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DRAFT
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark
One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-80775-01
Case Credit Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
76-0394710
(I.R.S. Employer Identification No.)
233 Lake Ave., Racine, WI 53403
(Address of principal executive offices including Zip Code)
Registrant's telephone number, including area code: (414) 636-6011
Securities registered pursuant to Section 12(b) of the Act:
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Name of Exchange
Title of Each Class on which registered
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6 1/8% Notes due October 15, 2001 New York
Floating-Rate Notes due January 21, 2000 New York
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. [X] YES [_] NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Common Stock, par value $5.00 per share: 200 shares outstanding as of
February 28, 1999, all of which are owned by Case Capital Corporation.
The registrant meets the conditions set forth in General Instruction
I(1)(a) and (b) of Form 10-K and is therefore filing this form with the
reduced disclosure format permitted by General Instruction I of Form 10-K.
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TABLE OF CONTENTS
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Page
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PART I
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Item 1. Business......................................................... 3
Item 2. Properties....................................................... 5
Item 3. Legal Proceedings................................................ 5
Item 4. Submission of Matters to a Vote of Security Holders.............. 5*
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.................................................................. 6
Item 6. Selected Financial Data.......................................... 6*
Item 7. Management's Analysis of Results of Operations................... 6
Item 8. Financial Statements and Supplementary Data...................... 10
Index to Financial Statements of Case Credit Corporation and
Consolidated Subsidiaries............................................ 10
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure..................................................... 30
PART III
Item 10. Directors and Executive Officers of the Registrant............... 30*
Item 11. Executive Compensation........................................... 30*
Item 12. Security Ownership of Certain Beneficial Owners and Management... 30*
Item 13. Certain Relationships and Related Transactions................... 30*
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.. 30
Financial Statements Included in Item 8................................ 30
Index to Financial Statements and Schedule Included in Item 14......... 30
Schedules Omitted as Not Required or Inapplicable...................... 30
Exhibits............................................................... 30
Reports on Form 8-K.................................................... 30
</TABLE>
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* No response to this item is included herein for the reason that it is
inapplicable, is not required pursuant to General Instruction I of Form 10-
K, or the answer to such item is negative.
2
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PART I.
Item 1. Business.
General
Case Credit(R) Corporation is a subsidiary of Case Capital Corporation
("Case Capital"). Case Capital, a wholly owned subsidiary of Case Corporation
("Case"), provides broad-based financial services for the global marketplace.
Case Credit Corporation, its wholly owned operating subsidiaries, Case Credit
Ltd. (Canada) and Case Credit Australia Pty Ltd, and Case Credit Corporation's
joint ventures, Case Credit Europe S.A.S. and UzCaseagroleasing (collectively,
"Case Credit" or the "Company") provide and administer financing for the
retail purchase or lease of new and used Case and other agricultural and
construction equipment. Case Credit offers various types of retail financing
to end-use customers to facilitate the sale or lease of Case products in the
United States, Canada, Australia, Europe, and Uzbekistan. The Company's
business principally involves purchasing retail installment sales contracts
from Case dealers. In addition, the Company facilitates and finances the sale
of insurance products to retail customers, provides financing for Case dealers
and Case rental equipment yards, and also provides other retail financing
programs in North America. In North America, Case Credit's private-label
credit card is used by customers to purchase parts, service, rentals,
implements and attachments from Case dealers. Case Credit also provides
financing options to dealers for a variety of purposes, including inventory,
working capital, real estate acquisitions, construction and remodeling,
business acquisitions, dealer systems, and service and maintenance equipment.
The Company's business is dependent on the ability of Case and its dealers
to generate sales and leasing activity, the willingness of customers to enter
into financing transactions with the Company and the availability of funds to
the Company to finance such transactions. The ability of Case and its dealers
to sell agricultural and construction equipment and thereby generate retail
receivables is affected by numerous factors, including:
. the general level of activity in the agricultural and construction
industries;
. the rate of North American agricultural production and demand;
. weather conditions;
. commodity prices;
. consumer confidence;
. government subsidies for the agricultural sector;
. prevailing levels of construction (especially housing starts); and
. levels of total industry capacity and equipment inventory.
In addition, the Company's business is affected by changes in market
interest rates, which in turn are related to general economic and capital
market conditions, demand for credit, inflation, governmental policies and
other factors.
The Company obtains funding for its operations from a variety of sources
including the issuance of commercial paper, medium-term notes and public debt;
the issuance of securities in asset-backed securitization ("ABS")
transactions; bank revolving credit facilities, earnings retained in the
business, and advances and equity capital from Case. The Company sells
substantial amounts of retail receivables in ABS transactions that typically
involve the sale of a pool of retail installment sales contracts to limited-
purpose business trusts or similar securitization entities. The Company
remains as servicer of these receivables, for which it is typically paid a
servicing fee.
The Company continues to expand its financing business by providing retail
and dealer financing in new geographic regions and for a broader range of
equipment, and by offering new financing products to Case dealers, end-use
customers and to others. The Company recently established Soris Financial
("Soris(TM)") as a brand name to serve the Company's diversified client base
in the agricultural, construction, industrial mobile and other equipment
industries. Soris offers a broad range of retail and wholesale financing
products including equipment and commercial loans and leases for North
American manufacturers, dealers, distributors, and their customers. Soris also
facilitates and finances the sale of insurance products to retail customers.
3
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Case Credit Corporation was incorporated in Delaware on January 26, 1993.
The principal offices of the Company are located at 233 Lake Avenue, Racine,
Wisconsin, 53403.
Business of Case Corporation
Case is a leading worldwide designer, manufacturer, marketer and
distributor of farm equipment and light- to medium-sized construction
equipment, and offers a broad array of financial products and services through
Case Capital, Case's financial services business. Case's market position is
particularly significant in several product categories including
loader/backhoes, skid steer loaders, large, high-horsepower farm tractors and
self-propelled combines.
In 1998, Case's sales of farm and construction equipment represented 93% of
total revenues, and financing operations accounted for 7% of total revenues.
In 1998, Case's sales of farm equipment represented 62% of revenues from
equipment sales, and sales of construction equipment represented 38% of
revenues from equipment sales.
Relationship with Case Corporation
The Company's common stock is owned entirely by Case Capital. Case
Corporation contributed all the common stock of Case Credit to Case Capital in
exchange for all the common stock of Case Capital. Case Capital is a wholly
owned subsidiary of Case Corporation. Case provides Case Capital with certain
operational and financial support, which is integral to the conduct of the
Company's business.
Employee Benefits, Intercompany Services and Tax Sharing
The Company and Case have entered into agreements relating to, among other
things, various employee benefit plans covering Company staff that are
administered by Case, the Company's reimbursement of Case for its staff and
certain corporate services, and intend to enter into tax sharing arrangements
between the Company and Case.
Special Marketing Programs
The Company, in conjunction with Case, Case dealers and other manufacturers
and their dealers, periodically offers, as part of its marketing strategy,
below-market interest rate and waived interest rate financing to customers.
When the Company acquires retail installment sales contracts and finance
leases subject to below-market interest rate and waived interest rate
financing, the Company is compensated for the difference between market rates
and the amounts received by the Company (collectively, "financing subsidies").
The cost of these financing subsidies is currently borne completely by the
manufacturers (and not by the Company) and is settled monthly. The financing
subsidies are recognized as income by Case Credit over the term of the
contracts. If such contract is subsequently sold, the financing subsidy is
recognized as part of the gain on retail notes sold.
Dividends
Case Credit did not pay dividends in 1998 and 1997. Case Credit paid
dividends to Case of $40 million for the year ended December 31, 1996.
Support Agreement
The Company and Case have entered into a support agreement (the "Support
Agreement") which provides, among other things, that Case will remain,
directly or indirectly, the sole owner of all of the voting stock of the
Company, and will make quarterly payments to the Company to the extent
necessary to ensure that the Company's consolidated pre-tax earnings (as
defined) available for fixed charges equal at least 1.10 times its fixed
charges (as defined) in all periods composed of four consecutive fiscal
quarters. The Support Agreement
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provides that Case is not directly or indirectly guaranteeing any
indebtedness, liability or obligation of the Company. The Support Agreement
may be modified or amended by the parties thereto or terminated by either
party upon thirty days' prior written notice to the other party, with copies
of such amendment or notice being sent to Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Ratings Group ("S&P"), and any other nationally
recognized statistical rating organizations then rating Case Credit debt, if
(1) Moody's and S&P confirm in writing that their ratings on Case Credit debt
then rated or capable of being rated by them would not be downgraded or
withdrawn as a result of such modification, amendment or termination, or (2)
the modification, amendment or notice of termination provides that the Support
Agreement will continue in effect with respect to debt of Case Credit
outstanding on the effective date of the modification, amendment or
termination, or (3) the holders of at least a majority of the aggregate unpaid
principal amount of all outstanding debt of Case Credit with an original
maturity in excess of 270 days consent in writing, so long as the holders of
debt of Case Credit having an original maturity of 270 days or less shall
continue to have the benefit of the Support Agreement until the maturity of
such debt. For purposes of the Support Agreement, no portion of any debt is
considered to be "outstanding" if such debt is deemed to be discharged and not
outstanding in accordance with the indenture or other governing instrument
defining the rights of the holders of such debt.
The calculation of pre-tax earnings available for fixed charges under the
Support Agreement differs from the calculation of the ratio of earnings to
fixed charges in accordance with the rules and regulations of the Securities
and Exchange Commission. Under the Support Agreement, all cash extraordinary,
non-recurring items of income or expense (other than cash debt defeasance
costs) are included, whereas under the Securities and Exchange Commission's
rules and regulations, such items are excluded. No payment has been required
by Case to meet the Support Agreement commitments.
Item 2. Properties.
Case Credit Corporation does not own any real estate. Its principal
executive offices are located at 233 Lake Avenue, Racine, WI 53403.
As of December 31, 1998, the Company had additional offices in or near
Memphis, Tennessee; Dallas, Texas; Minneapolis, Minnesota; Columbus, Ohio;
Toronto, Ontario; Tashkent, Uzbekistan; and St. Mary's, Australia.
Item 3. Legal Proceedings.
The Company is party to various litigation matters and claims arising from
its operations. Management believes that the outcome of these proceedings,
individually and in the aggregate, will not have a material adverse effect on
Case Credit's financial position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders.
Information for this Item 4 is not required pursuant to General Instruction
I(2) of Form 10-K.
5
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PART II.
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
As of December 31, 1998, all of the Company's common stock was owned by
Case Capital and was not publicly traded. Case Capital is a wholly owned
subsidiary of Case Corporation.
The Company did not pay dividends in 1998 or 1997. Case Credit paid
dividends to Case Corporation in the amount of $40 million in 1996.
Item 6. Selected Financial Data.
Information for this Item 6 is not required pursuant to General Instruction
I(2) of Form 10-K.
Item 7. Management's Analysis of Results of Operations.
1998 Compared to 1997
Net Income
Case Credit recorded net income of $85 million in 1998, as compared to net
income of $82 million in 1997. The $3 million increase in year-over-year
income is primarily due to higher earnings as a result of increased levels of
on-balance-sheet receivables, and improved margins resulting from the
declining interest rate environment. Additionally, higher lease income from
operating leases and higher realized gains from the sale of retail notes under
asset-backed securitization ("ABS") transactions also improved earnings. These
amounts were partially offset by an increase in the Company's credit loss
provision as a result of a higher loss-to-liquidation ratio in 1998, combined
with the significant growth in Case Credit's serviced portfolio. In addition,
1998 operating results reflect increased interest expense as a result of
higher average debt levels, as well as increased depreciation of equipment on
operating leases and a higher year-over-year tax rate.
Revenues
Case Credit reported total revenues of $377 million for 1998, an increase
of $105 million or 39% over the $272 million of revenues reported for 1997.
Finance income earned on retail and other notes and finance leases increased
to $140 million in 1998, as compared to $103 million for the same period in
1997, primarily due to increased levels of on-balance-sheet receivables.
Operating lease revenues increased $31 million to $64 million for 1998,
reflecting the growth in Case Credit's operating lease portfolio. These
revenue increases were compounded by increases in net gains on retail notes
sold, as well as higher securitization and servicing fee income. Case Credit
continues to implement its asset-management strategy of retaining a larger
percentage of assets on balance sheet, as opposed to selling those assets
through ABS transactions. The Company believes this strategy will generate a
more stable earnings performance for Case Credit.
Expenses
Operating expenses for Case Credit increased $51 million to a total of $103
million in 1998, as compared to $52 million in 1997. This increase primarily
resulted from a $21 million increase in depreciation expense for equipment on
operating leases relating to Case Credit's larger operating lease portfolio,
and a $14 million increase in Case Credit's provision for credit losses as a
result of a higher loss-to-liquidation ratio in 1998, combined with the
significant growth in Case Credit's serviced portfolio.
Case Credit's interest expense for 1998 was $143 million, up $45 million
from the $98 million reported in 1997. The increased interest expense resulted
from higher average debt levels during 1998, primarily due to the growth in
Case Credit's on-balance-sheet receivables and increased equipment on
operating leases.
Serviced Portfolio
As of December 31, 1998, Case Credit's serviced portfolio increased 31%
over the same period last year to a record $6.8 billion. Gross receivables
acquired in 1998 increased 31% for a total of $4.4 billion versus the
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same period in 1997. Case Credit retained approximately $483 million of
additional retail and other notes and finance leases as compared to December
31, 1997, consistent with the Company's asset-management strategy. Case
Credit's portfolio losses increased to $15 million in 1998 as compared to $8
million in 1997, resulting in a loss-to-liquidation ratio of 0.55% in 1998 and
0.34% in 1997.
The growth in Case Credit's serviced portfolio reflects the increased
marketing and growth initiatives of Case Credit and the strong demand for both
new and used equipment. During 1998, the Company completed a series of
strategic moves designed to further grow and diversify its financial services
business. Case Capital, formed in June 1998, serves as a broad-based financial
services company for the global marketplace. It encompasses Case Credit, which
has been providing financial services through the Case dealer network since
1957, and Soris Financial, launched in late 1998 to serve Case Capital's
diversified client base in the agricultural, construction, industrial mobile
and other equipment industries. In 1998, the Company expanded its insurance
business and announced that it is offering business insurance for U.S.
equipment dealers through an alliance with Universal Underwriters Group, a
subsidiary of Zurich Insurance Company, and other insurance underwriters. In
addition, Case Credit established a strategic marketing alliance with GMAC
Commercial Mortgage Corporation that offers agricultural real estate financing
through the Case dealer network.
In early 1997, Case Credit broadened its product line with the introduction
of a commercial loan program in North America. Case Credit expanded its
geographic reach in 1997 through the establishment of a joint venture in
Europe, Case Credit Europe S.A.S., that provides financing for Case's European
dealers and retail customers. Also in 1997, Case Credit and Cummins Engine
Co., Inc. ("Cummins") entered into an agreement under which Case Credit offers
financing to all qualified North American retail purchasers, dealers and
manufacturers of industrial equipment powered by Cummins engines.
Case Credit sold $2.1 billion and $1.8 billion of retail notes in 1998 and
1997, respectively, to limited-purpose business trusts organized by Case in
the United States and Canada. These trusts were formed for the purpose of
purchasing receivables from Case Credit and the receivables were used as
collateral for the issuance of asset-backed securities to outside investors.
The proceeds from the sale of the retail notes were used to repay indebtedness
and to finance additional receivables.
Interest Rate Risk Management
Case Credit is exposed to interest rate risk and, as such, has implemented
an interest rate risk management program. The program is within the guidelines
and policies approved by the Board of Directors to limit exposure to rising
interest rates.
At December 31, 1998, the Company performed a sensitivity analysis for the
Company's derivatives and other financial instruments that have interest rate
risk. The Company calculated the pretax earnings effect on its interest
sensitive instruments, including total receivables and long-term debt
obligations. The fair value gains or losses in the table below represent the
changes in the financial instrument's fair values that would be caused by
increasing the Company's weighted-average interest rates by 10% at December
31, 1998, based on the discounted values of their related cash flows (in
millions):
<TABLE>
<CAPTION>
Fair Value
Gains/(Losses)
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Total receivables, net.................................... (13)
Long-term debt............................................ 15
</TABLE>
Commodity Price and Foreign Currency Risk Management
The Company is not subject to significant foreign currency risk as its
foreign operations are funded locally. The company is not subject to commodity
price risk.
