<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1998
REGISTRATION NO. 333-50609
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
<TABLE>
<S> <C>
LEXMARK INTERNATIONAL GROUP, INC. LEXMARK INTERNATIONAL, INC.
(Exact Names of Registrants as Specified in Their Charters)
Delaware Delaware
(States or Other Jurisdictions of Incorporation or Organization)
22-3074422 06-1308215
(I.R.S. Employer Identification Nos.)
</TABLE>
--------------------------
ONE LEXMARK CENTRE DRIVE
LEXINGTON, KENTUCKY 40550
(606) 232-2000
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
--------------------------
VINCENT J. COLE, ESQ.
LEXMARK INTERNATIONAL GROUP, INC.
ONE LEXMARK CENTRE DRIVE
LEXINGTON, KENTUCKY 40550
(606) 232-2700
(Name, address, including zip code and telephone number, including area code
of agent for service)
--------------------------
COPIES TO:
DAVID B. HARMS, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable 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: / /
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 a dividend or
interest reinvestment plans, check the following box: / /
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) 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: / /
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: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS Subject to Completion Dated April 30, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
[LOGO]
LEXMARK INTERNATIONAL, INC.
$150,000,000
% SENIOR NOTES DUE 2008
FULLY AND UNCONDITIONALLY GUARANTEED BY
LEXMARK INTERNATIONAL GROUP, INC.
INTEREST PAYABLE AND
ISSUE PRICE: %
Interest on the % Senior Notes due 2008 (the "Notes") of Lexmark
International, Inc., a Delaware corporation (the "Issuer"), offered hereby is
payable semi-annually on and of each year, beginning , 1998. The
Notes are fully and unconditionally guaranteed (the "Guarantee") as to payments
of all amounts in respect thereof by Lexmark International Group, Inc., a
Delaware corporation (the "Company" or the "Guarantor"). The Notes are
redeemable, in whole or in part, at the option of the Issuer at any time at a
redemption price equal to the greater of (i) 100% of the principal amount of the
Notes to be redeemed or (ii) as determined by the Quotation Agent (as defined
herein), the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued to the date of redemption) discounted to the date of redemption
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined herein) plus basis
points, plus, in each case (i) and (ii), accrued interest thereon to the date of
redemption. The Notes will not be entitled to the benefits of any sinking fund.
See "Description of Notes and Guarantee."
The Notes will be represented by one or more global securities (collectively,
the "Global Note") registered in the name of The Depository Trust Company
("DTC") or its nominee. Beneficial interests in the Global Note will be shown
on, and transfers thereof will be effected only through, records maintained by
DTC and its participants. Except as provided herein, Notes in definitive form
will not be issued. See "Description of Notes and Guarantee."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) ISSUER(1)(3)
<S> <C> <C> <C>
Per Note % % %
Total $ $ $
</TABLE>
(1) Plus accrued interest, if any, from , 1998.
(2) The Issuer and the Guarantor have agreed, severally and jointly, to
indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(3) Before deducting expenses payable by the Issuer, estimated at $344,250.
The Notes are offered, subject to prior sale, when, as and if delivered to and
accepted by the Underwriters and subject to their right to reject any order in
whole or in part and to approval of certain legal matters. It is expected that
delivery of the Notes will be made on or about , 1998 through the
facilities of DTC, against payment therefor in immediately available funds.
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
NATIONSBANC MONTGOMERY SECURITIES LLC
, 1998
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SPECIFICALLY,
THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID FOR
AND PURCHASE THE NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus or incorporated by reference herein, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Issuer or any Underwriter. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy the Notes by
anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company or the Issuer since the date hereof or that the
information contained or incorporated by reference herein is correct as of any
time subsequent to the date of such information.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Available Information.................. 3
Incorporation of Certain Documents by
Reference............................ 3
The Company............................ 4
Recent Developments.................... 6
Capitalization......................... 7
Use of Proceeds........................ 8
<CAPTION>
PAGE
---
<S> <C>
Selected Consolidated Financial Data... 9
Summarized Financial Data For the
Issuer............................... 11
Description of Notes and Guarantee..... 12
Underwriting........................... 22
Forward Looking Statements............. 23
Validity of Notes and Guarantee........ 23
Experts................................ 23
</TABLE>
2
<PAGE>
AVAILABLE INFORMATION
Lexmark International Group, Inc. (the "Company") is subject to the
informational requirements of the Securities and Exchange Act of 1934, as
amended ( the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information filed
by the Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
7 World Trade Center, 7th Floor, New York, New York 10048. Copies of such
materials may also be obtained upon written request from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C., 20549, at
prescribed rates. The Commission also maintains a Web Site at
http://www.sec.gov. which contains reports and other information regarding
registrants that file electronically with the Commission. In addition, such
material may also be inspected and copied at the offices of the New York Stock
Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New York 10005, on which
the Company's Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), is listed.
The Company and the Issuer have filed with the Commission a joint registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Notes being offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Statements made in this Prospectus
as to the contents of any contract, agreement or other document are not
necessarily complete; with respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference. For
further information with respect to the Company, the Issuer and the Notes,
reference is hereby made to the Registration Statement.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to the
Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997, as amended by the Company's Annual Report on Form 10-K/A dated
March 23, 1998, including portions incorporated therein of the Company's
definitive Proxy Statement dated March 26, 1998.
2. The Company's Current Reports on Form 8-K, dated April 20, 1998 and April
21, 1998.
3. All other documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offerings of the Shares.
The Company will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus is delivered, upon the written or oral
request of any such person, a copy of any or all of the documents which are
incorporated herein by reference, other than exhibits to such information
(unless such exhibits are specifically incorporated by reference into such
documents). Requests should be directed to the Company, One Lexmark Centre
Drive, Lexington, Kentucky 40550, Attention: Investor Relations, telephone (606)
232-5108.
------------------------
Any statement contained in a document or a portion thereof which is incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document or portion thereof
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement so
superseded shall not be deemed to constitute part of this Prospectus.
3
<PAGE>
THE COMPANY HAS AS ITS ONLY SIGNIFICANT ASSET ALL THE OUTSTANDING COMMON STOCK
OF THE ISSUER. HEREINAFTER, "THE COMPANY" AND "LEXMARK" WILL REFER TO THE
COMPANY, THE ISSUER AND ITS SUBSIDIARIES, TAKEN TOGETHER, UNLESS THE CONTEXT
REQUIRES OTHERWISE.
THE COMPANY
Lexmark is a global developer, manufacturer and supplier of laser and inkjet
printers and associated consumable supplies for the office and home markets.
Lexmark also sells dot matrix printers for printing single and multi-part forms
by business users. In 1997, revenues from the sale of printers and associated
printer supplies increased 10% from 1996 and accounted for 81% of total Company
revenues of approximately $2.5 billion.
The Company's installed base of printers supports a large and profitable printer
supplies business. Because consumable supplies must be replaced on average one
to three times a year, depending on type of printer and usage, demand for laser
and inkjet print cartridges is increasing at a higher rate than their associated
printer shipments. This is a relatively high margin, recurring business that
management expects to contribute to the stability of Lexmark's earnings over
time.
In addition to its core printer business, Lexmark develops, manufactures and
markets a broad line of other office imaging products which include supplies for
International Business Machines Corporation ("IBM") branded printers,
after-market supplies for original equipment manufacturer ("OEM") products, and
typewriters and typewriter supplies that are sold under the IBM trademark. In
1997, revenues from the sale of other office imaging products decreased 7% from
1996, primarily as a result of lower typewriter sales and lower typewriter and
impact printing supplies volume reflecting the continuing decline of these
markets, and accounted for 19% of total Company revenues.
Revenues derived from international sales, including exports from the United
States, represent over half of the Company's revenues. Lexmark's products are
sold in over 150 countries in North and South America, Europe, the Middle East,
Africa, Asia, the Pacific Rim and the Caribbean. As of December 31, 1997, the
Company had approximately 8,000 employees worldwide.
The Company's principal executive offices are located at One Lexmark Centre
Drive, Lexington, Kentucky 40550. Telephone: (606) 232-2000.
PRINTERS AND ASSOCIATED SUPPLIES
Lexmark competes primarily in the markets for office desktop laser and color
inkjet printers--two of the fastest growing printer categories. Sales of office
desktop laser and color inkjet printers and their associated supplies together
represented approximately 86% and 87% of Lexmark's total printer and associated
supplies revenues in 1996 and 1997, respectively.
The Company's critical technology and manufacturing capabilities have allowed
Lexmark to effectively manage quality and to reduce its typical new product
introduction cycle times, for example, in the case of laser printers from 24
months to approximately 12 to 16 months. Management believes its cycle times are
among the fastest in the industry and that these capabilities have contributed
to the Company's success over the last several years.
LASER PRINTERS. Network laser printer growth is being driven by the office
migration from large mainframe computers to local area networks that link
various types of computers using a variety of protocols and operating systems.
This shift has created strong demand for office desktop laser printers with
network connectivity attributes. Laser printers that print at speeds of 11-30
pages per minute ("ppm") are referred to herein as "office desktop" or "network"
printers, while lower-speed (1-10 ppm) laser printers and inkjet printers are
referred to herein as "personal" printers. The Company's laser printers
primarily compete in the office desktop segment, which the Company believes is
one of the fastest growing segments of the laser printer market.
Lexmark develops and owns most of the technology for its desktop laser printers
and consumable supplies, which differentiates the Company from a number of its
major competitors, including Hewlett-Packard Company ("HP")
4
<PAGE>
which purchases its laser engines from third parties. Lexmark's integration of
research and development, manufacturing and marketing has enabled the Company to
design laser printers with features desired by specific customer groups and has
resulted in substantial market presence for Lexmark within certain industry
segments such as banking, retail/pharmacy, automobile distribution and
healthcare.
INKJET PRINTERS. The color inkjet printer market, the fastest growing segment
of the personal printer market, is expanding rapidly due to growth in personal
computers at home and in business and the development of easy-to-use color
inkjet technology with high quality color and black print capability at low
prices. Based on data from industry analysts, management believes that the
inkjet market grew from 4 million units in 1992 to 33 million units in 1997 and
will continue to grow substantially as a result of the increase in the number of
personal computers and as the inkjet market continues to shift from monochrome
to color and as inkjet printers continue to replace low-speed laser printers.
Lexmark introduced its first color inkjet printer using its own technology in
1994 and has experienced strong sales growth through retail outlets. The Company
has increased its product distribution through retail outlets, with the number
of such outlets worldwide rising from approximately 5,000 retail outlets in 1995
to more than 15,000 in 1996, and remaining relatively constant during 1997. The
Company's ability to increase or maintain its presence in the retail marketplace
with its branded products may be adversely affected as the Company becomes more
successful in its sales and marketing efforts for OEM opportunities. The Company
made substantial capital investments in its inkjet production capacity in 1995
and 1996 to address the growing demand for its color inkjet printers.
SUPPLIES. The Company is currently the exclusive source for new print
cartridges for the laser and inkjet printers it manufactures. Management expects
that an increasing percentage of future Company earnings will come from its
consumable supplies business due to the consumer's continual usage and
replacement of cartridges. In 1996, the Company substantially expanded its
inkjet cartridge manufacturing capacity in both North America and Europe.
STRATEGY. Lexmark's laser printer strategy is to target fast growing segments
of the network printer market and to increase market share by providing high
quality, technologically advanced products at competitive prices. To promote
Lexmark brand awareness and market penetration, Lexmark will continue to
identify and focus on customer segments where Lexmark can differentiate itself
by supplying laser printers with features that meet specific customer needs and
represent the best total cost of printing solution. Management intends to
continue to develop and market products with more functions and capabilities
than comparably priced HP printers. The Company's inkjet printer strategy is to
generate demand for the Lexmark color inkjet printer by offering high-quality
products at competitive prices to retail, business and OEM customers. Management
expects that the Company's associated printer supplies business will continue to
grow as its installed base of laser and inkjet printers increases.
OTHER OFFICE IMAGING PRODUCTS
The Company's other office imaging products category includes many mature
products such as supplies for IBM printers, typewriters and typewriter supplies
and other impact supplies that require little investment but provide a
significant source of cash flow. The Company introduced its after-market laser
cartridges in May 1995 for the large installed base of a range of laser printers
sold by other manufacturers. Management believes that the potential for an
after-market laser cartridge business is significant. The Company's strategy for
other office imaging products is to pursue the after-market OEM laser supplies
opportunity while at the same time managing its mature businesses for cash flow.
- ------------------------
Lexmark-TM- is a registered trademark of Lexmark International, Inc.
HP-Registered Trademark- is a registered trademark of Hewlett- Packard Company.
Apple-Registered Trademark- is a registered trademark of Apple Computer, Inc.
Canon-Registered Trademark- is a registered trademark of Canon Kabushiki Kaisha.
IBM-Registered Trademark- is a registered trademark of IBM. Xerox-Registered
Trademark- is a registered trademark of Xerox Corporation.
5
<PAGE>
RECENT DEVELOPMENTS
FIRST QUARTER OPERATING RESULTS. On April 20, 1998, Lexmark reported record
revenues for the first quarter of 1998 of $672 million, an increase of 15% over
the first quarter of 1997, reflecting strong growth of printers and associated
supplies. Earnings increased 61% to $50 million, with diluted earnings per share
increasing 72% to $0.69 (in each case before extraordinary charges in the first
quarter of 1997).
NEW REVOLVING CREDIT FACILITY. On January 27, 1998, Lexmark entered into a new
$300 million unsecured revolving credit and competitive advance facility with a
group of banks (the "New Credit Facility"). Upon entering into the New Credit
Facility, the Issuer used borrowings under the New Credit Facility to repay the
amounts outstanding under its existing term loan and revolving credit facility
(the "Prior Credit Facility"), which was then terminated. The New Credit
Facility matures on January 27, 2003.
SHARE REPURCHASES. As of December 31, 1997, the Company had repurchased
6,438,114 shares of its Class A Common Stock in open market and other
transactions, at prices ranging from $21.25 to $33.75 per share for an aggregate
cost of approximately $182 million, under previous board authorizations for
repurchases totaling $200 million. In February 1998, the Company's board of
directors authorized the repurchase of up to an additional $200 million of its
Class A Common Stock. This repurchase authority, like the prior authorizations,
allows the Company at management's discretion to selectively repurchase its
Class A Common Stock from time to time in the open market or in privately
negotiated transactions depending upon market price and other factors. During
the first quarter of 1998, the Company repurchased 2,000,000 shares of Class A
Common Stock from certain stockholders at a price per share equal to $43.38 per
share, leaving approximately $131 million remaining under the existing board
authorizations as of March 31, 1998. These 1998 repurchases were financed with
borrowings under the New Credit Facility.
6
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company
(a) at December 31, 1997, (b) as adjusted to give effect to (i) the repurchase
of 2,000,000 shares of Class A Common Stock during the first quarter of 1998,
(ii) repayment of the Prior Credit Facility and (iii) borrowing under the New
Credit Facility to finance the purchase in (i) and the repayment in (ii) ((i),
(ii) and (iii), collectively, the "Reflected Events") and (c) as adjusted to
give effect to the Reflected Events, the sale of the Notes offered hereby and
the application of the estimated net proceeds therefrom to repay borrowings
under the New Credit Facility (with the remaining proceeds added to cash or cash
equivalents), as described under "Use of Proceeds." The information in this
table should be read in conjunction with the consolidated historical financial
statements and related notes of the Company incorporated by reference herein.
See "Use of Proceeds."
<TABLE>
<CAPTION>
DECEMBER 31, 1997
<S> <C> <C> <C>
(IN MILLIONS)
-----------------------------------------------
<CAPTION>
AS ADJUSTED FOR
THE REFLECTED
AS ADJUSTED FOR EVENTS
THE REFLECTED AND THE OFFERING
ACTUAL EVENTS OF THE NOTES
--------- --------------- -------------------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS.......................................... $ 43.0 $ 43.0 $ 47.9
--------- ------- -------
--------- ------- -------
SHORT-TERM DEBT.................................................... $ 18.0 $ 18.0 $ 18.0
--------- ------- -------
LONG-TERM DEBT
% Senior Notes due 2008........................................ -- -- 150.0
Prior Credit Facility
Term Loan.................................................... 37.0 -- --
Revolving Credit Facility.................................... 20.0 -- --
New Credit Facility.............................................. -- 143.8(1) --
--------- ------- -------
Total long-term debt....................................... 57.0 143.8(1) 150.0
--------- ------- -------
STOCKHOLDERS' EQUITY(2):
Preferred stock, $.01 par value, 1,600,000 shares authorized, no
shares outstanding............................................. -- -- --
Class A common stock, $.01 par value, 160,000,000 shares
authorized, 67,539,935 outstanding............................. 0.7 0.7 0.7
Class B common stock, $.01 par value, 10,000,000 shares
authorized, 410,537 outstanding(3)............................. -- -- --
Additional paid-in capital....................................... 537.2 537.2 537.2
Retained earnings................................................ 168.8 168.8 168.8
Accumulated translation adjustment............................... (23.8) (23.8) (23.8)
Treasury stock, at cost.......................................... (182.2) (269.0) (269.0)
--------- ------- -------
Total stockholders' equity................................. 500.7 413.9 413.9
--------- ------- -------
Total capitalization....................................... $ 575.7 $ 575.7 $ 581.9
--------- ------- -------
--------- ------- -------
</TABLE>
- ------------------------
(1) Does not reflect working capital borrowings under the New Credit Facility
since December 31, 1997.
(2) As of December 31, 1997, the Company had repurchased 6,438,114 shares of
Class A Common Stock in open market and other transactions at prices ranging
from $21.25 to $33.75 per share for an aggregate cost of approximately $182
million, under board authorizations permitting repurchases totaling up to
$200 million. In February 1998, the Company's board of directors authorized
the repurchase of up to an additional $200 million of its Class A Common
Stock. This repurchase authority, like the prior authorizations, allows the
Company at management's discretion to selectively repurchase its stock from
time to time in the open market or in privately negotiated transactions
depending upon market prices and other factors. During the first quarter of
1998, the Company repurchased 2,000,000 shares of Class A Common Stock from
certain stockholders at a price per share equal to $43.38 per share, leaving
approximately $131 million remaining under the existing authorizations as of
March 31, 1998. These 1998 repurchases were financed with borrowings under
the New Credit Facility.
(3) As of February 12, 1998, all of the outstanding shares of Class B Common
Stock had been converted into Class A Common Stock.
7
<PAGE>
USE OF PROCEEDS
The net proceeds from the offering of the Notes are estimated to be
approximately $ million (after deducting expenses and underwriting
discounts and commissions paid by the Issuer). The Issuer expects to use a
portion of the net proceeds from the offering and sale of the Notes to repay all
of its borrowings under the New Credit Facility, which matures on January 27,
2003. Any remaining net proceeds will be used for general corporate purposes.
The indebtedness to be repaid bears interest at a weighted average rate of
approximately 6.1% as of April 30, 1998. It is expected that up to approximately
20% of the net proceeds of the offering of the Notes will be applied to
repayment of loans made to the Issuer by Morgan Guaranty Trust Company of New
York and NationsBank of Texas, N.A., both of which are lenders under the New
Credit Facility and are affiliates of J.P. Morgan Securities Inc. and
NationsBanc Montgomery Securities LLC, respectively, both of which are
Underwriters of the Notes. See "Underwriting."
8
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected financial data of the Company on a
consolidated basis. The statement of earnings data and the statement of
financial position data at and for the years ended December 31, 1997, 1996,
1995, 1994 and 1993 have been derived from the Company's audited consolidated
financial statements. The selected financial data set forth below should be read
in conjunction with, and are qualified in their entirety by reference to, the
Company's consolidated financial statements and notes thereto incorporated
herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995(1) 1994 1993
------------- ------------- ------------- ------------- -------------
<CAPTION>
(IN MILLIONS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Revenues............................. $ 2,493.5 $ 2,377.6 $ 2,157.8 $ 1,852.3 $ 1,675.7
Cost of revenues..................... 1,623.5 1,630.2 1,487.9 1,298.8 1,107.4
------------- ------------- ------------- ------------- -------------
Gross profit......................... 870.0 747.4 669.9 553.5 568.3
Research and development............. 128.9 123.9 116.1 101.0 111.7
Selling, general and administrative.. 466.5 388.0 359.1 292.9 322.0
------------- ------------- ------------- ------------- -------------
Operating income before option
compensation related to IPO and
amortization of intangibles........ 274.6 235.5 194.7 159.6 134.6
Option compensation related to IPO... -- -- 60.6 -- --
Amortization of intangibles(2)....... -- 5.1 25.6 44.7 64.0
------------- ------------- ------------- ------------- -------------
Operating income..................... 274.6 230.4 108.5 114.9 70.6
Interest expense..................... 10.8 20.9 35.1 50.6 63.9
Amortization of deferred financing
costs and other expense............ 9.1 7.9 10.1 13.6 13.1
------------- ------------- ------------- ------------- -------------
Earnings (loss) before income taxes
and extraordinary item............. 254.7 201.6 63.3 50.7 (6.4)
Provision for income taxes........... 91.7 73.8 15.2 6.1 3.0
------------- ------------- ------------- ------------- -------------
Earnings (loss) before extraordinary
item............................... 163.0 127.8 48.1 44.6 (9.4)
Extraordinary loss(3)................ (14.0) -- (15.7) -- --
------------- ------------- ------------- ------------- -------------
Net earnings (loss).................. $ 149.0 $ 127.8 $ 32.4 $ 44.6 $ (9.4)
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Diluted earnings (loss) per common
share before extraordinary
item(4)............................ $ 2.17 $ 1.69 $ 0.65 $ (0.48) $ (0.35)
Diluted net earnings (loss) per
common share(4).................... $ 1.98 $ 1.69 $ 0.44 $ (0.48) $ (0.35)
Shares used in diluted earnings per
share calculation.................. 75,168,776 75,665,734 74,200,279 58,853,416 58,880,761
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995(1) 1994 1993
------------- ------------- ------------- ------------- -------------
<CAPTION>
(IN MILLIONS, EXCEPT SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF FINANCIAL POSITION DATA:
Cash and cash equivalents............ $ 43.0 $ 119.3 $ 150.5 $ 42.0 $ 105.0
Trade receivables, net............... 318.9 304.7 213.6 191.1 221.4
Inventories.......................... 353.8 271.0 296.3 279.0 307.5
Prepaid expenses and other current
assets............................. 60.4 70.1 55.3 45.6 72.7
------------- ------------- ------------- ------------- -------------
Total current assets........... 776.1 765.1 715.7 557.7 706.6
Property, plant and equipment, net... 409.6 434.1 361.2 337.1 357.2
Other assets......................... 22.5 22.3 66.0 66.1 151.2
------------- ------------- ------------- ------------- -------------
Total assets................... $ 1,208.2 $ 1,221.5 $ 1,142.9 $ 960.9 $ 1,215.0
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Short-term debt (including current
portion of long-term debt)-term.... $ 18.0 $ 2.1 $ 20.0 $ -- $ 139.0
Accounts payable..................... 302.0 197.2 209.6 138.3 121.3
Accrued liabilities.................. 227.5 222.0 258.4 181.9 152.7
------------- ------------- ------------- ------------- -------------
Total current liabilities...... 547.5 421.3 488.0 320.2 413.0
Long-term debt....................... 57.0 163.2 175.0 290.0 511.7
Other liabilities.................... 103.0 96.7 89.7 55.2 31.6
Redeemable senior preferred
stock(5)........................... -- -- -- -- 85.0
Stockholders' equity................. 500.7 540.3 390.2 295.5 173.7
------------- ------------- ------------- ------------- -------------
Total liabilities and
stockholders' equity......... $ 1,208.2 $ 1,221.5 $ 1,142.9 $ 960.9 $ 1,215.0
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
OTHER DATA:
Working capital...................... $ 228.6 $ 343.8 $ 227.7 $ 237.5 $ 293.6
Ratio of earnings to fixed
charges(6)......................... 8.1 5.5 2.1 1.6 0.9
Debt to total capital ratio.......... 13% 23% 33% 50% 72%
Depreciation and amortization........ $ 77.5 $ 69.2 $ 99.1 $ 127.3 $ 139.1
Capital expenditures................. $ 69.5 $ 145.0 $ 106.8 $ 58.1 $ 62.4
</TABLE>
- ------------------------
(1) The Company recognized a non-cash compensation charge of $60.6 ($38.5 net of
tax benefit) in the fourth quarter of 1995 and will recognize additional
amounts totalling $2.2 ($1.4 net of tax benefit) in the years 1996 through
2000, resulting from the vesting of certain of the Company's outstanding
employee stock options at the time of the Company's initial public offering
in November 1995.
