accrued and unpaid interest thereon, shall
be due and payable on September 1, 2006 (the “Initial Maturity Date”), except as otherwise
provided herein.

     1. Interest. This Note shall accrue interest from and including the date of issuance hereof
(the “Issue Date”) to, but excluding, the date of payment thereof. Interest shall be
payable on the first day of each month, commencing on and including September 1, 2005, and on the
maturity date (each such date, an “Interest Payment Date”). The period from, and
including, the Issue Date to, but excluding, the next succeeding Interest Payment Date, and each
succeeding period beginning on, and including, the immediately preceding Interest Payment Date to,
but excluding, the next succeeding Interest Payment Date, is referred to herein as an “Interest
Period.” The rate at which interest shall accrue on the principal amount of this Note for each

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Interest Period shall be the Coupon Rate (as defined below). Such interest shall accrue on
the basis of the actual number of days in each Interest Period and a year of 360 days.

          Interest on this Note shall be payable, in arrears, on each Interest Payment Date, including
any Interest Payment Date on which the Holder hereof elects to extend this Note pursuant to
Paragraph 2 below, to the Holder of record of this Note at the close of business on the 15th day
(each such day, a “Regular Record Date”) of the month immediately preceding such Interest
Payment Date; provided, however, that if the maturity date of this Note is not an Interest Payment
Date, then the accrued and unpaid interest, if any, due upon maturity shall be paid to the Holder
of record of this Note at the close of business on such maturity date. If any Interest Payment
Date (other than an Interest Payment Date that is also and Optional Redemption Date (as defined
below), if any, or the maturity date) for this Note would otherwise be a day that is not a Business
Day (as defined below), then such Interest Payment Date will be postponed to the next succeeding
Business Day (and interest will accrue to, but excluding, that next succeeding Business Day).
However, if:

     a. that next succeeding Business Day falls in the next succeeding calendar month and/or

     b. the Interest Payment Date that does not occur on a Business Day is also the Optional
Redemption Date (if any) or the maturity date,

then the Interest Payment Date or the Optional Redemption Date (if any) or the maturity date, as
the case may be, will be the immediately preceding Business Day, and interest or payment of
principal and interest, as applicable, will accrue to, but excluding, that immediately preceding
Business Day.

[The Remainder of This Page Intentionally Left Blank]

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     The rate of interest that accrues on the principal amount of this Note for each Interest
Period shall be a per annum rate (the “Coupon Rate”) equal to (i) 3.53% for the first
Interest Period of this Note and (ii), for each other Interest Period, LIBOR for such Interest
Period plus the Margin. The “Margin” for any Interest Period shall be determined as of the
first day of such Interest Period (the “Date of Determination”) based on the table below.

	 	 	 	 	 
	Date of Determination	 	Margin
	On or after the Interest Payment Date in September 2005 but prior
to the Interest Payment Date in September 2006
	 	 	-0.03	%
	On or after the Interest Payment Date in September 2006 but prior
to the Interest Payment Date in September 2007
	 	 	-0.01	%
	On or after the Interest Payment Date in September 2007 but prior
to the Interest Payment Date in September 2008
	 	 	+0.01	%
	On or after the Interest Payment Date in September 2008 but prior
to the Interest Payment Date in September 2009
	 	 	+0.03	%
	On or after the Interest Payment Date in September 2009
	 	 	+0.03	%

          “Business Day” means any day, other than a Saturday or Sunday, that (i) is neither a
legal holiday nor a day on which commercial banks are authorized or required by law, regulation or
executive order to close in The City of New York and (ii) is also a LIBOR Business Day (as defined
below).

          “LIBOR Business Day” means any day, other than a Saturday or Sunday, on which dealings
in U.S. Dollars are transacted in the London interbank market.

          “Calculation Agent” means Citibank, N.A., as calculation agent for the Notes, or any
successor thereto duly appointed by the Issuer.