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Year 2000
As used in this "Year 2000" disclosure, the "Company," or "Case" refers to
Case Corporation and its consolidated subsidiaries, including Case Credit
Corporation and its subsidiaries ("Case Credit"). In addition, all references
to "Case Industrial" reflect the consolidation of all majority-owned
subsidiaries, excluding Case Credit.
In July 1996, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") issued EITF 96-14, "Accounting for the
Costs Associated with Modifying Computer Software for the Year 2000," which
requires that costs associated with modifying computer software for the Year
2000 be expensed as incurred. Through Case's ongoing process of evaluating and
performing systems and software upgrades and enhancements, the Company has
been actively addressing Year 2000 issues since 1995.
Case Corporation understands that it is important to our customers and
stakeholders that Case's products, services and internal systems are not
adversely affected by the Year 2000. Case has implemented procedures that it
deems necessary to safeguard the Company from computer-related issues
associated with adverse effects as a result of improperly recognizing the
millennial date change. These procedures include, where necessary, the
inventorying/assessing, planning, constructing/testing, and
implementing/certifying of critical internal-use hardware and software
systems, as well as other embedded systems in the Company's manufacturing
plants, other buildings, equipment and other infrastructure. The Company
believes that these procedures will adequately address both the information
technology and non-information technology aspects of our business. Based upon
its review and efforts to date, the Company believes that future external and
internal costs to be incurred for the modification of internal-use software to
address Year 2000 issues will not have a material adverse effect on Case's
financial position, cash flows or results of operations.
The Company believes, based upon its review and efforts to date, that
external and internal remediation costs to be incurred for the modification of
internal-use software to address Year 2000 issues will, in the aggregate,
approximate $45 million to $50 million. As Case Industrial and Case Credit
share many technology resources and internal-use systems, all the remediation
costs to address Year 2000 issues will be borne by Case Industrial. As of
December 31, 1998, Case Industrial has incurred approximately $22 million of
costs for Year 2000 remediation, and the Company currently anticipates that
remaining Year 2000 remediation costs will approximate $22 million in 1999 and
$3 million in 2000. These cost estimates include the costs of external
contractors, non-capitalizable purchases of software and hardware, and the
direct cost of internal employees working on Year 2000 projects. Case
maintains a process that tracks the cost and time of external contractors.
However, the Company does not separately track its own internal costs incurred
for the Year 2000 project. Internal costs are compiled principally from the
related payroll records for those personnel directly working on the Year 2000
effort. The Company's cost estimate does not include the cost of implementing
contingency plans, which are in the process of being developed, and also does
not include any potential litigation or warranty costs related to Year 2000
issues if the Company's remediation efforts are not successful.
Case has also undertaken a program to alert its suppliers and dealers of
Year 2000 issues. Based on its contacts with suppliers and dealers, the
Company believes that a majority of our most important suppliers are Year 2000
compliant, and the Company anticipates that most of its dealers will be Year
2000 compliant by mid-1999. Case will continue to work with its remaining
suppliers and its dealers throughout 1999 to secure Year 2000 compliance by
December 31, 1999. Based on third-party representations and internal testing,
and subject to the Company's ongoing compliance efforts, the costs and
uncertainties relating to timely resolution of Year 2000 issues applicable to
the Company's business and operations are not reasonably expected by the
Company to have a material adverse effect on Case's financial position, cash
flows or results of operations. For those suppliers and dealers that have not
adequately responded to our Year 2000 concerns, we are following up to
ultimately achieve an acceptable level of compliance within our supply chain.
As there can be no assurance that an acceptable level of Year 2000 compliance
will be achieved, Case is in the process of developing contingency plans to
address potential issues.
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Case has completed all steps with regards to Year 2000 compliance that it
considers necessary regarding its agricultural and construction equipment and,
as a result, the Company has no information to suggest that its agricultural
and construction equipment is not Year 2000 compliant. The Company believes,
based on its review and testing, that products purchased from Case will
accurately determine chronological dates and accurately perform all
calculations and data manipulations based upon such dates.
Based upon Case's review and efforts to date, the Company currently
anticipates completion of critical Year 2000 compliance issues by mid-1999,
and the Company plans to continue integration testing throughout the balance
of 1999. If Case's Year 2000 compliance efforts, as well as the efforts of the
Company's suppliers and dealers, individually and in the aggregate, are not
successful, it could have a material adverse effect on the Company's financial
position, cash flows and results of operations. Factors that could cause
actual results to differ include unanticipated supplier or dealer failures,
disruption of utilities, transportation or telecommunications breakdowns,
foreign or domestic governmental failures, as well as unanticipated failures
on our part to address Year 2000 related issues. The Company's most reasonably
likely worst case scenario in light of these risks would involve a potential
loss in sales resulting from order, production and shipping delays throughout
the Company's supply chain caused by Year 2000 related disruptions. The degree
of sales loss impact would depend on the severity of the disruption, the time
required to correct it, whether the sales loss was temporary or permanent, and
the degree to which our primary competitors were also impacted by the
disruption. The Company is in the process of developing Year 2000 contingency
plans that will be designed to mitigate the impact on the Company in the event
that its Year 2000 compliance efforts are not successful. The targeted
completion date for the Company's contingency planning is mid-1999. Case's
contingency plans may include the use of alternative systems and non-
computerized approaches to our business including manual procedures for
machine operation, collecting and reporting of information, as well as
alternative sources of supply. At this time, the Company has not determined
whether it will be necessary to stockpile inventory or supplies as part of its
contingency planning.
The information included in this "Year 2000" section represents forward-
looking statements and involves risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements.
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Item 8. Financial Statements and Supplementary Data.
INDEX TO FINANCIAL STATEMENTS OF CASE CREDIT CORPORATIONAND CONSOLIDATED
SUBSIDIARIES
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Report of independent public accountants.................................. 11
Statements of income for each of the three years in the period ended
December 31, 1998........................................................ 12
Balance sheets as of December 31, 1998 and 1997........................... 13
Statements of cash flows for each of the three years in the period ended
December 31, 1998........................................................ 14
Statements of changes in stockholder's equity for each of the three years
in the period ended December 31, 1998.................................... 15
Notes to financial statements............................................. 16
</TABLE>
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholder of Case Credit Corporation:
We have audited the accompanying consolidated balance sheets of Case Credit
Corporation (a Delaware Corporation) and subsidiaries, as of December 31, 1998
and 1997, and the related consolidated statements of income, cash flows, and
stockholder's equity, for each of the three years in the period ended December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Case Credit Corporation
and subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
Milwaukee, Wisconsin
January 20, 1999
(except with respect to the matters
discussed in Note 12, as to which
the date is February 25, 1999)
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CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(in millions)
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
Finance income earned on retail and other notes and finance
leases...................................................... $140 $103 $ 64
Net gain on retail notes sold................................ 82 71 85
Securitization and servicing fee income...................... 46 42 60
Lease income on operating leases............................. 64 33 16
Interest income from Case Corporation........................ 30 19 17
Other income................................................. 15 4 2
---- ---- ----
Total revenues............................................. 377 272 244
Expenses:
Interest expense.............................................. 143 98 72
Operating expenses:
Depreciation of equipment on operating leases................ 43 22 10
Fees charged by Case Corporation............................. 24 18 20
Administrative and operating expenses........................ 18 11 11
Provision (credit) for credit losses......................... 14 -- (3)
Other........................................................ 4 1 1
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Total operating expenses................................... 103 52 39
---- ---- ----
Total expenses............................................. 246 150 111
---- ---- ----
Income before taxes and extraordinary items.................... 131 122 133
Income tax provision........................................... 46 40 45
---- ---- ----
Income before extraordinary items.............................. 85 82 88
Extraordinary items............................................ -- -- (3)
---- ---- ----
Net income..................................................... $ 85 $ 82 $ 85
==== ==== ====
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Income.
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CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1998 AND 1997
(in millions, except share data)
<TABLE>
<CAPTION>
ASSETS
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1998 1997
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<S> <C> <C>
Cash and cash equivalents...................................... $ 35 $ 67
Retail and other notes and finance leases...................... 2,216 1,733
Due from Trusts................................................ 289 267
------ ------
Total receivables.......................................... 2,505 2,000
Allowance for credit losses.................................... (29) (22)
------ ------
Total receivables--net..................................... 2,476 1,978
Affiliated receivables......................................... 51 67
Equipment on operating leases, at cost......................... 531 209
Accumulated depreciation....................................... (63) (30)
------ ------
Net equipment on operating leases.......................... 468 179
Property and equipment, at cost................................ 5 4
Accumulated depreciation....................................... (2) (1)
------ ------
Net property and equipment................................. 3 3
Other assets................................................... 227 68
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Total...................................................... $3,260 $2,362
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<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
<S> <C> <C>
Short-term debt................................................ $ 550 $1,147
Accounts payable and other accrued liabilities................. 124 64
Affiliated payables............................................ -- 39
Deposits withheld from dealers................................. 17 18
Long-term debt................................................. 2,108 735
------ ------
Total liabilities.......................................... 2,799 2,003
------ ------
Commitments and Contingencies (Note 10)
Minority Interest.............................................. 2 2
Stockholder's equity:
Common Stock, $5 par value, 200 shares authorized, issued and
outstanding................................................. -- --
Paid-in capital.............................................. 269 244
Accumulated other comprehensive income....................... (24) (16)
Retained earnings............................................ 214 129
------ ------
Total stockholder's equity................................. 459 357
------ ------
Total...................................................... $3,260 $2,362
====== ======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Balance Sheets.
13
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(in millions)
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Operating activities:
Net income........................................ $ 85 $ 82 $ 85
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization................... 45 24 12
Deferred income tax expense..................... 24 18 1
Extraordinary items, after tax.................. -- -- 3
Net gain on retail notes sold................... (82) (71) (85)
Changes in components of working capital:
(Increase) decrease in other assets........... (19) (4) 5
Increase (decrease) in accounts payables and
other accrued liabilities.................... (6) 22 21
Other, net.................................... (7) (6) --
------- ------- -------
Net cash provided (used) by operating
activities................................. 40 65 42
------- ------- -------
Investing activities:
Cost of receivables acquired...................... (3,209) (2,791) (2,143)
Proceeds from sales of receivables................ 1,975 1,749 1,584
Collections of receivables........................ 834 489 296
Purchase of equipment on operating leases (net of
disposals)....................................... (333) (100) (71)
Increase in investments in other assets........... (142) (27) --
Investments in joint ventures..................... -- (16) --
Expenditures for property and equipment........... (1) (1) (2)
------- ------- -------
Net cash provided (used) by investing
activities................................. (876) (697) (336)
------- ------- -------
Financing activities:
Proceeds from issuance of long-term debt.......... 1,070 150 200
Net increase (decrease) in short-term debt and
revolving credit facilities...................... (291) 487 136
Dividends paid to Case Corporation................ -- -- (40)
Capital contributions............................. 25 45 --
------- ------- -------
Net cash provided (used) by financing
activities................................. 804 682 296
------- ------- -------
Increase (decrease) in cash and cash equivalents.... (32) 50 2
Cash and cash equivalents, beginning of period...... 67 17 15
------- ------- -------
Cash and cash equivalents, end of period............ $ 35 $ 67 $ 17
======= ======= =======
Cash paid during the period for interest............ $ 126 $ 101 $ 71
======= ======= =======
Cash paid during the period for taxes............... $ 26 $ 44 $ 47
======= ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Cash Flows.
14
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(in millions)
<TABLE>
<CAPTION>
Accumulated
Other
Common Paid-in Retained Comprehensive Comprehensive
Stock Capital Earnings Income Total Income
------ ------- -------- ------------- ----- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995....................................... $-- $199 $ 2 $ (8) $193
Comprehensive income:
Net income..................................................... -- -- 85 -- 85 $ 85
Dividends declared............................................. -- -- (40) -- (40)
Translation adjustment......................................... -- -- -- 2 2 2
--- ---- ---- ---- ---- ----
Total........................................................ $ 87
====
Balance, December 31, 1996....................................... -- 199 47 (6) 240
Comprehensive income:
Net income..................................................... -- -- 82 -- 82 $ 82
Translation adjustment......................................... -- -- -- (10) (10) (10)
----
Total........................................................ $ 72
====
Capital contribution from Case Corporation....................... -- 45 -- -- 45
--- ---- ---- ---- ----
Balance, December 31, 1997....................................... -- 244 129 (16) 357
Comprehensive income:
Net income..................................................... -- -- 85 -- 85 $ 85
Translation adjustment......................................... -- -- -- (8) (8) (8)
----
Total........................................................ $ 77
====
Capital contribution from Case Capital........................... -- 25 -- -- 25
--- ---- ---- ---- ----
Balance, December 31, 1998....................................... $-- $269 $214 $(24) $459
- --------------------------------------------------
=== ==== ==== ==== ====
</TABLE>
The accompanying notes to financial statements are an integral part of these
Statements of Changes in Stockholder's Equity.
15
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
Note 1: Nature of Operations
Case Credit Corporation is a subsidiary of Case Capital Corporation ("Case
Capital"). Case Capital, a wholly owned subsidiary of Case Corporation
("Case"), provides broad-based financial services for the global marketplace.
Case Credit Corporation, its wholly owned operating subsidiaries, Case Credit
Ltd. (Canada) and Case Credit Australia Pty Ltd, and Case Credit Corporation's
joint ventures, Case Credit Europe S.A.S. and UzCaseagroleasing (collectively,
"Case Credit" or the "Company") provide and administer financing for the
retail purchase or lease of new and used Case and other agricultural and
construction equipment. Case Credit offers various types of retail financing
to end-use customers to facilitate the sale or lease of Case products in the
United States, Canada, Australia, Europe and Uzbekistan. The Company's
business principally involves purchasing retail installment sales contracts
from Case dealers. In addition, the Company facilitates and finances the sale
of insurance products to retail customers, provides financing for Case dealers
and Case rental equipment yards, and also provides other retail financing
programs in North America. In North America, Case Credit's private-label
credit card is used by customers to purchase parts, service, rentals,
implements and attachments from Case dealers. Case Credit also provides
financing options to dealers for a variety of purposes, including inventory,
working capital, real estate acquisitions, construction and remodeling,
business acquisitions, dealer systems, and service and maintenance equipment.
Note 2: Summary of Significant Accounting Policies
Principles of Consolidation and Presentation
The accompanying financial statements reflect the consolidated results of
Case Credit Corporation and its consolidated subsidiaries. All significant
intercompany transactions have been eliminated in consolidation.
Certain reclassifications have been made to conform prior years' financial
statements to the 1998 presentation.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Foreign Currency Translation
The assets and liabilities of foreign subsidiaries are translated into U.S.
dollars using year-end exchange rates. Revenue and expenses are translated at
average rates during the year. Adjustments resulting from this translation are
deferred and included in "Accumulated other comprehensive income" in the
accompanying Balance Sheets. Foreign exchange transaction gains/losses for the
years ended December 31, 1998, 1997 and 1996, were not material.
Recognition of Finance and Interest Income
Retail and Other Notes, Finance Leases and Operating Leases--The Company
records finance income earned on retail and other notes and finance leases
using the effective interest method. A portion of the earned finance income
arises from sales programs offered by Case and other manufacturers on which
finance charges are waived or low-rate financing programs are offered. When
the Company acquires retail installment sales contracts and finance leases
subject to below-market interest rate and waived interest rate financing, the
Company
16
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
is compensated for the difference between market rates and the amounts
received by the Company. Case Credit receives compensation from Case and other
manufacturers in an amount equal to the difference between the competitive
interest rate and the amount paid by the customer. This amount is initially
recognized as unearned finance charges and is recognized as interest income
over the term of the retail notes from sales programs offered by Case and
others. The amounts received from Case for below-market interest rate and
waived interest rate financing, are included in "Interest income from Case
Corporation" in the accompanying Statements of Income, and amounted to $20
million, $19 million and $17 million in 1998, 1997 and 1996, respectively. For
selected operating leases, the Company is also compensated from Case for the
difference between the market rental and the amount paid by the customer. The
amounts received were $4 million in 1998 and are included in "Interest income
from Case Corporation." The Company is also compensated for funding of various
receivables on behalf of Case. The amount earned was $6 million in 1998 and is
included in "Interest income from Case Corporation." Compensation received for
below-market interest rates and waived interest rate financing from other
manufacturers is included in "Finance income earned on retail and other notes
and finance leases" in the accompanying Statements of Income. When the
receivables are sold, the unrecognized portion of the unearned finance charges
is included in the calculation of the net gain on retail notes sold. The
Company included in its gain calculations income from Case amounting to $62
million, $63 million and $67 million in 1998, 1997 and 1996, respectively, as
part of the sale of retail notes. These amounts are included in "Net gain on
retail notes sold" in the accompanying Statements of Income. Recognition of
income on loans is generally suspended when an account becomes 120 days
delinquent or when management determines that collection of future income is
not probable. Accrual is resumed if the receivable becomes contractually
current and collection doubts are removed. Previously suspended income is
recognized at that time. The amount of loans and related finance charges for
which income recognition has been suspended is not material.