(2) Acquisition-related intangibles were fully amortized at March 31, 1996.
(3) Represents extraordinary after-tax loss caused by early extinguishments of
debt related to the refinancing of the Company's term loan in April 1995 and
prepayment of the Company's senior subordinated notes in March 1997.
(4) Earnings per share amounts have been calculated and presented under the
provisions of SFAS No. 128. Diluted earnings (loss) per common share are net
of dividends of $11.5 and $11.8 paid on the Company's redeemable senior
preferred stock in 1993 and 1994, respectively. Earnings attributable to
common stock in 1994 are also net of a $61.3 preferred stock redemption
premium related to the exchange of redeemable senior preferred stock for
Class A Common Stock on December 30, 1994. No senior preferred stock is
currently outstanding.
(5) Redeemable senior preferred stock with a liquidation preference of $85.0 was
exchanged for 9,750,000 shares of Class A Common Stock on December 30, 1994.
As of December 31, 1997, the Company had repurchased 6,438,114 shares of
Class A Common Stock in the open market for an aggregate cost of
approximately $182.2 million.
(6) The ratios of earnings to fixed charges were computed by dividing (i) the
sum of (a) net income, before deducting extraordinary items and the
provision for income taxes and (b) fixed charges (excluding capitalized
interest), by (ii) total fixed charges. Fixed charges (including capitalized
interest) consist of interest on debt, including amortization of deferred
financing costs and gross rental expense.
10
<PAGE>
SUMMARIZED FINANCIAL DATA FOR THE ISSUER
Set forth below is summarized financial information for the Issuer, as of and
for each of the three years in the period ended December 31, 1997 which has been
derived from the Company's audited consolidated financial statements. Such
information should be read in conjunction with, and is qualified in its entirety
by reference to, the Company's consolidated financial statements and notes
thereto incorporated herein by reference. This information is substantially the
same as the financial information reported for the Company because: (i) the
operations of the Company are conducted by the Issuer and the direct and
indirect subsidiaries of the Issuer; (ii) the Company has no material assets
other than all of the ownership interest in the Issuer; and (iii) substantially
all of the assets and liabilities shown in the consolidated financial statements
for the Company are assets and liabilities of the Issuer and its direct and
indirect subsidiaries.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
(IN MILLIONS)
STATEMENT OF EARNINGS DATA:
Revenues....................................................................... $ 2,493.5 $ 2,377.6 $ 2,157.8
Gross profit................................................................... 870.0 747.4 669.9
Earnings before extraordinary item............................................. 163.0 127.8 48.1
Net earnings................................................................... 149.0 127.8 32.4
--------- --------- ---------
STATEMENT OF FINANCIAL POSITION DATA:
Total current assets........................................................... 776.1 765.1 715.7
Noncurrent assets.............................................................. 432.1 456.4 427.2
Total current liabilities...................................................... 551.4 423.9 490.5
Noncurrent liabilities......................................................... 160.0 259.9 264.7
</TABLE>
11
<PAGE>
DESCRIPTION OF NOTES AND GUARANTEE
The Notes are to be issued under an Indenture, to be dated as of , 1998
(the "Indenture"), among the Issuer, the Company, as guarantor (the
"Guarantor"), and The Bank of New York, as Trustee (the "Trustee"), a copy of
which is filed as an exhibit to the Registration Statement. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain terms.
Wherever particular Sections or defined terms of the Indenture are referred to,
such Sections or defined terms are incorporated herein by reference. All
references in this section, "Description of Notes and Guarantee," to the
"Guarantor" refer solely to Lexmark International Group, Inc. and not Lexmark
International Group, Inc. and its consolidated subsidiaries, and all references
to the "Issuer" refer solely to Lexmark International, Inc. and not to Lexmark
International, Inc. and its consolidated subsidiaries.
GENERAL; GUARANTEE
The Notes will be unsecured and unsubordinated obligations of the Issuer and
will rank PARI PASSU, without any preference or priority of payment, with all
other unsecured and unsubordinated indebtedness of the Issuer. The Notes will be
limited to $150,000,000 aggregate principal amount and will mature on at
100% of their principal amount, unless earlier redeemed pursuant to the terms
thereof. See "Optional Redemption." The Notes will have the benefit of a
guarantee (the "Guarantee") from the Guarantor. Pursuant to the Guarantee, the
Guarantor will unconditionally guarantee the due and punctual payment of
principal, interest and any other amount that the Issuer is obligated to pay in
respect of the Notes, as and when the same shall become due and payable, whether
at Stated Maturity, by declaration of acceleration, call for redemption or
otherwise. The Guarantee will be an unsecured and unsubordinated obligation of
the Guarantor and will rank PARI PASSU, without any preference or priority of
payment, with all other present and future unsecured and unsubordinated
indebtedness of the Guarantor. The Guarantee will remain in effect until all
amounts payable in respect of the Notes have been paid in full. Except as
described under "Restrictive Covenants," the Indenture does not limit other
indebtedness or securities which may be incurred or issued by the Guarantor, the
Issuer or any of their subsidiaries or contain financial or similar restrictions
on the Guarantor, the Issuer or any of their subsidiaries. The Guarantor's and
the Issuer's rights and the rights of their creditors, including holders of the
Notes, to participate in any distribution of assets of any subsidiary of the
Guarantor (other than the Issuer) upon the subsidiary's liquidation or
reorganization or otherwise are effectively subordinated to the claims of the
subsidiary's creditors, except to the extent that the Guarantor or the Issuer or
any of their creditors may itself be a creditor of that subsidiary.
INTEREST AND PAYMENTS
The Notes will bear interest at the rate per annum shown on the front cover of
this Prospectus from , 1998 or from the most recent Interest Payment Date
to which interest has been paid or provided for, payable semi-annually on
and of each year, commencing , 19 , to the Person in whose name
the Note (or any predecessor Note) is registered (a "Holder") at the close of
business on the preceding or , as the case may be (the "Record
Dates"). (SectionSection 301 and 308). Interest on the Notes will be computed on
the basis of a 360-day year of twelve 30-day months.
As described below, the Notes will be issued in global (I.E., book-entry) form
and all payments in respect of global Notes will be made through the facilities
of The Depository Trust Company ("DTC"), as depositary for such Notes. (Section
305). Payment procedures, including those applicable to any Notes that in the
future may be issued in certificated (i.e., non book-entry) form, are described
under "Form, Denomination, Transfer and Book-Entry Procedures." Any payment
required to be made on a date that is not a Business Day need not be made on
such day, but may be made on the next succeeding Business Day with the same
force and effect as if made on such date. As used herein, the term "Business
Day" means any day, other than a Saturday or Sunday, on which banks in The City
of New York are not required or authorized by law or executive order to be
closed.
The Notes are not entitled to the benefits of any sinking fund.
12
<PAGE>
FORM, DENOMINATION, TRANSFER AND BOOK-ENTRY PROCEDURES
The Notes will be issued only in fully registered form, without coupons, in
minimum denominations of $1,000 and any integral multiple thereof. (Section
302). Notes will be issued at the closing for the offering of the Notes only
against payment in immediately available funds.
GLOBAL NOTE
The Notes will be represented by one or more Notes in registered, global form
without interest coupons (collectively, the "Global Note"). The Global Note will
be deposited upon issuance with the Trustee as custodian for The Depository
Trust Company (the "Initial Depositary"), in New York, New York, and registered
in the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below. (Section 305).
Transfers of beneficial interests in the Global Note will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants,
which may change from time to time. Except as set forth below, the Global Note
may be transferred, in whole and not in part, only to DTC, another nominee of
DTC or to a successor of DTC or its nominee. Beneficial interests in the Global
Note may not be exchanged for Notes in certificated form except in the limited
circumstances described below. See "--Exchange of Book-Entry Notes for
Certificated Notes."
EXCHANGE OF GLOBAL NOTE FOR CERTIFICATED NOTES
A beneficial interest in the Global Note may not be exchanged for a Note in
certificated (i.e., non-book-entry) form unless (i) DTC (x) notifies the Issuer
that it is unwilling or unable to continue as Depositary for the Global Note and
the Issuer thereupon fails to appoint a successor Depositary or (y) has ceased
to be a clearing agency registered under the Exchange Act or (ii) there shall
have occurred and be continuing an Event of Default (as defined below) with
respect to the Notes. In all cases, certificated Notes delivered in exchange for
the Global Note or beneficial interests therein will be registered in the names,
and issued in any approved denominations, requested by or on behalf of the
Depositary (in accordance with its customary procedures).
Unless otherwise specified, the following procedures for payment and
registration of transfer will apply to any certificated Note that may be issued
in the future. Payments of principal, interest and other amounts due on such a
Note at maturity will be made to the registered Holder on the payment date upon
surrender of such Note at the office of the Paying Agent, by check drawn on, or
by transfer to an account maintained by the Holder at, a bank located in New
York City (PROVIDED that the interest that is payable on any Interest Payment
Date shall be paid to the Person in whose name a Note is registered at the close
of business on the Regular Record Date for such interest). Payments of interest
due at other times will be made by the Paying Agent by check of this type mailed
to the Holder at its address as it appears in the Security Register.
Notwithstanding the foregoing, a Holder of at least $1,000,000 in aggregate
principal amount of Notes will be entitled to receive payment of any amount due
on such Notes on any date by wire transfer of immediately available funds to an
account maintained by a bank located in New York City, if appropriate wire
transfer instructions have been given to the Issuer or its agent at least 10
Business Days prior to the due date (and any such instructions, once given, will
remain in effect with regard to payments due on all future dates unless properly
revoked).
Any certificated Note may be presented for registration of transfer and exchange
at the office of the Paying Agent. No service charge will be made for any
registration of transfer or exchange of any Note, but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. (Section 306).
CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL NOTES
The description of the operations and procedures of DTC that follows is provided
solely as a matter of convenience. These operations and procedures are solely
within the control of DTC and are subject to change from
13
<PAGE>
time to time. The Issuer and the Guarantor take no responsibility for these
operations and procedures and urge investors to contact DTC or its participants
directly to discuss these matters.
DTC has advised the Issuer that DTC is a limited-purpose trust company created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's system is also available to other entities such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
(collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interest and transfer
of ownership interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised the Issuer that pursuant to procedures established by it,
(i) upon deposit of the Global Note, DTC will credit, on its internal system,
the accounts of Participants designated by the Underwriters with portions of the
principal amount of the Global Note and (ii) ownership of such interests in the
Global Note will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Note).
Investors in the Global Note may hold their interests therein directly through
DTC, if they are Participants in such system, or indirectly through
organizations which are participants in such system. All interests in the Global
Note may be subject to the procedures and requirements of DTC. Transfers and
exchange of interests in the Global Note will also be subject to the
restrictions described above under "--Exchange of Book-Entry Notes for
Certificated Notes."
The laws of some states require that certain persons take physical delivery in
definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in the Global Note to such persons may be limited
to that extent. Because DTC can act only on behalf of Participants, which in
turn act on behalf of Indirect Participants and certain banks, the ability of a
person having beneficial interests in the Global Note to pledge such interests
to persons or entities that do not participate in the Depositary system, or
otherwise take actions in respect of such interests, may be affected by the lack
of a physical certificate evidencing such interests.
As long as DTC or its nominee is the registered Holder of the Global Note, DTC
or such nominee, as the case may be, will be considered the sole owner and
Holder of the Notes represented by the Global Note for all purposes under the
Indenture, the Notes and the Guarantee. Except as described above, owners of
interests in the Global Note will not have Notes registered in their names, will
not receive physical delivery of Notes in certificated form and will not be
considered the registered owners or holders thereof under the Indenture, the
Notes or the Guarantee for any purpose.
Payments in respect of the principal of (and premium, if any) and interest on
the Global Note will be made to DTC or its nominee in its capacity as the
registered Holder under the Indenture. The Issuer expects that DTC, upon receipt
of any payment in respect of the Global Note, will credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective beneficial interests in the Global Note as
shown on the records of DTC. The Issuer also expects that payments by the
Participants and the Indirect Participants to the beneficial owners of the
Global Note will be governed by standing instructions and customary practices
and will be the responsibility solely of the Participants or the Indirect
Participants. Neither the Issuer, the Guarantor nor the Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Global Note, and the Issuer, the Guarantor and the Trustee may
conclusively rely on and will be protected in relying on instructions from DTC
or its nominee as the registered owner of the Global Note for all purposes.
14
<PAGE>
Interests in the Global Note will trade in DTC's Same-Day Funds Settlement
System and secondary market trading activity in such interests will therefore
settle in immediately available funds, subject in all cases to the rules and
procedures of DTC and its Participants. Transfers between Participants in DTC
will be effected in accordance with DTC's procedures, and will be settled in
same-day funds.
DTC has advised the Issuer that it will take any action permitted to be taken by
a Holder of Notes only at the direction of one or more Participants to whose
account with DTC interests in the Global Note are credited and only in respect
of such portion of the aggregate principal amount of the Notes as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Notes, DTC reserves the right to exchange the
Global Note for Notes in certificated form, and to distribute such Notes to its
Participants.
Neither the Issuer, the Guarantor nor the Trustee will have any responsibility
for the performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations, including maintaining, supervising and reviewing the records related
to, and payments made on account of, beneficial ownership interests in the
Global Note, and any other action taken by any such depositary, participant or
indirect participant.
OPTIONAL REDEMPTION
The Notes will be redeemable, in whole or in part, at the option of the Issuer
at any time at a redemption price equal to the greater of (i) 100% of the
principal amount of the Notes to be redeemed or (ii) as determined by the
Quotation Agent, the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including any portion of such
payments of interest accrued to the date of redemption) discounted to the date
of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate plus basis points,
plus, in each case (i) or (ii), accrued interest thereon to the date of
redemption. (Section 1101).
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the date fixed for redemption to each holder of the Notes to be
redeemed. Unless the Issuer defaults in payment of the redemption price, on and
after the date fixed for redemption, interest will cease to accrue on the Notes
or portions thereof called for redemption. (Section 1105).
RESTRICTIVE COVENANTS
LIMITATION ON LIENS
The Guarantor will not, and will not permit any Subsidiary to, incur any Lien on
property or assets owned on or acquired after the date of the Indenture to
secure Debt without making, or causing such Subsidiary to make, effective
provision for securing the Notes (and, if the Guarantor may so determine, any
other Debt of the Guarantor or such Subsidiary that is not subordinated in right
of payment to the Notes) (x) equally and ratably with such Debt as to such
property or assets for as long as such Debt will be so secured or (y) in the
event such Debt is subordinated in right of payment to the Notes, prior to such
Debt as to such property for as long as such Debt will be so secured. (Section
1008).
The foregoing restrictions will not apply to Liens existing on the date of the
Indenture or to: (i) Liens securing only the Notes; (ii) Liens in favor of only
one or more of the Guarantor and its Subsidiaries; (iii) any Lien on property of
a Person existing immediately prior to the time such Person is merged with or
into or consolidated with the Guarantor or any Subsidiary of the Guarantor or
otherwise becomes a Subsidiary of the Guarantor (PROVIDED that such Lien is not
incurred in anticipation of such transaction and does not extend beyond the
property subject thereto, or secure any Debt that is not secured thereby,
immediately prior to such transaction); (iv) any Lien on property existing
immediately prior to the time of acquisition thereof (PROVIDED that such Lien is
not incurred in anticipation of such acquisition and does not extend beyond the
property subject thereto, or secure any Debt that is not secured thereby,
immediately prior to such acquisition); (v) Liens to secure Debt
15
<PAGE>
incurred for the purpose of financing all or any part of the purchase price of,
or the cost of construction on or improvement of, the property subject to such
Liens, PROVIDED, HOWEVER, that (a) the principal amount of any Debt secured by
such a Lien does not exceed 100% of such price or cost, (b) such Lien does not
extend to or cover any other property other than such item of property and any
improvements on such item, and (c) such Lien must be created no later than the
270th day after such purchase or the completion of such construction or
installation of such improvements; (vi) Liens on property of the Guarantor or
any Subsidiary of the Guarantor in favor of the United States of America or any
state thereof, or any instrumentality of either, to secure payments to be made
pursuant to any contract or statute; (vii) (a) Liens for taxes or assessments or
other governmental charges or levies or (b) any statutory Liens of a carrier,
warehouseman, mechanic, materialman or other like Liens imposed by law incurred
in the ordinary course of business that, in either case (a) or (b), are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which such reserve or other appropriate provision,
if any, as may be required in accordance with generally accepted accounting
principles has been made; (viii) Liens to secure obligations under workmen's
compensation, unemployment insurance or other social security laws or similar
legislation; (ix) Liens incurred to secure the performance of statutory
obligations, surety or appeal bonds, performance or return-of-money bonds or
other obligations of a like nature incurred in the ordinary course of business;
(x) any Lien in favor of the Trustee in respect of expenses incurred or services
rendered pursuant to the Indenture; (xi) any Lien that may be deemed to arise
from a Permitted Receivables Financing; (xii) Liens securing obligations arising
under easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Guarantor or any Subsidiary; and (xiii) Liens to secure Debt
incurred to extend, renew, refinance or refund (or successive extensions,
renewals, refinancings or refundings), in whole or in part, Debt secured by any
Lien referred to in the foregoing clauses (iii), (iv) or (v) as long as such
Lien does not extend to any other property and the Debt so secured is not
increased except for increases in the amount of interest, premiums or fees and
associated costs payable in connection with such extensions, renewals,
refinancings or refundings. (Section 1008).
In addition to the foregoing, the Guarantor and its Subsidiaries may, without
equally and ratably securing the Notes, incur a Lien to secure Debt or enter
into a Sale and Leaseback Transaction if, after giving effect thereto, the sum
of: (i) the amount of all Debt secured by all Liens incurred on or after the
date of the Indenture and otherwise prohibited by the Indenture and (ii) the
Attributable Value of Sale and Leaseback Transactions entered into on or after
the date of the Indenture and otherwise prohibited by the Indenture does not
exceed 15% of Consolidated Net Tangible Assets. (Section 1008).
In the event the Issuer ceases to be a Subsidiary of the Guarantor, the
covenants described above will apply not only to the Guarantor but also to the
Issuer, as if it became the Guarantor.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
The Guarantor will not, and will not permit any Subsidiary to, enter into any
Sale and Leaseback Transaction (except for a period not exceeding 36 months)
unless (i) the Guarantor or such Subsidiary would be entitled to enter into such
Sale and Leaseback Transaction pursuant to the provisions described in the third
paragraph under "Limitation on Liens" without equally and ratably securing the
Notes; (ii) the Guarantor or a Subsidiary of the Guarantor applies, within 180
days after the related Sale Transaction, an amount equal to the Net Available
Proceeds of such Sale Transaction to the redemption of Notes or other debt of
the Issuer that ranks PARI PASSU with the Notes in right of payment; or (iii)
the transaction is solely between the Guarantor and a Wholly Owned Subsidiary or
between Wholly Owned Subsidiaries for as long as such Subsidiaries are Wholly
Owned Subsidiaries. (Section 1009).
In the event the Issuer ceases to be a Subsidiary of the Guarantor, the
covenants described above will apply not only to the Guarantor but also to the
Issuer, as if it became the Guarantor.
16
<PAGE>
CERTAIN DEFINITIONS
The Indenture will include, among others, the following definitions:
"Adjusted Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date.
"Attributable Value" means, as to any lease under which any Person is at the
time liable, other than a Capital Lease Obligation, and at any date as of which
the amount thereof is to be determined, the total net amount of rent required to
be paid by such Person under such lease during the remaining term thereof as
determined in accordance with generally accepted accounting principles,
discounted from the last date of such term to the date of determination at a
rate per annum equal to the discount rate that would be applicable to a Capital
Lease Obligation with like term in accordance with generally accepted accounting
principles. The net amount of rent required to be paid under any such lease for
any such period will be the aggregate amount of rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account of
insurance, taxes, assessments, utility, operating and labor costs and similar
charges. In the case of any lease that is terminable by the lessee upon the
payment of a penalty, such net amount will also include the amount of such
penalty, but no rent will be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated. "Attributable
Value" means, as to a Capital Lease Obligation under which any Person is at the
time liable and at any date as of which the amount thereof is to be determined,
the capitalized amount thereof that would appear on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles.
"Capital Lease Obligation" of any Person means the obligation to pay rent or
other payment amounts under a lease of (or other Debt arrangements conveying the
right to use) real or personal property of such Person that is required to be
classified and accounted for as a capital lease or a liability on the face of a
balance sheet of such Person in accordance with generally accepted accounting
principles. The stated maturity of such obligation will be deemed to be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Quotation Agent as having a maturity comparable to the remaining term of
the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i) the
average of the Reference Treasury Dealer Quotations for such date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(ii) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Consolidated Net Tangible Assets" means all assets, less (i) all current
liabilities (excluding any indebtedness for borrowed money having a maturity of
less than 12 months from the date of the most recent consolidated balance sheet
of the Guarantor but which by its terms is renewable or extendable beyond 12
months from such date at the option of the borrower), (ii) the net book value of
all licenses, patents, patent applications, copyrights, trademarks, trade names,
goodwill, non-compete agreements, organizational expenses and other like
intangibles, (iii) all unamortized Debt discount and expense, and (iv) all
proper reserves, including all reserves for depreciation, obsolescence,
depletion and amortization of properties, of the Guarantor and its subsidiaries
after eliminating inter-company items and including appropriate deductions for
any minority interest, as determined on a consolidated basis in accordance with
generally accepted accounting principles; PROVIDED, HOWEVER, that no effect will
be given to any adjustments on or after the date of the Indenture to the
accounting books and records of the Guarantor in accordance with Accounting
Principles Board Opinions Nos. 16 and 17 (or successor opinions thereto) or
otherwise resulting from the acquisition of control of the Guarantor by another
Person.