          “LIBOR” means, for any Interest Period, the rate for deposits in U.S. dollars for the
applicable period referred to below that appears on Moneyline Telerate Page 3750 (as defined below)
as of 11:00 a.m., London time, on the second LIBOR Business Day prior to the first day of such
Interest Period (a “LIBOR Determination Date”). If such rate does not appear on such page
at such time, then the Calculation Agent will request the principal London office of each of four
major reference banks, which may include one or more of their agents or their affiliates, in the
London interbank market, selected by the Calculation Agent, to provide such bank’s offered
quotation to prime banks in the London interbank market for deposits in U.S. dollars in a
Representative Amount (as defined below) and for the applicable period referred to below, as of
11:00 a.m., London time, on the LIBOR Determination Date. If at least two such quotations are so
provided, LIBOR will be the arithmetic mean of such quotations. If fewer than

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two such quotations are provided, the Calculation Agent will request each of three major banks,
which may include one or more of their agents or their affiliates, in The City of New York,
selected by the Calculation Agent, to provide such bank’s rate to leading European banks for loans
in U.S. dollars in a Representative Amount and for the applicable period referred to below, as of
approximately 11:00 a.m., New York City time, on the LIBOR Determination Date. If at least two
such rates are so provided, LIBOR will be the arithmetic mean of such rates. If fewer than two
such rates are so provided, then LIBOR will be LIBOR in effect during the preceding Interest
Period. All percentages resulting from any calculation on this Note will be rounded to the nearest
one hundred-thousandth of a percentage point, with five-one millionths of a percentage point
rounded upwards (e.g., 9.876545% (or 0.09876545) would be rounded to 9.87655% (or 0.0987655)), and
all dollar amounts used in or resulting from such calculation on this Note will be rounded to the
nearest cent (with one-half cent being rounded upwards). The applicable period referred to above
is one (1) month, in each case commencing on the first day of the applicable Interest Period.

          “Moneyline Telerate Page 3750” means the display designated as Page 3750 on Telerate,
Inc. (or such other page as may replace Page 3750 on that service or such other service as may be
designated by the British Bankers’ Association as the information vendor for the purpose of
displaying British Bankers’ Association Interest Settlement Rates for U.S. dollar deposits).

          “Representative Amount” shall mean a principal amount of not less than US$1,000,000
that is, in the Calculation Agent’s judgment, representative for a single transaction in the
relevant market at the relevant time.

     2. Extension. The holder of this Note may, during the Notice Period (as defined below)
relating to each Election Date (as defined below), elect to extend the maturity of all of this Note
or a portion hereof having a principal amount of US$250,000 or any multiple of US$1,000 in excess
thereof, so that the maturity thereof will be extended to the date occurring 366 calendar days from
and including the next succeeding Election Date. However, if that 366th calendar day is not a
Business Day, the maturity will be extended to the immediately preceding Business Day.
Notwithstanding anything herein to the contrary, in no event shall the maturity date of this Note
be extended beyond September 1, 2010 (the “Final Maturity Date”) (i.e., if all extension
rights with respect to this Note shall have been duly exercised, then this Note shall mature on the
Final Maturity Date). If a holder elects to extend the maturity of only a portion of this Note,
the principal amount of this Note remaining after the extension must also be in an Authorized
Denomination. The Election Dates will be the first calendar day of each month from and including
September 2005 through and including August 2009, whether or not any such day is a Business Day
(each, an “Election Date”).

     To make an election to extend the maturity of this Note effective with respect to an Election
Date, the Holder must deliver a written notice of election during the Notice Period for that
Election Date. Such written notice of election shall be in a form reasonably satisfactory to the
Company, and no such notice shall be effective if the principal amount to which it relates is not
of an Authorized Denomination or if the principal amount of this Note to be remaining after such
election is not of an Authorized Denomination. The Notice Period for each Election

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Date will begin on the fifth Business Day prior to the Election Date and end on the Election Date;
provided, however, that if that Election Date is not a Business Day, the Notice Period will be
extended to the following Business Day (the “Notice Period”). To be effective, a notice of
election must be delivered to the Trustee no later than the close of business on the last Business
Day in the Notice Period relating to the applicable Election Date. Upon such delivery of a notice
of election to extend the maturity of this Note or any portion hereof during any Notice Period,
that election will be revocable during each day of such Notice Period, until 12:00 noon, New York
City time, on the last Business Day in the Notice Period relating to the applicable Election Date,
at which time such notice will become irrevocable.