The Company offers retail and other notes with interest rates that float
with the prime rate, plus an applicable margin. At December 31, 1998 and 1997,
these notes amount to $325 million and $279 million, respectively.
Receivables Sold and Serviced
Retail notes receivable have been securitized and sold to limited-purpose
business trusts ("Trusts") with recourse up to specified amounts. For sales
occurring during 1998 and 1997, receivables, net of retained interests, are
removed from the balance sheet, and a gain or loss on sale is recognized in
accordance with the provisions of Statement of Financial Accounting Standards
("SFAS") No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities." For sales of retail receivables between
June 1994 and December 1996, the retail notes receivable sold were removed
from the balance sheet, and a gain or loss on sale was recognized for the
difference between the carrying value of the receivables and the adjusted
sales proceeds. The adjusted sales proceeds were based on the proceeds
received from investors adjusted for normal servicing fees, the estimated
obligation pursuant to recourse provisions, and other factors, as appropriate.
For receivables sold prior to June 1994, Case Credit recognizes excess
servicing fees that represent the excess of the yield on the portfolio sold
over the yield paid to investors in the Trusts. These excess servicing fees
are recognized as the amounts are received from the Trusts rather than at the
time of sale, due to the uncertainty of the amount of fees that would
ultimately be collected. Case Credit did not receive any excess servicing fees
for 1998, but had servicing fees amounting to $3 million and $21 million in
1997 and 1996, respectively, which was included in "Securitization and
servicing fee income" in the accompanying Statements of Income. No servicing
asset or liability has been recorded under the provisions of SFAS No. 125 by
the Company as management believes that the servicing fee income received is
fair compensation for the services provided.
Case Credit is required to remit the cash collected on the serviced
portfolio to the Trusts within two business days. At December 31, 1998 and
1997, $20 million and $21 million, respectively, of unremitted cash payable to
the Trusts is included in "Accounts payable and other accrued liabilities" in
the accompanying Balance Sheets.
17
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
Accounting Pronouncements
Effective January 1, 1997, the Company adopted SFAS No. 125. The adoption of
this statement did not have a material effect on the Company's financial
position or results of operations.
Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This statement establishes standards for the reporting
and display of comprehensive income and its components. Components of
comprehensive income are net income and all other non-owner changes in equity.
SFAS No. 130 requires that an enterprise classify items of other comprehensive
income by their nature in a financial statement for the period in which they
are recognized. The Company has chosen to disclose comprehensive income in the
accompanying Consolidated Statements of Changes in Stockholder's Equity. As
disclosed in the accompanying Balance Sheets at December 31, 1998 and 1997,
"Accumulated other comprehensive income" is comprised solely of cumulative
foreign currency translation adjustments. The adoption of this statement did
not have an effect on the Company's financial position or results of
operations.
Effective January 1, 1998, the Company adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." The adoption of this
statement did not have an effect on the Company's financial position or results
of operations. See Note 11 "Segment and Geographical Information."
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. This statement must be adopted no later than January 1,
2000, although earlier application is permitted. The Company is currently
evaluating the impact of adopting SFAS No. 133.
Effective January 1, 1998, the Company adopted Statement of Position ("SOP")
No. 98-1, "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use." The Company's accounting for the costs of computer software
developed or obtained for internal use is consistent with the guidelines
established in the SOP and, as a result, the adoption of this statement had no
effect on the Company's financial position or results of operations.
Case Credit will adopt SOP No. 98-5, "Reporting on the Costs of Start-Up
Activities," effective January 1, 1999. The Company's accounting for the costs
of start-up activities is consistent with the guidelines established in the SOP
and, as a result, the adoption of this statement will have no effect on the
Company's financial position or results of operations.
Cash and Cash Equivalents
Cash equivalents are comprised of all highly liquid investments with an
original maturity of three months or less.
Deposits Withheld from Dealers
These deposits represent amounts withheld from dealers relating to retail
sales financed using retail and other notes and finance leases. Any subsequent
losses on retail and other notes or finance leases that were acquired with
limited recourse are charged against the amounts withheld from the dealer. To
the extent that a loss on a retail or other note or finance lease exceeds the
dealers' reserves, the amount is charged against the Company's allowance for
credit losses. Annually, the balance of each dealer's withholding account, in
excess of minimum levels, is remitted to the dealer.
Derivatives
The Company uses derivative financial instruments to manage its interest
rate exposures. Case Credit does not hold or issue such instruments for trading
purposes. Amounts to be received or paid under these instruments
18
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
are recognized in the results of operations as interest expense or are
recorded as part of the gain on sale of receivables, as appropriate, in the
periods to which they relate.
Reference is made to Note 8, "Financial Instruments," for further
information regarding the Company's use of derivative financial instruments.
Extraordinary Items
During 1996, the Company recorded a $3 million extraordinary, after-tax
charge to write-off unamortized bank fees in conjunction with the refinancing
of the Company's credit facilities.
Note 3: Receivables
A summary of receivables is as follows (in millions):
<TABLE>
<CAPTION>
December 31,
--------------
1998 1997
------ ------
<S> <C> <C>
Retail and other notes.................................... $1,822 $1,417
Finance leases............................................ 648 491
Due from Trusts........................................... 289 267
------ ------
Gross receivables..................................... 2,759 2,175
Less--Unearned finance charges............................ (254) (175)
Less--Allowance for credit losses......................... (29) (22)
------ ------
Total receivables, net................................ $2,476 $1,978
====== ======
</TABLE>
Retail and Other Notes and Finance Leases
The terms of retail and other notes and finance leases generally range from
two to six years and allow for prepayment at any time without penalty. The
average effective yield on retail and other notes and finance leases held by
the Company was approximately 9.1% at December 31, 1998 and 1997.
Maturities of retail and other notes and finance leases as of December 31,
1998, are as follows (in millions):
<TABLE>
<S> <C>
Years ending December 31,
1999............................................................ $ 980
2000............................................................ 614
2001............................................................ 425
2002............................................................ 262
2003............................................................ 153
2004 and thereafter............................................. 36
------
Total retail and other notes and finance leases--gross.......... 2,470
Less--Unearned finance charges.................................. (254)
------
Total retail and other notes and finance leases, net of
unearned finance charges..................................... $2,216
======
</TABLE>
The allowance for credit losses is established to cover potential losses
for receivables owned by the Company. Changes in the allowance for credit
losses are as follows (in millions):
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Balance, beginning of year.................................... $22 $23
Provision for credit losses................................... 14 --
Write-offs, net of recoveries................................. (7) (1)
--- ---
Balance, end of year.......................................... $29 $22
=== ===
</TABLE>
19
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
The preceding table reflects the Company's provision for credit losses, but
does not include losses charged to dealers or those absorbed by the Trusts.
Total losses incurred on the Company's serviced portfolio were $15 million in
1998 and $8 million in 1997.
Case Credit sold $2.1 billion and $1.8 billion of retail notes (net of
unearned finance charges) in 1998 and 1997, respectively, to Trusts in the
United States and Canada. The Trusts were formed for the purpose of purchasing
Case Credit receivables and the receivables were used as collateral for the
issuance of asset-backed securitization ("ABS") transactions to outside
investors. The proceeds received from the sales of notes were reduced by $56
million and $55 million in 1998 and 1997, respectively, pursuant to recourse
provisions in the sale agreements. These reductions in cash proceeds are held
in escrow by the Trusts to provide security in the event of uncollectible notes
and are released to the Company when the notes are collected. Escrow amounts
held by the Trusts of $170 million and $154 million at December 31, 1998 and
1997, respectively, are recorded in "Due from Trusts" on the accompanying
Balance Sheets. Case Credit has established reserves for the estimated losses
on amounts held in escrow, and these reserves are also included in "Due from
Trusts" on the accompanying Balance Sheets. A security interest in the
equipment financed by the retail notes is maintained such that in the event of
non-performance, the related equipment can be repossessed to minimize losses.
As these Trusts are controlled by third parties and meet minimum equity
capitalization standards, the assets of the Trust are not included in the
consolidated financial statements of the Company.
Case Credit's portfolio of managed receivables, including receivables owned
and receivables serviced for others, has grown from $5.2 billion at December
31, 1997, to $6.8 billion at December 31, 1998. Case's serviced portfolio at
December 31, 1998, included $5.6 billion of retail and other notes (net of
unearned finance charges), of which $3.1 billion (net of unearned finance
charges) were owned by Trusts in the United States and Canada. At December 31,
1997, Case Credit serviced a portfolio of $4.6 billion of managed receivables
(net of unearned finance charges), including retail and other notes amounting
to $2.7 billion (net of unearned finance charges) that were owned by Trusts in
the United States and Canada. Case Credit also serviced $18 million and $88
million of retail notes (net of unearned finance charges) at December 31, 1998
and 1997, respectively, that were owned by an unaffiliated third party.
At December 31, 1998 and 1997, approximately $74 million and $56 million,
respectively, of retail notes receivable (net of unearned finance charges) have
been pledged as collateral under the Company's three-year, $750 million, U.S.
asset-backed commercial paper liquidity facility.
Retail and other notes receivable and serviced receivables have significant
concentrations of credit risk in the farm and construction business sectors. On
a geographic basis, there is not a disproportionate concentration of credit in
any area of the United States, Canada or Australia.
Note 4: Equipment on Operating Leases
A summary of equipment on operating leases, is as follows (in millions):
<TABLE>
<CAPTION>
December
31,
----------
1998 1997
---- ----
<S> <C> <C>
Equipment on operating leases................................. $531 $209
Accumulated depreciation...................................... (63) (30)
---- ----
Net equipment on operating leases......................... $468 $179
==== ====
</TABLE>
20
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
Lease payments owed to Case Credit for equipment under non-cancelable
operating leases as of December 31, 1998, are as follows (in millions):
<TABLE>
<S> <C>
1999................................. $81
2000................................. 66
2001................................. 29
2002................................. 16
2003................................. 4
2004 and thereafter.................. 1
</TABLE>
Case Credit purchases equipment that is leased to retail customers under
operating leases from dealers. Income from operating leases is recognized over
the term of the lease. The Company's investment in operating leases is based on
estimated residual values of the leased equipment, which are calculated at the
lease inception date. Realization of the residual values is dependent on the
Company's future ability to market the equipment under the then prevailing
market conditions. Although realization is not assured, management believes
that it is more likely than not that the estimated residual values will be
realized. Each of these assets is depreciated on a straight-line basis over a
period of time consistent with the lease term. Depreciation expense totaled $43
million, $22 million and $10 million for the years ended December 31, 1998,
1997 and 1996, respectively. Expenditures for maintenance and repairs are the
responsibility of the lessee.
Note 5: Short-Term Debt
The Company has various lines of credit and liquidity facilities that
include borrowings under both committed credit facilities and uncommitted lines
of credit and similar arrangements. The Company also has the ability to issue
commercial paper in the United States, Canada and Australia. Under the terms of
the Company's commercial paper programs, the principal amount of the commercial
paper outstanding, combined with the amounts outstanding under the applicable
revolving credit facility mentioned above, cannot exceed the total amount
available under the revolving credit facility.
Case Credit established the following credit facilities in August 1996: (1)
a five-year, $1.2 billion revolving credit facility; (2) a three-year, $750
million U.S. asset-backed commercial paper liquidity facility (the "Liquidity
Facility"); and (3) a five-year, C$500 million revolving credit facility. In
October 1997, Case Credit's Australian subsidiary, Case Credit Australia Pty
Ltd, established a A$400 million revolving credit facility comprised of a five-
year, A$300 million revolving credit facility and a 364-day, A$100 million
revolving credit facility.
A summary of short-term debt is set forth in the following table (in
millions):
<TABLE>
<CAPTION>
December
31,
-----------
1998 1997
---- ------
<S> <C> <C>
Credit agreements (a)........................................ $ 88 $ --
Commercial paper............................................. 389 1,112
Commercial paper liquidity facility.......................... 73 35
---- ------
Total short-term debt.................................... $550 $1,147
==== ======
</TABLE>
- --------
(a) The credit agreements include borrowings under both committed credit
facilities and uncommitted lines of credit and similar arrangements.
The weighted-average interest rates on total short-term debt outstanding at
December 31, 1998 and 1997, were 5.6% and 5.9%, respectively. At December 31,
1998, the unused portion of the combined committed credit
21
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
facilities and the commercial paper program was $764 million, and the unused
portion of the asset-backed commercial paper liquidity facility was $691
million. At December 31, 1997, the unused portion of the combined committed
credit facilities and the commercial paper program was $438 million, and the
unused portion of the asset-backed commercial paper liquidity facility was
$715 million.
At the option of the Company, borrowings under the revolving credit
facilities bear interest at: (1) prime rate; (2) LIBOR, plus an applicable
margin; or (3) banker's bills of acceptance rates, plus an applicable margin.
Borrowings may be obtained in U.S. dollars and certain other foreign
currencies. Borrowings under the Liquidity Facility bear interest at
prevailing commercial paper rates at the date of the borrowing. Case Credit's
revolving credit facilities (other than the Liquidity Facility) contain
restrictive covenants that require that Case Credit maintain certain financial
conditions including a maximum ratio of debt to net worth and a minimum fixed-
charge coverage ratio. The revolving credit facilities (other than the
Liquidity Facility) also impose certain restrictions on certain indebtedness,
liens on Company assets and ownership of certain subsidiaries. Pursuant to a
support agreement, Case has agreed to maintain a direct or indirect ownership
in, and provide financial backing for, Case Credit. At December 31, 1998, the
Company was in compliance with all debt covenants.
Due to the availability of financing under the Company's credit facilities,
Case Credit has classified $341 million, $105 million and $245 million of
borrowings under the commercial paper facilities of Case Credit Corporation,
Case Credit Australia Pty Ltd, and Case Credit Ltd., respectively, as long
term at December 31, 1998.
The credit facilities generally provide for facility fees on the total
commitment, whether used or unused, and also provide for annual agency fees to
the administrative agents for the facilities.
Note 6: Long-Term Debt
In 1998, Case Credit issued $785 million, net of $3 million discount, of
floating- and fixed-rate, medium-term notes in the United States. The
floating-rate notes have maturities that range between 18 and 36 months and
bear interest based on three-month LIBOR; the fixed-rate notes have maturities
of two to three years and interest rates ranging from 5.8% to 6.2%. Case
Credit also issued $100 million principal amount of 6.125% notes due October
15, 2001, and $100 million principal amount of floating-rate notes due January
21, 2000, with an initial rate of 5.91%. These note issuances were offered
pursuant to the Company's shelf registration statements as filed with the
Securities and Exchange Commission in May 1998 and September 1997. The net
proceeds from these issuances were used to fund Case Credit's growth
initiatives and for other corporate purposes, including the repayment of
short-term indebtedness.
In the fourth quarter of 1998, Case Credit's Canadian subsidiary, Case
Credit Ltd., established a C$750 million medium-term note program pursuant to
a short-form prospectus and prospectus supplement filed with the Canadian
Securities Administrators. In the fourth quarter, Case Credit Ltd. issued
C$125 million of its medium-term notes in Canada, with a maturity of two years
and an interest rate of 6.20%, pursuant to this prospectus and prospectus
supplement. The net proceeds from this issuance were used to fund Case Credit
Ltd.'s growth initiatives and for other corporate purposes, including the
repayment of short-term indebtedness. In 1997, Case Credit Australia Pty Ltd
established a A$600 million medium-term note program; no amounts were
outstanding under this program at December 31, 1998.