17
<PAGE>
"Debt" means (without duplication), with respect to any Person, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) every Capital Lease Obligation of such Person, and (vi) all
Guaranties by such Person of every obligation of the type referred to in Clauses
(i) through (v) of another Person.
"Guaranty" by any Person means any obligation, contingent or otherwise, of such
Person guaranteeing any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and includes any obligation of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the holder of such
Debt of the payment of such Debt, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt (and "Guaranteed,"
"Guaranteeing" and "Guarantor" have meanings correlative to the foregoing);
PROVIDED, HOWEVER, that a Guaranty by any Person will not include endorsements
by such Person for collection or deposit, in either case in the ordinary course
of business.
"Lien" means, with respect to any property or assets, any mortgage or deed of
trust, pledge, hypothecation, assignment, security interest, lien, charge,
encumbrance, easement or other security agreement of any kind or nature
whatsoever on or with respect to such property or assets (including any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Net Available Proceeds" from any Sale Transaction by any Person means cash or
readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any consideration received in the form of assumption of Debt or other
obligations by others or received in any other noncash form) therefrom by such
Person, net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability as a consequence of such Sale
Transaction, (ii) all payments made by such Person or its Subsidiaries on any
Debt that is secured by a Lien on the property or assets so disposed of in
accordance with the terms of such Lien or that must, by the terms of such Lien,
or in order to obtain a necessary consent to such Sale Transaction, or by
applicable law, be repaid out of the proceeds from such Sale Transaction, and
(iii) all distributions and other payments made to third parties (other than
Subsidiaries) in respect of minority or joint venture interests as a result of
such Sale Transaction.
"Permitted Receivables Financing" means any program for the transfer without
recourse (other than customary limited recourse) by the Guarantor or any of its
Subsidiaries to any buyer, purchaser or lender of interests in accounts
receivable, so long as (a) such program is intended by the parties thereto to be
treated (whether or not such treatment is ultimately disallowed) as an "off
balance sheet" transaction and (b) the aggregate outstanding amount of
receivables transferred by the Guarantor and its Subsidiaries pursuant to such
program shall not exceed $500,000,000 at any one time.
"Quotation Agent" means the Reference Treasury Dealer appointed by the Issuer to
serve as Quotation Agent.
"Reference Treasury Dealer" means (i) J.P. Morgan Securities Inc., Salomon
Brothers Inc, NationsBanc Montgomery Securities LLC and their respective
successors; PROVIDED, HOWEVER, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Issuer shall substitute therefor another Primary Treasury Dealer,
and (ii) any other Primary Treasury Dealer selected by the Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Issuer, of the bid and asked prices for the Comparable Treasury
18
<PAGE>
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day (as defined in the Indenture) preceding such redemption date.
"Sale and Leaseback Transaction" of any Person means an arrangement with any
lender or investor or to which such lender or investor is a party providing for
the leasing by such Person of any property or assets of such Person which has
been or is being sold, conveyed, transferred or otherwise disposed of by such
Person more than 270 days after the acquisition thereof or the completion of
construction or commencement of operation thereof to such lender or investor or
to any person to whom funds have been or are to be advanced by such lender or
investor on the security of such property or assets. The stated maturity of such
arrangement will be deemed to be the date of the last payment of rent or any
other amount due under such arrangement prior to the first date on which such
arrangement may be terminated by the lessee without payment of a penalty.
"Sale Transaction" means any sale, conveyance, transfer or other disposition of
the kind referred to in the first sentence of the definition of "Sale and
Leaseback Transaction."
"Subsidiary" of any Person means any corporation, partnership, limited liability
company, trust or other entity as to which more than 50% of the voting power of
its outstanding capital stock or other ownership interests is owned, directly or
indirectly, by such Person, by one or more other Subsidiaries of such Person or
by such Person and one or more other Subsidiaries of such Person. Unless
otherwise indicated, any reference to a Subsidiary means a Subsidiary of the
Guarantor.
"Wholly Owned Subsidiary" of any Person means any corporation, partnership,
limited liability company, trust or other entity as to which 100% of the voting
power of its outstanding capital stock or other ownership interests is owned,
directly or indirectly, by such Person, by one or more other Wholly Owned
Subsidiaries of such Person or by such Person and one or more other Wholly Owned
Subsidiaries of such Person. Unless otherwise indicated, any reference to a
Wholly Owned Subsidiary means a Wholly Owned Subsidiary of the Guarantor.
(Section 101).
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each of the Guarantor and the Issuer will not merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets (determined on a
consolidated basis with respect to the Guarantor or the Issuer, as the case may
be, and its Subsidiaries taken as a whole), unless (i) either (x) the Guarantor
or the Issuer, as the case may be, is the continuing Person or (y) the
continuing Person is a corporation, partnership, trust, limited liability
company or other entity organized and validly existing under the laws of any
domestic jurisdiction and expressly assumes the Guarantor's or the Issuer's, as
the case may be, obligations on the Notes and under the Indenture, (ii)
immediately after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, with respect to the Notes shall have occurred and be continuing, (iii)
if, as a result of the transaction, property of the Guarantor or the Issuer, as
the case may be, or any Subsidiary would become subject to a Lien, the
incurrence of which would not be permitted under the limitation on Liens
described above under "Restrictive Covenants," the Guarantor or the Issuer, as
the case may be, takes such steps as are necessary to cause the Notes to be
secured equally and ratably with (or prior to) the Debt secured by such Lien as
provided in such limitation, and (iv) certain other conditions set forth in the
Indenture are met. (Section 801).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the Indenture
with respect to Notes: (a) failure by the Issuer to pay principal of or any
premium on any Note when due, PROVIDED that failure by the Issuer to make such a
payment will not constitute an Event of Default if the Guarantor makes such
payment as required when due; (b) failure by the Issuer to pay any interest on
any Notes when due, continued for 30 days, PROVIDED that failure by the Issuer
to make such a payment will not constitute an Event of Default if the Guarantor
makes such payment as required during such 30-day period; (c) failure to perform
any other covenant of the Guarantor or the Issuer in the Indenture, continued
for 90 days after written notice has been given by the Trustee, or the Holders
of at least 25% in principal amount of the Outstanding Notes, as provided in the
Indenture; (d) a default or
19
<PAGE>
defaults under any note(s) or other evidence(s) of Debt, or any agreement(s) or
instrument(s) under which there may be issued or by which there may be secured
or evidenced any Debt, of the Guarantor or any Subsidiary having a principal
amount outstanding, individually or in the aggregate, of at least $25 million,
and whether existing on or created after the date of the Indenture, which
default or defaults (i) constitute a failure to pay at least $25 million of the
principal of such Debt when due (unless such default is waived or cured within
30 days after the expiration of any applicable grace period) or (ii) have
resulted in acceleration of any portion of such Debt having an aggregate
principal amount equal to or in excess of $25 million, in each case (i) and
(ii), without the overdue or accelerated portion of such Debt having been
discharged, or without such acceleration having been rescinded or annulled,
within 30 days after written notice has been given by the Trustee or the Holders
of at least 25% in aggregate principal amount of the Outstanding Notes as
provided in the Indenture; and (e) certain events in bankruptcy, insolvency or
reorganization. (Section 501).
If an Event of Default (other than an Event of Default described in clause (e)
above) with respect to the Notes at the time Outstanding shall occur and be
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Notes by notice as provided in the Indenture
may declare the principal amount of (together with accrued interest on) all the
Notes to be due and payable immediately. If an Event of Default described in
clause (e) above with respect to the Notes at the time Outstanding shall occur,
the principal amount of (together with accrued interest on) all the Notes will
automatically, and without any action by the Trustee or any Holder, become
immediately due and payable. After any such acceleration, but before a judgment
or decree based on acceleration, the Holders of a majority in aggregate
principal amount of the Outstanding Notes may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal, have been cured or waived as provided in
the Indenture. (Section 502). For information as to waiver of defaults, see
"Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the Trustee
in case an Event of Default shall occur and be continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable indemnity. (Section 603). Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Notes will 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. (Section 512).
No Holder of a Note will have any right to institute any proceeding with respect
to the Indenture, or for the appointment of a receiver or a trustee, or for any
other remedy thereunder, unless (i) such Holder has previously given to the
Trustee written notice of a continuing Event of Default with respect to the
Notes, (ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Notes have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and (iii) the Trustee has failed to institute such proceeding, and has
not received from the Holders of a majority in aggregate principal amount of the
Outstanding Notes a direction inconsistent with such request, within 90 days
after such notice, request and offer. However, such limitations do not apply to
a suit instituted by a Holder of a Note for the enforcement of payment of the
principal of or any premium or interest on such Note on or after the applicable
due date specified in such Note. (Sections 507 and 508).
DEFEASANCE AND COVENANT DEFEASANCE
The Issuer may elect, at its option at any time, to have the provisions of
Section 1202, relating to defeasance and discharge of indebtedness, or Section
1203, relating to defeasance of certain restrictive covenants in the Indenture,
applied to the Notes. (Section 1201).
DEFEASANCE AND DISCHARGE
The Indenture will provide that, upon the Issuer's exercise of its option to
have Section 1202 applied to the Outstanding Notes, the Issuer and the Guarantor
will be discharged from all their obligations with respect to such Notes (except
for certain obligations to exchange or register the transfer of Notes, to
replace stolen, lost or mutilated Notes to maintain paying agencies and to hold
moneys for payment in trust) upon the deposit in trust for the benefit of the
Holders of such Notes of money or U.S. Government Obligations, or both, which,
through
20
<PAGE>
the payment of principal and interest in respect thereof in accordance with
their terms, will provide money in an amount sufficient to pay the principal of
and interest on such Notes on the Stated Maturity in accordance with the terms
of the Indenture and the Notes. Such defeasance or discharge may occur only if,
among other things, the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that the Issuer has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that Holders of such
Notes will not recognize gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge were not to occur.
(SectionSection 1202 and 1204).
DEFEASANCE OF CERTAIN COVENANTS
The Indenture will provide that, upon the Issuer's exercise of its option to
have Section 1203 applied to the Outstanding Notes, the Issuer and the Guarantor
may omit to comply with the restrictive covenants described above under
"Restrictive Covenants" and such omission will be deemed not to be an Event of
Default with respect to the Notes. The Issuer, in order to exercise such option,
will be required to deposit, in trust for the benefit of the Holders of such
Notes, money or U.S. Government Obligations, or both, which, through the payment
of principal and interest in respect thereof in accordance with their terms,
will provide money in an amount sufficient to pay the principal of and interest
on such Notes on the Stated Maturity in accordance with the terms of the
Indenture and the Notes. The Issuer will also be required, among other things,
to deliver to the Trustee an Opinion of Counsel to the effect that Holders of
such Notes will not recognize gain or loss for federal income tax purposes as a
result of such deposit and defeasance of certain obligations and will be subject
to federal income tax on the same amount, in the same manner and at the same
times as would have been the case if such deposit and defeasance were not to
occur. In the event the Issuer exercised this option with respect to the
Outstanding Notes and such Notes were declared due and payable because of the
occurrence of any Event of Default, the amount of money and U.S. Government
Obligations so deposited in trust would be sufficient to pay amounts due on such
Notes at the Stated Maturity but may not be sufficient to pay amounts due on
such Notes upon any acceleration resulting from such Event of Default. In such
case, the Issuer and the Guarantor would remain liable for such payments.
(SectionSection 1203 and 1204).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Issuer and the
Guarantor with the consent of the Holders of a majority in aggregate principal
amount of the Outstanding Notes; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Note
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, (b) reduce the principal amount of, or
interest on, any Note, (c) change the place or currency of payment of principal
of, or interest on, any Note, (d) impair the right to institute suit for the
enforcement of any payment on or with respect to any Note, (e) reduce the
above-stated percentage of Outstanding Notes necessary to modify or amend the
Indenture, (f) reduce the percentage of aggregate principal amount of
Outstanding Notes necessary for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults or (g) change the obligations of
the Guarantor under the Guarantee with respect to any of the obligations of the
Issuer that may not be modified or amended without the consent of each Holder as
aforesaid. (Section 902).
The Holders of a majority in aggregate principal amount of the Outstanding Notes
may waive compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1011). The Holders of a majority in aggregate principal
amount of the Outstanding Notes may waive any past default under the Indenture,
except a default in the payment of principal or interest. (Section 513).
The Guarantor and the Issuer may amend or supplement the Indenture without
notice to or the consent of any Holder, in order, among other things: (1) to
cure any ambiguity, defect or inconsistency in the Indenture, PROVIDED that such
amendments or supplements shall not materially and adversely affect the
interests of the Holders; (2) to comply with any requirements of the Commission
in connection with the qualification of the Indenture under the Trust Indenture
Act; (3) to evidence and provide for the acceptance of appointments under the
Indenture with respect to the Securities by a successor Trustee; and (4) to make
any change that does not materially and adversely affect the interests of the
Holders.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement,
dated , 1998 (the "Underwriting Agreement"), the Issuer has agreed to
sell to each of the underwriters named below (the "Underwriters"), and each of
such Underwriters has severally agreed to purchase from the Issuer the
respective principal amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OF NOTES
<S> <C>
--------------
NAME
- --------------------------------------------------------------------------------------------------
J.P. Morgan Securities Inc........................................................................
Salomon Brothers Inc..............................................................................
NationsBanc Montgomery Securities LLC.............................................................
--------------
Total............................................................................................. $ 150,000,000
--------------
--------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the Underwriters
are committed to take and pay for all of the Notes, if any are taken.
The Company and the Issuer have been advised by the Underwriters that they
initially propose to offer the Notes directly to the public at the public
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less a concession not in excess of % of the principal
amount of the Notes. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of % of the principal amount of the Notes on sales
to certain other dealers. After the initial public offering of the Notes, the
public offering price and such concessions to dealers may be changed by the
Underwriters.
The Notes are a new issue of securities with no established trading market. The
Company and the Issuer have been advised by the Underwriters that the
Underwriters currently intend to make a market for the Notes, but are not
obligated to do so and may discontinue market making at any time without notice.
No assurance can be given as to the liquidity of the trading market for the
Notes.
It is expected that in the aggregate up to approximately 20% of the net proceeds
of the offering of the Notes will be used to repay loans made to the Issuer by
Morgan Guaranty Trust Company of New York, an affiliate of J.P. Morgan
Securities Inc., and NationsBank, N.A., an affiliate of NationsBanc Montgomery
Securities LLC, under the Issuer's New Credit Facility. See "Use of Proceeds."
Under the Conduct Rules of the National Association of Securities Dealers, Inc.
(the "NASD"), special considerations apply to a public offering of securities
where more than 10% of the net proceeds thereof will be paid to a participating
underwriter or any of its affiliates. Therefore, the offering of the Notes is
being conducted pursuant to Rule 2710(c)(8) of the NASD Conduct Rules, which
establishes certain procedural safeguards in connection with offerings in such
circumstances in which NASD member firms intend to participate and where more
than 10% of the offering proceeds are to be paid to such member firms or their
affiliates.
The Company and the Issuer have agreed, severally and jointly, to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or to contribute to payments which the Underwriters may be
required to make in respect thereof.
In connection with the offering of the Notes, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriters may overallot in connection with the
offering of the Notes, creating a syndicate short position. In addition, the
Underwriters may bid for, and purchase, Notes in the open market to cover
syndicate short positions or to stabilize the price of the Notes. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the Notes in the offering of the Notes, if the syndicate repurchases previously
distributed Notes in syndicate covering transactions, stabilization transactions
or otherwise. Any of these activities may stabilize or maintain the market price
of the Notes above
22
<PAGE>
independent market levels. The Underwriters are not required to engage in any of
these activities, and may end any of them at any time.
In the ordinary course of their respective businesses, the Underwriters and
their affiliates have engaged, are engaging and may in the future engage, in
commercial banking and investment banking transactions with the Company, the
Issuer and their respective affiliates.
FORWARD LOOKING STATEMENTS
Certain statements in this Prospectus and in documents incorporated by reference
herein contain forward-looking statements that are based on current
expectations, estimates and projections and management's beliefs and
assumptions. Words such as "believes," "expects," "intends," "plans,"
"estimates," or variations of such words and similar expressions, are intended
to identify such forward-looking statements. These statements are not guarantees
of future performance and involve certain risks and uncertainties which are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. Neither the Company nor the Issuer undertakes any obligation to
update publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
Such risks and uncertainties include, but are not limited to, the impact of
competitive products and pricing, increased investment to support product
introductions and enter new markets, currency fluctuations, market acceptance of
new products and programs, product transitions by the Company and its
competitors, management of inventory levels, production and supply difficulties,
intellectual property infringement claims and expenses, the outcome of pending
and future litigation or governmental proceedings, changes in a country's or
region's political or economic conditions, and other risks described herein and
in other filings by the Company with the Commission.
VALIDITY OF NOTES AND GUARANTEE
The validity of the Notes and the Guarantee will be passed upon for the Company
by Vincent J. Cole, Esq., General Counsel of the Issuer and the Guarantor, and
for the Underwriters by Sullivan & Cromwell, New York, New York.
EXPERTS
The consolidated statements of financial position as of December 31, 1996 and
1997 and the consolidated statements of earnings, cash flows and stockholders'
equity for each of the three years in the period ended December 31, 1997
incorporated by reference in this Prospectus have been incorporated by reference
herein in reliance on the report of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
23
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses of the issuance and distribution of the
Notes being registered, including fees and expenses incurred by the Company and
the Issuer, other than any underwriting compensation.
<TABLE>
<CAPTION>
<S> <C>
Registration fee............................................................................ $ 44,250
Accounting fees and expenses................................................................ $ 40,000
Rating agency fees.......................................................................... $ 150,000
Printing and engraving...................................................................... $ 50,000
Trustee's fees and expenses................................................................. $ 10,000
Blue Sky fees and expenses (including counsel fees)......................................... $ 35,000
Miscellaneous expenses...................................................................... $ 15,000
----------
Total................................................................................. $ 344,250
----------
----------
</TABLE>
All of the above expenses of the Offering will be borne by the Issuer.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding; PROVIDED that such officer or
director acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the corporation's best interests, and, for criminal proceedings,
had no reasonable cause to believe his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
Article VI of the By-Laws of the Company and the Issuer provide for
indemnification by the Company or the Issuer, as the case may be, of its
directors and officers to the full extent permitted by the Delaware Law.
Pursuant to Section 145 of the Delaware Law, the Company's and the Issuer's
present and former directors and officers are insured against any liability
asserted against or incurred by them in such capacity or arising out of their
status as such.
Pursuant to specific authority granted by Section 102 of the Delaware Law,
Article FIFTH of the Company's Third Restated Certificate of Incorporation
contains the following provision regarding limitation of liability of directors
and officers:
"(e) No director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of his or her fiduciary
duty as a director, PROVIDED that nothing contained in this Third Restated
Certificate of Incorporation shall eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the
law, (iii) under Section 174 of
II-1
<PAGE>
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit."
Pursuant to specific authority granted by Section 102 of the Delaware Law,
Article SEVENTH of the Issuer's Certificate of Incorporation contains the
following provision regarding limitation of liability of directors and officers:
"No director shall be personally liable to the Corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived
an improper personal benefit.
Pursuant to an indemnification agreement with certain former stockholders, and
under the Third Restated Certificate of Incorporation, the Company has agreed to
indemnify the members of the Company's Board of Directors to the fullest extent
allowable under applicable Delaware law.
Reference is hereby made to Section 7 of the Underwriting Agreement filed as
Exhibit 1.1 for certain indemnification arrangements.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1. (A) EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBITS
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Third Restated Certificate of Incorporation of Lexmark International Group, Inc. (the "Company").(1)
3.2 By-Laws of the Company, as amended and restated as of October 26, 1995, and amended by Amendment No. 1
dated as of February 13, 1997.(2)
3.3 Certificate of Incorporation of Lexmark International, Inc. (the "Issuer"), as amended.(3)
3.4 By-Laws of the Issuer, as amended and restated as of October 26, 1995, and amended by Amendment No. 1
dated as of February 13, 1997.(3)
4.1 Form of Indenture among the Company, the Issuer and The Bank of New York, as Trustee.
4.2 Form of Senior Note due 2008 (included in Exhibit 4.1).
4.3 Form of Guarantee of Senior Note due 2008 (included in Exhibit 4.1).
5 Opinion of Vincent J. Cole, Esq. regarding the validity of the securities being registered.
12.1 Computation of ratio of earnings to fixed charges.(3)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Vincent J. Cole, Esq. (included in the Opinion of Vincent J. Cole, Esq. filed as
Exhibit 5).
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Indenture.
</TABLE>
- ------------------------
(1) Incorporated herein by reference to the Company's Form S-1 Registration
Statement, Amendment No. 1 (Registration No. 33-97218) filed with the
Commission on October 27, 1995.
(2) Incorporated herein by reference to the Company's Annual Report on Form 10-K
(File No. 1-14050) for the Fiscal Year ended December 31, 1996.
(3) Filed previously.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the registrants pursuant to the foregoing provisions, or otherwise, the
II-2
<PAGE>
registrants have been advised that in the opinion of the 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 registrants of expenses incurred
or paid by a director, officer or controlling person of the registrants 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 registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Act, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective;
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and
(3) For purposes of determining any liability under the Act, each filing of
the annual report of Lexmark International Group, Inc. 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 plan's annual report pursuant
to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lexington, Commonwealth of Kentucky, on April 30,
1998.
LEXMARK INTERNATIONAL GROUP, INC.
By /s/ MARVIN L. MANN
-----------------------------------------
Name: Marvin L. Mann
Title: Chairman of the Board & Chief
Executive Officer
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the following capacities on
April 30, 1998.