          If, with respect to any Election Date, the Holder does not make an election to extend the
maturity of all or any portion of the principal amount of this Note, the principal amount of this
Note for which no such election has been made will become due and payable on the Initial Maturity
Date, or any later date to which the maturity of this Note has previously been extended. The
principal amount of this Note for which such election is not exercised will be represented by a
substitute Note issued on such Election Date. The substitute Note so issued will have the same
terms as the originally offered Note, except that it will not be extendible, will have a separate
CUSIP number and its maturity date will be the Initial Maturity Date or any later date to which the
maturity of such Note has previously been extended. A Holder’s failure to elect to extend the
maturity of all or any portion of this Note will be irrevocable and will be binding upon any
subsequent Holder of this Note.

     3. Optional Redemption. On each Interest Payment Date occurring in March, June, September and
December of each year on or after the Interest Payment Date occurring in September 2006, the Issuer
may elect to redeem this Note, in whole or in part, on not less than 30 nor more than 60 days’
prior notice to the Holder(s) of this Note, to the Dealers (as defined below) and to the Trustee at
a redemption price (the “Redemption Price”) equal to 100% of the principal amount of this
Note or portion thereof to be redeemed plus any unpaid interest that shall have accrued to, but
excluding, the Optional Redemption Date (as defined below); provided, however, that such accrued
and unpaid interest, if any, shall be paid to the Holder of record of this Note at the close of
business on the Regular Record Date corresponding to the Interest Payment Date that occurs on such
Optional Redemption Date. Except as otherwise provided in the immediately preceding sentence, the
Redemption Price due upon such redemption shall be paid to the Holder surrendering this Note for
such redemption.

          The date of any such redemption is referred to herein as the “Optional Redemption
Date” for such Note.

          “Dealers,” as used herein, means Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co. and Deutsche Bank Securities Inc.

     4. Events of Default. If an Event of Default (as defined below) with respect to the
Securities of the series of this Note at the time outstanding occurs and is continuing, then,
unless the principal of the Securities of such 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 such series then outstanding under the Indenture, by notice in writing to the Issuer
and the

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Guarantor (and to the Trustee if given by Holders), may declare the principal amount of, plus
accrued and unpaid interest, if any, on all the Securities of such 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 herein or in the Indenture to the contrary, an Event of Default
shall not be deemed to have occurred with respect to Securities of the series of this Note solely
as a result of the occurrence of a default or event of default with respect to Securities of
another series.

     “Event of Default” means any one of the following events:

          a. a default in the payment of any installment of interest upon this Note as and when the same
shall become due and payable, and continuance of such default for a period in excess of 30 days; or

          b. a default in the payment of the principal of this Note as and when the same shall become
due and payable, either at maturity, upon redemption, by declaration or otherwise; or

          c. the default or breach of any material covenant or warranty of the Issuer or the Guarantor
in the Indenture (other than a covenant or warranty a default in the performance of which or breach
of which is specifically dealt with in the Indenture or which has expressly been included in the
Indenture solely for the benefit of one or more series of Securities other than the series of this
Note) and continuance of such default or breach for a period of 90 days after there has been given,
by registered or certified mail, to the Issuer and the Guarantor by the Trustee, or to the Issuer,
the Guarantor and the Trustee by the Holders of at least 25% in aggregate principal amount of the
Securities of the series of this Note then outstanding under the Indenture, a written notice
specifying such default or breach and requiring it to be remedied and stating that such notice is a
“Notice of Default” under the Indenture, unless the Trustee, or the Trustee and the Holders of a
principal amount of Securities of such series not less than the principal amount of Securities of
such series the Holders of which gave such notice, as the case may be, shall agree in writing to an
extension of such period prior to its expiration; or

          d. if a decree or order for relief shall be entered by a court of competent jurisdiction in
respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Issuer or of any substantial part of its
property, or ordering the winding up or liquidation of the Issuer’s affairs, and such decree or
order shall remain unstayed and in effect for a period of 90 consecutive days; or

          e. if the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or the Issuer shall consent to the entry by order
of a court of competent jurisdiction of a decree or order in respect of the Issuer in an
involuntary case or proceeding under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or to the commencement of any bankruptcy or insolvency proceeding against
the Issuer; or

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          f. if the Issuer shall make an assignment for the benefit of its creditors, or shall admit in
writing its inability to pay its debts generally as they become due, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or
of a substantial part of its property.