22
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
A summary of long-term debt is set forth in the following table (in
millions):
<TABLE>
<CAPTION>
December
31,
-----------
1998 1997
------ ----
<S> <C> <C>
Case Credit Corporation
Notes, payable in 2000, floating interest rate of 5.91%.......... $ 100 $--
Notes, payable in 2001, interest rate of 6.125%.................. 100 --
Notes, payable in 2003, interest rate of 6.125%.................. 200 200
Notes, payable in 2007, interest rate of 6.75%................... 150 150
Fixed-rate, medium-term notes, net of $3 discount, maturities
through 2001, weighted-average interest rate of 6.04%........... 645 --
Floating-rate, medium-term notes, maturities through 2001,
weighted-average interest rate of 5.48%......................... 140 --
Long-term portion of borrowings under commercial paper
facilities, average interest rate of 6.0% and 6.4%.............. 341 250
Case Credit Australia Pty Ltd
Long-term portion of borrowings under commercial paper
facilities, average interest rate of 5.1% in both years......... 105 65
Case Credit Ltd. (Canada)
Medium-term notes, payable in 2000, interest rate of 6.2%........ 82 --
Long-term portion of borrowings under commercial paper
facilities, average interest rate of 5.4% and 4.3%.............. 245 70
------ ----
Total long-term debt........................................... $2,108 $735
====== ====
</TABLE>
A summary of the minimum annual repayments of long-term debt as of December
31, 1998, is as follows (in millions):
<TABLE>
<S> <C>
2000.............................. $ 488
2001.............................. 578
2002.............................. --
2003.............................. 200
2004 and thereafter............... 842
------
Total........................... $2,108
======
</TABLE>
Note 7: Income Taxes
The income and expenses of Case Credit and its domestic subsidiaries are
included in the consolidated income tax return of Case. The Company's Canadian
subsidiaries file separate income tax returns. In addition, Case Credit's
Australian subsidiaries are permitted income tax relief with Case's Australian
subsidiaries. Provisions for income taxes for all periods are made as if Case
Credit filed a separate income tax return. Any liability incurred by Case
resulting from the inclusion of Case Credit in its income tax returns was
reimbursed to or paid by Case Credit or the appropriate subsidiary.
At December 31, 1998 and 1997, the Company has current taxes receivable of
$25 million and $18 million, respectively, which are included in "Affiliated
receivables" on the accompanying Balance Sheets.
23
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
The sources of income before taxes and extraordinary items were as follows
(in millions):
<TABLE>
<CAPTION>
Years Ended
December 31,
--------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
U.S. sources.............................................. $112 $ 94 $105
Foreign sources........................................... 19 28 28
---- ---- ----
Income before taxes and extraordinary items............... $131 $122 $133
==== ==== ====
</TABLE>
The provision (benefit) for income taxes is as follows (in millions):
<TABLE>
<CAPTION>
Years Ended
December 31,
---------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Current:
United States........................................... $13 $13 $30
Foreign................................................. 8 10 10
State................................................... 1 (1) 4
--- --- ---
Total current......................................... 22 22 44
--- --- ---
Deferred:
United States........................................... 22 17 2
Foreign................................................. 1 -- (2)
State................................................... 1 1 1
--- --- ---
Total deferred........................................ 24 18 1
--- --- ---
Total tax provision................................... $46 $40 $45
=== === ===
</TABLE>
Following is a reconciliation of income taxes computed at the U.S. Federal
income tax rate to the tax provision reflected in the accompanying Statements
of Income (in millions):
<TABLE>
<CAPTION>
Years Ended
December 31,
----------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Tax provision at U.S. Federal income tax rate........... $46 $43 $47
State taxes, net of Federal benefit..................... 1 -- 3
U.S. tax on foreign subsidiaries earnings............... -- -- 1
Reduction in valuation allowance........................ -- (2) (2)
Other................................................... (1) (1) (4)
--- --- ---
Total tax provision................................. $46 $40 $45
=== === ===
</TABLE>
Case Credit had previously established valuation allowances for deferred tax
assets for which realization was uncertain. Case Credit has not recorded
valuation allowances against deferred tax assets in tax jurisdictions where
Case and Case Credit have been profitable as management believes it is more
likely than not that such assets will be realizable. Deferred tax assets are
included in "Other assets" on the accompanying Balance Sheets. The Company had
valuation allowances in certain tax jurisdictions where future profitability
was uncertain. During 1996, Case Credit reversed a portion of the valuation
allowance as Case Credit affiliates generated income to support such a
reduction. In 1997, the remaining valuation allowances were reversed in full.
24
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
The components of the net deferred tax assets/(liabilities) are as follows
(in millions):
<TABLE>
<CAPTION>
Years Ended
December 31,
--------------
1998 1997
------ ------
<S> <C> <C>
Deferred tax assets/(liabilities):
Allowance for credit losses............................ $ 12 $ 10
Deferred gains on receivables.......................... (34) (16)
Accrued expenses....................................... 3 2
Leasing adjustments.................................... 5 4
Depreciation........................................... (18) (4)
Other.................................................. (1) 1
------ ------
Net deferred tax liabilities......................... $ (33) $ (3)
====== ======
</TABLE>
Note 8: Financial Instruments
Fair Market Value of Financial Instruments
The estimated fair market values of financial instruments that do not
approximate the carrying values in the financial statements are as follows (in
millions):
<TABLE>
<CAPTION>
December 31,
-------------------------------
1998 1997
--------------- ---------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ------ -------- ------
<S> <C> <C> <C> <C>
Notes receivable.......................... $2,476 $2,494 $1,978 $1,982
Long-term debt............................ 2,108 2,106 735 735
</TABLE>
The fair value of notes receivable was based on discounting the estimated
future payments of fixed-rate receivables at prevailing market rates. The fair
value of the interest only strip component of the "Due from Trusts" included
in total receivables was based on loss, prepayment and interest rate
assumptions approximating those currently experienced by the Company. The
carrying amount of floating-rate receivables was assumed to approximate its
fair market value. The fair value of fixed-rate, long-term debt was based on
the market value of debt with similar maturities and interest rates; the
carrying amount of floating-rate, long-term debt was assumed to approximate
its fair value. The carrying amount and fair value of derivatives was not
material.
Derivatives
The Company uses derivative financial instruments to manage its interest
rate exposures. Case Credit does not hold or issue such instruments for
trading purposes. The notional amounts of these contracts do not represent
amounts exchanged by the parties and, thus, are not a measure of the Company's
risk. The net amounts exchanged are calculated on the basis of the notional
amounts and other terms of the contracts, such as interest rates, and only
represent a small portion of the notional amounts. The credit and market risk
under these agreements is minimized through diversification among
counterparties with high credit ratings.
Depending on the item being hedged, gains and losses on derivative
financial instruments are either recognized in the results of operations as
they accrue or are deferred until the hedged transaction occurs. Derivatives
used as hedges are effective at reducing the risk associated with the exposure
being hedged and are designated as a hedge at the inception of the derivative
contract. Accordingly, changes in the market value of the derivative are
highly correlated with changes in the market value of the underlying hedged
item at the inception of the hedge and over the life of the hedge contract.
25
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
Interest Rate Swaps
Case Credit enters into interest rate swaps to stabilize funding costs by
minimizing the effect of potential interest rate increases on floating-rate
debt in a rising interest rate environment. Under these agreements, the
Company contracts with a counterparty to exchange the difference between a
fixed rate and a floating rate applied to the notional amount of the swap.
Swap contracts are principally between one and four years in duration. The
differential to be paid or received on interest rate swap agreements is
accrued as interest rates change and is recognized in net income as an
adjustment to interest expense.
Gains and losses resulting from terminated interest rate swap agreements
are deferred and recognized in net income over the shorter term of the
remaining contractual life of the swap agreement or the remaining term of the
debt underlying the swap agreement. If swap agreements are terminated due to
the underlying debt being extinguished, any resulting gain or loss is
recognized in net income as an adjustment to interest expense at the time of
the termination.
The weighted-average pay and receive rates for the swaps outstanding at
December 31, 1998, were 5.55% and 5.10%, respectively, at a notional amount of
approximately $347 million. The weighted-average pay and receive rates for the
swaps outstanding at December 31, 1997, were 5.99% and 4.76%, respectively.
Back-to-Back Interest Rate Caps
The Liquidity Facility requires a subsidiary of Case Credit to have
interest rate cap agreements in place. Due to the relatively high expense of
obtaining such an instrument, Case Credit sells an identical cap, concurrent
with the cap purchase, to the same counterparty. This effectively minimizes
the overall expense to Case Credit, meets the requirements of the Liquidity
Facility and eliminates any risk of financial loss on the purchased cap. The
defined term of the cap is approximately 48 months.
Premiums paid for interest rate cap agreements purchased and sold are
included in "Other assets" and "Accounts payable and other accrued
liabilities," respectively, in the accompanying Balance Sheets, and are
amortized to interest expense over the terms of the agreements. Amounts
receivable or payable under cap agreements are recognized in net income as
adjustments to interest expense over the term of the related debt. If interest
rate cap agreements are terminated due to the underlying debt being
extinguished, in conjunction with an ABS transaction, any resulting gain or
loss is recognized in net income as a component of "Net gain on retail notes
sold" at the time of the termination.
At December 31, 1998, Case Credit had a back-to-back cap at a rate of
7.00%, at a notional amount of approximately $55 million. At December 31,
1997, Case Credit had a back-to-back cap at a rate of 7.00%, at a notional
amount of approximately $57 million.
Treasury Rate Lock Agreements
A Treasury rate lock is a commitment to either purchase or sell the
designated financial instrument at a future date (the determination date) for
a specified price (the reference yield). The purpose of this instrument is to
protect fixed-rate debt from fluctuations in the yield of the Treasury Note
that forms the basis of pricing the debt. As of December 31, 1998, Case Credit
had entered into $125 million of Treasury rate locks based on two-year
Treasury Notes at a weighted-average yield of 4.59%. At December 31, 1997,
Case Credit had Treasury Rate locks with a notional value of $150 million,
based on two- and three-year Treasury Notes, at a weighted-average yield of
5.75%.
Note 9: Related Party Transactions
Case Credit receives compensation from Case for retail contracts that were
created under certain low-rate financing programs and interest waiver programs
offered by Case. The amount of such compensation not yet
26
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
paid by Case as of December 31, 1998 and 1997, was $10 million, and is
included in "Affiliated receivables" on the accompanying Balance Sheets.
Operating expenses include charges from Case for administrative expenses
related to employees who perform specific functions for Case Credit. Such
charges amounted to $24 million, $18 million, and $20 million for the years
ended December 31, 1998, 1997 and 1996, respectively. Management believes that
these charges reasonably reflect the actual costs of services provided.
Note 10: Commitments and Contingencies
Legal Matters
The Company is party to various litigation matters and claims arising from
its operations. Management believes that the outcome of these proceedings,
individually and in the aggregate, will not have a material adverse effect on
Case Credit's financial position or results of operations.
Commitments
Commitments under capital and operating leases are not significant to the
financial statements. Total rental expense for operating leases was minimal
for the years ended December 31, 1998, 1997 and 1996.
Note 11: Segment and Geographical Information
The Company's reportable segments are strategic business units that are
organized around differences in geographic areas. Each segment is managed
separately as they require different knowledge of regulatory environments and
marketing strategies.
Each of Case Credit's segments provides financing for retail installment
sales contracts and leases. These financing arrangements are established in
conjunction with the purchase or lease of new and used Case farm and
construction equipment and other new and used products to end-use customers.
The North American segments also include commercial lending within the
equipment industry, multiple lines of insurance products and private-label
credit cards.
The accounting policies of the segments are described in Note 2, "Summary
of Significant Accounting Policies." Case Credit evaluates segment performance
based on segment profit, defined as segment net income before extraordinary
items. Transfers between segments are accounted for at market value.
27
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Continued)
A summary of Case Credit's reportable segment and geographical information
is set forth in the following table (in millions):
<TABLE>
<CAPTION>
Years Ended December
31,
--------------------
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Revenues:
United States..................................... $ 315 $ 219 $ 196
Canada............................................ 42 36 36
Australia......................................... 20 17 12
------ ------ ------
Total........................................... $ 377 $ 272 $ 244
====== ====== ======
Interest expense:
United States..................................... $ 113 $ 75 $ 54
Canada............................................ 21 12 10
Australia......................................... 9 11 8
------ ------ ------
Total........................................... $ 143 $ 98 $ 72
====== ====== ======
Segment profit:
United States..................................... $ 75 $ 64 $ 69
Canada............................................ 6 15 17
Australia......................................... 4 3 2
------ ------ ------
Total........................................... $ 85 $ 82 $ 88
====== ====== ======
Depreciation and amortization:
United States..................................... $ 42 $ 22 $ 11
Canada............................................ 3 2 1
------ ------ ------
Total........................................... $ 45 $ 24 $ 12
====== ====== ======
Expenditures for additions to long-lived assets*:
United States..................................... $ 321 $ 92 $ 67
Canada............................................ 13 9 6
------ ------ ------
Total........................................... $ 334 $ 101 $ 73
====== ====== ======
Segment assets (at the end of the year):
United States..................................... $2,220 $1,733 $1,064
Canada............................................ 543 383 308
Australia......................................... 488 225 185
Other............................................. 9 21 --
------ ------ ------
Total........................................... $3,260 $2,362 $1,557
====== ====== ======
Long-lived assets* (at the end of the year):
United States..................................... $ 448 $ 169 $ 93
Canada............................................ 23 13 6
------ ------ ------
Total........................................... $ 471 $ 182 $ 99
====== ====== ======
</TABLE>
- --------
* Includes equipment on operating leases and property, plant, and equipment.
28
<PAGE>
CASE CREDIT CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(Concluded)
Note 12: Subsequent Events
In January 1999, Case Credit filed a shelf registration statement with the
Securities and Exchange Commission, pursuant to which it may issue up to $800
million of debt securities.
In February 1999, Case Credit's Australian subsidiary, Case Credit
Australia Pty Ltd, issued A$175 million of floating- and fixed-rate medium-
term notes under its A$600 million medium-term note program that was
established in October 1997. The floating-rate notes have a maturity of two
years and bear interest based on the three-month Australian Bank Bill Swap
Reference Rate. The fixed-rate notes have a maturity of 30 months and an
interest rate of 5.75%.
In February 1999, Case Credit issued an aggregate of $250 million of its
fixed-rate, medium-term notes, with maturities of two to three years and
interest rates ranging from 5.85% to 6.15% pursuant to the Company's shelf
registration statements filed with the Securities and Exchange Commission in
May 1998 and September 1997.
29
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 10, "Directors and Executive Officers of the Registrant," Item 11,
"Executive Compensation," Item 12, "Security Ownership of Certain Beneficial
Owners and Management," and Item 13, "Certain Relationships and Related
Transactions," are not required pursuant to General Instruction I (2) of Form
10-K.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
FINANCIAL STATEMENTS INCLUDED IN ITEM 8
See "Index to Financial Statements of Case Credit Corporation and
Consolidated Subsidiaries" set forth in Item 8, "Financial Statements and
Supplementary Data."
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE INCLUDED IN ITEM 14
SCHEDULES OMITTED AS NOT REQUIRED OR INAPPLICABLE
<TABLE>
<C> <S>
Schedule I Condensed financial information of registrant
Schedule II Valuation and qualifying accounts
Schedule III Real estate and accumulated depreciation
Schedule IV Mortgage loans on real estate
Schedule V Supplemental Information Concerning Property
Casualty Insurance Operations
</TABLE>
EXHIBITS
A list of the exhibits included as part of this Form 10-K is set forth in
the Index to Exhibits that immediately precedes such exhibits, which is
incorporated herein by reference.
REPORTS ON FORM 8-K
For the fiscal quarter ended December 31, 1998, Case Credit Corporation
filed a Current Report on Form 8-K dated October 21, 1998, for the purpose of
announcing its unaudited financial results for the quarter ended September 30,
1998.