SIGNATURE TITLE
- ------------------------------ ---------------------------
Chairman of the Board/Chief
/s/ MARVIN L. MANN Executive Officer
- ------------------------------ (Principal Executive
Marvin L. Mann Officer)
Vice President/Chief
/s/ GARY E. MORIN Financial Officer
- ------------------------------ (Principal Financial
Gary E. Morin Officer)
/s/ DAVID L. GOODNIGHT Corporate Controller
- ------------------------------ (Principal Accounting
David L. Goodnight Officer)
/s/ B. CHARLES AMES Director
- ------------------------------
B. Charles Ames
/s/ RODERICK H. CARNEGIE Director
- ------------------------------
Roderick H. Carnegie
/s/ FRANK T. CARY Director
- ------------------------------
Frank T. Cary
/s/ PAUL J. CURLANDER Director
- ------------------------------
Paul J. Curlander
/s/ WILLIAM R. FIELDS Director
- ------------------------------
William R. Fields
/s/ DONALD J. GOGEL Director
- ------------------------------
Donald J. Gogel
/s/ RALPH E. GOMORY Director
- ------------------------------
Ralph E. Gomory
/s/ STEPHEN R. HARDIS Director
- ------------------------------
Stephen R. Hardis
II-4
<PAGE>
SIGNATURE TITLE
- ------------------------------ ---------------------------
/s/ MICHAEL J. MAPLES Director
- ------------------------------
Michael J. Maples
/s/ MARTIN D. WALKER Director
- ------------------------------
Martin D. Walker
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Issuer registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lexington, Commonwealth of Kentucky, on April 30,
1998.
LEXMARK INTERNATIONAL, INC.
By /s/ MARVIN L. MANN
-----------------------------------------
Name: Marvin L. Mann
Title: Chairman of the Board & Chief
Executive Officer
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the following capacities on
April 30, 1998.
SIGNATURE TITLE
- ------------------------------ ---------------------------
Chairman of the Board/Chief
/s/ MARVIN L. MANN Executive Officer
- ------------------------------ (Principal Executive
Marvin L. Mann Officer)
Vice President/Chief
/s/ GARY E. MORIN Financial Officer
- ------------------------------ (Principal Financial
Gary E. Morin Officer)
/s/ DAVID L. GOODNIGHT Corporate Controller
- ------------------------------ (Principal Accounting
David L. Goodnight Officer)
/s/ B. CHARLES AMES Director
- ------------------------------
B. Charles Ames
/s/ RODERICK H. CARNEGIE Director
- ------------------------------
Roderick H. Carnegie
/s/ FRANK T. CARY Director
- ------------------------------
Frank T. Cary
/s/ PAUL J. CURLANDER Director
- ------------------------------
Paul J. Curlander
/s/ WILLIAM R. FIELDS Director
- ------------------------------
William R. Fields
/s/ DONALD J. GOGEL Director
- ------------------------------
Donald J. Gogel
/s/ RALPH E. GOMORY Director
- ------------------------------
Ralph E. Gomory
/s/ STEPHEN R. HARDIS Director
- ------------------------------
Stephen R. Hardis
II-6
<PAGE>
SIGNATURE TITLE
- ------------------------------ ---------------------------
/s/ MICHAEL J. MAPLES Director
- ------------------------------
Michael J. Maples
/s/ MARTIN D. WALKER Director
- ------------------------------
Martin D. Walker
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ----------- ------------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
1.1 Form of Underwriting Agreement.
3.1 Third Restated Certificate of Incorporation of Lexmark International Group, Inc. (the
"Company").(1)
3.2 By-Laws of the Company, as amended and restated as of October 26, 1995, and amended by Amendment
No. 1 dated as of February 13, 1997.(2)
3.3 Certificate of Incorporation of Lexmark International, Inc. (the "Issuer"), as amended.(3)
3.4 By-Laws of the Issuer, as amended and restated as of October 26, 1995, and amended by Amendment
No. 1 dated as of February 13, 1997.(3)
4.1 Form of Indenture among the Company, the Issuer and The Bank of New York, as Trustee.
4.2 Form of Senior Note due 2008 (included in Exhibit 4.1).
4.3 Form of Guarantee of Senior Note due 2008 (included in Exhibit 4.1).
5 Opinion of Vincent J. Cole, Esq. regarding the validity of the securities being registered.
12.1 Computation of ratio of earnings to fixed charges.(3)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Vincent J. Cole, Esq. (included in the Opinion of Vincent J. Cole, Esq. filed as
Exhibit 5).
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York,
as Trustee under the Indenture.
</TABLE>
- ------------------------
(1) Incorporated herein by reference to the Company's Form S-1 Registration
Statement, Amendment No. 1 (Registration No. 33-97218) filed with the
Commission on October 27, 1995.
(2) Incorporated herein by reference to the Company's Annual Report on Form 10-K
(File No. 1-14050) for the Fiscal Year ended December 31, 1996.
(3) Filed previously.
<PAGE>
Draft of April 18, 1998
$150,000,000
LEXMARK INTERNATIONAL, INC.
% Senior Notes due 2008
Unconditionally
Guaranteed by
LEXMARK INTERNATIONAL GROUP, INC.
Underwriting Agreement
, 1998
J.P. Morgan Securities Inc.
Salomon Brothers Inc
NationsBanc Montgomery Securities LLC
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
Lexmark International, Inc., a Delaware corporation (the "Issuer"),
proposes to issue and sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), $150,000,000 principal amount of its __% Senior Notes due
2008 (the "Notes"). The Notes will be unconditionally guaranteed (the
"Guarantee" and, together with the Notes, the "Securities") as to payment of
principal, interest and all other amounts due in respect of the Notes by Lexmark
International Group, Inc., a Delaware corporation, as guarantor (the
"Guarantor"). The Securities will be issued pursuant to the provisions of an
Indenture to be dated as of __, 1998 among the Issuer, the Guarantor and The
Bank of New York, as Trustee (the "Trustee").
The Issuer and the Guarantor have prepared and filed with the Securities
and Exchange Commission (the "Commission") in accordance with the provisions of
the
<PAGE>
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Securities. The registration
statement as amended at the time when it shall become effective, or, if a
post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including in each
case information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the form first used to confirm sales of Securities is referred to
in this Agreement as the "Prospectus". If the Issuer and the Guarantor have
filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the effective date of the
Registration Statement or the date of such preliminary prospectus or the
Prospectus, as the case may be, and any reference to "amend", "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein.
The Issuer and the Guarantor hereby agree with the Underwriters as follows:
1. The Issuer and Guarantor agree to issue and sell the Securities to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Issuer and the Guarantor the respective principal amount of Securities
set forth opposite such Underwriter's name in Schedule I hereto at a price equal
to o% of their principal amount plus accrued interest, if any, from o, 1998 to
the date of payment and delivery.
2. The Issuer and the Guarantor understand that the Underwriters intend (i)
to make a public offering of their respective portions of the Securities as soon
after (A) the Registration Statement has become effective and (B) the parties
hereto have executed and delivered this Agreement, as in the judgment of the
Representatives is advisable, and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
2
<PAGE>
3. Payment for the Securities shall be made by wire transfer in immediately
available funds to the account specified by the Issuer to the Representatives
not later than 2:00 p.m. on o, 1998, or at such other time on the same or such
other date, not later than the fifth Business Day thereafter, as the
Representatives and the Issuer may agree upon in writing. The time and date of
such payment is referred to herein as the "Closing Date". As used herein, the
term "Business Day" means any day other than a day on which banks are permitted
or required to be closed in New York City.
Payment for the Securities shall be made against delivery to the nominee of
The Depository Trust Company for the respective accounts of the several
Underwriters of the Securities of one or more global notes (collectively, the
"Global Note") representing the Securities, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Securities duly paid by
the Issuer and/or the Guarantor. The Global Note will be made available for
inspection by the Representatives at the office of the Trustee, 101 Barclay
Street, New York, New York 10286 not later than 1:00 P.M., New York City time,
on the Business Day prior to the Closing Date.
As compensation to the Underwriters for their commitments hereunder, the
Issuer will pay, or cause to be paid, to J.P. Morgan Securities Inc., for the
accounts of the several Underwriters, an amount equal to __% of the principal
amount of the Securities to be delivered by the Issuer hereunder on the Closing
Date. On __, 1998, or on such other date, no later than the fifth Business Day
thereafter, as the Representatives and the Issuer may agree upon in writing, the
Issuer will pay or cause to be paid, by wire transfer, in immediately available
funds, such commission to the account specified by J.P. Morgan Securities Inc.
4. Each of the Issuer and the Guarantor, jointly and severally, represents
and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary prospectus
has been issued by the Commission, and each preliminary prospectus filed as part
of the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act, complied when
so filed in all material respects with the Securities Act, and did not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information relating to any Underwriter
furnished to the Issuer and the Guarantor in writing by such Underwriter through
the Representatives expressly for use therein;
3
<PAGE>
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Issuer or the Guarantor, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material respects
with the Securities Act and the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Trust
Indenture Act") and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the date of
the Prospectus and any amendment or supplement thereto, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented, if applicable, at the Closing Date
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture Act, and (ii)
statements or omissions in the Registration Statement or the Prospectus made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Issuer and the Guarantor in writing by such Underwriter through
the Representa tives expressly for use therein;
(c) the documents incorporated by reference in the Prospectus, when they
become effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Securities Exchange Act as applicable and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents are filed
with the Commission, will conform in all material respects to the requirements
of the Exchange Act, and will not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(d) the financial statements, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Guarantor and its
consolidated
4
<PAGE>
subsidiaries as of the dates indicated and the results of their operations and
the changes in their consolidated cash flows for the periods specified; and said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the Registration Statement
present fairly the information required to be stated therein;
(e) neither the Guarantor nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, which loss or interference has had a material adverse effect or would
reasonably be expected to have a material adverse effect on the general affairs,
financial position, stockholders' equity or consolidated results of operations
of the Guarantor and its subsidiaries taken as a whole, otherwise than as set
forth or contemplated in the Prospectus; since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capital stock (other than pursuant to any employee
incentive or benefit plan in existence on the date of this Agreement) or
increase in the long-term debt of the Guarantor or any of its subsidiaries in
excess of $25,000,000 (other than working capital borrowings classified as long
term debt in an amount not exceeding $75,000,000), or any material adverse
change, or any prospective material adverse change, in or affecting the general
affairs, financial position, stockholders' equity or consolidated results of
operations of the Guarantor and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus neither the Guarantor nor any of its subsidiaries
has entered into any transaction or agreement (whether or not in the ordinary
course of business) material to the Guarantor and its subsidiaries taken as a
whole;
(f) each of the Guarantor, the Issuer and Lexmark International, S.N.C.
("Lexmark-France"), Lexmark International Technology S.A. ("LexTech" and,
together with the Issuer and Lexmark-France, the "Material Subsidiaries") has
been duly incorporated and is validly existing as a corporation, or with respect
to Lexmark- France, a societe en nom collectif, as the case may be, in good
standing under the laws of its jurisdiction incorporation, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure
5
<PAGE>
to be so qualified or in good standing would not have a material adverse effect
on the Guarantor and its subsidiaries, taken as a whole;
(g) the Guarantor has an authorized capitalization as described in the
Prospectus, and, except as otherwise described in the Prospectus, all of the
outstanding shares of capital stock of the Guarantor have been duly authorized
and validly issued and are fully paid and non-assessable; all of the outstanding
shares of capital stock of the Issuer and LexTech have been duly authorized and
validly issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Guarantor, free and
clear of all liens, encumbrances, security interests and claims; and all of the
equity interests of Lexmark-France have been duly authorized and validly issued
and are fully paid and (except for directors' qualifying shares and except as
set forth in the Prospectus) are owned directly or indirectly by the Guarantor,
free and clear of all liens, encumbrances, security interests and claims;
(h) this Agreement has been duly authorized, executed and delivered by each
of the Issuer and the Guarantor;
(i) the Notes have been duly authorized, and when issued and delivered
pursuant to this Agreement, will have been duly executed, authenticated, issued
and delivered and will constitute valid and binding obligations of the Issuer,
entitled to the benefits provided by the Indenture and enforceable in accordance
with their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles (including,
without limitation, the availability of specific performance, injunctive relief
and other equitable remedies); the Guarantee has been duly authorized, and when
issued and delivered together with the Notes pursuant to this Agreement, will
have been duly executed, issued and delivered and will constitute a valid and
binding obligation of the Guarantor entitled to the benefits provided by the
Indenture and enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles (including, without limitation, the availability of
specific performance, injunctive relief and other equitable remedies); the
Indenture has been duly authorized and upon effectiveness of the Registration
Statement will have been duly qualified under the Trust Indenture Act and, when
executed and delivered by the Issuer, the Guarantor and the Trustee, the
Indenture will constitute a valid and binding instrument enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(including, without limitation, the availability of specific performance,
injunctive
6
<PAGE>
relief and other equitable remedies); and the Securities and the Indenture will
conform to the descriptions thereof in the Prospectus;
(j) neither the Guarantor nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Guarantor or any of its subsidiaries is a party or by which it or any
of them or any of their respective properties is bound, except (other than, in
the case of each of the Issuer and the Guarantor, with respect to its
Certificate of Incorporation and By-laws) for violations and defaults which
individually and in the aggregate are not material to the Guarantor and its
subsidiaries taken as a whole; the issue and sale by the Issuer of the Notes and
the issuance by the Guarantor of the Guarantee and the performance by each of
the Issuer and the Guarantor of all its obligations under the Securities, the
Indenture and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Guarantor or any of its subsidiaries is a party or by which the Guarantor or any
of its subsidiaries is bound or to which any of the property or assets of the
Guarantor or any of its subsidiaries is subject except for any such breach,
conflict or default which is not material to the Guarantor and its subsidiaries
taken as a whole; nor will any such action result in any violation of the
provisions of the Certificate of Incorporation or the By-Laws of the Issuer or
the Guarantor or any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Guarantor, its subsidiaries or any of their respective properties except such
violations of law, statute, or any order, rule or regulation which are not
material to the Guarantor and its subsidiaries taken as a whole; and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Issuer or the Guarantor of the
transactions contemplated by this Agreement or the Indenture, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and the Trust
Indenture Act or state securities or Blue Sky laws;
(k) other than as set forth or contemplated in the Prospectus, there are no
legal or governmental investigations, actions, suits or proceedings pending or,
to the knowledge of the Issuer or the Guarantor, threatened against or affecting
the Guarantor or any of its subsidiaries or any of their respective properties
or to which the Guarantor or any of its subsidiaries is or may be a party or to
which any property of the Guarantor or any of its subsidiaries is or may be the
subject which, if determined adversely to the Guarantor or any of its
subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the general affairs, financial
position,
7
<PAGE>
stockholders' equity or consolidated results of operations of the Guarantor and
its subsidiaries, taken as a whole, and, to the best of the Issuer's and the
Guarantor's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and there are no statutes,
regulations, contracts or other documents that are required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
(l) to the best knowledge of the Guarantor, Coopers & Lybrand L.L.P., who
have certified certain financial statements of the Guarantor and its
subsidiaries, are independent public accountants as required by the Securities
Act;
(m) the Guarantor and its Material Subsidiaries have good and marketable
title in fee simple to all items of real property (including, without
limitation, all such properties described as owned under the caption "Item 2:
Properties" in the Guarantor's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (the "10-K") incorporated by reference in the
Prospectus) and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects except
such as are described or referred to in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Guarantor and its Material
Subsidiaries, and any real property and buildings held under lease by the
Guarantor and its Material Subsidiaries (including, without limitation, all such
properties and buildings described as leased under the caption "Item 2:
Properties" in the 10-K incorporated by reference in the Prospectus) are held by
them under valid, existing and enforceable leases with such exceptions as are
not material and do not interfere with the use made or proposed to be made of
such property and buildings by the Guarantor and its Material Subsidiaries;
(n) no relationship, direct or indirect, exists between or among the
Guarantor or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Guarantor or any of its
subsidiaries on the other hand, which is required by the Securities Act to be
described in the Registration Statement and the Prospectus which is not so
described;
(o) neither the Issuer nor the Guarantor is and, after giving effect to the
offering and sale of the Securities, will be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(p) except as disclosed in the Prospectus, the Guarantor and its
subsidiaries own or possess or are licensed to use the patents, patent licenses,
trademarks, trade
8
<PAGE>
names, service marks, service names, copyrights and other intellectual property
rights (collectively, the "Intellectual Property") necessary to carry on their
business as presently conducted and as proposed to be conducted, without any
conflict with or infringement of the rights of others except for any such
conflicts or infringements that, individually or in the aggregate, do not or
would not reasonably be expected to have a material adverse effect on the
general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole;
to the best knowledge of the Guarantor and the Issuer, none of the technology
employed by the Guarantor or its subsidiaries has been obtained or is being used
by the Guarantor or its subsidiaries in violation of any contractual or
fiduciary obligation binding on the Guarantor, its subsidiaries or any of their
respective directors, employees or consultants or otherwise in violation of the
rights of any person except for any such violations that, individually or in the
aggregate, do not or would not reasonably be expected to have a material adverse
effect on the general affairs, financial position, stockholders' equity or
consolidated results of operations of the Guarantor and its subsidiaries, taken
as a whole; except as disclosed in the Prospectus, neither the Guarantor nor any
of its subsidiaries has received any notice of infringement or violation of or
conflict with (and knows of no such infringement or conflict with) asserted
rights of others with respect to any Intellectual Property or any trade secrets,
proprietary information, inventions, know-how, processes and procedures owned,
used by or licensed to the Guarantor or any such subsidiary which, individually
or in the aggregate, if the subject of any unfavorable decision, ruling or
finding, would reasonably be expected to have a material adverse effect on the
general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole;
(q) Neither the Guarantor nor its subsidiaries have experienced an ERISA
Event (as defined below) which individually, or taken together with all other
ERISA Events, could reasonably be expected to have a material adverse effect on
the general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole.
For the purposes of this paragraph (q), "ERISA Event" means (a) any "reportable
event" as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to any employee pension benefit plan (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA ("Multiemployer Plan")) subject
to the provisions of Title IV of ERISA or Section 412 of the Internal Revenue
Code of 1986, as amended (the "Code") or Section 302 of ERISA, and in respect of
which the Guarantor or any of its subsidiaries is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA (collectively, a "Plan"), (other than an event
for which the 30-day notice period is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section
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412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minium funding standard with respect to any Plan; (d) the incurrence by the
Guarantor or any of its subsidiaries of any liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by the Guarantor or
any of its subsidiaries from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Guarantor or any of its
subsidiaries of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Guarantor or any of its subsidiaries of any notice, or the receipt by any
Multiemployer Plan from the Guarantor or any of its subsidiaries of any notice,
concerning the imposition of any liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
5. Each of the Issuer and the Guarantor covenants and agrees with each of
the several Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to become
effective at the earliest possible time and, if required, to file the final
Prospectus with the Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act; and to file promptly all reports and any
definitive proxy or information statements required to be filed by the Issuer
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities; and to furnish copies of the Prospectus to the Underwriters in
New York City prior to 10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement in such quantities as the Representatives
may reasonably request;
(b) to deliver, at the expense of the Issuer, to the Representatives, four
signed copies of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and documents incorporated by
reference therein, and to each other Underwriter a conformed copy of the
Registration Statement (as originally filed) and each amendment thereto, in each
case without exhibits but including the documents incorporated by reference
therein and, during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representatives may reasonably request;
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(c) before filing any amendment or supplement to the Registration Statement
or the Prospectus, whether before or after the time the Registration Statement
becomes effective, to furnish to the Representatives a copy of the proposed
amendment or supplement for review and not to file any such proposed amendment
or supplement to which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm such advice in
writing, (i) when the Registration Statement has become effective, (ii) when any
amendment to the Registration Statement has been filed or becomes effective,
(iii) when any supplement to the Prospectus or any amendment to the Prospectus
has been filed and to furnish the Representatives with copies thereof, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose, (vi) of the
occurrence of any event, within the period referenced in paragraph (e) below, as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
and (vii) of the receipt by the Issuer or the Guarantor of any notification with
respect to any suspension of the qualification of the Securities for offer and
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of any such
stop order, or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such qualification
of the Securities, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Securities as in the opinion of counsel for the Underwriters a
prospectus relating to the Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Issuer, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Issuer and
the Guarantor) to which Securities may have been sold by the
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Representatives on behalf of the Underwriters and to any other dealers upon
request, such amendments or supplements to the Prospectus as may be necessary so
that the statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus will comply with law;
(f) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Securities; provided that neither
the Issuer nor the Guarantor shall be required to file a general consent to
service of process in any jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable, an earnings statement which will satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 of the
Commission promulgated thereunder covering a period of at least twelve months
beginning with the first fiscal quarter of the Issuer commencing after the
"effective date" (as defined in Rule 158) of the Registration Statement;
(h) for three years following the Closing Date, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Securities, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;
(i) during the period beginning on the date hereof and continuing to and
including the Business Day following the Closing Date, not to offer, sell,
contract to sell, or otherwise dispose of any debt securities of or guaranteed
by the Issuer or the Guarantor which are substantially similar to the
Securities;
(j) to use the net proceeds received by the Issuer from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution, authentication
and delivery of the Securities, includ ing any expenses of the Trustee, (ii)
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any prelimi-
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nary prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification
and determination of eligibility for investment of the Securities under the laws
of such jurisdictions as the Underwriters may designate (including fees of
counsel for the Underwriters and their disbursements), (iv) related to any
filing with the National Association of Securities Dealers, Inc., (v) in
connection with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Indenture, the Preliminary and Supplemental
Blue Sky Memoranda and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided, and (vi) payable
to rating agencies in connection with the rating of the Securities.