     5. Parent Guarantee. To the extent provided in, and in accordance with, the Indenture and the
Parent Guarantee endorsed hereon, this Note shall be guaranteed by the Guarantor.

     6. Obligation Absolute. No provision of the Indenture under which this Note is issued shall
alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal or redemption price of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.

     7. Notice. Whenever the Indenture or this Note requires that the Issuer or the Trustee give
notice to the Holder of this Note, the Issuer or the Trustee will cause such notice to be mailed by
first-class mail to such Holder at its address set forth in the register maintained by the Trustee.

     8. Governing Law. This Note shall be governed by, and interpreted in accordance with, the
laws of the State of New York.

* * *

          The Issuer, for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal amount specified above in the Specified Currency on the Initial Maturity Date
(subject to extension as provided herein) and to pay interest hereon in the manner provided above.

          Unless the certificate of authentication hereon has been executed by or on behalf of the
Trustee by manual signature of one of its authorized officers or by a duly appointed Authenticating
Agent, this Note shall not be entitled to any benefit under the Indenture or the Parent Guarantee
or be valid or obligatory for any purpose.

          This Note may be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute one and the same instrument.

[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]

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          In Witness Whereof, Eli Lilly Services, Inc. has caused this Note to be duly executed
on this August 9, 2005.

	 	 	 	 	 
	 	Eli Lilly Services, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

Authenticated in New York, New York, on

August 9, 2005

This is one of the Notes of the series

designated therein referred to in the

within-mentioned Indenture

Citibank, N.A.

	 	 	 	 	 	 	 
	By:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Authorized Signatory	 	 	 	 

 

 

ANNEX A

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY

          The following exchanges of a part of this Global Security for an interest in another Global
Security or for Securities in certificated form have been made:

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Principal amount	 	 	 
	 	 	Amount of	 	 	Amount of	 	 	of this Global	 	 	Signature or
	 	 	decrease in	 	 	Increase in	 	 	Security	 	 	authorized
	 	 	Principal amount	 	 	Principal amount	 	 	following such	 	 	signatory of
	Date of	 	of this Global	 	 	of this Global	 	 	decrease or	 	 	Trustee or Note
	Exchange	 	Security	 	 	Security	 	 	increase	 	 	Custodian

A-1

 

 

EXHIBIT B

Form of Parent Guarantee

 

 

 

GUARANTEE

          Guarantee, dated as of August 9, 2005, of Eli Lilly and Company, a corporation
organized under the laws of Indiana (the “Guarantor”).

          The Guarantor, for value received, hereby agrees as follows for the benefit of the holders of
record (the “Holders”) from time to time of the Security hereinafter described:

     1. The Guarantor irrevocably guarantees payment in full, as and when the same becomes due and
payable (whether at maturity, by declaration of acceleration, call for redemption, or otherwise),
of the principal of and interest, if any, on the US$[principal amount] 13-Month Floating Rate
Extendible Note (CUSIP No. [___], Certificate No. [_]) to which this Guarantee is attached (the
“Security”), issued by Eli Lilly Services, Inc., a British Virgin Islands corporation and
an indirect wholly owned subsidiary of the Guarantor (the “Issuer”), on the date hereof
pursuant to the Indenture, dated as of August 9, 2005 as the same may be amended, supplemented or
modified from time to time, among the Issuer, the Guarantor and Citibank, N.A. (the
“Indenture”).

     2. The Guarantor’s obligations under this Guarantee shall be unconditional, irrespective of
the validity or enforceability of any provision of the Indenture or the Security.