30
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Case Credit Corporation
/s/Andrew E. Graves
By: _________________________________
Andrew E. Graves
President and Chief Executive
Officer
Date: March 1, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Andrew E. Graves Principal Executive Officer and Director
___________________________________________
Andrew E. Graves
/s/ Robert A. Wegner Principal Financial and Accounting Officer
___________________________________________ and Director
Robert A. Wegner
/s/ Theodore R. French Director
___________________________________________
Theodore R. French
</TABLE>
Date: March 1, 1999
Supplemental Information To Be Furnished With Reports Filed Pursuant to
Section 15(d) Of The Act By Registrants Which Have Not Registered Securities
Pursuant To Section 12 Of The Act.
No annual report to security holders covering the registrant's fiscal year
ended December 31, 1998, or any proxy material has been sent to the
registrant's security holders.
31
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description of Exhibit Numbers
------- ---------------------- ----------
<C> <S> <C>
3(a) Certificate of Incorporation of Case Credit
Corporation, dated January 26, 1993. (Filed as
Exhibit 3(a) to the Company's Registration Statement
No. 33-80775, and incorporated herein by reference.)
3(b) By-Laws of Case Credit Corporation, adopted January
26, 1993. (Filed as Exhibit 3(b) to the Company's
Registration Statement No. 33-80775, and incorporated
herein by reference.)
4(a)(1) Indenture between Case Credit Corporation, Case
Corporation and The Bank of New York, dated as of
February 1, 1996. (Filed as Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996, and incorporated herein
by reference.)
4(a)(2) 6 1/8% Note due 2003 of Case Credit Corporation
issued pursuant to the Indenture, dated as of
February 1, 1996, between Case Credit Corporation,
Case Corporation and The Bank of New York. (Filed as
Exhibit 4.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1996, and
incorporated herein by reference.)
4(a)(3) Resolutions of the Board of Directors of Case Credit
Corporation authorizing the public offering of debt
securities of Case Credit Corporation in an aggregate
principal amount of up to $300,000,000. (Filed as
Exhibit 4(c) to the Company's Registration Statement
No. 33-80775, and incorporated herein by reference.)
4(a)(4) Resolutions of the Board of Directors of Case
Corporation authorizing the Support Agreement and/or
$300,000,000 Guarantee for Case Credit Corporation
Debt Offering. (Filed as Exhibit 4(d) to the
Company's Registration Statement No. 33-80775, and
incorporated herein by reference.)
4(b)(1) Indenture between Case Credit Corporation and The
Bank of New York, dated as of October 1, 1997. (Filed
as Exhibit 4(a) to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997,
and incorporated herein by reference.)
4(b)(2) Resolutions to the Board of Directors of Case Credit
Corporation authorizing the public offering of debt
securities of Case Credit Corporation in an aggregate
principal amount of up to $700,000,000. (Filed as
Exhibit 4(c) to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997,
and incorporated herein by reference.)
4(b)(3) Form of Medium-Term Note, Series A (Fixed Rate) due
from 9 months to 30 years from the date of issue.
(Filed as Exhibit 4.1 to the Form 8-K dated December
19, 1997, and incorporated herein by reference.)
4(b)(4) Form of Medium-Term Note, Series A (Floating Rate)
due from 9 months to 30 years from date of issue.
(Filed as Exhibit 4.2 to the Form 8-K dated December
19, 1997, and incorporated herein by reference.)
4(b)(5) Action of Authorized Officers of Case Credit
Corporation, dated December 8, 1997, establishing the
Medium-Term Notes, Series A. (Filed as Exhibit 4.3 to
the Form 8-K dated December 19, 1997, and
incorporated herein by reference.)
4(b)(6) Officers' Certificate and Company Order of Case
Credit Corporation, dated December 8, 1997, related
to the Medium-Term Notes, Series A. (Filed as Exhibit
4.4 to the Form 8-K dated December 19, 1997 and
incorporated herein by reference.)
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description of Exhibit Numbers
------- ---------------------- ----------
<C> <S> <C>
4(c)(1) Resolutions of the Board of Directors of Case Credit
Corporation authorizing the public offering of debt
securities of Case Credit Corporation in an aggregate
principal amount of up to $1,000,000,000. (Filed as
Exhibit 4(a) to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998, and
incorporated herein by reference.)
4(c)(2) Form of Medium-Term Note, Series B (Fixed Rate) due
from 9 months to 30 years from the date of issue.
(Filed as Exhibit 4(b) to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30,
1998, and incorporated herein by reference.)
4(c)(3) Form of Medium-Term Note, Series B (Floating Rate)
due from 9 months to 30 years from the date of issue.
(Filed as Exhibit 4(c) to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30,
1998, and incorporated herein by reference.)
4(c)(4) Action of Authorized Officers of Case Credit
Corporation, dated July 27, 1998, establishing the
Medium-Term Notes, Series B. (Filed as Exhibit 4(d)
to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998, and incorporated
herein by reference.)
4(c)(5) Officers' Certificate and Company Order of Case
Credit Corporation, dated July 27, 1998, related to
the Medium-Term Notes, Series B. (Filed as Exhibit
4(e) to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998, and incorporated
herein by reference.)
4(d) Indenture, dated as of November 10, 1998, among Case
Credit Ltd., Case Credit Corporation, as guarantor,
and Montreal Trust Company, as trustee, as
supplemented by the First Supplemental Indenture,
dated as of November 10, 1998.
4(e) Case Credit hereby agrees to furnish to the
Securities Exchange Commission, upon its request, the
instruments with respect to certain indebtedness
issued by it and its subsidiaries, which indebtedness
does not exceed 10% of Case Credit's total
consolidated assets.
10(a) Support Agreement, dated January 10, 1996, between
Case Corporation and Case Credit Corporation. (Filed
as Exhibit 10(a) to the Company's Registration
Statement No. 33-80775, and incorporated herein by
reference.)
10(b)(1) Revolving Credit and Guarantee Agreement, dated as of
August 23, 1996, among Case Credit Corporation,
certain Foreign Subsidiary Borrowers from time to
time parties thereto, the Lenders parties thereto,
the Co-Agents and Lead Managers named therein, and
The Chase Manhattan Bank, as Administrative Agent.
(Filed as Exhibit 10(a) to the Company's Quarterly
Report on Form 10-Q for the quarter ended September
30, 1996, and incorporated herein by reference.)
10(b)(2) First Amendment, dated as of November 21, 1996, to
the Revolving Credit and Guarantee Agreement dated as
of August 23, 1996, among Case Credit Corporation,
certain Foreign Subsidiary Borrowers from time to
time parties thereto, the Lenders parties thereto,
the Co-Agents and Lead Managers named therein, and
The Chase Manhattan Bank, as Administrative Agent.
(Filed as Exhibit 10(c) to the Company's Annual
Report for the year ended December 31, 1996, and
incorporated herein by reference.)
10(b)(3) Second Amendment, dated as of August 25, 1997, to the
Revolving Credit and Guarantee Agreement, dated as of
August 23, 1996 among Case Credit Corporation,
certain foreign Subsidiaries from time to time
parties thereto, the Lenders parties thereto, the Co-
Agents and Lead Managers named therein, and The Chase
Manhattan Bank, as Administrative Agent. (Filed as
Exhibit 10(a) to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997,
and incorporated herein by reference.)
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description of Exhibit Numbers
------- ---------------------- ----------
<C> <S> <C>
10(c)(1) Revolving Credit Agreement, dated as of August 23,
1996, among Case Credit Ltd., the Lenders parties
thereto, the Canadian Imperial Bank of Commerce, as
Co-Agent, and The Bank of Nova Scotia, as Agent.
(Filed as Exhibit 10(b) to the Company's Quarterly
Report on Form 10-Q for the quarter ended September
30, 1996, and incorporated herein by reference.)
10(c)(2) First Amendment, dated as of November 21, 1992, to
the Revolving Credit Agreement, dated as of August
23, 1996, among Case Credit Ltd., the Lenders parties
thereto, the Canadian Imperial Bank of Commerce, as
Co-Agent, and The Bank of Nova Scotia, as
Administrative Agent. (Filed as Exhibit 10(e) to the
Company's Annual Report for the year ended December
31, 1996, and incorporated herein by reference.)
10(c)(3) Second Amendment, dated as of August 25, 1997, to the
Revolving Credit Agreement, dated as of August 23,
1996, among Case Credit Ltd., the Lenders parties
thereto, Canadian Imperial Bank of Commerce, as Co-
Agent, and The Bank of Nova Scotia, as Administrative
Agent (Filed as Exhibit 10(b) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, and incorporated herein by
reference.)
10(d)(1) Deed of Guarantee and Negative Pledge, dated October
17, 1997, executed by Case Credit Corporation
pursuant to which Case Credit Corporation guarantees
certain indebtedness of Case Credit Australia Pty Ltd
(Filed as Exhibit 10(c) to the Company's Quarterly
Report on Form 10-Q for the Quarter ended September
30, 1997, and incorporated herein by reference.)
10(d)(2) Bill Facility Agreement, dated October 17, 1997,
between Case Credit Australia Pty Ltd, the lenders
parties thereto, and National Australia Bank Limited,
as Agent (Filed as Exhibit 10(d) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, and incorporated herein by
reference.)
10(d)(3) Deed Poll, dated October 17, 1997, executed by Case
Credit Australia Pty Ltd, pursuant to which Case
Credit Australia Pty Ltd may from time to time issue
medium term notes (Filed as Exhibit 10(e) to the
Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, and incorporated
herein by reference.)
10(e)(1) Liquidity Agreement dated as of June 23, 1994, among
Case Equipment Loan Trust 1994-B, the Lenders named
therein, the Co-Agents named therein, and Chemical
Bank, as U.S. Agent. (Filed as Exhibit 10(a)(3) of
Case Corporation's Registration Statement No. 33-
82158, and incorporated herein by reference.)
10(e)(2) Second Amendment and Consent, dated as of August 28,
1996, among Case Equipment Loan Trust 1994-B, the
Lenders parties thereto, the Co-Agents named therein
and The Chase Manhattan Bank, as Administrative
Agent, amending the Liquidity Agreement, dated as of
June 23, 1994, as previously amended, among Case
Equipment Loan Trust 1994-B, the Lenders parties
thereto, and The Chase Manhattan Bank (f/k/a Chemical
Bank), as Administrative Agent. (Filed as Exhibit
10(c) to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996, and
incorporated herein by reference.)
12 Computation of Ratio of Earnings to Fixed Charges.
23 The consent of Arthur Andersen LLP, Independent
Public Accountants for Case Credit Corporation
(Milwaukee, Wisconsin).
</TABLE>
34
<PAGE>
CASE CREDIT LTD.
and
CASE CREDIT CORPORATION
as Guarantor
and
MONTREAL TRUST COMPANY OF CANADA
as Trustee
INDENTURE
Providing for Issuance of Debt Securities in Series
Dated as of November 10, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.............2
Section 1.1 Definitions..................................................2
Section 1.2 Compliance Certificates and Opinions........................12
Section 1.3 Form of Documents Delivered to Trustee......................13
Section 1.4 Immunity of Incorporators, Stockholders, Officers and
Directors..................................................13
Section 1.5 Singular-Plural, Masculine-Feminine, Etc. ..................13
Section 1.6 Accounting Terms and Principles.............................13
Section 1.7 Effect of Headings and Table of Contents....................14
Section 1.8 Statute References..........................................14
Section 1.9 Successors and Assigns......................................14
Section 1.10 Severability Clause.........................................14
Section 1.11 Benefits of Indenture.......................................14
Section 1.12 Governing Law...............................................14
Section 1.13 Payment on a Business Day...................................14
Section 1.14 Language....................................................14
Section 1.15 Judgments...................................................15
Section 1.16 Submission to Jurisdiction..................................15
Section 1.17 Monetary References.........................................15
ARTICLE 2 ISSUE, EXECUTION AND REGISTRATION OF DEBT SECURITIES...............15
Section 2.1 Issue of Debt Securities In Series..........................15
Section 2.2 Certification and Delivery of Debt Securities...............18
Section 2.3 Place and Medium of Payment.................................19
Section 2.4 Registration of Debt Securities.............................20
Section 2.5 Transferee Entitled to Registration.........................21
Section 2.6 Exchange of Debt Securities.................................21
Section 2.7 Charges for Transfer and Exchange...........................21
Section 2.8 Registers Open for Inspection...............................22
Section 2.9 C1osing of Registers........................................22
Section 2.10 Ownership of Debt Securities................................22
Section 2.11 Debt Securities Delivered in Exchange for or on
Transfer of other Debt Securities to be Valid Obligations..22
Section 2.12 Execution of Debt Securities and Trustee's Certificate......23
Section 2.13 Lost, Destroyed, Stolen or Mutilated Debt Securities........23
Section 2.14 Annual Rates of Interest....................................24
Section 2.15 Book-Entry System...........................................24
ARTICLE 3 COVENANTS OF THE COMPANY...........................................26
Section 3.1 Covenants of the Company....................................26
Section 3.2 Performance of Covenants by Trustee.........................28
Section 3.3 Trustee's Remuneration and Expenses.........................28
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ARTICLE 4 GUARANTEE OF DEBT SECURITIES.......................................28
Section 4.1 Guarantee of Debt Securities................................28
Section 4.2 Execution and Delivery of Guarantee.........................30
ARTICLE 5 COVENANTS OF THE GUARANTOR.........................................31
Section 5.1 Covenants of the Guarantor:.................................31
ARTICLE 6 REDEMPTION AND PURCHASE OF DEBT SECURITIES.........................33
Section 6.1 Redemption of Debt Securities at Option of Company..........33
Section 6.2 Notice of Redemption........................................33
Section 6.3 Upon Due Publication of Notice, Debt Securities Called for
Redemption to Become Due and Payable on Redemption Date,
Interest to Cease After Redemption Date, Company to
Deposit Funds Sufficient for Redemption....................33
Section 6.4 Surrender of Debt Securities for Cancellation...............34
Section 6.5 Purchase of Debt Securities.................................34
ARTICLE 7 REMEDIES...........................................................34
Section 7.1 Event of Default............................................34
Section 7.2 Acceleration of Maturity; Rescission and Annulment..........37
Section 7.3 Collection of Indebtedness and Suits for Enforcement by
Trustee....................................................38
Section 7.4 Trustee May File Proof of Claim.............................38
Section 7.5 Trustee May Enforce Claims Without Possession of Debt
Securities.................................................39
Section 7.6 Application of Moneys Collected.............................39
Section 7.7 Limitation on Suits.........................................40
Section 7.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest.......................................40
Section 7.9 Restoration of Rights and Remedies..........................41
Section 7.10 Rights and Remedies Cumulative..............................41
Section 7.11 Delay or Omission not Waiver................................41
Section 7.12 Control by Holders..........................................41
Section 7.13 Waiver of Past Defaults.....................................41
Section 7.14 Undertaking for Costs.......................................41
Section 7.15 Waiver of Stay or Extension of Laws.........................42
Section 7.16 Notice of Payment by Trustee................................42
Section 7.17 Trustee May Demand Production of Debt Securities............42
Section 7.18 Trustee Appointed Attorney..................................42
ARTICLE 8 THE TRUSTEE........................................................43
Section 8.1 Indenture Legislation.......................................43
Section 8.2 Standard of Care of Trustee.................................43
Section 8.3 Trustee to Give Notice of Event of Default..................43
Section 8.4 Trustee Not Ordinarily Bound................................43
Section 8.5 Conditions Precedent to Trustee's Ob1igations to Act
Hereunder..................................................44
Section 8.6 Delegation; Experts and Advisers............................44
Section 8.7 Documents, Money Etc. Held by Trustee.......................45
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Section 8.8 Action by Trustee to Protect Interests......................45
Section 8.9 Trustee Not Required to Give Security or Ensure Use of
Proceeds...................................................45
Section 8.10 Payments by Trustee.........................................46
Section 8.11 Financial Statements........................................46
Section 8.12 Trustee Has No Conflict of Interest.........................46
Section 8.13 Protection of the Trustee...................................46
Section 8.14 Indemnification of the Trustee..............................47
Section 8.15 Replacement of the Trustee..................................47
Section 8.16 Acceptance of Trust.........................................47
ARTICLE 9 MEETINGS OF HOLDERS................................................48
Section 9.1 Right to Convene Meetings...................................48
Section 9.2 Notice of Meetings..........................................48
Section 9.3 Chair.......................................................48
Section 9.4 Quorum......................................................48
Section 9.5 Power to Adjourn............................................49
Section 9.6 Show of Hands...............................................49
Section 9.7 Poll........................................................49
Section 9.8 Voting......................................................49
Section 9.9 Evidence of Ownership.......................................49
Section 9.10 Company, Guarantor and Trustee May Be Represented...........49
Section 9.11 Powers Exercisable by Extraordinary Resolution..............49
Section 9.12 "Extraordinary Resolution" at Adjourned Meeting.............51
Section 9.13 Powers Cumulative...........................................52
Section 9.14 Minutes.....................................................52
Section 9.15 Instruments in Writing......................................52
Section 9.16 Serial Meetings.............................................52
Section 9.17 Binding Effect of Resolutions...............................53
Section 9.18 Regulations.................................................54
ARTICLE 10 SATISFACTION AND DISCHARGE........................................54
Section 10.1 Cancellation and Destruction................................54
Section 10.2 Non-Presentation of Debt Securities.........................55
Section 10.3 Repayment of Unclaimed Moneys...............................55
Section 10.4 Discharge...................................................55
Section 10.5 Protection of Purchasers....................................55
Section 10.6 Defeasance..................................................56
ARTICLE 11 CONSOLIDATION, AMALGAMATION, MERGER, CONVEYANCE OR TRANSFER OF
COMPANY OR GUARANTOR.............................................56
Section 11.1 The Company May Consolidate on Certain Terms................56
Section 11.2 Successor Corporation Substituted...........................57
Section 11.3 The Guarantor May Consolidate on Certain Terms..............57
Section 11.4 Successor Corporation Substituted...........................58
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ARTICLE 12 SUPPLEMENTAL INDENTURES...........................................59
Section 12.1 Supplemental Indentures Without Consent of Holders..........59
Section 12.2 Supplemental Indentures With Consent of Holders.............60
Section 12.3 Execution of Supplemental Indentures........................60
Section 12.4 Effect of Supplemental Indentures...........................60
ARTICLE 13 NOTICES...........................................................61
Section 13.1 Notice to Company...........................................61
Section 13.2 Notice to Holders...........................................61
Section 13.3 Notice to Trustee...........................................61
Section 13.4 Notice to the Guarantor.....................................62
Section 13.5 Mail Service Interruption...................................62
ARTICLE 14 EXECUTION.........................................................63
Schedule I: Form of Guarantee
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THIS INDENTURE made as of the 10/th/ day of November, 1998.