6. The several obligations of the Underwriters hereunder to purchase the
Securities on the Closing Date are subject to the performance by the Issuer and
the Guarantor of their obligations hereunder and to the following additional
conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act, such
post-effective amendment shall have become effective) not later than 5:00 P.M.,
New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Regis tration Statement or any post-affective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Issuer and the Guarantor
contained herein are true and correct on and as of the Closing Date as if made
on and as of the Closing Date and the Issuer and the Guarantor shall have
complied with all agreements and all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(c) subsequent to the execution and delivery of this Agreement and prior to
the Closing Date, there shall not have occurred any downgrading, nor shall any
notice have been given of (i) any downgrading, (ii) any intended or potential
downgrading, or (iii) any review or possible change that does not indicate an
improvement, in the rating accorded any securities of or guaranteed by the
Issuer or the Guarantor by any
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"nationally recognized statistical rating organization", as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus, there shall not have been any change in the capital stock (other
than pursuant to any employee benefit or incentive plan in existence on the date
of this Agreement) or increase in the long-term debt of the Guarantor or any of
its subsidiaries in excess of $25,000,000 (other than working capital borrowings
classified as long-term debt in an amount not exceeding $75,000,000), or any
material adverse change, or prospective material adverse change, in or affecting
the general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the effect of
which in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the Closing Date on the terms and in the manner contemplated in
the Prospectus; and neither the Guarantor nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, in excess of
any applicable insurance, or from any labor dispute or court or governmental
action, order to decree, otherwise than as set forth or contemplated in the
Prospectus;
(e) the Representatives shall have received on and as of the Closing Date a
certificate of an executive officer of the Issuer and the Guarantor, with
specific knowledge about the Issuer's financial matters, satisfactory to the
Representatives to the effect set forth in subsections (a) through (c) (with
respect to the respective representations, warranties, agreements and conditions
of the Issuer and the Guarantor) of this Section and to the further effect that
there has not occurred any material adverse change, or prospective material
adverse change, in or affecting the general affairs, financial position,
stockholders' equity or consolidated results of operations of the Guarantor and
its subsidiaries taken as a whole from that set forth or contemplated in the
Registration Statement;
(f) Vincent J. Cole, General Counsel for the Guarantor and the Issuer,
shall have furnished to the Representatives his written opinion, dated the
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) each of the Issuer and the Guarantor has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority (corporate and
other) to
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own its properties and conduct its business as described in the Prospectus
or the 10-K incorporated by reference therein;
(ii) each of the Issuer and the Guarantor has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
other than where the failure to be so qualified or in good standing would
not have a material adverse effect on the Guarantor and its subsidiaries
taken as a whole;
(iii) the Guarantor has an authorized capitalization as described in
the Prospectus, and, except as otherwise described in the Prospectus, all
of the outstanding shares of capital stock of the Guarantor have been duly
authorized and validly issued and are fully paid and non-assessable; all of
the outstanding shares of capital stock of the Issuer and LexTech have been
duly authorized and validly issued, are fully paid and non-assessable and
(except for directors' qualifying shares are owned directly or indirectly
by the Guarantor, free and clear of all liens, encumbrances, security
interests and claims; and all of the equity interests of Lexmark-France
have been duly authorized and validly issued and are fully paid and (except
for directors' qualifying shares and except as set forth in the Prospectus)
are owned directly or indirectly by the Guarantor, free and clear of all
liens, encumbrances, security interests and claims;
(iv) to the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus or the 10-K incorporated by
reference therein, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such counsel's
knowledge, threatened against the Guarantor or any of its subsidiaries or
any of their respective properties or to which the Guarantor or any of its
subsidiaries is or may be a party or to which any property of the Guarantor
or its subsidiaries is or may be the subject which, if determined adversely
to the Guarantor or any of its subsidiaries, could individually or in the
aggregate have, or reasonably be expected to have, a material adverse
effect on the general affairs, financial position, stockholders' equity or
consolidated results of operations of the Guarantor and its subsidiaries
taken as a whole; to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and such counsel does not know of any statutes,
regulations, contracts or other documents required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
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(v) this Agreement has been duly authorized, executed and delivered by
each of the Issuer and the Guarantor;
(vi) the Notes have been duly authorized, executed and delivered by
the Issuer and, when they have been duly authenticated in accordance with
the terms of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will
constitute valid and binding obligations of the Issuer entitled to the
benefits provided by the Indenture and the Guarantee and enforceable in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (including, without limitation, the availability of
specific performance, injunctive relief and other equitable remedies); the
Guarantee has been duly authorized, executed and delivered by the
Guarantor, and when the Notes have been duly authenticated in accordance
with the terms of the Indenture and the Securities have been delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement, the Guarantee will constitute a valid and binding obligation of
the Guarantor entitled to the benefits provided by the Indenture and
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (including, without limitation, the availability
of specific performance, injunctive relief and other equitable remedies);
and the Securities and the Indenture conform to the descriptions thereof in
the Prospectus;
(vii) the Indenture has been duly authorized, executed and delivered
by each of the Issuer and the Guarantor and (assuming the due
authorization, execution and delivery thereof by the Trustee pursuant
thereto) constitutes a valid and binding instrument of each of the Issuer
and the Guarantor enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been duly
qualified under the Trust Indenture Act; (including, without limitation,
the availability of specific performance, injunctive relief and other
equitable remedies);
(viii) neither the Guarantor nor any of its subsidiaries is, in
violation of or in default under, its Certificate of Incorporation or
By-Laws or any indenture, mortgage, deed of trust, loan agreement or other
agreement or
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instrument known to such counsel to which the Guarantor or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except (other than, in the case of each of
the Issuer and the Guarantor, with respect to its Certificate of
Incorporation and By-Laws) for violations and defaults which individually
and in the aggregate are not material to the Guarantor and its subsidiaries
taken as a whole; the issue and sale by the Issuer of the Notes and the
issuance by the Guarantor of the Guarantee and the performance by each of
the Issuer and the Guarantor of all of its obligations under the
Securities, the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which the Guarantor
or any of its subsidiaries is a party or by which the Guarantor or any of
its subsidiaries is bound or to which any of the property or assets of the
Guarantor or any of its subsidiaries is subject, except for violations or
defaults which individually or in the aggregate are not material to the
Guarantor and its subsidiaries taken as a whole) nor will any such action
result in any violation of the provisions of the Certificate of
Incorporation, or the By-Laws of the Issuer or the Guarantor or any
applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor, its
subsidiaries or any of their respective properties;
(ix) no consent, approval, authorization, order, license, registration
or qualification of or with any court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Issuer and the Guarantor of the other transactions contemplated by this
Agreement or the Indenture, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as have
been obtained under the Securities Act and the Trust Indenture Act or state
securities or Blue Sky laws;
(x) the statements in the Prospectus under "Description of Notes" and
"Underwriting", in the Prospectus incorporated by reference from Item 3 of
Part 1 of the 10-K and in the Registration Statement in Item 15, insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents or proceedings;
(xi) neither the Issuer nor the Guarantor is and, after giving effect
to the offering and sale of the Securities, will be an "investment company"
or an
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entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(xii) such counsel is of the opinion that the Registration Statement
and the Prospectus and any amendments and supplements thereto (other than
the financial statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Trust Indenture Act and
believes that (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion and other than
that part of the Registration Statement which constitutes the Form T-1 of
the Trustee under the Trust Indenture Act) the Registration Statement and
the prospectus included therein at the time the Registration Statement
became effective did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that the Prospectus, as
amended or supplemented, if applicable, at the time it was filed pursuant
to Rule 424(b) under the Securities Act did not, and as of the closing date
does not, does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(xiii) the Guarantor and its Material Subsidiaries have good and
marketable title in fee simple to all items of real property (including,
without limitation, all such properties described as owned under the
caption "Item 2: Properties" in the Guarantor's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997 (the "10-K") incorporated by
reference in the Prospectus) and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Guarantor and its Material Subsidiaries, and any real
property and buildings held under lease by the Guarantor and its Material
Subsidiaries (including, without limitation, all such properties and
buildings described as leased under the caption "Item 2: Properties" in the
10-K incorporated by reference in the Prospectus) are held by them under
valid, existing and enforceable leases with such exceptions as are not
material and do not interfere with the use made or proposed to be made of
such property and buildings by the Guarantor and its Material Subsidiaries;
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(xiv) the documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Issuer or the Guarantor
prior to the Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and they have no reason to
believe that any of such documents, when such documents became effective or
were so filed, as the case may be, contained, in the case of a registration
statement which became effective under the Securities Act, an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under the
Exchange with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such documents were so filed, not misleading; and
(xv) to the best of such counsel's knowledge, other than as set forth
in the Prospectus or in the 10-K: (a) neither the Issuer nor the Guarantor
has received notice of any claim of infringement or violation of or
conflict with rights or claims of others with respect to any patents,
patent rights or other Intellectual Property owned, licensed or used by the
Issuer or the Guarantor except for any such conflicts or infringements
that, individually or in the aggregate, do not or would not reasonably be
expected to have a material adverse effect on the Guarantor and its
subsidiaries, taken as a whole; (b) and such counsel is not aware of any
research or licensing agreements, royalty arrangements, patents, patent
rights or other Intellectual Property of others which are infringed by the
Guarantor's or the Issuer's products or processes in such a manner which
would, individually or in the aggregate, reasonably be expected to result
in a material adverse effect on the Guarantor and its subsidiaries, taken
as a whole.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Delaware and New York, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or opinions
(in form and substance reasonably satisfactory to Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar with
the applicable laws; (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible
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officers of the Issuer and the Guarantor and certificates or other written
statements of officials of jurisdictions having custody of documents respecting
the corporate existence or good standing of the Issuer and the Guarantor. The
opinion of such counsel for the Issuer and the Guarantor shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. With respect to the matters to be covered in
subparagraph (xiii) above counsel may state their opinion and belief is based
upon their participation in the preparation of the Registration Statement and
the Prospectus and any amendment or supplement thereto but is without
independent check or verification except as specified.
The opinion of Vincent J. Cole described above shall be rendered to the
Underwriters at the request of the Issuer and shall so state therein;
(g) on the effective date of the Registration Statement and the effective
date of the most recently filed post-effective amendment to the Registration
Statement and also on the Closing Date, Coopers & Lybrand L.L.P. shall have
furnished to you letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, containing statements and information of
the type customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus;
(h) the Representatives shall have received on and as of the Closing Date
an opinion of Sullivan & Cromwell, counsel to the Underwriters, with respect to
the validity of the Indenture and the Securities, the Registration Statement,
the Prospectus and other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters; and
(i) on or prior to the Closing Date the Issuer and the Guarantor shall have
furnished to the Representatives such further certificates and documents as the
Representatives shall reasonably request.
7. The Issuer and the Guarantor, jointly and severally, agree to indemnify
and hold harmless each Underwriter, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Securities and each person,
if any, who controls any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation, the
legal fees and other expenses incurred
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in connection with any suit, action or proceeding or any claim asserted) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectus (as amended or supplemented if
the Issuer and the Guarantor shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Issuer
and the Guarantor in writing by such Underwriter through the Representatives
expressly for use therein and provided, further, that neither the Issuer nor the
Guarantor shall be liable to any Underwriter under the indemnity agreement in
this subsection with respect to any preliminary prospectus to the extent that
any such loss, claim, damage or liability of such Underwriter results from the
fact that such Underwriter sold Securities to a person to whom there was not
sent by commercially reasonable means, at or prior to the written confirmation
of such sale, a copy of the Prospectus, where such delivery is required by the
Securities Act, if the Issuer or the Guarantor has previously furnished
sufficient copies thereof to such Underwriter and the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission of a
material fact contained in a preliminary prospectus and corrected in the
Prospectus.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Issuer, the Guarantor, their directors, its officers who sign the
Registration Statement and each person who controls the Issuer or the Guarantor
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Issuer and
the Guarantor to each Underwriter, furnished to the Issuer and the Guarantor in
writing by such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such
21
<PAGE>
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters,
each affiliate of any Underwriter which assists such Underwriter in the
distribution of the Securities and such control persons of Underwriters shall be
designated in writing by J.P. Morgan Securities Inc. and any such separate firm
for the Issuer, the Guarantor, their directors, its officers who sign the
Registration Statement and such control persons of the Issuer or the Guarantor
shall be designated in writing by the Guarantor. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person
22
<PAGE>
under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuer and the Guarantor on the one hand and the Underwriters on the other hand
from the offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuer and the Guarantor on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Issuer and the Guarantor on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total net
proceeds from the offering (before deducting expenses) received by the Issuer
and the Guarantor and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of the Issuer and the Guarantor on the one hand
and the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer and the Guarantor or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Issuer, the Guarantor and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considera tions referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Under-
23
<PAGE>
writers' obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of Securities set forth opposite
their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law of in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Issuer and the Guarantor set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Issuer, the Guarantor, their officers or directors or any other
person controlling the Issuer or the Guarantor, and (iii) acceptance of and
payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Issuer and the Guarantor, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Issuer or the Guarantor shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment) by the Commission.
If on the Closing Date any one or more of the Underwriters shall fail or
refuse to purchase Securities which it or they have agreed to purchase hereunder
on such date,
24
<PAGE>
and the aggregate principal amount of Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate principal amount of the Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as the Representatives may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-tenth of such principal amount of Securities without the written
consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Securities which it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Representatives and the Issuer for the purchase
of such Securities are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Issuer. In any such case either you or the Issuer shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. If this Agreement shall be terminated by the Underwriters except for
any termination pursuant to Section 8(i), (iii) or (iv), or any of
them, because of any failure or refusal on the part of the Issuer or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Issuer or the Guarantor shall be unable to
perform its obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Issuer and/or the Guarantor
agrees to reimburse the Underwriters or such Underwriters as have so terminated
this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and expenses of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Issuer, the Guarantor, the Underwriters, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Securities, any controlling
persons referred
25
<PAGE>
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260-0060 (telefax: [212-648- 5151]); Attention: Syndicate Department.
Notices to the Issuer shall be given to it at One Lexmark Centre Drive,
Lexington, Kentucky 40550, (telefax: 606 232-3128); Attention: Vincent J. Cole,
Esq.
13. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
26
<PAGE>
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
LEXMARK INTERNATIONAL, INC.
By:
------------------------
Title:
LEXMARK INTERNATIONAL GROUP,
INC.
By:
------------------------
Title:
Accepted: , 1998
------------------
J.P. Morgan Securities Inc.
Salomon Brothers Inc
NationsBanc Montgomery Securities LLC
Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.
By: J.P. Morgan Securities Inc.
By:
------------------------
Title:
27
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
of Securities to be
Underwriter Purchased
----------- ---------
<S> <C>
J.P. Morgan Securities Inc......................................................... $
Salomon Brothers Inc............................................................... $
NationsBanc Montgomery Securities LLC.............................................. $
======================
Total........................................ $ 150,000,000
</TABLE>
28
<PAGE>
Exhibit 4.1
Draft of April 29, 1998
- --------------------------------------------------------------------------------
LEXMARK INTERNATIONAL, INC.,
AS ISSUER
and
LEXMARK INTERNATIONAL GROUP, INC.,
AS GUARANTOR
to
THE BANK OF NEW YORK,
AS TRUSTEE
________________
Indenture
Dated as of -, 1998
________________
$ 150,000,000
- % SENIOR NOTES DUE 2008
- --------------------------------------------------------------------------------
<PAGE>
LEXMARK INTERNATIONAL, INC.
LEXMARK INTERNATIONAL GROUP, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . 613
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . 701
702(a)
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . 703(a)
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . 101
1004
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(d). . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . 704
(b). . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d). . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e). . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . 601
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 602
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d). . . . . . . . . . . . . . . . . . . . . . . . . . 601
(e). . . . . . . . . . . . . . . . . . . . . . . . . . 514
- ----------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 508
(c). . . . . . . . . . . . . . . . . . . . . . . . . . 104(c)
Section 317(a)(1). . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 504
(b). . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . 107
- ----------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-ii-
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . 15
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . 15
SECTION 104. Acts of Holders; Record Dates. . . . . . . . . . . . . . . . . 16
SECTION 105. Notices, Etc., to Trustee, Issuer and Guarantor. . . . . . . . 19
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . 20
SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . 20
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . . . . 21
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 21
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . . . . 21
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . 21
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . 23
SECTION 203. Form of Reverse of Security. . . . . . . . . . . . . . . . . . 27
SECTION 204. Form of Trustee's Certificate of Authentication. . . . . . . . 31
SECTION 205. Form of Guarantee. . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE THREE
The Securities
SECTION 301. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . 36
- ---------------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-i-
<PAGE>
Page
----
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . 37
SECTION 305. Global Securities. . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 306. Registration, Registration of Transfer and Exchange. . . . . . 39
SECTION 307. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . 41
SECTION 308. Payment of Interest; Interest Rights Preserved . . . . . . . . 42
SECTION 309. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . 44
SECTION 310. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 311. Computation of Interest. . . . . . . . . . . . . . . . . . . . 44
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . . . . 45
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . 47
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . 50
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . 52
SECTION 505. Trustee May Enforce Claims Without Possession of Securities. . 53
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . 53
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 54
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest . . . . . . . . . . . 55
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . 55
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 55
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . 56
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 56
- ---------------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-ii-
<PAGE>
Page
----
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 57
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . 57
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . . . . 58
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . 58
SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . 60
SECTION 605. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . 60
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . 61
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . 61
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . . . . 62
SECTION 610. Resignation and Removal; Appointment of Successor. . . . . . . 62
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . . . . 64
SECTION 612. Merger, Conversion, Consolidation or Succession to Business. . 64
SECTION 613. Preferential Collection of Claims Against Issuer or Guarantor. 65
SECTION 614. Appointment of Authenticating Agent. . . . . . . . . . . . . . 65
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Issuer
SECTION 701. Issuer to Furnish Trustee Names and Addresses of Holders . . . 67
SECTION 702. Preservation of Information; Communications to Holders . . . . 68
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 704. Reports by Issuer and Guarantor. . . . . . . . . . . . . . . . 69
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
- ---------------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-iii-
<PAGE>
Page
----
SECTION 801. Guarantor and Issuer May Consolidate,
Etc.,Only on Certain Terms. . . . . . . . . . . . . . . . . . 68
SECTION 802. Successor Substituted. . . . . . . . . . . . . . . . . . . . . 71
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . 71
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . 72
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . 74
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . . . . . . 74
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . . . . . . 74
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . 74
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest. . . . . . . . . . 75
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . 75
SECTION 1003. Money for Security Payments to Be Held in Trust . . . . . . . 76
SECTION 1004. Statement by Officers as to Default . . . . . . . . . . . . . 77
SECTION 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . 78
SECTION 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . 78
SECTION 1008. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . 79
SECTION 1009. Limitation on Sale and Leaseback Transactions . . . . . . . . 81
SECTION 1010. Certain Covenants to Become Binding on Issuer . . . . . . . . 82
SECTION 1011. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . 82
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Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE>
Page
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ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption . . . . . . . . . . . . . . . . . . . . 83
SECTION 1102. Applicability of Article. . . . . . . . . . . . . . . . . . 83
SECTION 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . 83
SECTION 1104. Selection by Trustee of Securities to Be Redeemed . . . . . 83
SECTION 1105. Notice of Redemption. . . . . . . . . . . . . . . . . . . . 84
SECTION 1106. Deposit of Redemption Price . . . . . . . . . . . . . . . . 85
SECTION 1107. Securities Payable on Redemption Date . . . . . . . . . . . 85
SECTION 1108. Securities Redeemed in Part . . . . . . . . . . . . . . . . 86
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Issuer's Option to Effect Defeasance or Covenant Defeasance 86
SECTION 1202. Defeasance and Discharge. . . . . . . . . . . . . . . . . . 86
SECTION 1203. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . 87
SECTION 1204. Conditions to Defeasance or Covenant Defeasance . . . . . . 88
SECTION 1205. Deposited Money and U.S. Government Obligations to be
Held in Trust; Miscellaneous Provisions . . . . . . . . . . 90
SECTION 1206. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE THIRTEEN
Guarantee
SECTION 1301. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 1302. Execution and Delivery of Guarantee.. . . . . . . . . . . . . 94
SECTION 1303. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 1304. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . 95
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
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Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE>
Page
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SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
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Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE>
INDENTURE, dated as of , 1998, among Lexmark International,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Issuer"), Lexmark International Group, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Guarantor"), each having its principal office at One Lexmark
Centre Drive, Lexington, Kentucky 40550, and The Bank of New York, a New York
banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE ISSUER AND THE GUARANTOR
The Issuer has duly authorized the creation of an issue of
$150,000,000 aggregate principal amount of its -% Senior Notes due 2008 (herein
called the "Securities") of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Issuer has duly authorized the execution and
delivery of this Indenture.
The Guarantor desires to unconditionally guarantee the payment of
principal, premium (if any) and interest due under this Indenture and the
Securities, as the same shall become due and payable in accordance with the
terms of this Indenture and the Securities (with the Guarantee of the Guarantor
endorsed thereon), and the performance of all the Issuer's obligations
thereunder, and to provide therefor has duly authorized the execution and
delivery of this Indenture.
All things necessary (i) to make the Securities, when executed by
the Issuer and authenticated and delivered hereunder and duly issued by the
Issuer, the valid obligations of the Issuer, (ii) to make the Guarantee of the
Guarantor, when executed by the Guarantor and endorsed on the Securities
executed, authenticated and delivered hereunder, the valid obligation of the
Guarantor and (iii) to make this Indenture a valid agreement of the Issuer and
of the Guarantor, all in accordance with their respective terms, have been done.
<PAGE>
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such account-ing principles as
are generally accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
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"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security (including any rules or
procedures providing for payments to be made in immediately available funds), to
the extent applicable to such transaction and as in effect from time to time.
"Attributable Value" means, as to any lease under which any Person is
at the time liable, other than a Capital Lease Obligation, and at any date as of
which the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining term
thereof as determined in accordance with generally accepted accounting
principles, discounted from the last date of such term to the date of
determination at a rate per annum equal to the discount rate that would be
applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period will be the aggregate amount of
rent payable by the lessee with respect to such period after
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excluding amounts required to be paid on account of insurance, taxes,
assessments, utility, operating and labor costs and similar charges. In the
case of any lease that is terminable by the lessee upon the payment of a
penalty, such net amount will also include the amount of such penalty, but no
rent will be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated. "Attributable Value" means,
as to a Capital Lease Obligation under which any Person is at the time liable
and at any date as of which the amount thereof is to be determined, the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with generally accepted accounting principles.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
"Authorized Officer" of any Person means the Chairman of the Board, a
Vice Chairman of the Board, the Chief Executive Officer, a President or a Vice
President, Controller, a Treasurer or an Assistant Treasurer of such Person.
"Board of Directors" means, with respect to any Person, either the
board of directors or any duly authorized committee of that board. Except as
otherwise provided or unless the context otherwise requires, each reference
herein to the "Board of Directors" shall mean the Board of Directors with
respect to the Issuer.
"Board Resolution" of the Issuer or the Guarantor means a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Issuer or
Guarantor, as the case may be, to have been duly adopted by its Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee. Except as otherwise expressly provided or unless
the context otherwise requires, each reference herein to a "Board Resolution"
shall mean a Board Resolution of the Issuer.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
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<PAGE>
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person that is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with generally accepted
accounting principles. The stated maturity of such obligation will be deemed to
be the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Securities.
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (ii) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Consolidated Net Tangible Assets" means all assets, less (i) all
current liabilities (excluding any indebtedness for borrowed money having a
maturity of less than 12 months from the date of the most recent consolidated
balance sheet of the Guarantor but which by its terms is renewable or extendable
beyond 12 months from such date at the option of the borrower), (ii) the net
book value of all licenses, patents, patent applications, copyrights,
trademarks, trade names, goodwill, non-compete agreements,
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<PAGE>
organizational expenses and other like intangibles, (iii) all unamortized Debt
discount and expense and (iv) all proper reserves, including all reserves for
depreciation, obsolescence, depletion and amortization of properties, of the
Guarantor and its subsidiaries after eliminating inter-company items and
including appropriate deductions for any minority interest, as determined on a
consolidated basis in accordance with generally accepted accounting principles;
PROVIDED, HOWEVER, that no effect will be given to any adjustments on or after
the date of the Indenture to the accounting books and records of the Guarantor
in accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of the Guarantor by another Person.