     3. This Guarantee is a guaranty of the due and punctual payment (and not merely of collection)
of the principal of and interest, if any, on the Security by the Issuer and shall remain in full
force and effect until all amounts have been validly, finally and irrevocably paid in full, and
shall not be affected in any way by any circumstance or condition whatsoever, including without
limitation (i) the absence of any action to obtain such amounts from the Issuer, (ii) any
variation, extension, waiver, compromise or release of any or all of the obligations of the Issuer
under the Indenture or the Security or of any collateral security therefor (provided, however, that
no such variation, extension, waiver, compromise or release shall, without the consent of the
Guarantor, increase the principal amount of the Security, or increase the interest rate thereon, or
change any redemption provisions thereof (including any change to increase any premium payable upon
redemption thereof), or change the stated maturity thereof) or (iii) any change in the existence or
structure of, or the bankruptcy or insolvency of, the Issuer or by any other circumstance (other
than by complete, irrevocable payment) that might otherwise constitute a legal or equitable
discharge or defense of a guarantor or surety. The Guarantor waives all requirements as to
diligence, presentment, demand for payment, protest and notice of any kind with respect to the
Indenture and the Security.

     4. In the event of a default in payment of principal of or interest, if any, on the Security,
the Holders of the Security may institute legal proceedings directly against the Guarantor to
enforce this Guarantee without first proceeding against the Issuer.

     5. This Guarantee shall remain in full force and effect until the date upon which the entire
principal of and interest, if any, on the Security have been, or have been deemed pursuant to the
provisions of Article XII of the Indenture to have been, paid in full or otherwise discharged;
provided, however, that this Guarantee shall be reinstated if at any time any payment

1

 

by the Issuer of the principal of or interest, if any, on the Security, in whole or in part,
is rescinded or must otherwise be returned by the Holder upon the insolvency, bankruptcy or
reorganization of the Issuer or otherwise, all as though such payment had not been made.

     6. This Guarantee shall be governed by and construed in accordance with the laws of the State
of New York.

     7.

          a. The Guarantor hereby irrevocably accepts and submits to the non-exclusive jurisdiction of
the United States federal courts located in the Borough of Manhattan.

          b. The Guarantor hereby irrevocably designates, appoints and empowers National Registered
Agents, Inc., with offices at 875 Avenue of the Americas, Suite 501, New York, NY 10001, as its
designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and its
properties, service for any and all legal process, summons, notices and documents which may be
served in any such action, suit or proceeding brought in the courts listed in Section 7(a) hereof
which may be made on such designee, appointee and agent in accordance with legal procedures
prescribed for such courts, with respect to any action, suit or proceeding in connection with or
arising out of this Guarantee. If for any reason such designee, appointee and agent hereunder
shall cease to be available to act as such, the Guarantor agrees to designate a new designee,
appointee and agent in the City of New York on the terms and for the purposes of this Section 7.
The Guarantor further hereby irrevocably consents and agrees to the service of any and all legal
process, summons, notices and documents out of any of the aforesaid courts in any such action, suit
or proceeding by serving a copy thereof upon the agent for service of process referred to in this
Section 7 (whether or not the appointment of such agent shall for any reason prove to be
ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by
registered or certified airmail, postage prepaid, to it at its address specified in or designated
pursuant to this Guarantee. The Guarantor agrees that the failure of any such designee, appointee
and agent to give any notice of such service to the Guarantor shall not impair or affect in any way
the validity of such service or any judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the Holders of the Security to
serve any such legal process, summons, notices and documents in any other manner permitted by
applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or
proceedings against the undersigned in such other jurisdictions, and in such other manner, as may
be permitted by applicable law. The Guarantor hereby irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any of the aforesaid
actions, suits or proceedings arising out of or in connection with this Guarantee brought in the
courts listed in Section 7(a) and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.

     8. The Guarantor shall be subrogated to all rights of the Holders of the Security against the
Issuer in respect of any amounts paid by the Guarantor on account of the Security pursuant to the
provisions of this Guarantee or the Indenture; provided, however, that the

2

 

Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based
upon, such right of subrogation until the principal of and interest, if any, on the Security shall
have been paid in full.

[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]

3

 

          In Witness Whereof, Eli Lilly and Company has caused this Guarantee to be duly
executed on this August 9, 2005.