B E T W E E N:
CASE CREDIT LTD., a corporation existing under the laws of the
Province of Alberta
(the "Company")
- and -
CASE CREDIT CORPORATION, a corporation organized and existing under
the laws of the State of Delaware
(the "Guarantor")
- and -
MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated under
the laws of Canada
(the "Trustee")
WHEREAS:
(1) the Company deems it desirable from time to time to borrow money for its
corporate purposes and to create and issue Debt Securities therefor, and to
that end has duly authorized the execution and delivery of this Indenture
to provide for one or more series of Debt Securities;
(2) the Company under the laws relating thereto is duly authorized to create
and issue the Debt Securities to be issued as herein provided;
(3) the Guarantor owns all of the issued shares in the capital of the Company
and has agreed to enter into this Indenture and the Guarantee to assist the
Company, for the mutual benefit of the Company and the Guarantor, in the
sale of the Debt Securities;
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(4) the Guarantor has duly authorized the entering into of this Indenture and
the Guarantee provided for herein;
(5) all acts and things necessary to constitute these presents a valid
indenture and agreement according to its terms have been done and
performed, and the execution of this Indenture by the Company has in all
respects been duly authorized by the Company;
(6) all acts and things necessary to make the Guarantee to be endorsed on the
Debt Securities, when executed by the Guarantor and endorsed on Debt
Securities executed by the Company and certified by or on behalf of the
Trustee as in this Indenture provided, the valid, binding and legal
obligations of the Guarantor, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and
performed by the Guarantor, and the execution by the Guarantor of this
Indenture and the Guarantee of the Debt Securities have in all respects
been duly authorized by the Guarantor;
(7) the Company and the Guarantor wish to appoint Montreal Trust Company of
Canada (the "Trustee") to perform certain of the duties of the trustee
hereunder; and
(8) the foregoing recitals (A) to (G) and any statements of fact contained
therein are and shall be deemed to be made by the Company and/or the
Guarantor (as the case may be) and not the Trustee;
NOW THEREFORE THIS INDENTURE WITNESSES and it is hereby covenanted,
agreed and declared as follows:
ARTICLE 9
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 9.1 Definitions: For all purposes of this Indenture and the recitals
hereof, except as otherwise expressly provided or unless the context otherwise
requires, the following words and phrases shall have the following meanings:
"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 purpose 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
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securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board of Directors of the Company" or "of the Guarantor" means either the
board of directors of the Company or the Guarantor, as the case may be, or
any duly authorized committee of that board.
"Board Resolution of the Company" or "of the Guarantor" means a copy of a
resolution certified by the Secretary or an Assistant Secretary of the
Company or the Guarantor, as the case may be, to have been duly adopted by
the Board of Directors of the Company or of the Guarantor, as the case may
be, and to be in full force and effect on the date of such certification
and delivered to the Trustee. Despite the foregoing, so long as a written
declaration by the sole shareholder of the Company pursuant to subsection
136 of the Business Corporations Act (Alberta), or any successor statute,
is or remains in effect, pursuant to which written declaration such
shareholder (or subsequent shareholders) has all the rights, powers, duties
and liabilities of the directors of the Company to manage, or supervise the
management of, the business and affairs of the Company, a resolution
adopted by such shareholder (or subsequent shareholders) shall be treated
for purposes of this Indenture as a "Board Resolution of the Company".
"Book-Entry System" means the record entry security transfer and pledge
system known as of the date hereof by the name "Depository Service", which
is administered by CDS in accordance with the operating rules and
procedures of the securities settlement service of CDS, enforced from time
to time, and any successor system thereof.
"Business Day" means any day, other than Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in the city of
Toronto, Ontario or Racine, Wisconsin.
"Capital Lease Obligations" of either the Guarantor or any Restricted
Subsidiary means the obligations of such Person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to
use) real property, the original term of which extends beyond 12 months,
which obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person under generally accepted
accounting principles and, for the purposes of this Indenture, the amount
of such obligation shall be the
<PAGE>
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capitalized amount thereof, determined in accordance with generally
accepted accounting principles.
"CDS" means The Canadian Depository for Securities Limited and its
successors approved by the Company, the Guarantor and the Trustee.
"Company" means Case Credit Ltd., until a successor Corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean each such successor Corporation.
"Company's Auditors" or "Auditors of the Company", "Guarantor's Auditors"
or "Auditors of the Guarantor" means an independent firm of chartered
accountants or certified public accountants, appointed as auditors of the
Company or the Guarantor, as the case may be.
"Company Certificate" means a certificate signed by the Chairman, the
President or a Vice President and by the Secretary, Treasurer, an Assistant
Secretary or an Assistant Treasurer of the Company, which may contain
orders or directions to the Trustee, and delivered to the Trustee.
"Company Request" means a written request, order or consent signed by an
officer of the Company and delivered to the Trustee.
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recent consolidated balance sheet of the Guarantor
and Restricted Subsidiaries as at the end of the fiscal quarter of the
Guarantor ending not more than 135 days prior to such date, prepared in
accordance with generally accepted accounting principles, less (a) all
current liabilities (due within one year) as shown on such balance sheet,
(b) applicable reserves, (c) investments in and advances to Securitization
Subsidiaries and Subsidiaries of Securitization Subsidiaries that are
consolidated on the consolidated balance sheet of the Guarantor and its
Subsidiaries, and (d) Intangible Assets and liabilities relating thereto.
"Corporation" includes corporations, joint stock companies and business
trusts.
"Counsel" means a lawyer or firm of lawyers retained or employed by the
Trustee, or retained or employed by the Company or the Guarantor and
acceptable to the Trustee.
<PAGE>
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"debt" means indebtedness of the Guarantor or the Company, as the case may
be, representing money borrowed, except indebtedness for money borrowed by
the Guarantor or the Company from any Affiliate of the Company or the
Guarantor, as the case may be, and shall include indebtedness of any Person
for money borrowed when such indebtedness is guaranteed by the Guarantor or
the Company, as the case may be.
"Debt Securities" means any debenture, notes and/or other unsecured
evidence of the Company's indebtedness created, issued and executed by the
Company and certified and delivered by the Trustee from time to time
pursuant to this Indenture.
"Depositary", with respect to Debt Securities issuable in whole or in part
in the form of one or more global Debt Securities, means CDS or such other
person designated as Depositary by the Company, in each case until a
successor Depositary shall have been so designated by the Company, and
thereafter the term "Depositary" shall mean or include each person who is
then a Depositary hereunder and if at any time there is more than one such
person, the term "Depositary" as used with respect to the Debt Securities
of any series shall mean the Depositary with respect to the Debt Securities
of such series.
"Dollars" means lawful Canadian dollars unless the text specifically states
otherwise.
"Event of Default" has the meaning specified in Section 7.1.
"Extraordinary Resolution" means (a) a resolution passed as an
Extraordinary Resolution at a meeting of Holders duly convened for the
purpose and held in accordance with the provisions of Article 9 at which,
subject to the Section 9.12, the Holders of not less than 50% in principal
amount of Debt Securities then outstanding are present in person or by
proxy and passed by the affirmative votes of the Holders of not less than
66 2/3% of the principal amount of Debt Securities represented at the
meeting and voted on a poll upon such resolution and (b) an instrument in
writing signed pursuant to Section 9.15 by the Holders of not less than
66 2/3% of the principal amount of the Debt Securities then outstanding.
"Funded Debt" means (i) any indebtedness of the Guarantor or a Restricted
Subsidiary maturing more than 12 months after the time of computation
thereof, (ii) guarantees by the Guarantor or a Restricted Subsidiary of
Funded Debt or of dividends of others (except guarantees in connection with
the sale or discount of accounts receivable, trade acceptances and other
paper arising in the ordinary course of business), (iii) in
<PAGE>
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the case of any Restricted Subsidiary, all preferred stock of such
Restricted Subsidiary, and (iv) all Capital Lease Obligations of the
Guarantor or a Restricted Subsidiary.
"Guarantee" means the guarantee of the Guarantor endorsed on a Debt
Security.
"Guarantor" means Case Credit Corporation until a successor Corporation
shall have become such pursuant to the applicable provisions of this
Indenture and thereafter "Guarantor" shall mean each such successor
Corporation.
"Guarantor Certificate" means a certificate signed by the Chairman, the
President or a Vice President and by the Secretary, Treasurer, an Assistant
Secretary or an Assistant Treasurer of the Guarantor, which may contain
orders or directions to the Trustee, and delivered to the Trustee.
"Holder" means the Person in whose name a Debt Security shall be
registered.
"Indebtedness" when used in paragraphs 3.1(i), 5.1(f) and 7.1(e) means, at
any date, without duplication, (i) all obligations for borrowed money of
the Guarantor or a Restricted Subsidiary or any other indebtedness of the
Guarantor or a Restricted Subsidiary, evidenced by bonds, debentures, notes
or other similar instruments, and (ii) Funded Debt, except such obligations
and other indebtedness of the Guarantor or a Restricted Subsidiary and
Funded Debt, if any, incurred as a part of a Securitization Transaction.
"Indenture", "herein", "hereby", "hereof", "hereunder" and similar
expressions mean this Indenture, and, unless the context otherwise
indicates, all indentures supplemental hereto from time to time in effect;
and the expression "Article", "Section", "Subsection" or "paragraph"
followed by a number means and refers to the specified Article, Section,
Subsection or paragraph of this Indenture.
"Indenture Legislation" has the meaning specified in Section 8.1.
"Intangible Assets" means, at any date, the value (net of any applicable
reserves), as shown on or reflected in the most recent consolidated balance
sheet of the Guarantor and the Restricted Subsidiaries as at the end of the
fiscal quarter of the Guarantor ending not more than 135 days prior to such
date, prepared in accordance with generally accepted accounting principles,
of: (i) all trade names, trademarks, licences, patents, copyrights, service
marks, goodwill and other like intangibles; (ii) organizational and
development
<PAGE>
-7-
costs; (iii) deferred charges (other than prepaid items such as insurance,
taxes, interest, commissions, rents, deferred interest waiver, compensation
and similar items and tangible assets being amortized); and (iv)
unamortized debt discount and expense, less unamortized premium.
"Interest Payment Date" means any Stated Maturity of an instalment of
interest on a Debt Security.
"Judgment Currency" has the meaning specified in Section 1.15.
"Liens" means pledges, mortgages, security interests and other liens,
including purchase money liens, on any property of the Guarantor or any
Restricted Subsidiary which secure Secured Funded Debt.
"Maturity" when used with respect to any Debt Security means the date on
which the principal of such Debt Security becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration or acceleration, call for redemption or otherwise.
"Obligations" has the meaning specified in Subsection 4.1.
"Opinion of Counsel" means a written opinion of Counsel.
"Original Issue Date" in respect of a Debt Security means the date on which
the Debt Security is originally issued, unless the Debt Security (the "new
Debt Security") is issued in replacement of another Debt Security (the "old
Debt Security"), on a transfer, exchange or otherwise, in which case it
shall mean the date on which the old Debt Security was issued.
"outstanding", when used with respect to Debt Securities means, subject to
Subsection 9.16(2), as of the date of determination, all Debt Securities
theretofore certified under this Indenture, except:
(a) Debt Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Debt Securities for whose payment or redemption, if any, money in the
necessary amount has been theretofore deposited with the Trustee in
accordance with the provisions hereof or any Paying Agent, in trust,
provided that, if such Debt Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this
<PAGE>
-8-
Indenture or provision therefor satisfactory to the Trustee has been
made; and
(c) Debt Securities in exchange for or in lieu of which other Debt
Securities have been certified and delivered pursuant to this
Indenture;
provided however, that in determining whether the Holders of the requisite
principal amount of Debt Securities outstanding have given any request,
demand, authorization, notice, consent or waiver hereunder, Debt Securities
owned by the Company or the Guarantor or any other obligor upon the Debt
Securities or any Affiliate of the Company or 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 acting and relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Debt Securities which the Trustee knows to be so owned shall
be so disregarded. Debt Securities so owned which have been pledged in good
faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledges's right so to act with respect to
such Debt Securities and that the pledgee is not the Company or the
Guarantor or any other obligor upon the Debt Securities or any Affiliate of
the Company or the Guarantor or such other obligor.
"Participant" means a broker, dealer, bank or other financial institution
or other person for whom CDS effects book-entry transfers under the Book-
Entry System.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on
behalf of the Company.