"Corporate Trust Office" means the principal office of the Trustee in
New York, New York, at which at any particular time its corporate trust business
shall be administered, which, on the date hereof, is located at 101 Barclay
Street, New York, New York 10286, Attention: Corporate Trust Administration,
Floor 21 West.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Debt" means (without duplication), with respect to any Person, (i)
every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) every Capital Lease Obligation of such Person, and (vi) all
Guaranties by such Person of every obligation of the type referred to in Clauses
(i) through (v) of another Person.
"Defaulted Interest" has the meaning specified in Section 308.
"Depositary" means a clearing agency that is registered as such under
the Exchange Act and is designated
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<PAGE>
by the Issuer to act as Depositary for the Securities (or any successor clearing
agency so registered).
"DTC" means The Depository Trust Company, a New York corporation (or
successor Person).
"Event of Default" has the meaning specified in Section 501.
"Global Security" means a Security that evidences all or a part of the
Securities and bears the first legend set forth in Section 204.
"Guarantee" has the meaning specified in the form of Guarantee set
forth in Section 205.
"Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor Person.
"Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and includes
any obligation of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the purpose of assuring
the holder of such Debt of the payment of such Debt, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Debt (and "Guaranteed," "Guaranteeing" and "Guarantor" have meanings correlative
to the foregoing); PROVIDED, HOWEVER, that a Guaranty by any Person will not
include endorsements by such Person for collection or deposit, in either case in
the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto
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<PAGE>
entered into pursuant to the applicable provisions hereof, including, for all
purposes of this instrument and any such supplemental indenture, the provisions
of the Trust Indenture Act that are deemed to be a part of and govern this
instrument and any such supplemental indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Securities.
"Issuer" means the Person named as the "Issuer" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Issuer" shall mean
such successor Person.
"Issuer Request" or "Issuer Order" means a written request or order
signed in the name of the Issuer by its Chairman of the Board, its Vice Chairman
of the Board, its President or a Vice President, Controller and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, security interest, lien,
charge, encumbrance, easement, or other security agreement of any kind or nature
whatsoever on or with respect to such property or assets (including any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Material Subsidiary" means, any subsidiary, the (a) assets, (b)
revenues or (c) operating profit (excluding intercompany receivables and
revenues that would be eliminated upon consolidation in accordance with GAAP) of
which are, at the time of determination (determined, in the case of clause (a),
as at the end of the most recently concluded fiscal quarter, and, in the case of
clauses (b) and (c), in respect of the most recent period of four consecutive
fiscal quarters of the Guarantor for which the relevant financial information is
available), equal to or greater than five percent of the consolidated assets or
consolidated operating profit or ten percent of the consolidated revenues
(excluding intercompany receivables and revenue that would be eliminated upon
consolidation in accordance with GAAP), respectively, of the Guarantor and
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<PAGE>
its subsidiaries at such time. Upon the acquisition of a new subsidiary,
qualification as a "Material Subsidiary" shall be determined on a PRO FORMA
basis on the assumption that such subsidiary had been acquired at the beginning
of the relevant period of four consecutive fiscal quarters.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Net Available Proceeds" from any Sale Transaction by any Person means
cash or readily marketable cash equivalents received (including by way of sale
or discounting of a note, installment receivable or other receivable, but
excluding any consideration received in the form of assumption of Debt or other
obligations by others or received in any other noncash form) therefrom by such
Person, net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability as a consequence of such Sale
Transaction, (ii) all payments made by such Person or its Subsidiaries on any
Debt that is secured by a Lien on the property or assets so disposed of in
accordance with the terms of such Lien or that must, by the terms of such Lien,
or in order to obtain a necessary consent to such Sale Transaction, or by
applicable law, be repaid out of the proceeds from such Sale Transaction, and
(iii) all distributions and other payments made to third parties (other than
Subsidiaries) in respect of minority or joint venture interests as a result of
such Sale Transaction.
"Officers' Certificate" of the Issuer or the Guarantor means a
certificate signed by any two Authorized Officers of the Issuer or the
Guarantor, as the case may be, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Issuer or the
Guarantor, as the case may be.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Issuer or the Guarantor.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all
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<PAGE>
Securities theretofore authenticated and delivered under this Indenture, EXCEPT:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Issuer or the Guarantor) in trust or
set aside and segregated in trust by the Issuer or the Guarantor (if
the Issuer or the Guarantor, as the case may be, shall act as a Paying
Agent) for the Holders of such Securities; PROVIDED that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Securities which have been defeased pursuant to Section 1202
hereof; and
(iv) Securities which have been paid pursuant to Section 307 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Issuer;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Issuer, the Guarantor or any other obligor upon the Securities or the
Guarantee or any Affiliate of the Issuer, the Guarantor or such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith
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<PAGE>
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer, the Guarantor or any other obligor upon the
Securities or the Guarantee or any Affiliate of the Issuer, the Guarantor or
such other obligor.
"Paying Agent" means any Person authorized by the Issuer or the
Guarantor to pay the principal, interest and any other amounts payable in
respect of any Securities on behalf of the Issuer or the Guarantor.
"Permitted Holder" at any time means any Person who, at such time, is
the Holder of at least $1,000,000 in aggregate principal amount of Securities.
"Permitted Receivables Financing" means any program for the transfer
without recourse (other than customary limited recourse) by the Guarantor or any
of its Subsidiaries to any buyer, purchaser or lender of interests in accounts
receivable, so long as (a) such program is intended by the parties thereto to be
treated (whether or not such treatment is ultimately disallowed) as an "off
balance sheet" transaction and (b) the aggregate outstanding amount of
receivables transferred by the Guarantor and its Subsidiaries pursuant to such
program shall not exceed $500,000,000 at any one time.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, 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 307 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"premium" has the meaning specified in Section 203.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Issuer to serve as Quotation Agent.
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<PAGE>
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Treasury Dealer" means (i) J.P. Morgan Securities Inc.,
Salomon Brothers Inc., NationsBanc Montgomery Securities LLC and their
respective successors; PROVIDED, HOWEVER, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the
Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Issuer, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the __________ or _____________ (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means
any vice president, any assistant secretary, any assistant treasurer, any trust
officer or assistant trust officer, the controller or any assistant controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Sale and Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or assets of such
Person which have been or are being sold, conveyed, transferred or otherwise
disposed of by such Person more than 270 days after the acquisition thereof or
the completion of construction or commencement of operation thereof to such
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lender or investor or to any person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or assets.
The stated maturity of such arrangement will be deemed to be the date of the
last payment of rent or any other amount due under such arrangement prior to the
first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"Sale Transaction" means any sale, conveyance, transfer or other
disposition of the kind referred to in the first sentence of the definition of
"Sale and Leaseback Transaction".
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 306.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 308.
"Stated Maturity", when used with respect to any Security or any
instalment of interest thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such instalment of
interest is due and payable.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, trust or other entity as to which more than
50% of the voting power of its outstanding capital stock or other ownership
interests is owned, directly or indirectly, by such Person, by one or more other
Subsidiaries of such Person or by such Person and one or more other Subsidiaries
of such Person. Unless otherwise indicated, any reference to a Subsidiary means
a Subsidiary of the Guarantor.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor
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Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean such successor Trustee.
"U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (ii) an
obligation 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, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
Clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
PROVIDED 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 U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt.
"Vice President", when used with respect to the Issuer, the Guarantor
or the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
"Wholly Owned Subsidiary " of any Person means any Subsidiary of such
Person as to which 100% of the voting power of its outstanding capital stock or
other ownership interests is owned, directly or indirectly, by such Person, by
one or more other Wholly Owned Subsidiaries of such Person or by such Person and
one or more other Wholly Owned Subsidiaries of such Person. Unless otherwise
indicated, any reference to a Wholly Owned Subsidiary means a Wholly Owned
Subsidiary of the Guarantor.
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SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Issuer or the Guarantor to the
Trustee to take any action under any provision of this Indenture, the Issuer or
the Guarantor, as the case may be, shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act and
this Indenture. Each such certificate or opinion shall be given in the form of
an Officers' Certificate of the Issuer or Guarantor, if to be given by an
officer of the Issuer or the Guarantor, as the case may be, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be
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certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Issuer or the Guarantor stating that the information with respect to such
factual matters is in the possession of the Issuer or the Guarantor, as the case
may be, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any
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such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee, the Issuer and the Guarantor, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, the
Issuer or the Guarantor in reliance thereon, whether or not notation of such
action is made upon such Security.
(e) The Issuer may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities, PROVIDED that the Issuer may not set a record date for,
and the provisions of this paragraph shall not apply with respect to, the giving
or making of any notice, declaration, request or direction referred to in the
next paragraph (f). If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities on such record date, and no other
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Holders, shall be entitled to take the relevant action, whether or not such
Holders remain Holders after such record date; PROVIDED that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities on such record date. Nothing in this paragraph shall be construed to
prevent the Issuer from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Issuer, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 106.
(f) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2) or (iv) any direction referred to in Section 512. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; PROVIDED that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this
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paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Trustee, at the Issuer's expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Issuer in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 106.
(g) With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities in the manner set forth in Section
106, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
SECTION 105. NOTICES, ETC., TO TRUSTEE, ISSUER AND
GUARANTOR.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Issuer or the Guarantor shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(2) the Issuer or the Guarantor by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise
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herein expressly provided) if in writing and mailed, first-class postage
prepaid, addressed to it at the address of the Guarantor's principal office
specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Issuer or Guarantor.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or
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excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer or the
Guarantor shall bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities or the
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities or the Guarantee,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and the Holders of Securities, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE, THE SECURITIES AND THE GUARANTEE SHALL EACH BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity,
PROVIDED that no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities, the Guarantee to be endorsed thereon and the Trustee's
certificates of authentication shall be in substantially the forms set forth in
this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities or Guarantee, as the case may be, as
evidenced by their execution thereof.
The definitive Securities and Guarantee to be endorsed thereon shall
be printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such Securities or
Guarantee, as the case may be, as evidenced by their execution thereof.
Upon their original issuance, the Securities shall be issued in the
form of one or more Global Securities
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registered in the name of DTC, as Depositary, or its nominee and deposited with
the Trustee, as custodian for DTC, for credit by DTC to the respective accounts
of beneficial owners of the Securities represented thereby (or such other
accounts as they may direct).
SECTION 202. FORM OF FACE OF SECURITY.
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- 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 THEREOF. THIS
SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND
NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[IF THE SECURITY IS A GLOBAL SECURITY AND DTC IS TO BE THE DEPOSITARY
THEREFOR, THEN INSERT (WITH SUCH CHANGES AS DTC MAY REQUEST AND ARE NOT
OTHERWISE INCONSISTENT HEREWITH) -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
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CUSIP NO.
LEXMARK INTERNATIONAL, INC.
-% SENIOR NOTES DUE 2008
GUARANTEED AS TO PAYMENT OF PRINCIPAL, INTEREST AND ANY
OTHER AMOUNT BY LEXMARK INTERNATIONAL GROUP, INC.
No. __________ $________
Lexmark International, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Issuer", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to __________________, or registered
assigns, the principal sum of _____________________ Dollars [IF THE SECURITY IS
A GLOBAL SECURITY, THEN INSERT -- , or such other principal amount (which, when
taken together with the principal amounts of all other Outstanding Securities,
shall not exceed $- in the aggregate at any time) as may be set forth in the
records of the Trustee hereinafter referred to in accordance with the
Indenture,] on -, 2008 and to pay interest thereon from -, 1998 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on - and - in each year, commencing -, 1998 at the rate of -
% per annum, until the principal hereof is paid or made available for payment,
PROVIDED that any amount of interest or premium on this Security which is
overdue shall bear interest (to the extent that payment thereof shall be legally
enforceable) at the rate per annum then borne by this Security from the date
such amount is due to the day it is paid or made available for payment, and such
overdue interest shall be payable on demand.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be - or - (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on the relevant Regular Record Date and may
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either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture. Interest on
this Security shall be computed on the basis set forth in the Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Issuer maintained for such
purpose in the Borough of Manhattan, The City of New York, and at any other
office or agency maintained by the Issuer for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that at the
option of the Issuer payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register; PROVIDED, FURTHER, that all payments of the principal of (and
premium, if any) and interest on the Security, any Permitted Holder of which has
given wire transfer instructions to the Issuer or its agent at least 10 Business
Days prior to the applicable payment date, will be required to be made by wire
transfer of immediately available funds to the accounts specified by such
Permitted Holders in such instructions. Notwithstanding the foregoing, payment
of any amount payable in respect of a Global Security will be made in accordance
with the Applicable Procedures of the Depositary.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated:
LEXMARK INTERNATIONAL, INC.
By
------------------------------
Name
Title:
Attest:
----------------------------
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SECTION 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities of the
Issuer designated as its -% Senior Notes due 2008 (herein called the
"Securities"), limited in aggregate principal amount to $150,000,000, issued and
to be issued under an Indenture, dated as of -, 1998 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), among the Issuer, the Guarantor named therein and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Issuer, the
Guarantor, the Trustee and the Holders of the Securities and of the terms upon
which the Securities, with the Guarantee endorsed thereon, are, and are to be,
authenticated and delivered.
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Issuer under the Indenture and this
Security are guaranteed pursuant to a Guarantee endorsed hereon as provided in
the Indenture.
REDEMPTION
The Securities are subject to redemption upon not less than 30 nor
more than 60 days prior notice to Holders thereof (in the manner provided in the
Indenture) at any time, as a whole or in part, at the election of the Issuer, at
a Redemption Price equal to the greater of (i) 100% of the principal amount of
the Securities to be redeemed or (ii) as determined by the Quotation Agent, the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (not including any portion of such payments of interest accrued
to the date of redemption) discounted to the redemption date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate plus [ ] basis points, plus, in each case (i) and (ii),
accrued interest on such Security to the date of redemption. The amount, if
any, by which the amount specified in clause (ii) exceeds the amount specified
in clause (i) is herein called the "premium." Interest installments whose
Stated Maturity is on or prior to such date of redemption will be payable to the
Holders of such
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Securities, or one or more predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities (with the Guarantee of the Guarantor endorsed thereon)
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
DEFEASANCE
The Indenture contains provisions for defeasance at any time of
(i) the entire indebtedness of this Security (with certain exceptions set forth
therein) or (ii) certain restrictive covenants and Events of Default with
respect to this Security, in each case (i) and (ii) upon compliance with certain
conditions set forth therein.
MODIFICATION AND WAIVER
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the Guarantor and the rights of the Holders of the Securities under
the Indenture at any time by the Issuer, the Guarantor and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Issuer or the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
EVENTS OF DEFAULT; REMEDIES
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due
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and payable in the manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee indemnity reasonably satisfactory to it and the Trustee
shall not have received from the Holders of a majority in principal amount of
the Securities at the time Outstanding a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 90 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein (or, in the case of
redemption, on or after the date of redemption).
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
REGISTRATION OF TRANSFER; EXCHANGE
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Issuer in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
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principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
MISCELLANEOUS
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer,
the Guarantor or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Issuer, the Guarantor, the Trustee nor any such agent
shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated:
By
------------------------
AUTHORIZED OFFICER
SECTION 205. FORM OF GUARANTEE.
GUARANTEE
For value received, Lexmark International Group, Inc., a corporation
duly organized and existing under the laws of the State of Delaware (herein
called the "Guarantor", which term includes any successor Person under the
Indenture hereinafter referred to) hereby unconditionally and irrevocably
guarantees (the "Guarantee") to the Holder of the Security upon which this
Guarantee is endorsed all obligations of the Issuer under such Security and
under the Indenture with respect to such Security, including the due and
punctual payment of the principal of (and premium, if any) and interest on such
Security, when and as the same shall become due and payable, whether at Stated
Maturity, by declaration of acceleration, call for redemption or otherwise,
according to the terms thereof and the Indenture. In the case of a failure of
the Issuer punctually to make any such payment when and as the same shall become
due and payable (or to perform any of the other obligations under the Indenture
when and as provided therein), the Guarantor hereby agrees to cause such payment
to be made at such time as if such payment were made by the Issuer and according
to the terms of such Security and the Indenture (and to cause any such other
obligation of the Issuer to be performed when and as provided in the Indenture).
The Guarantor hereby agrees that its obligation hereunder and under
the Indenture shall be as if it were
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principal obligor and not merely surety, and shall be unconditional,
irrespective of the validity, regularity or enforceability of such Security or
the Indenture or the absence of any action to enforce the same; any creation,
exchange, release or non-perfection of any lien on any collateral for all or of
any of the Securities; any election by the Trustee or any of the Holders in any
proceeding, any borrowing or grant of a security interest by the Issuer or the
disallowance of all or any portion of the claims of the Trustee or any of the
Holders for payment of any of the Securities under, or the application of any
provision of, any applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws of general applicability relating to or
affecting creditors' rights; or any waiver or consent by the Holder of such
Security or by the Trustee or either of them with respect to any provisions
thereof or of the Indenture, the obtaining of any judgment against the Issuer or
any action to enforce the same or any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
The Guarantor hereby waives the benefits of diligence, presentment or
demand of payment, any requirement that the Trustee or any of the Holders
protect, secure, perfect or insure any security interest in or other lien on any
property subject thereto or exhaust any right or take any action against the
Issuer or any other Person or any collateral, any filing of claims with a court
in the event of any insolvency, bankruptcy or similar event relating to the
Issuer, any right to require a proceeding first against the Issuer, protest or
notice with respect to such Security or the indebtedness evidenced thereby and
all demands whatsoever, and covenants that this Guarantee will not be discharged
except by complete performance of the obligations contained in such Security and
in this Guarantee. The Guarantor hereby agrees that, in the event of a default
in payment of principal of or any premium or interest on or of any other amount
in respect of such Security, whether at Stated Maturity, by acceleration, call
for redemption or otherwise, legal proceedings may be instituted by the Trustee
on behalf of, or by, the Holder of such Security, subject to the terms and
conditions set forth in the Indenture, directly against the Guarantor to enforce
this Guarantee without first proceeding against the Issuer. The Guarantor
agrees that if, after the occurrence and during the continuance of an Event of
Default, the Trustee or any of the Holders are prevented by applicable law from
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exercising their respective rights to accelerate the maturity of the Securities,
to collect interest on the Securities or to enforce or exercise any other right
or remedy with respect to the Securities, the Guarantor shall pay to the Trustee
for the account of the Holders, upon demand therefor, the amount that would
otherwise have been due and payable had such rights and remedies been permitted
to be exercised by the Trustee or any of the Holders.
The Guarantor hereby irrevocably waives (i) any right to which it may
be entitled in connection with any obligation of any Holder or the Trustee to
sue the Issuer prior to a claim being made against the Guarantor hereunder and
(ii) any right to which it may be entitled to have the assets of the Issuer
first be used as payment of the Issuer's or the Guarantor's obligations
hereunder prior to any amounts being claimed from or paid by the Guarantor
hereunder.
This Guarantee shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Issuer for
liquidation or reorganization, should the Issuer become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Issuer's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Securities, whether as a "voidable
preference," "fraudulent transfer" or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Securities shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
No reference herein to the Indenture and no provision of this
Guarantee or of the Indenture shall alter or impair the Guarantee of the
Guarantor, which is absolute and unconditional, of the due and punctual payment
of the principal (premium, if any) and interest on the Security upon which this
Guarantee is endorsed.
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The Guarantor shall be subrogated to all rights of the Holder of such
Security against the Issuer in respect of any amounts paid by the Guarantor on
account of such Security pursuant to the provisions of this Guarantee or the
Indenture; PROVIDED, HOWEVER, that the 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 (premium, if any) and interest on such
Security and all other Securities issued under the Indenture shall have been
paid in full.
The Guarantor agrees to pay to the Holder of the Security upon which
this Guarantee is endorsed on demand all reasonable out-of-pocket expenses
(including reasonable fees and expenses of counsel) incurred by such Holder that
in any way relate to the enforcement of the rights of such Holder under this
Guarantee; PROVIDED that the Guarantor shall not be liable for any such expenses
if (i) no payment under this Guarantee is due or (ii) the Guarantor shall not
have received such documentation of such expenses as it may reasonably require.
The Guarantor hereby makes, for the benefit of the Holder of the
Security upon which this Guarantee is endorsed, the covenants and agreements
applicable to it set forth in the Indenture, including Articles Eight and Ten
thereof, all of which shall be enforceable by the Trustee on behalf of, or by
the Holder of such Security, subject to the terms and conditions set forth in
the Indenture, directly against the Guarantor.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this Guarantee is
endorsed shall have been executed by the Trustee under the Indenture by manual
signature.
All terms used in this Guarantee which are defined in the Indenture
referred to in the Security upon which this Guarantee is endorsed shall have the
meanings assigned to them in such Indenture. Reference is made to Article
Thirteen of the Indenture for further provisions with respect to this Guarantee.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed.
LEXMARK INTERNATIONAL GROUP, INC.
By:
---------------------------------
Name:
Title:
ARTICLE THREE
The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $150,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 307, 906 or 1108.
The Securities shall be known and designated as the "-% Senior Notes
due 2008" of the Issuer. Their Stated Maturity shall be -, 2008 and they shall
bear interest at the rate of -% per annum, from -, 1998 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, as
the case may be, payable semi-annually on - and -, commencing -, 1998, until the
principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, New York, maintained for such purpose and at
any other office or agency maintained by the Issuer for such purpose; PROVIDED,
HOWEVER, that at the option of the Issuer payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register; PROVIDED, FURTHER, that all payments of the
principal of (and premium, if any) and interest on Securities, the Permitted
Holders of which have given wire transfer instructions to the Issuer or its
agent at least 10 Business Days prior to the applicable payment
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date, will be required to be made by wire transfer of immediately available
funds to the accounts specified by such Permitted Holders in such instructions.
Notwithstanding the foregoing, payment of any amount payable in respect of a
Global Security will be made in accordance with the applicable procedures of the
Depositary.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall not have the benefit of any sinking fund
obligations.
The Securities shall be subject to defeasance at the option of the
Issuer as provided in Article Twelve.
The Securities shall be Guaranteed by the Guarantor as provided in
Article Thirteen.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND
DATING.
The Securities shall be executed on behalf of the Issuer by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
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At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Securities executed by the Issuer and
having endorsed (by attachment or imprint) thereon the Guarantee executed as
provided in Section 1302 by the Guarantor to the Trustee for authentication,
together with an Issuer Order for the authentication and delivery of such
Securities with such Guarantee endorsed thereon; and the Trustee in accordance
with such Issuer Order shall authenticate and deliver such Securities with such
Guarantee endorsed thereon as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security or Guarantee endorsed thereon shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein executed by the Trustee by manual signature, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and that the Guarantee has been duly endorsed thereon.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities each with the
Guarantee of the Guarantor endorsed thereon, the Issuer may execute, and upon
Issuer Order the Trustee shall authenticate and deliver, temporary Securities
each with a temporary Guarantee endorsed thereon, which Securities and Guarantee
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities and Guarantee, respectively, in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities and Guarantee may determine, as
evidenced by their execution thereof.