	 	 	 	 	 
	 	Eli Lilly And Company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:<PAGE>
                                                                  EXHIBIT 10.107

                             SEPARATION AND GENERAL

                                RELEASE AGREEMENT

         THIS SEPARATION AND GENERAL RELEASE AGREEMENT is made and entered into
by and between MAX W. JONES (hereinafter referred to as "Jones") and GOODY'S
FAMILY CLOTHING, INC. (hereinafter referred to as "the Company").

                               STATEMENT OF FACTS

         On July 31, 2000, the Company and Jones entered into an Employment
Agreement (the "Employment Agreement"). Jones voluntarily resigned from the
Company effective June 14, 2005 to pursue other opportunities. Jones desires to
accept the following agreements, and Jones and the Company desire to settle
fully and finally any differences and disputes between them, including, but in
no way limited to, any differences and disputes that might arise, or have
arisen, out of Jones' employment with the Company, and the termination thereof.

                               STATEMENT OF TERMS

         In consideration of the premises and mutual promises herein contained,
it is agreed as follows:

         SECTION 1.        TERMINATION OF EMPLOYMENT

         Jones represents, understands and agrees that his employment with the
Company terminated on June 14, 2005 (the "Date of Termination").

         SECTION 2.        NON-ADMISSION OF LIABILITY

         This Separation and General Release (the "Agreement") shall not in any
way be construed as an admission by the Company that it has acted wrongfully
with respect to Jones or that Jones has any rights whatsoever against the
Company, and the Company specifically disclaims any liability to or wrongful
acts against Jones on the part of itself, its employees, officers, directors or
its agents.

                                       -1-
<PAGE>

                                                                  EXHIBIT 10.107

         SECTION 3.        CONSIDERATION

         Severance Payment.  Within fifteen (15) days after the seven (7) day
revocation period referenced in Section 9, Company shall pay Jones the total
gross amount of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00), less applicable tax
withholding and other standard deductions.

Provided the Company complies with the Severance Payment, such payment shall be
in full settlement of any claim Jones may have by reason of his employment
relationship with the Company, including, without limitation wages, bonuses,
accrued or unused vacation days, holiday pay and sick pay and any rights under
the Employment Agreement. The Company and Jones acknowledge and agree that fair
and reasonable consideration has been received in exchange for this Agreement.
Jones agrees that his entitlement to receive the consideration set forth above
is conditioned upon his execution of this Agreement and his full compliance with
this Agreement, including, without limitation, the terms of Section 12 of the
Employment Agreement regarding confidentiality and non-solicitation. The parties
acknowledge and agree that any non-payment of the Company of the consideration
recited in Section 3 by reason of Jones' non-compliance with any of the terms of
this Agreement or the Employment Agreement shall not render unenforceable any
provision of this Agreement.

         SECTION 4.        EXPENSES

         Jones has submitted to the Company any and all expenses incurred by him
through the Date of Termination and that all such expenses have been paid by the
Company in accordance with its existing policies and procedures.

         SECTION 5.        RETURN OF COMPANY MATERIALS AND PROPERTY

         Jones understands and agrees that he has turned over to the Company on
or before the execution date of this Agreement all files, memoranda, records,
credit cards and other documents, physical or personal property which he
received from the Company and/or which he used in the course of his employment
with the Company and which are the property of the Company. Jones agrees,
represents and acknowledges that as a result of his employment with the Company,
he has had in his custody, possession and control proprietary documents, data,
materials, files and other similar items concerning proprietary information of
the Company and Jones acknowledges, warrants and agrees that he has returned all
such items and any copies or extras thereof and any other property, files or
documents obtained as a result of his employment with the Company and he has
held such information in trust and in strict confidence and will continue to do
so.

         SECTION 6.        CONFIDENTIALITY; NON-SOLICITATION

                                       -2-
<PAGE>

                                                                  EXHIBIT 10.107

         For the twelve (12) month period following the Date of Termination,
Jones shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly solicit or aid in the solicitation of any employees of
the Company to leave their employment from the Company. Jones understands and
agrees that the terms of Section 12.(b) of the Employment Agreement regarding
the covenant of non-solicitation and the terms of Sections 12(a) and (c) of the
Employm ent Agreement regarding the covenant of confidentiality are enforceable
and remain in full force and effect.