"Permitted Liens" means:
(a) Liens on real or physical property of any Corporation existing at the
time such Corporation becomes a Subsidiary;
(b) Liens on real or physical property existing at the time of acquisition
thereof or incurred within 180 days of the time of acquisition thereof
(including, without limitation, acquisition through merger or
consolidation) by the Guarantor or any Restricted Subsidiary;
(c) Liens on real or physical property hereafter acquired (or constructed)
by the Guarantor or any Restricted Subsidiary and created prior to, at
the time of, or within 270 days after such acquisition (including,
without limitation, acquisition through merger or
<PAGE>
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consolidation) (or the completion of such construction or commencement
of commercial operation of such property, whichever is later) to
secure or provide for the payment of all or any part of the purchase
price (or the construction price) thereof;
(d) Liens in favour of the Guarantor or any Restricted Subsidiary;
(e) Liens in favour of Canada or any province or territory thereof or the
United States of America, any state thereof or the District of
Columbia, or any agency, department or other instrumentality thereof,
to secure partial, progress, advance or other payments pursuant to any
contract or provisions of any statute;
(f) Liens incurred or assumed in connection with an issuance of revenue
bonds the interest on which is exempt from Federal income taxation
pursuant to Section 103(b) of the United States Internal Revenue Code
of 1986, as amended;
(g) Liens securing the performance of any contract or undertaking not
directly or indirectly in connection with the borrowing of money, the
obtaining of advances or credit or the securing of Funded Debt, if
made and continuing in the ordinary course of business;
(h) Liens incurred (no matter when created) in connection with the
Guarantor's or a Restricted Subsidiary's engaging in leveraged or
single-investor lease transactions; provided, however, that the
instrument creating or evidencing any borrowings secured by such Lien
shall provide that such borrowings are payable solely out of the
income and proceeds of the property subject to such Lien and are not a
general obligation of the Guarantor or such Restricted Subsidiary;
(i) Liens under workers' compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids,
tenders, contracts or deposits to secure public or statutory
obligations of the Guarantor or any Restricted Subsidiary, or deposits
of cash or obligations of the United States of America to secure
surety, replevin and appeal bonds to which the Guarantor or any
Restricted Subsidiary is a party or in lieu of such bonds, or pledges
or deposits for similar purposes in the ordinary course of business,
or Liens imposed by law, such as labourers' or other employees',
carriers', warehousemen's, mechanics', materialmen's and vendors'
Liens and Liens arising out of judgments or awards against the
Guarantor or any Restricted Subsidiary with respect to which the
Guarantor or such Restricted
<PAGE>
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Subsidiary at the time shall be prosecuting an appeal or proceedings
for review and with respect to which it shall have secured a stay of
execution pending such appeal or proceedings for review, or Liens for
taxes not yet subject to penalties for nonpayment or the amount or
validity of which is being in good faith contested by appropriate
proceedings by the Guarantor or any Restricted Subsidiaries, as the
case may be, or minor survey exceptions, minor encumbrances, easements
or reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions or Liens as to the use of
real properties, which Liens, exceptions, encumbrances, easements,
reservations, rights and restrictions do not, in the opinion of the
Guarantor or the Company (as the case may be), in the aggregate
materially detract from the value of said properties or materially
impair their use in the operation of the business of the Guarantor and
Restricted Subsidiaries;
(j) Liens incurred to finance all or any portion of the cost of
construction, alteration or repair of any real or physical property
and improvements thereto prior to or within 270 days after completion
of such construction, alteration or repair;
(k) Liens incurred (no matter when created) in connection with a
Securitization Transaction;
(l) Liens on property (or any Receivable arising in connection with the
lease thereof) acquired by the Guarantor or a Restricted Subsidiary
through repossession, foreclosure or like proceeding and existing at
the time of the repossession, foreclosure or like proceeding;
(m) Liens on deposits of the Guarantor or a Restricted Subsidiary with
banks (in the aggregate, not exceeding U.S.$50,000,000), in accordance
with customary banking practice, in connection with the providing by
the Guarantor or a Restricted Subsidiary of financial accommodations
to any Person in the ordinary course of business;
(n) Liens outstanding on the date of this Indenture; or
(o) any extension, renewal, refunding or replacement (or successive
extensions, renewals, refundings or replacements), as a whole or in
part, of any Lien referred to in the foregoing clauses (a) to (n),
inclusive; provided, however, that (i) such extension, renewal,
refunding or replacement Lien shall be limited
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to all or a part of the same property that secured the Lien extended,
renewed, refunded or replaced (plus improvements on such property) and
(ii) the Funded Debt secured by such Lien at such time is not
increased.
"Person" means any individual, Corporation, partnership, joint venture,
association, trust, unincorporated organization or government or any agency
or political sub-division thereof.
"Receivables" means any right of payment from or on behalf of any obligor,
whether constituting an account, chattel paper, instrument, general
intangible or otherwise, arising, either directly or indirectly, from the
financing by the Guarantor or any Subsidiary of the Guarantor of property
or services, and monies due thereunder, security interests in the property
and services financed thereby and any and all other related rights.
"Record Date" with respect to an instalment of interest on a Debt Security
means the fifteenth calendar day (whether or not a Business Day) prior to
the Interest Payment Date for such instalment of interest or such other
date as may be provided pursuant to an indenture supplemental hereto to be
the record date with respect to an instalment of interest on a Debt
Security of a particular series.
"Redemption Date", when used with respect to any Debt Security that is
redeemable, means a date fixed for redemption of such Debt Security by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Debt Security that is
redeemable, means a price, fixed by or pursuant to this Indenture, at which
the Debt Security may be redeemed.
"Restricted Subsidiary" means each Subsidiary other than Securitization
Subsidiaries and Subsidiaries of Securitization Subsidiaries.
"Secured Funded Debt" means Funded Debt which is secured by any pledge, or
mortgage, security interest or other lien on any property (whether owned on
the date hereof or hereafter created) of the Guarantor or of a Restricted
Subsidiary.
"Securitization Subsidiary" means a Subsidiary of the Guarantor (a) which
is formed for the purpose of effecting one or more Securitization
Transactions and engaging in other activities reasonably related thereto
and (b) as to which no portion of the indebtedness or any other obligations
of which (i) is guaranteed by the Guarantor or any Restricted
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Subsidiary, or (ii) subjects any property or assets of the Guarantor or any
Restricted Subsidiary, directly or indirectly, contingently or otherwise,
to any lien, other than pursuant to representations, warranties and
covenants (including those related to servicing) entered into in the
ordinary course of business in connection with a Securitization Transaction
and inter-company notes and other forms of capital or credit support
relating to the transfer or sale of Receivables or asset-backed securities
to such Securitization Subsidiary and customarily necessary or desirable in
connection with such transactions.
"Securitization Transaction" means any transactions or series of
transactions that have been or may be entered into by the Guarantor or any
of its Subsidiaries in connection with or reasonably related to a
transaction or series of transactions in which the Guarantor or any of its
Subsidiaries may sell, convey or otherwise transfer to (i) a Securitization
Subsidiary or (ii) any other Person, or may grant a security interest in,
any Receivables or asset-backed securities or interest therein (whether
such Receivables or securities are then existing or arising in the future)
of the Guarantor or any Subsidiary, and any assets related thereto,
including, without limitation, all security interests in the property or
services financed thereby, the proceeds of such Receivables or asset-backed
securities and any other assets which are sold or in respect of which
security interests are granted in connection with Securitization
Transactions involving such assets.
"Stated Maturity", when used with respect to any Debt Security or any
instalment of interest thereon, means the date specified in such Debt
Security as the fixed date on which the principal of such Debt Security or
such instalment of interest is due and payable.
"Subsidiary" when used in connection with the Guarantor or the Company
means any Corporation at least a majority of the outstanding stock of which
having voting powers under ordinary circumstances (not dependent upon the
happening of a contingency) for the election of directors (or the
equivalent thereof, in the case of Corporations organized outside of the
United States of America or Canada, as the case may be) is at the time
owned directly or indirectly by the Guarantor or the Company (as the case
may be) or by one or more Subsidiaries or by the Guarantor or the Company
(as the case may be) and one or more Subsidiaries. The term "wholly-owned
Subsidiary" means any Subsidiary all of the outstanding stock of which,
other than director's qualifying shares, is at the time owned directly or
indirectly by the Guarantor or the Company (as the case may be) or by one
or more wholly-owned Subsidiaries or by
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the Guarantor or the Company (as the case may be) and one or more wholly-
owned Subsidiaries.
"Trustee" means Montreal Trust Company of Canada until a successor trustee
shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean each such successor trustee.
"Vice President" when used with respect to the Company or 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".
Section 9.2 Compliance Certificates and Opinions:
(1) The Company or the Guarantor, as the case may be, shall furnish to the
Trustee evidence of compliance with the conditions in this Indenture relating to
(a) the issue, certification and delivery of Debt Securities, (b) the
satisfaction and discharge of this Indenture, and (c) the taking of any other
action to be taken by the Trustee at the request of or on the application of the
Company or the Guarantor.
(2) Evidence of compliance referred to in Subsection 1.2(1) shall consist of (a)
a Company Certificate or a Guarantor Certificate, as the case may be, stating
that any such condition has been complied with in accordance with the terms of
this Indenture, (b) in the case of any condition which is subject to review by
legal counsel, an Opinion of Counsel that the condition has been complied with
in accordance with the terms of this Indenture, and (c) in the case of any
condition subject to review by auditors or accountants, an opinion or report of
the Auditors of the Company or of the Guarantor, as the case may be, based on
the examinations or enquiries required to be made hereunder, as to the accuracy
or reliability of the statements required to be reviewed or examined and stating
that the condition has been complied with in accordance with the terms of this
Indenture.
(3) Evidence of compliance, other than evidence relating to the issue,
certification and delivery of Debt Securities hereunder, the satisfaction and
discharge of this Indenture and the taking of any other action to be taken by
the Trustee at the request of or on the application of the Company or the
Guarantor, may consist of a report or opinion of any counsel, auditor,
accountant, engineer or appraiser or any other person whose qualifications give
authority to a statement made by him, but if such report or opinion is provided
by a director, officer or employee of the Company or the Guarantor it shall be
in the form of a Company Certificate or a Guarantor Certificate, as the case may
be.
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(4) Evidence of compliance required under Subsections 1.2(2) and (3) shall
include a statement by the Person giving the evidence:
(a) that the Person has read and understands the conditions of this
Indenture under which it is required;
(b) briefly describing the nature and scope of the examination or
investigation upon which the statements or opinions contained in the
evidence are based (which, in the case of the Auditors of the Company
or the Guarantor, may be a brief review not sufficient for purposes of
an audit); and
(c) declaring that the Person has made such examination or investigation
as the Person believes necessary to enable the Person to make the
statement or express the opinion contained or expressed therein.
Section 9.3 Form of Documents Delivered to Trustee:
(1) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more 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.
(2) Any certificate or opinion of an officer of the Company 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 wrong. Any such certificate or opinion of an officer of the
Company or the Guarantor may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, another officer or
officers of the Company or the Guarantor, as the case may be, stating that the
information with respect to such factual matters is in the possession of the
Company or the Guarantor, as the case may be, unless such first-mentioned
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations of such other officer with respect to
such matters are wrong.
(3) 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.
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Section 9.4 Immunity of Incorporators, Stockholders, Officers and Directors:
No recourse shall be had for the payment of the principal of, premium, if any,
or the interest on, any Debt Security, or for any claim based thereon, or upon
any obligation, covenant or agreement of this Indenture, against any officer or
director, as such, past, present or future of the Company or the Guarantor or
any incorporator or stockholder, as such, past, present or future of the Company
or the Guarantor, either directly or indirectly through the Company or the
Guarantor, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise; it being expressly
agreed and understood that this Indenture and all the Debt Securities and the
Guarantees are solely corporate obligations, and that no personal liabilities
whatever shall attach to, or is incurred by any officer or director, past,
present or future, of the Company or the Guarantor or any incorporator or
stockholder of the Guarantor, either directly or indirectly through the Company
or the Guarantor, because of the incurring of the indebtedness hereby authorized
or under or by reason of any obligations, covenants or agreements contained in
the Indenture or in any of the Debt Securities, or to be implied herefrom or
therefrom; and that all such personal liability is hereby expressly released and
waived as a condition of, and as part of the consideration for, the execution of
this Indenture and the issue of the Debt Securities.
Section 9.5 Singular-Plural, Masculine-Feminine, Etc.: Where the context
permits, unless such interpretation would be inappropriate, words importing the
singular only may include the plural and vice versa and words importing gender
may include any gender.
Section 9.6 Accounting Terms and Principles: Except as otherwise expressly
provided or unless the context otherwise requires, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in accordance
with the accounting principles and practice generally accepted in Canada or (in
the case of accounting terms used in connection with the Guarantor or any of its
Subsidiaries other than the Company or any Subsidiary of the Company) the United
States and references to generally accepted accounting principles or practices
refer to such principles or practices generally accepted in Canada or the United
States (as the case may be).
Section 9.7 Effect of Headings and Table of Contents: The division of this
Indenture into Articles and Sections, the insertion of headings and the
provision of a table of contents are for convenience only and shall not affect
the construction or interpretation hereof.
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Section 9.8 Statute References: Any reference in this Indenture to a statute
shall be deemed to be a reference to such statute as amended, re-enacted or
replaced from time to time.
Section 9.9 Successors and Assigns: All covenants and agreements in this
Indenture by the Company or by the Guarantor shall bind its respective
successors and assigns, whether so expressed or not.
Section 9.10 Severability Clause: Each of the provisions contained in this
Indenture, the Debt Securities or the Guarantees is distinct and severable and,
if any provision in this Indenture or in the Debt Securities or in the
Guarantees 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 9.11 Benefits of Indenture: Nothing in this Indenture or in the Debt
Securities, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
Section 9.12 Governing Law: This Indenture, including the obligations of the
Guarantor, and the Debt Securities and the Guarantees shall be construed in
accordance with and governed by the laws of the Province of Ontario and the laws
of Canada applicable therein and shall be treated in all respects as Ontario
contracts.
Section 9.13 Payment on a Business Day: In any case where any Interest Payment
Date, Redemption Date, Maturity or Stated Maturity of any Debt Security shall
not be a Business Day, then (notwithstanding any other provision of the
Indenture) payment of interest or principal, and premium, if any, as the case
may be, 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 or Maturity, and, in case of
payment, no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date, Stated Maturity or Maturity, as the case may be.
In any case where any day on which any other action is required to be taken
hereunder is not a Business Day, then (notwithstanding any other provision of
this Indenture) such action shall be required to be taken on or before the
requisite time on the first Business Day after such day.
Section 9.14 Language: The parties to this Indenture hereby require that the
Indenture be prepared in the English language. Les parties a cet acte de
fiducie demandent par les presentes que cet acte de fiducie soit redige en
anglais.
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Section 9.15 Judgments: If a judgment or order is rendered by a court of any
particular jurisdiction for the payment of any amounts owing to the Trustee or
any Holder under this Indenture, the Debt Securities or the Guarantees or under
a judgment or order of a court of any other jurisdiction in respect thereof or
for the payment of damages in respect of any thereof and any such judgment or
order is expressed in a currency (herein called the "Judgment Currency") other
than lawful money of Canada, the Company and, failing the Company, the
Guarantor, shall indemnify and hold the Trustee and the Holders harmless against
any deficiency arising or resulting from any variation in rates of exchange
between the Judgment Currency and lawful money of Canada occurring between (i)
the date on which any amount expressed in lawful money of Canada is converted,
for the purposes of making or filing any claim resulting in any judgment or
order, into an equivalent amount in the Judgment Currency, and (ii) the date or
dates of payment of such amount (or part thereof) or of discharge of such first-
mentioned judgment or order (or part thereof) as appropriate. This indemnity
shall constitute a separate and independent obligation from the other
obligations contained in this Indenture, the Debt Securities and the Guarantees,
shall give rise to a separate and independent cause of action and shall apply
irrespective of any indulgence granted by any Holder or the Trustee from time to
time and shall continue in full force and effect notwithstanding any judgment or
order for a liquidated sum or sums in respect of amounts due hereunder or under
any judgment or order.
Section 9.16 Submission to Jurisdiction: The Trustee or (where entitled to do
so under the provisions contained herein) any Holder shall be entitled to take
proceedings against the Company and the Guarantor in the courts of any Province
of Canada in respect of their obligations hereunder and under the Debt
Securities and Guarantees. The Guarantor hereby submits for all purposes of or
in connection with this Indenture, the Debt Securities and Guarantees to the
non-exclusive jurisdiction of the courts of the Province of Ontario and appoints
for such purposes any director or officer of the Company for the time being to
accept service of process in the Province of Ontario on the Guarantor's behalf.
Section 9.17 Monetary References: Any reference in this Indenture to "dollar",
"dollars" or the sign "$" shall constitute a reference to the lawful money of
Canada.
ARTICLE 10
ISSUE, EXECUTION AND REGISTRATION OF DEBT SECURITIES
Section 10.1 Issue of Debt Securities In Series:
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(1) The aggregate principal amount of Debt Securities that may be issued
hereunder is unlimited, and, subject to Section 2.15, Debt Securities may be
issued as fully registered Debt Securities in one or more series, either at par
or at a discount or at a premium, shall bear such series designation, mature on
such date or dates, bear interest at such rate or rates or on such basis, and be
payable on such dates, and shall have such other terms and provisions, all as
shall, before the certification thereof, be established, consistent with the
other provisions of this Indenture. Principal of and interest and premium, if
any, on any Debt Securities shall be made in the currency provided for in this
Indenture with respect to such Debt Security or in such Debt Security. All Debt
Securities now or hereafter certified and issued under this Indenture shall,
subject to the terms of this Indenture, be equally and proportionately entitled
to the benefits of this Indenture, except as to purchase or sinking fund or
early maturity provisions (if any) applicable to different Debt Securities, as
if all of the Debt Securities had been issued and negotiated simultaneously. The
Debt Securities shall be direct unsecured obligations of the Company and shall
rank pari passu with all other debentures, notes and other unsecured and
unsubordinated debt of the Company for borrowed money.