If temporary Securities are issued, the Issuer will cause definitive
Securities, each with the Guarantee of the Guarantor endorsed thereon, to be
prepared without unreasonable delay. After the preparation of definitive
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Securities, each with the Guarantee of the Guarantor endorsed thereon, the
temporary Securities shall be exchangeable for definitive Securities with such
definitive Guarantee endorsed thereon, upon surrender of the temporary
Securities at any office or agency of the Issuer designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Issuer shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations each having endorsed thereon a
definitive Guarantee executed by the Guarantor. Until so exchanged the
temporary Securities and Guarantee endorsed thereon shall in all respects be
entitled to the same benefits under this Indenture as the definitive Securities
and Guarantee, respectively.
SECTION 305. GLOBAL SECURITIES.
(a) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Issuer for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Issuer that it is
unwilling or unable to continue as Depositary for such Global Security or
(B) has ceased to be a clearing agency registered as such under the Exchange Act
or (ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.
(c) Subject to Clause (b) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.
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(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three, Section 906 or 1108 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture, the Securities and the Guarantee. To the extent any Securities are
evidenced by a Global Security (i) the Trustee may deal with the Depositary as
the Holder of such Securities, (ii) the rights of the beneficial owners of such
Securities shall be exercised only through the Depositary and shall be limited
to those established by law and agreement among such beneficial owners, the
Depositary and direct participants of the Depositary, (iii) the Depositary may
make book-entry transfers among the direct participants of the Depositary and
may receive and transmit distributions of principal (and premium, if any) and
interest on the Securities to such direct participants, and (iv) the direct
participants of the Depositary shall have no rights under this Indenture or
under or with respect to any such Securities held on their behalf by the
Depositary, and the Depositary may be treated by the Trustee and its agents,
employees, officers and directors as the absolute owner of such Securities for
all purposes whatsoever.
SECTION 306. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Issuer shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Issuer designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
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Upon surrender for registration of transfer of any Security at an
office or agency of the Issuer designated pursuant to Section 1002 for such
purpose, the Issuer shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount, with each such new Security having endorsed thereon the Guarantee
executed by the Guarantor.
At the option of the Holder, Securities may be exchanged for new
Securities of any authorized denominations and of a like aggregate principal
amount, with each such new Security having endorsed thereon the Guarantee
executed by the Guarantor, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Securities are so surrendered for
exchange, the Issuer shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities and the Guarantee endorsed thereon issued upon any
registration of transfer or exchange of Securities shall be the valid
obligations of the Issuer and the Guarantor, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities and the
Guarantee endorsed thereon, respectively, surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1108 not involving any transfer.
The Issuer shall not be required (i) to issue, register the transfer
of or exchange any Security during a
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period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Securities selected for redemption under
Section 1104 and ending at the close of business on the day of such mailing, or
(ii) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
SECTION 307. MUTILATED, DESTROYED, LOST AND
STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of a like principal amount, having endorsed thereon the
Guarantee executed by the Guarantor and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Issuer and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of them,
the Guarantor and any agent of any of them or the Guarantor harmless, then, in
the absence of notice to the Issuer or the Trustee that such Security has been
acquired by a bona fide purchaser, the Issuer shall execute the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of a like principal amount, having endorsed thereon the
Guarantee executed by the Guarantor and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Issuer in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security, and the
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Guarantee endorsed thereon, shall constitute an original additional contractual
obligation of the Issuer and the Guarantor, respectively, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities and the Guarantee,
respectively, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 308. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Issuer, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Issuer may elect to make payment of any Defaulted Interest to
the Persons in whose names the 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 Issuer shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and
the date of the proposed payment, and at the same time the Issuer shall
deposit with the Trustee an amount of
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money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Issuer of such Special Record Date and, in the name and
at the expense of the Issuer, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be given to
each Holder in the manner provided in Section 106, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
given, such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Issuer may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Issuer to the Trustee of the proposed payment pursuant to this Clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of
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any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 309. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the
Guarantor or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and (subject to Section 308) interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Issuer, the Guarantor, the Trustee nor any agent of the Issuer, the
Guarantor or the Trustee shall be affected by notice to the contrary.
SECTION 310. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and, together with the Guarantee endorsed thereon,
shall be promptly canceled by it. The Issuer may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all
Securities so delivered shall, together with the Guarantee endorsed thereon, be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held
by the Trustee, together with the Guarantee endorsed therein, shall be disposed
of as directed by an Issuer Order, PROVIDED, HOWEVER, that the Trustee shall not
be required to destroy such cancelled Securities.
SECTION 311. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Issuer Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 307 and (ii) Securities
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer or the Guarantor and thereafter
repaid to the Issuer or the Guarantor or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
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redemption by the Trustee in the name, and at the expense, of the
Issuer,
and the Issuer or the Guarantor, in the case of (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal (and premium, if any) and interest to the
date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be
(PROVIDED that any such amount to be deposited for principal, premium (if
any) and interest due on a future date is determinable as provided herein
when such deposit is made);
(2) the Issuer or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Issuer and the Guarantor; and
(3) the Issuer and the Guarantor have delivered to the Trustee
Officers' Certificates of the Issuer and the Guarantor, respectively, and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer and the Guarantor to the Trustee under Section 607,
the obligations of the Trustee to any Authenticating Agent under Section 614
and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
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SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer or the Guarantor acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal,
premium (if any) and interest for whose payment such money has been deposited
with the Trustee.
ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of the principal of (or premium, if any,
on) any Security at its Maturity; PROVIDED that failure by the Issuer to
make such a payment shall not constitute an Event of Default if the
Guarantor makes such payment as required when it becomes due and payable;
or
(2) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of
30 days; PROVIDED that failure by the Issuer to make such a payment shall
not constitute an Event of Default if the Guarantor makes such payment as
required during such 30-day period; or
(3) default in the performance, or breach, of any covenant or
warranty of the
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Issuer or the Guarantor in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section 501 specifically dealt with), and continuance of such default
or breach for a period of 90 days after there has been given, in the manner
provided in Section 106, to the Issuer by the Trustee or to the Issuer and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(4) a default or defaults under any one or more note(s) or other
evidence(s) of Debt, or any agreement(s) or instrument(s) under which there
may be issued or by which there may be secured or evidenced any Debt, of
the Guarantor or any of its Subsidiaries, having a principal amount
outstanding, individually or in the aggregate of at least $25,000,000, and
whether existing on or created after the date of this Indenture, which
default or defaults, individually or in the aggregate, (A) constitute a
failure to pay at least $25,000,000, of the principal of such Debt when due
(unless such default is waived or cured within 30 days after the expiration
of any applicable grace period) or (B) have resulted in acceleration of any
portion of such Debt having an aggregate principal amount equal to or
exceeding $25,000,000, in each case (A) and (B) without such overdue or
accelerated amount having been discharged, or such acceleration having been
rescinded or annulled, within 30 days after written notice of such default
has been given, in the manner provided in Section 106, to the Issuer by the
Trustee or to the Issuer and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities specifying such default or
breach and requiring it to be remedied and stating that
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such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Guarantor, the Issuer or any
other Material Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Guarantor, the Issuer or
any other Material Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Guarantor, the Issuer or any other
Material Subsidiary , as the case may be, or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Guarantor, the Issuer or any other
Material Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for
relief in respect of the Guarantor, the Issuer or any other Material
Subsidiary , as the case may be, in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee,
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trustee, sequestration or other similar official of the Guarantor, the
Issuer or any other Material Subsidiary , as the case may be, or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Guarantor, the Issuer or any other Material
Subsidiary, as the case may be, in furtherance of any such action.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION
AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities may declare the principal of all the Securities to be
due and payable immediately, by a notice in writing to the Issuer (and to the
Trustee if given by Holders), and upon any such declaration such principal shall
become immediately due and payable. If an Event of Default specified in Section
501(5)or 501(6) occurs, the principal of all the Securities shall automatically,
and without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Outstanding Securities, by written notice
to the Issuer and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Issuer or the Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest on all Securities,
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(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate provided therefor in the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided therefor in the
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS
FOR ENFORCEMENT BY TRUSTEE.
The Issuer covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days without such payment being made by the Guarantor in such
period, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof without such payment being
made by the Guarantor when it becomes due and payable,
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the Issuer will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium and on any overdue interest, at the rate provided
therefor in the Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Issuer, the
Guarantor or any other obligor upon the Securities or the property of the Issuer
or its creditors or of the Guarantor or its creditors, the Trustee shall be
entitled and empowered, by intervention in such proceeding or otherwise, to take
any and all actions, including participation as a member, voting or otherwise,
of any committee of creditors, authorized under the Trust Indenture Act in order
to have claims of the Holders and the Trustee allowed in any such proceeding.
In particular, the Trustee shall be authorized to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestration or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.
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No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS
WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
or the Guarantee may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities
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for principal (and premium, if any)and interest, respectively; and
THIRD: To the Issuer.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 90 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 90-day period by the Holders of a majority
in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture,
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except in the manner herein provided and for the equal and ratable benefit of
all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO
RECEIVE PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 308) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, including
under the Guarantee, and such rights shall not be impaired without the consent
of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Issuer, the Guarantor, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 307, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or
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otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities 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, PROVIDED that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article
Nine
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cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Issuer or the Guarantor.
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
Each of the Issuer and the Guarantor covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and each of the
Issuer and the Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
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ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder
actually known to a Responsible Officer of the Trustee as and to the extent
provided by the Trust Indenture Act; PROVIDED, HOWEVER, that in the case of any
default of the character specified in Section 501(3), no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genu-
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ine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Issuer or Guarantor mentioned
herein shall be sufficiently evidenced by an Issuer Request or Guarantor
Request, as the case may be, or by an Issuer Order or Guarantor Order, as
the case may be, and any resolution of the Board of Directors of the Issuer
or the Guarantor, as the case may be, may be sufficiently evidenced by a
Board Resolution of the Issuer or the Guarantor, as the case may be;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
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bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Issuer,
personally or by agent or attorney; 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 604. NOT RESPONSIBLE FOR RECITALS
OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities and the Guarantee
endorsed thereon, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer or the Guarantor, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Indenture, the
Securities or the Guarantee endorsed thereon. The Trustee shall not be
accountable for the use or application by the Issuer of Securities or the
proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Issuer or the Guarantor, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Issuer, the
Guarantor and any other obligor upon the Securities and the Guarantee with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
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SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Issuer or the Guarantor, as the case may be.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Issuer agrees
(1) to pay to the Trustee from time to time such compensation
for all services rendered by it hereunder as the Issuer and the
Trustee shall from time to time agree (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
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If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such, has
a combined capital and surplus of at least $50,000,000 and has its Corporate
Trust Office located in the Borough of Manhattan, The City of New York. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of its supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 610. RESIGNATION AND REMOVAL;
APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Issuer. If an instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within
30 days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and the Issuer. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within
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30 days after the giving of such notice of removal, the Trustee being removed
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Issuer or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Issuer or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Issuer by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Issuer and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Issuer.
If no successor Trustee shall have been so appointed by the
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Issuer or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer, the Guarantor 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 request of
the Issuer, the Guarantor 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. Upon request of any
such successor Trustee, the Issuer and the Guarantor 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.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION
OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or
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any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF
CLAIMS AGAINST ISSUER OR GUARANTOR.
If and when the Trustee shall be or become a creditor of the Issuer,
the Guarantor or any other obligor upon the Securities or the Guarantee, the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Issuer, the Guarantor or any such other
obligor.
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer, partial
redemption or pursuant to Section 307, and Securities so authenticated, and the
Guarantee endorsed thereon, shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if such Securities had
been authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Issuer and shall at all times be a corporation organized and
doing business under the laws of
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the United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and the Issuer. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Issuer and shall give written notice of
such appointment, in the manner provided in Section 106, to all Holders. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
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The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
The Bank of New York,
As Trustee
By
----------------------------
As Authenticating Agent
By
----------------------------
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Issuer
SECTION 701. ISSUER TO FURNISH TRUSTEE
NAMES AND ADDRESSES OF HOLDERS.
The Issuer will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
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(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION;
COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities or the
Guarantee, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Issuer, the Guarantor and the Trustee that neither the Issuer,
the Guarantor nor the Trustee nor any agent of any of them shall be held
accountable by reason of any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
If required by Section 313(a) of the Trust Indenture Act, the Trustee shall,
within sixty days after each [ ] following the date of this Indenture,
deliver
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to Holders a brief report, dated as of such [ ], which complies with the
provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Issuer. The
Issuer will notify the Trustee in writing when the Securities are listed on any
stock exchange.
SECTION 704. REPORTS BY ISSUER AND GUARANTOR.
The Issuer and the Guarantor shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
PROVIDED that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. GUARANTOR AND ISSUER MAY CONSOLIDATE, ETC., . ONLY ON
CERTAIN TERMS.
Each of the Guarantor and the Issuer shall not merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of its
assets (determined on a consolidated basis with respect to the Guarantor or the
Issuer, as the case may be, and its Subsidiaries taken as a whole), unless:
(1) in case the Guarantor or the Issuer shall consolidate with or
merge into another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the Person formed by
such consolidation or into which the
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Guarantor or the Issuer, as the case may be, is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Guarantor or the Issuer, as the case may be, substantially as
an entirety, if other than the Guarantor or the Issuer, as the case may be,
shall be a corporation, partnership, trust, limited liability company or
other entity, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest on
all the Securities and the performance or observance of every covenant of
this Indenture on the part of the Guarantor or the Issuer, as the case may
be, to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such sale,
transfer, lease or other disposition, properties or assets of the Guarantor
or the Issuer, as the case may be, would become subject to a Lien, the
incurrence of which would not be permitted by Section 1008, the Guarantor,
the Issuer or such continuing Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) the Debt secured by such Lien as provided in
Section 1008; and
(4) the Guarantor and the Issuer have delivered to the Trustee
Officers' Certificates of both the Guarantor and the Issuer, respectively,
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
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SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Guarantor or the Issuer, as the case may
be, with, or merger of the Guarantor or the Issuer, as the case may be, into,
any other Person or any sale, transfer, lease or other disposition of all or
substantially all the properties and assets of the Guarantor or the Issuer, as
the case may be, in accordance with Section 801, the successor Person formed by
such consolidation or into which the Guarantor or the Issuer, as the case may
be, is merged or to which such sale, transfer, lease or other disposition is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Guarantor or the Issuer, as the case may be, under this Indenture
with the same effect as if such successor Person had been named as the Guarantor
or the Issuer, as the case may be, herein, and thereafter, except in the case of
a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities or the Guarantee, as the case
may be.
ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES
WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Issuer, when authorized by a
Board Resolution of the Issuer, the Guarantor, when authorized by a Board
Resolution of the Guarantor, and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form satisfactory
to the Trustee, the Issuer and the Guarantor for any of the following purposes:
(1) to evidence the succession of another Person to the Issuer or the
Guarantor and the assumption by any such successor of the covenants of the
Issuer or the Guarantor, as applicable, herein and in the Securities and
the Guarantee; or
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(2) to add to the covenants of the Issuer or the Guarantor for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Issuer or the Guarantor; or
(3) to secure the Securities pursuant to the requirements of
Section 1008 or otherwise; or
(4) to cure any ambiguity, defect or inconsistency herein, PROVIDED
that such action pursuant to this Clause (4) shall not materially and
adversely affect the interests of the Holders;
(5) to comply with any requirements of the Securities and Exchange
Commission in connection with the qualification of this Indenture under the
Trust Indenture Act;
(6) to evidence and provide for the acceptance of appointments
hereunder with respect to the Securities by a successor Trustee in
accordance herewith; and
(7) to make any change that does not materially and adversely affect
the interests of the Holders.
SECTION 902. SUPPLEMENTAL INDENTURES
WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than the majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Issuer and the Trustee, the Issuer, when authorized by a Board Resolution
of the Issuer, the Guarantor, when authorized by a Board Resolution of the
Guarantor, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
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(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date or),
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
or
(3) modify any of the provisions of this Section, Section 513 or
Section 1011 except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, or
(4) modify the obligations of the Guarantor under the Guarantee or
Section 1301 with respect to any of the obligations of the Issuer that
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or indemnities under this Indenture or
otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. REFERENCE IN SECURITIES
TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer, guaranteed by the Guarantor and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
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ARTICLE TEN
Covenants
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Issuer will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will maintain, in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuer or the Guarantor in
respect of the Securities, the Guarantee and this Indenture may be served. The
Issuer will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and each of the Issuer and the Guarantor hereby appoints the Trustee as
its agent to receive all such presentations, surrenders, notices and demands.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the Issuer of
its obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York for such purposes. The Issuer will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
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SECTION 1003. MONEY FOR SECURITY
PAYMENTS TO BE HELD IN TRUST.
If the Issuer or the Guarantor shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal of (and premium, if
any) or interest on any of the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Issuer or the Guarantor shall have one or more Paying
Agents, it will, prior to each due date of the principal of (and premium, if
any) or interest on any Securities, deposit (or, if the Issuer has deposited
with the Trustee any trust funds pursuant to Section 1204(2), cause the Trustee
therefor to deposit) with a Paying Agent a sum sufficient to pay such amount,
such sum to be held as provided by the Trust Indenture Act, and (unless such
Paying Agent is the Trustee) the Issuer or the Guarantor, as the case may be,
will promptly notify the Trustee of its action or failure so to act.
The Issuer or the Guarantor will cause each Paying Agent other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Issuer (or any other obligor upon the Securities,
including the Guarantor) in the making of any payment in respect of the
Securities, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent as such.
The Issuer or the Guarantor may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Issuer Order or Guarantor Order, as the case may be, direct
any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer,
the Guarantor or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Issuer, the Guarantor
or
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such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuer or the Guarantor, in trust for the payment of the principal of
(and premium, if any) or interest on any Security and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Issuer or the Guarantor on Issuer Request, or
(if then held by the Issuer or the Guarantor) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Issuer and the Guarantor for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuer or the Guarantor as trustee thereof, shall
thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer or the Guarantor, as the
case may be.
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
Each of the Issuer and the Guarantor will deliver to the Trustee,
within 120 days after the end of each of the fiscal years ending after the date
hereof, an Officers' Certificate, stating whether or not to the best knowledge
of the signers thereof the Issuer or the Guarantor, as the case may be, is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Issuer or the Guarantor,
as the case may be, shall be in default, specifying all such defaults and the
nature and status thereof of which the signers may have knowledge.
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SECTION 1005. EXISTENCE.
Subject to Article Eight, each of the Guarantor and the Issuer will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; PROVIDED,
HOWEVER, that neither the Guarantor nor the Issuer shall be required to preserve
any such right or franchise if its Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of its business and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Guarantor will cause all properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Guarantor may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this Section shall prevent the Guarantor from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Guarantor, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS.
The Guarantor will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Guarantor or any Subsidiary or
upon the income, profits or property of the Guarantor or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Guarantor or any Subsidiary;
PROVIDED, HOWEVER, that the Guarantor shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount,
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applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1008. LIMITATION ON LIENS.
(a) The Guarantor will not, and will not permit any Subsidiary to,
incur any Lien on property or assets owned on or acquired after the date of this
Indenture to secure Debt without making, or causing such Subsidiary to make,
effective provision for securing the Securities(and, if the Guarantor may so
determine, any other Debt of the Guarantor or such Subsidiary that is not
subordinated in right or payment to the Securities) (x) equally and ratably with
such Debt as to such property or assets for as long as such Debt will be so
secured or (y) in the event such Debt is subordinated in right of payment to the
Securities, prior to such Debt as to such property for as long as such Debt will
be so secured.
The restrictions in the preceding paragraph will not apply to Liens
existing on the date of this Indenture or to:
(i) Liens securing only the Securities;
(ii) Liens in favor of only one or more of the Guarantor and its
Subsidiaries;
(iii) any Lien on property of a Person existing immediately prior
to the time such Person is merged with or into or consolidated with
the Guarantor or any Subsidiary of the Guarantor or otherwise becomes
a Subsidiary of the Guarantor (PROVIDED that such Lien is not incurred
in anticipation of such transaction and does not extend beyond the
property subject thereto, or secure any Debt that is not secured
thereby, immediately prior to such transaction);
(iv) any Lien on property existing immediately prior to the
time of acquisition thereof (PROVIDED that such Lien is not incurred
in anticipation of such acquisition and does not extend beyond the
property subject thereto, or secure any Debt that is not secured
thereby, immediately prior to such acquisition);
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(v) Liens to secure Debt incurred for the purpose of financing
all or any part of the purchase price of, or the cost of construction
on or improvement of, the property subject to such Liens, PROVIDED,
HOWEVER, that (A) the principal amount of any Debt secured by such a
Lien does not exceed 100% of such price or cost, (B) such Lien does
not extend to or cover any other property other than such item of
property and any improvements on such item and (C) such Lien must be
created no later than the 270th day after such purchase or the
completion of such construction or installation of such improvements;
(vi) Liens on property of the Guarantor or any Subsidiary of the
Guarantor in favor of the United States of America, any state thereof
or the District of Columbia, or any instrumentality of either, to
secure payments to be made pursuant to any contract or statute;
(vii) (A) Liens for taxes or assessments or other governmental
charges or levies or (B) any statutory Liens of a carrier,
warehouseman, mechanic, materialman or other like Liens imposed by law
incurred in the ordinary course of business that, in either case (A)
or (B), are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and for which such
reserve or other appropriate provision, if any, as may be required in
accordance with generally accepted accounting principles has been
made;
(viii) Liens to secure obligations under workmen's compensation,
unemployment insurance or other social security laws or similar
legislation;
(ix) Liens incurred to secure the performance of statutory
obligations, surety or appeal bonds, performance or return-of-money
bonds or other obligations of a like nature incurred in the ordinary
course of business;
(x) any Lien in favor of the Trustee in respect of expenses incurred
or services rendered pursuant to this Indenture;
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(xi) any Lien that may be deemed to arise from a Permitted
Receivables Financing;
(xii) Liens securing obligations arising under easements, zoning
restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary
conduct of business of the Guarantor or any Subsidiary; and
(xiii) Liens to secure Debt incurred to extend, renew, refinance
or refund (or successive extensions, renewals, refinancings or
refundings), in whole or in part, Debt secured by any Lien referred to
in the foregoing sub-clauses (iii), (iv) and (v) as long as such Lien
does not extend to any other property and the Debt so secured is not
increased except for increases in the amount of interest, premiums or
fees and associated costs payable in connection with such extensions,
renewals, refinancings or refunding;
(b) In addition to the foregoing, the Guarantor and its Subsidiaries
may, without equally and ratably securing the Securities, incur a Lien to secure
Debt or enter into a Sale and Leaseback Transaction if, after giving effect
thereto, the sum of: (i) the amount of all Debt secured by all Liens incurred
on or after the date of this Indenture and otherwise prohibited by this
Indenture and (ii) the Attributable Value of all Sale and Leaseback Transactions
entered into on or after the date of this Indenture and otherwise prohibited by
this Indenture does not exceed 15% of Consolidated Net Tangible Assets.