         SECTION 7.        SEVERABILITY

         The provisions of this Agreement are severable, and if any part of it
is found to be unenforceable, the other paragraphs shall remain fully valid and
enforceable. This Agreement shall survive the termination of any arrangements
contained herein.

         SECTION 8.        CONSULTATION WITH AN ATTORNEY

         The Company advises Jones to consult with an attorney prior to
executing this Agreement. Jones agrees that he has had the opportunity to
consult counsel if he chose to do so. Jones further acknowledges that he has had
ample time in which to execute this Agreement, and that he has had sufficient
time to read and consider this Agreement before executing it. Jones acknowledges
that he is responsible for any costs and fees resulting from his attorney
reviewing this Agreement. Jones agrees that he has carefully read this Agreement
and understands its contents, that he signs this Agreement voluntarily, with a
full understanding of its significance, and intending to be bound by its terms.

         SECTION 9.        PERIOD OF CONSIDERATION; RIGHT TO REVOKE

         Jones acknowledges that in further consideration of his release of any
claim under the Age Discrimination in Employment Act (the "Act"), and in
compliance with such Act, he may take up to twenty one (21) days to decide
whether he wants to accept and sign this Agreement. Jones understands that if he
signs this Agreement within less than twenty-one (21) days, such decision was
knowing and voluntary on his part and in no way was coerced by the Company. If
Jones signs this Agreement, Jones may revoke and cancel this Agreement at any
time within seven (7) days after each party's execution of this Agreement by
providing written notice of revocation to the Company. If Jones does so revoke,
this Agreement will be null and void. This Agreement shall not become effective
and enforceable until after the expiration of this seven (7) day revocation
period; after such time, if there has been no revocation, the Agreement shall be
fully effective and enforceable.

         SECTION 10.       COMPLETE RELEASE; PROMISE NOT TO SUE ON CLAIMS
                           RELEASED

         As a material inducement to the Company to enter into this Agreement,
Jones hereby irrevocably and unconditionally releases, acquits and forever
discharges the Company and each

                                       -3-
<PAGE>

                                                                  EXHIBIT 10.107

of the Company's owners, stockholders, predecessors, successors, assigns,
agents, directors, officers, employees, representatives, attorneys, parent
companies, divisions, subsidiaries, affiliates (and agents, directors, officers,
employees, representatives and attorneys of such parent companies, divisions,
subsidiaries and affiliates), and all persons acting by, through, under or in
concert with any of them (collectively, "Releasees"), or any of them, from any
and all, but not limited to, rights arising out of alleged violations or
breaches of any contracts, express or implied, or any tort, or any legal
restrictions on the Company's right to terminate employees, or any federal,
state or other governmental statute, regulation, or ordinance, including,
without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by
the Civil Rights Act of 1991, (race, color, religion, sex, and national origin
discrimination); (2) 42 U.S.C. Section 1981 (discrimination); (3) the Americans
with Disabilities Act (disability discrimination); (4) 29 U.S.C. Sections
621-624 (the Age Discrimination in Employment Act); (5) 29 U.S.C. Section
206(d)(1) (equal pay); (6) Executive Order 11246 (race, color, religion, sex and
national origin discrimination); (7) Executive Order 11141 (age discrimination);
(8) Section 503 of the Rehabilitation Act of 1973 (handicap discrimination); (9)
intentional or negligent infliction of emotional distress or "outrage"; (10)
defamation; (11) interference with employment; (12) wrongful discharge; (13)
invasion of privacy; and (14) or any other alleged violation of any local, state
or federal statutory or common law, regulation or ordinance, contract or tort
law having any bearing whatsoever on Jones' relationship with the Company, which
Jones now has, owns or holds, or claims to have, own or hold, or which Jones at
any time heretofore had, owned or held, or claimed to have, owned or held,
against each or any of the Releasees at any time up to and including the
effective date of this Agreement. Jones acknowledges that the payment recited in
Section 3 of this Agreement is being given to him for his promise not to
initiate any court or judicial-type or administrative proceeding against the
Company or any Releasees that involves any claim that is covered by this Section
10 and if he breaches his promise not to sue, he will pay all costs and expenses
of defending against such suit incurred by the Company or any Releasees. Jones
further acknowledges that he has not hertofore initiated any court or
judicial-type or administrative proceeding against the Company or any Releasees.