SECTION 1009. LIMITATION ON SALE AND LEASEBACK
TRANSACTIONS.
The Guarantor will not, and will not permit any Subsidiary to, enter
into any Sale and Leaseback Transaction (except for a period not exceeding 36
months) unless (i) the Guarantor or such Subsidiary would be entitled to enter
into such Sale and Leaseback Transaction pursuant to the provisions of Section
1008(b) without equally and ratably
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securing the Securities; (ii) the Guarantor or a Subsidiary of the Guarantor
applies, within 180 days after the related Sale Transaction, an amount equal to
the Net Available Proceeds of such Sale Transaction to the redemption of
Securities or other debt of the Issuer that ranks PARI PASSU with the Securities
i right of payment; or (iii) the transaction is solely between the Guarantor and
a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries but only for as
long as such Subsidiary or Subsidiaries are Wholly Owned Subsidiaries.
SECTION 1010. CERTAIN COVENANTS TO BECOME BINDING ON . . ISSUER.
If at any time the Issuer ceases to be a Subsidiary of the Guarantor,
the covenants set forth in Section 1006 through 1009 shall be covenants of and
be binding on not only the Guarantor but also the Issuer. Insofar as such
covenants become covenants of and are binding on the Issuer, all references
therein (and in the defined terms used therein) to the Guarantor or any
subsidiary of the Guarantor shall be deemed to refer to the Issuer or any
subsidiary of the Issuer, as the case may be.
SECTION 1011. WAIVER OF CERTAIN COVENANTS.
The Issuer and the Guarantor may each omit in any particular instance
to comply with any covenant or condition set forth in Sections 1005 through 1010
inclusive (or in any covenant provided pursuant to Section 901(2), if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Issuer or the Guarantor, as the case
may be, and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
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ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. RIGHT OF REDEMPTION.
The Securities may be redeemed at the election of the Issuer, as a
whole or from time to time in part, at any time the Redemption Price specified
in the form of Security hereinbefore set forth, together with accrued interest
to the date of redemption.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Issuer as permitted by
any provision of this Indenture shall be made in accordance with such provision
and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO
TRUSTEE.
The election of the Issuer to redeem any Securities pursuant to
Section 1101 shall be evidenced by Board Resolutions of the Issuer and the
Guarantor. In case of any redemption of less than all the Securities, the
Issuer shall, at least 60 days prior to the redemption date fixed by the Issuer
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such redemption date and of the principal amount of Securities to be
redeemed.
SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
date fixed for redemption by the Trustee, from the Outstanding Securities not
previously called for redemption, pro rata, by lot or by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to $1,000 or any integral multiple thereof) of
the principal amount of Securities of a denomination larger than $1,000.
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The Trustee shall promptly notify the Issuer and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the date fixed
for redemption, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP numbers) state:
(1) the date fixed for redemption,
(2) the method by which the Redemption Price will be determined,
(3) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the date fixed for redemption the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date; and
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
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Notice of redemption of Securities to be redeemed pursuant to this
Article Eleven shall be given by the Issuer or, at the Issuer's request, by the
Trustee in the name and at the expense of the Issuer, and such notice, when
given to the Holders, shall be irrevocable.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m. on any date fixed for redemption date, the Issuer
shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the redemption date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the date fixed for redemption, become due and payable
at the Redemption Price therein specified, and from and after such date (unless
the Issuer shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Issuer at the Redemption Price, together with accrued interest to
the redemption date; PROVIDED, HOWEVER, that installments of interest whose
Stated Maturity is on or prior to the redemption date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular Record Dates according to
their terms and the provisions of Section 308.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any), and (to
the extent provided herein) any overdue interest, shall, until paid, bear
interest from the date fixed for redemption at the rate borne by the Security.
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SECTION 1108. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Issuer designated for that purpose pursuant to
Section 1002 (with, if the Issuer or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Issuer and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Issuer shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities (each with a Guarantee of the Guarantor executed by the
Guarantor and endorsed thereon), of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. ISSUER'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.
The Issuer may at its option by Board Resolutions of the Issuer and
the Guarantor, at any time, elect to have either Section 1202 or Section 1203
applied to all the Outstanding Securities (in whole and not in part) upon
compliance with the conditions set forth below in this Article Twelve.
SECTION 1202. DEFEASANCE AND DISCHARGE.
Upon the Issuer's exercise of its option to have this Section applied
to the Outstanding Securities, the Issuer shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1204 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that (i) the Issuer shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such
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Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Issuer shall execute proper instruments
acknowledging the same) and (ii) the Guarantor shall be released from all of its
obligations under its Guarantee and under Article Thirteen of this Indenture,
subject, in each case (i) or (ii), to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1204 and
as more fully set forth in such Section, payments in respect of the principal of
(and premium, if any) and interest on such Securities when payments are due,
(2) the Issuer's and, if applicable, the Guarantor's obligations with respect to
such Securities under Sections 304, 305, 306, 307, 1002 and 1003, (3) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and
(4) this Article. Subject to compliance with this Article, the Issuer may
exercise its option to have this Section applied to any Outstanding Securities
notwithstanding the prior exercise of its option to have Section 1203 applied to
such Securities.
SECTION 1203. COVENANT DEFEASANCE.
Upon the Company's exercise of its option to have this Section applied
to the Outstanding Securities (1) the Issuer and the Guarantor, as applicable,
shall be released from their respective obligations under Sections 801(3) and
Sections 1005 through 1010, inclusive (and any covenant provided pursuant to
Section 901(2)), and (2) the occurrence of any event specified in Section 501(3)
(with respect to any of Section 801(3), and Sections 1005 though 1010, inclusive
(or to any covenant provided pursuant to Section 901(2)), or Section 501(4)
shall be deemed not to be or result in an Event of Default, in each case with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1204 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Issuer and the Guarantor, as applicable, may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in (or provided pursuant to) any such
specified Section (to the extent so specified in the case of Section 501(3)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by
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reason of any reference in any such Section to any other provision herein or in
any other document, but the remainder of this Indenture and such Securities
shall be unaffected thereby.
SECTION 1204. CONDITIONS TO DEFEASANCE OR COVENANT . . DEFEASANCE.
The following shall be the conditions to the application of
Section 1202 or Section 1203 to the Outstanding Securities:
(1) The Issuer or the Guarantor shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee which satisfies
the requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case 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 and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of (and premium, if
any) and interest on such Securities on the respective Stated Maturities,
in accordance with the terms of this Indenture and such Securities.
(2) In the event of an election to have Section 1202 apply to the
Outstanding Securities, the Issuer or the Guarantor shall have delivered to
the Trustee an Opinion of Counsel stating that (A) the Issuer or the
Guarantor, as the case may be, has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date
of this instrument, there has been a change in the applicable Federal
income tax law, in either case (A)
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or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 1203 apply to the
Outstanding Securities, the Issuer or the Guarantor shall have delivered to
the Trustee an Opinion of Counsel to the effect that the Holders of such
Securities will not recognize gain or loss for Federal income tax purposes
as a result of the deposit and Covenant Defeasance to be effected with
respect to such Securities and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case
if such deposit and Covenant Defeasance were not to occur.
(4) The Issuer or the Guarantor shall have delivered to the Trustee
an Officer's Certificate to the effect that such Securities, if then listed
on any securities exchange, will not be delisted as a result of such
deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities shall have
occurred and be continuing at the time of such deposit or, with regard to
any such event specified in Sections 501(5) and (6), at any time on or
prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th
day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning of
such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a
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default under, any other agreement or instrument to which the Issuer is a
party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) Each of the Issuer and the Guarantor shall have delivered to the
Trustee an Officer's Certificate, and the Issuer or the Guarantor shall
have delivered to the Trustee an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant Defeasance
have been complied with.
SECTION 1205. DEPOSITED MONEY AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST;
MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section 1205 and Section 1206, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1204 in respect
of the Outstanding Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Issuer or
the Guarantor acting as its own Paying Agent) as the Trustee may determine, to
the Holders of such Securities, of all sums due and to become due thereon in
respect of principal and interest, but such money need not be segregated from
other funds except to the extent required by law.
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The Issuer and the Guarantor, jointly and severally, shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
1204 or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of
the Outstanding Securities. The preceding sentence shall survive the
termination of this Indenture, and the earlier removal or resignation of the
Trustee.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuer from time to time upon Issuer Request and be
relieved of all liability with respect to any money or U.S. Government
Obligations held by it as provided in Section 1204 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent defeasance or covenant defeasance.
SECTION 1206. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1202 or 1203 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Issuer's and the Guarantor's obligations under this
Indenture, the Securities and the Guarantee shall be revived and reinstated as
though no deposit had occurred pursuant to this Article Twelve until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 1202 or 1203; PROVIDED, HOWEVER, that if the Issuer
makes any payment of principal of (or premium, if any) or interest on any
Security following the reinstatement of its obligations, the Issuer shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or the Paying Agent.
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ARTICLE THIRTEEN
Guarantee
SECTION 1301. GUARANTEE.
The Guarantor hereby unconditionally and irrevocably guarantees (the
"Guarantee") to each Holder of a Security authenticated and delivered by the
Trustee, and to the Trustee on behalf of such Holder, all obligations of the
Issuer under such Security and under this Indenture with respect to such
Security, including the due and punctual payment of the principal of (and
premium, if any) and interest on, such Security when and as the same shall
become due and payable, whether at Stated Maturity, by declaration of
acceleration, call for redemption, or otherwise, according to the terms of such
Security and this Indenture. In the case of a failure of the Issuer punctually
to make any such payment when and as the same shall become due and payable (or
to perform any of the other obligations hereunder when and as provided herein),
the Guarantor hereby agrees to cause such payment to be made at such time as if
such payment were made by the Issuer and according to the terms of such Security
and this Indenture (and to cause any such other obligations of the Issuer to be
performed when and as provided herein).
The Guarantor hereby agrees that its obligation hereunder and under
the Securities shall be as if it were principal obligor and not merely surety,
and shall be unconditional, irrespective of the validity, regularity or
enforceability of such Securities or this Indenture or the absence of any action
to enforce the same; any creation, exchange, release or non-perfection of any
lien on any collateral for all or of any of the Securities; any election by the
Trustee or any of the Holders in any proceeding, any borrowing or grant of a
security interest by the Issuer or the disallowance of all or any portion of the
claims of the Trustee or any of the Holders for payment of any of the Securities
under, or the application of any provision of, any applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other laws of
general applicability relating to or affecting creditors' rights; or any waiver
or consent by the Holder of such Security or by the Trustee or either of them
with respect to any provisions thereof or of this Indenture, the obtaining of
any judgment against the Issuer or any action to enforce the same or any other
circumstances which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
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The Guarantor hereby waives the benefits of diligence, presentment or
demand of payment, any requirement that the Trustee or any of the Holders
protect, secure, perfect or insure any security interest in or other lien on any
property subject thereto or exhaust any right or take any action against the
Issuer or any other Person or any collateral, any filing of claims with a court
in the event of any insolvency, bankruptcy or similar event relating to the
Issuer, any right to require a proceeding first against the Issuer, protest or
notice with respect to such Security or the indebtedness evidenced thereby and
all demands whatsoever, and covenants that the Guarantee will not be discharged
except by complete performance of the obligations contained in such Security and
in the Guarantee. The Guarantor hereby agrees that, in the event of a default
in payment of principal of or premium or interest on such Security, whether at
Stated Maturity, by acceleration, call for redemption or otherwise, legal
proceedings may be instituted by the Trustee on behalf of, or by, the Holder of
such Security, subject to the terms and conditions set forth in this Indenture,
directly against the Guarantor to enforce the Guarantee without first proceeding
against the Issuer. The Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any of the Holders
are prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on the Securities
or to enforce or exercise any other right or remedy with respect to the
Securities, the Guarantor shall pay to the Trustee for the account of the
Holders, upon demand therefor, the amount that would otherwise have been due and
payable had such rights and remedies been permitted to be exercised by the
Trustee or any of the Holders.
The Guarantor hereby irrevocably waives (i) any right to which it may
be entitled in connection with any obligation of any Holder or the Trustee to
sue the Issuer prior to a claim being made against the Guarantor hereunder and
(ii) any right to which it may be entitled to have the assets of the Issuer
first be used as payment of the Issuer's or the Guarantor's obligations
hereunder prior to any amounts being claimed from or paid by the Guarantor
hereunder.
The Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Issuer for liquidation
or reorganization, should the Issuer become insolvent or make an assignment for
the benefit of creditors or should a
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receiver or trustee be appointed for all or any significant part of the Issuer's
assets, and shall, to the fullest extent permitted by law, continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Securities is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee on
the Securities, whether as a "voidable preference," "fraudulent transfer" or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Securities shall, to the fullest extent permitted by law, be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
The Guarantor hereby agrees to cause the Issuer (a) to comply with all
of the terms of and (b) to perform all of the Issuer's obligations under the
Securities and this Indenture.
No provision of the Guarantee, any Security or this Indenture shall
alter or impair the Guarantee of the Guarantor, which is absolute and
unconditional, of the due and punctual payment of the principal of (and premium,
if any) and interest on each Security upon which such Guarantee is endorsed.
SECTION 1302. EXECUTION AND DELIVERY OF GUARANTEE.
The Guarantee to be endorsed on the Securities shall include the terms
of the Guarantee set forth in Section 1301 and any other terms that may be set
forth in the form established pursuant to Section 205. The Guarantor hereby
agrees to execute its Guarantee, in a form established pursuant to Section 205,
to be endorsed on each Security authenticated and delivered by the Trustee.
The Guarantee shall be executed on behalf of the Guarantor by any two
of its Chairman of the Board, Vice Chairman of the Board, Chief Executive
Officer, Chief Financial Officer, President or Vice Presidents. The signature
of any or all of these officers on the Guarantee may be manual or facsimile.
A Guarantee bearing the manual or facsimile signatures of individuals
who were at any time the proper
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officers of the Guarantor shall bind the Guarantor, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of the Security on which such Guarantee is endorsed
or did not hold such offices at the date of such Guarantee.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee endorsed
thereon on behalf of the Guarantor. The Guarantor hereby agrees that its
Guarantee set forth in Section 1301 shall remain in full force and effect
notwithstanding any failure to endorse a Guarantee on any Security.
SECTION 1303. SUBROGATION.
The Guarantor shall be subrogated to all rights of the Holders of the
Securities upon which the Guarantee is endorsed against the Issuer in respect of
any amounts paid by the Guarantor on account of such Security pursuant to the
provisions of the Guarantee or this Indenture; PROVIDED, HOWEVER, that the
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
premium, if any) , interest on all Securities issued under this Indenture shall
have been paid in full.
SECTION 1304. PAYMENT OF EXPENSES.
The Guarantor shall pay to each Holder of a Security upon which the
Guarantee is endorsed on demand all reasonable out-of-pocket expenses (including
reasonable fees and expenses of counsel) incurred by such Holder that in any way
relate to the enforcement of the rights of such Holder under the Guarantee;
PROVIDED that the Guarantor shall not be liable for any such expenses if (i) no
payment under the Guarantee is due or (ii) the Guarantor shall not have received
such documentation of such expenses as it may reasonably require.
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____________________
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and, in the case of the Issuer, its corporate seal to be
hereunto affixed, and attested, all as of the day and year first above written.
LEXMARK INTERNATIONAL, INC.,
As Issuer
By___________________________
Name:
Title:
Attest:
__________________________
LEXMARK INTERNATIONAL GROUP, INC.
As Guarantor
By:__________________________
Name:
Title:
Attest:
___________________________
THE BANK OF NEW YORK
As Trustee
By:__________________________
Name:
Title:
Attest:
___________________________
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STATE OF NEW YORK ) ss.:
COUNTY OF NEW YORK )
On the _____ day of __________, 1998, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that [he --she] is _________________________________ of Lexmark
International, Inc., one of the corporations described in and which executed the
foregoing instrument; that [he -- she] knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that
[he -- she] signed [his -- her] name thereto by like authority.
-----------------------------------
STATE OF NEW YORK ) ss.:
COUNTY OF NEW YORK )
On the _____ day of __________, 1998, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that [he --she] is ________________________________________ of
Lexmark International Group, Inc., one of the corporations described in and
which executed the foregoing instrument; that [he -- she] knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that [he -- she] signed [his -- her] name thereto by like
authority.
-----------------------------------
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<PAGE>
[LETTERHEAD]
April 29, 1998
Board of Directors
Lexmark International Group, Inc.
Lexmark International, Inc. Exhibit 5
One Lexmark Centre Drive
Lexington, Kentucky 40550
LEXMARK INTERNATIONAl, INC.
LEXMARK INTERNATIONAl GROUP, INC.
REGISTRATION STATEMENT ON FORM S-3
Dear Sirs:
I have acted as counsel to Lexmark International Group, Inc. ("LIG"), and
Lexmark International, Inc. ("LII"), each a Delaware corporation (together
the "Registrant") in connection with a joint Registration Statement on Form
S-3 (the "Registration Statement") filed by the Registrant with the
Securities and Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Act"), relating to $150,000,000
aggregate principal amount of securities consisting of Senior Notes (the
"Notes") of LII, fully and unconditionally guaranteed by LIG (the Notes,
together with such guarantee, the "Securities"), to be issued pursuant to
an indenture (the "Indenture") to be executed by and among LIG, LII and The
Bank of New York, as Trustee.
In so acting, I have examined and relied upon the originals, or copies
certified or otherwise identified to my satisfaction, of such records,
documents, certificates and other instruments as in my judgment are necessary
or appropriate to enable me to render the opinion expressed below.
I am of the opinion that the Securities have been duly authorized and (upon
execution and delivery of the Indenture and execution and authentication of
the Securities in accordance with the Indenture and delivery of the Securities
to the purchasers thereof against payment therefor) will be legal, valid and
binding obligations of LII and LIG, respectively, enforceable in accordance
with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' right
generally and that the remedy of specific performance and injunctive and other
forms of equitable relief are subject to certain equitable defenses and to the
discretion of the court before which any proceeding may be brought.
<PAGE>
Board of Directors
April 29, 1998
Page Two
I hereby consent to the filing of this opinion as an exhibit to Amendment No.
1 to the Registration Statement and to the reference to me under the caption
"Validity of the Notes and Guarantee" in the Prospectus forming a part
thereof. In giving such consent, I do not thereby concede that I am within
the category of person whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Vincent J. Cole
Vincent J. Cole
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 of our reports dated February 18, 1998, on
our audits of the consolidated financial statements and financial statement
schedule of Lexmark International Group, Inc. and subsidiaries as of December
31, 1996 and 1997, and for the years ended December 31, 1995, 1996 and 1997.
We also consent to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Lexington, Kentucky
April 29, 1998
<PAGE>
Exhibit 25
===========================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
-------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------------
LEXMARK INTERNATIONAL GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 22-3074422
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
LEXMARK INTERNATIONAL, INC.
(Exact name of obligor as specified in its charter)
Delaware 06-1308215
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Lexmark Centre Drive
Lexington, Kentucky 40550
(Address of principal executive offices) (Zip code)
-------------------
Senior Notes due 2008
(Title of the indenture securities)
===========================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 29th day of April, 1998.
THE BANK OF NEW YORK
By: /s/ Thomas B. Zakrzewski
-------------------------------
Name: Thomas B. Zakrzewski
Title: Assistant Vice President
-4-
<PAGE>
Exhibit 7
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Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin . . . . . . . . . . . . . . . . .$ 5,742,986
Interest-bearing balances. . . . . . . . . . . . . . .1,342,769
Securities:
Held-to-maturity securities . . . . . . . . . . . . .1,099,736
Available-for-sale securities. . . . . . . . . . . . .3,882,686
Federal funds sold and Securities pur-
chased under agreements to resell. . . . . . . . . . .2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . . . . . . . . . 35,019,608
LESS: Allowance for loan and
lease losses . . . . . . . . . . . . . . . . . . . . .627,350
LESS: Allocated transfer risk
reserve. . . . . . . . . . . . . . . . . . . . . . . . . . .0
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . . . 34,392,258
Assets held in trading accounts. . . . . . . . . . . . .2,521,451
Premises and fixed assets (including
capitalized leases). . . . . . . . . . . . . . . . . . .659,209
Other real estate owned. . . . . . . . . . . . . . . . . . 11,992
Investments in unconsolidated
subsidiaries and associated
companies . . . . . . . . . . . . . . . . . . . . . . .226,263
Customers' liability to this bank on
acceptances outstanding. . . . . . . . . . . . . . . .1,187,449
Intangible assets . . . . . . . . . . . . . . . . . . . .781,684
Other assets . . . . . . . . . . . . . . . . . . . . . .1,736,574
-----------
Total assets . . . . . . . . . . . . . . . . . . . . .$56,153,587
-----------
-----------
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . .$27,031,362
Noninterest-bearing . . . . . . . . . . . . . . . . 11,899,507
Interest-bearing . . . . . . . . . . . . . . . . . . 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . . . 13,794,449
Noninterest-bearing . . . . . . . . . . . . . . . . . .590,999
Interest-bearing . . . . . . . . . . . . . . . . . . 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase. . . . . . . . . .2,338,881
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . . . . .173,851
Trading liabilities . . . . . . . . . . . . . . . . . .1,695,216
Other borrowed money:
With remaining maturity of one year
or less . . . . . . . . . . . . . . . . . . . . . .1,905,330
With remaining maturity of more than
one year through three years . . . . . . . . . . . . . . . .0
With remaining maturity of more than
three years . . . . . . . . . . . . . . . . . . . . . 25,664
Bank's liability on acceptances exe-
cuted and outstanding. . . . . . . . . . . . . . . . .1,195,923
Subordinated notes and debentures. . . . . . . . . . . .1,012,940
Other liabilities. . . . . . . . . . . . . . . . . . . .2,018,960
-----------
Total liabilities. . . . . . . . . . . . . . . . . . . 51,192,576
-----------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . .1,135,284
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . .731,319
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . . . .3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . 36,866
Cumulative foreign currency transla-
tion adjustments . . . . . . . . . . . . . . . . . . . .(36,184)
-----------
Total equity capital . . . . . . . . . . . . . . . . . .4,961,011
-----------
Total liabilities and equity
capital. . . . . . . . . . . . . . . . . . . . . . .$56,153,587
-----------
-----------
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
)
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
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