         Nothing herein is intended to be or is to be construed to affect or
release Jones' 401(k) benefits and vested stock options, if any, as a result of
his employment with the Company.

         SECTION 11.        CONFIDENTIALITY

         Jones agrees to hold this Agreement and the terms of it in confidence
and not to disclose the existence, content or details thereof to anyone, other
than to his spouse, his attorneys, accountants and/or tax advisers, who must be
advised of and agreed to be bound by the confidentiality provision, except as
required by law, rule or regulation. The Company, its officers, directors and
employees likewise agree to keep this Agreement and its contents confidential,
except as required by law, rule or regulation. The Company may disclose the
existence of this Agreement and/or its details to those individuals (including
the Company's lenders, external accounting firms and law firms) or other
management officials who have a "need to know" in the furtherance of their
official duties, or in furtherance of the Company's

                                       -4-
<PAGE>

                                                                  EXHIBIT 10.107

business interest. Jones understands and agrees that the terms of Section 12(a)
and (c) of the Employment Agreement are enforceable and remain in full force and
effect.

         SECTION 12.       NON-DISPARAGEMENT; COOPERATION

         Jones agrees not to indulge in any conduct that is intended to reflect
adversely upon the Company, its employees, officers, directors and shareholders.
Jones further agrees not to make any statements that may be reasonably construed
to disparage the reputation or character of the Company or its employees,
officers, directors or shareholders.

         Jones agrees to cooperate, without additional compensation (except for
reasonable out-of-pocket expenses such as travel, meals and lodging), with the
Company and its attorneys in the defense of all claims or actions (whether in an
administrative agency or in court) involving the Company. Such cooperation shall
include, but not be limited to, making himself available as reasonably requested
to meet with the Company's attorneys to discuss his knowledge of pertinent facts
and to prepare for his testimony concerning those facts, appearing as required
at deposition or trial to testify as to those facts, and testifying truthfully
to the best of his abilities. In the event that he is required to testify at
deposition or at trial in connection with any such action, the Company will
provide his legal representation at the deposition and/or trial.

         SECTION 13.       NO OTHER REPRESENTATIONS

         Jones represents and acknowledges that in executing this Agreement he
does not rely, and has not relied, upon any representation or statement not set
forth herein made by any of the Releasees or by any of the Releasees' agents,
representatives, or attorneys with regard to the subject matter, basis or effect
of this Agreement or otherwise.

         SECTION 14.       PREVAILING PARTY

         In the event any lawsuit or proceeding is brought to enforce the terms
of this Agreement, the prevailing party shall recover against the other party,
reasonable attorneys' fees and expenses incurred in connection with such action,
including any appeals.

         SECTION 15.       CHOICE OF LAW

         This agreement shall be construed and interpreted according to the laws
of the State of Tennessee.

                                       -5-
<PAGE>

                                                                  EXHIBIT 10.107

         SECTION 16.       SOLE AND ENTIRE AGREEMENT

         This Agreement sets forth the entire agreement between the parties
hereto, and supersedes any and all prior agreements or understandings between
the parties pertaining to the subject matter hereof.

         Jones warrants that he has had ample time to consider this Agreement,
that he understands its provisions, and that he enters into this Agreement
voluntarily and after having the opportunity to receive the advice and counsel
of his attorney.

         PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.

         Executed at Knoxville, Tennessee this 8th day of July, 2005.

                                        MAX W. JONES

                                        -------------------------------
                                        Max W. Jones

         Executed at Knoxville, Tennessee this 8th day of July, 2005.

                                        GOODY'S FAMILY CLOTHING, INC.

                                        By:
                                           -------------------------------------

                                       -6-

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