(2) The terms and provisions of any series of Debt Securities shall be set forth
in an indenture supplemental hereto, which (and, where appropriate, the Debt
Securities issued pursuant thereto) shall provide for the following:
(a) the specific designation of such Debt Securities;
(b) any limit on the aggregate principal amount of such Debt Securities;
(c) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the
portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof or the method by which such
portion shall be determined;
(d) the date or dates, or the method by which such date or dates will be
determined or extended, on which the principal of such Debt Securities
will be payable;
(e) the rate or rates at which such Debt Securities will bear interest, if
any, or the method by which such rate or rates shall be determined;
(f) the date or dates from which interest, if any, on such Debt Securities
shall accrue or the method by which such date or dates shall be
determined, the dates on which such interest, if any, will be payable
and the Record Date, if any, for the interest payable on any
registered
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security of such series on any Interest Payment Date, or the method by
which any such date shall be determined, and the basis on which
interest shall be calculated if other than on the basis of 360-day
year of twelve 30-day months;
(g) the period or periods within which, the price or prices at which, the
currency or currencies or currency unit or units in which, and the
other terms and conditions upon which, such Debt Securities may be
redeemed in whole or in part, at the option of the Company;
(h) the obligation, if any, of the Company to redeem or purchase such Debt
Securities pursuant to any sinking fund or analogous provision or at
the option of the Holder thereof and the period or periods within
which or the date or dates on which, the price or prices at which, the
currency or currencies or currency unit or units in which, and the
other terms and conditions upon which, such Debt Securities shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(i) whether such Debt Securities are to be issuable either temporarily or
permanently, as global securities and, if so, whether beneficial
owners of interests in any such global security may exchange such
interests for Debt Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, and if Debt Securities of the series are to
be issuable as a global security, the identity of the Depositary for
such series;
(j) the currency or currencies or currency unit or units in which such
Debt Securities will be denominated and in which the principal (and
premium, if any) and any interest on such Debt Securities will be
payable;
(k) whether the Company or a Holder may elect payment of the principal
(and premium, if any) or interest, if any, on such Debt Securities in
one or more currencies or currency units other than that in which such
Debt Securities are denominated or stated to be payable, the period or
periods within which, and the terms and conditions upon which, such
election may be made, and the time and manner of determining the
exchange rate between the currency or currencies or currency unit or
units in which such Debt Securities are denominated or stated to be
payable and the currency or currencies or currency unit or units in
which such Debt Securities are to be so payable;
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(l) the place or places, if any, other than or in addition to the City of
Toronto, where the principal (and premium, if any) and any interest on
such Debt Securities shall be payable, such Debt Securities may be
surrendered for registration of transfer, such Debt Securities may be
surrendered for exchange and notices or demands to or upon the Company
in respect of such Debt Securities and the Indenture may be served;
(m) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which such Debt Securities shall be
issuable;
(n) if other than the Company or the Trustee, the identity of each
security registrar and/or Paying Agent;
(o) the person to whom any interest on any Debt Security of the series
shall be payable, if other than the person in whose name such Debt
Security is registered at the close of business on the Record Date for
such interest, and the extent to which, or the manner in which, any
interest payable on the global security on an interest payable date
will be paid if other than in the manner provided in the Indenture;
(p) provisions, if any, granting special rights to the Holders of such
Debt Securities upon the occurrence of such events as may be
specified;
(q) any deletions from, modifications of or additions to the Events of
Default with respect to such Debt Securities;
(r) whether the amount of payments of principal (and premium, if any) or
interest on such Debt Securities may be determined with reference to a
formula or other method and the manner in which such amounts shall be
determined;
(s) whether and under what circumstances the Company will pay additional
amounts on such Debt Securities in respect of certain taxes (and the
terms of any such payment) and, if so, whether the Company will have
the option to redeem such Debt Securities rather than pay such
additional amounts (and the terms of such options); and
(t) any other terms of such Debt Securities.
(3) The forms of Debt Securities of any series, of the Guarantees of such Debt
Securities, and of the certificate of the Trustee to be endorsed thereon and the
registration panel, if any, shall be such as the respective Boards of Directors
of the Company and the Guarantor shall determine to be necessary and advisable,
subject to the provisions of this Indenture and the approval of the Trustee.
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(4) Subject to the right of the Company from time to time to establish larger
minimum denominations or minimum subscription amounts to comply with applicable
law or undertakings or otherwise, Debt Securities shall be issued in
denominations of $1,000 (or such larger base amount as the Company may
determine) and any larger amount that is an integral multiple of $1,000.
(5) In addition to the English text thereof, the form of Debt Securities,
Guarantees and certificate of the Trustee may include a corresponding French
text. In the event of any contradiction, discrepancy or difference between the
English language portion of the text and the French language portion of the text
of the forms of Debt Securities, Guarantees or the certificate of the Trustee,
the English language portion of the text shall govern, except where applicable
law otherwise requires.
Section 10.2 Certification and Delivery of Debt Securities: Whenever any
series of Debt Securities has been authorized, the Company may, from time to
time, subject to the provisions hereof, execute and deliver to the Trustee for
certification, and the Trustee shall thereupon certify and deliver as directed
by a Company Certificate, Debt Securities of such series, after receipt by the
Trustee of:
(a) a Board Resolution of the Company approving the creation and issue of
Debt Securities of the series in the aggregate principal amount
therein specified, designating the series of such Debt Securities,
authorizing their execution and delivery and approving and authorizing
the execution by the Company and delivery to the Trustee of this
Indenture (in the case of the first issuance of Debt Securities) and
of an indenture supplemental hereto providing for the terms and
provisions of the Debt Securities of such series;
(b) a Board Resolution of the Guarantor authorizing the execution of the
Guarantees of the Debt Securities of the series and approving and
authorizing the execution by the Guarantor and delivery to the Trustee
of this Indenture (in the case of the first issuance of Debt
Securities) and of an indenture supplemental hereto providing for the
terms and provisions of the Guarantees of the Debt Securities of such
series;
(c) this Indenture (in the case of the first issuance of Debt Securities)
and an indenture supplemental hereto in form satisfactory to the
Trustee providing for the terms and provisions of the Debt Securities
of such series and the Guarantees of such Debt Securities in each case
duly executed on behalf of the Company and the Guarantor;
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(d) a Company Certificate, complying with Subsections 1.2(2) and (4),
stating that, as of the time that the documents in paragraphs (a),
(b), or (c) of this Section 2.2 are delivered to the Trustee, the
Company has complied with all conditions contained in this Indenture,
the non-compliance with which would, with the giving of notice or the
lapse of time, or both, or otherwise, constitute an Event of Default;
(e) a Guarantor Certificate, complying with Subsections 1.2(2) and (4),
stating that, as of the time that the documents in paragraphs (a),
(b), or (c) of this Section 2.2 are delivered to the Trustee, the
Guarantor has complied with all conditions contained in this
Indenture, the non-compliance with which would, with the giving of
notice or the lapse of time, or both, or otherwise, constitute an
Event of Default;
(f) an Opinion of Counsel, complying with Subsections 1.2(2) and (4), that
all legal requirements in respect of the issue of the Debt Securities
of such series required to be met as of the time that the documents in
paragraphs (a), (b), (c), (d), and (e) of this Section 2.2 are
delivered to the Trustee, have been met; and
(g) a Company Request requesting certification and delivery of one or more
of the Debt Securities of such series. Such Company Request may be
contained in a Company Certificate, complying with Subsections 1.2 (2)
and (4), stating that the conditions in this Indenture relating to the
issue, certification and delivery of the Debt Securities referred to
in such Company Certificate have been complied with in accordance with
the terms of this Indenture.
Section 10.3 Place and Medium of Payment: Principal and interest with respect
to any series of Debt Securities shall be payable in the currency specified in
the supplemental indenture authorizing such series. Subject to the provisions
of the supplemental indenture authorizing such series, the principal of, and
premium, if any, on, any Debt Security shall be payable at the principal office
of the Trustee if the Trustee acts as a Paying Agent for such series or, at the
option of the Holder, at the principal office of any other Paying Agent upon
presentation and surrender of such Debt Security. Subject to the provisions of
the supplemental indenture authorizing such series, the interest on Debt
Securities bearing coupons shall be payable at the principal office of the
Trustee if the Trustee acts as a Paying Agent for such series or, at the option
of the Holder, at the principal office of any other Paying Agent upon
presentation and surrender of the coupons representing such interest. As the
interest on fully registered Debt Securities becomes due (except in the case of
payment of
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interest at Maturity or on redemption which shall be paid on presentation and
surrender of such Debt Securities for payment and except as hereinafter in this
Section 2.3 provided), the Company shall, at least five days prior to each
Interest Payment Date, forward, or cause to be forwarded, by pre-paid ordinary
mail, to the Holder for the time being, or, in the case of joint Holders, to
whichever of such joint Holders is named first in the appropriate register
maintained by the Company for such purpose, at his or her address appearing in
such register, a cheque drawn on the Company's bankers for such interest (less
any tax required by law to be deducted), payable to the order of such Holder or
Holders and negotiable at par at any Canadian chartered bank in Canada or at
such other places at which interest upon Debt Securities of any series is stated
to be payable under the supplemental indenture authorizing such series of Debt
Securities. The forwarding of such cheque shall satisfy and discharge the
liability for the interest upon such Debt Securities to the extent of the sums
represented thereby (plus the amount of any tax deducted as aforesaid) unless
such cheque be not paid on presentation. In the event of the non-receipt of such
cheque by such Holder or the loss or destruction thereof the Company, upon being
furnished with reasonable evidence of such non-receipt, loss or destruction and
an indemnity in amount and form reasonably satisfactory to it, shall issue or
cause to be issued to such Holder a replacement cheque for the amount of such
cheque. The Company, in lieu of forwarding, or causing to be forwarded, any such
cheque in payment of interest, may at its option pay interest to or to the order
of such Holder (i) at the principal office of the Trustee if the Trustee acts as
a Paying Agent for such series or, at the option of the Holder, at the principal
office of any other Paying Agent, or (ii) by electronic funds transfer to an
account maintained by the Person entitled thereto (at that Person's expense) as
specified in the register for that series of Debt Securities.
Section 10.4 Registration of Debt Securities:
(1) The Company shall cause to be kept by and at the principal office of the
Trustee in Toronto (and in any such other place or places by the Trustee or by
such other registrar or registrars, if any, as the Company with the approval of
the Trustee may designate) registers in which shall be entered the names and
addresses of the Holders of Debt Securities and particulars of the Debt
Securities held by them respectively.
(2) No transfer of a Debt Security shall be valid unless made on one of such
registers by the registered Holder or such Holder's executors, administrators or
other legal representatives or such Holder's or their attorney duly appointed by
an instrument in writing in form and execution satisfactory to the Trustee or
other registrar, upon compliance with such reasonable requirements as the
Trustee or other registrar may prescribe, and unless such Debt Security is then
cancelled by the Trustee and a new Debt Security
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or Debt Securities in the same aggregate principal amount and on the same terms
(including the same Original Issue Date) is issued to the transferee Holder or
Holders.
Section 10.5 Transferee Entitled to Registration:
The transferee of a Debt Security shall, after the Debt Security and appropriate
form of transfer is lodged with the Trustee or other registrar and upon
compliance with all other conditions in that behalf required by this Indenture
or by law, be entitled to be entered on the register as the owner of such Debt
Security free from all equities or rights of set-off or counterclaim between the
Company and the transferor or any previous holder of such Debt Security, save in
respect of equities or rights of which the Company is required to take notice by
statute or order of a court of competent jurisdiction.
Section 10.6 Exchange of Debt Securities:
(1) Debt Securities in any authorized denomination may be exchanged upon
reasonable notice for Debt Securities of the same series and of like aggregate
principal amount and term of different authorized denominations.
(2) Debt Securities may be exchanged only at the principal office of the Trustee
in Toronto or at such other place or places as may from time to time be
designated by the Company with the approval of the Trustee. Any Debt Securities
tendered for exchange shall be surrendered to the Trustee. The Company shall
execute and the Trustee shall certify all Debt Securities necessary to carry out
transfers and exchanges as aforesaid. All Debt Securities surrendered for
transfer or exchange shall be cancelled.
(3) Debt Securities issued on transfer or in exchange for Debt Securities which
at the time of such issue have been selected or called for redemption at a later
date shall be deemed to have been selected or called for redemption in the same
manner and shall have noted thereon a statement to that effect, provided that
nothing in this Subsection (3) shall require the Trustee to make transfers or
exchanges of any Debt Securities issued in definitive form which have been
selected or called for redemption at a later date.
Section 2.7 Charges for Transfer and Exchange:
(1) Except as provided in Subsection (2), for each Debt Security exchanged or
transferred, the Trustee or other registrar may, if required by the Company,
make a reasonable charge for its services and for each new Debt Security issued;
and payment of such charges and reimbursement of the Trustee or other registrar
or the Company for any transfer taxes or governmental or other charges required
to be paid shall be made by the party requesting such exchange or transfer as a
condition precedent thereto.
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(2) No charge shall be made hereunder for any exchange or transfer of any Debt
Security applied for within the period of two months after the Original Issue
Date thereof.
Section 10.8 Registers Open for Inspection: The registers hereinbefore
referred to shall at all reasonable times be open for inspection by the Company,
the Guarantor, the Trustee or any Holder. Every registrar (including the
Trustee) shall from time to time when requested so to do in writing by the
Company or by the Trustee furnish the Company or the Trustee with a list of the
names and addresses of Holders of Debt Securities entered on the register kept
by such registrar and showing the principal amount and serial numbers of the
Debt Securities held by each such Holder.
Section 10.9 C1osing of Registers:
(1) The Company, with the approval of the Trustee, may at any time close any
register for the Debt Securities, other than those kept at the principal office
of the Trustee in Toronto, and transfer the registration of any Debt Securities
registered thereon to another register and thereafter such Debt Securities shall
be deemed to be registered on such other register.
(2) Neither the Company nor the Trustee nor any registrar shall be required: (i)
to make transfers or exchanges of Debt Securities on any Interest Payment Date
or during the ten preceding Business Days; or (ii) to make transfers or
exchanges of any Debt Securities which are redeemable on the day of any
selection by the Trustee of Debt Securities to be redeemed or during the ten
preceding Business Days.
Section 10.10 Ownership of Debt Securities:
(1) The Person in whose name any Debt Security is registered shall for all
purposes of this Indenture be and be deemed to be the owner thereof and payment
of or on account of the principal of and premium (if any) on such Debt Security
and interest thereon shall be made only to or upon the order in writing of such
Holder.
(2) Neither the Company, the Guarantor, the Trustee nor any registrar shall be
bound to take notice of or see to the execution of any trust, whether express,
implied or constructive, in respect of any Debt Security and may transfer the
same on the direction of the person registered as the Holder thereof, whether
named as trustee or otherwise, as though that person were the beneficial owner
thereof.
(3) The Holder for the time being of any Debt Security shall be entitled to the
principal, premium (if any) and/or interest evidenced thereby free from all
equities or rights of set-off or counterclaim between the Company or the
Guarantor, as the case may be, and the original or any intermediate Holder
thereof and all persons may act accordingly and the receipt of any such Holder
for any such principal, premium or interest shall be a good discharge to the
Company, the Guarantor and the
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Trustee for the same and neither the Company nor the Guarantor nor the Trustee
shall be bound to inquire into the title of any such Holder.
Section 10.11 Debt Securities Delivered in Exchange for or on Transfer of other
Debt Securities to be Valid Obligations: All Debt Securities executed,
certified, and delivered in exchange for, or upon transfer of, Debt Securities
surrendered as provided in this Article 2 shall be the valid obligations of the
Company, evidencing the same debt as the Debt Securities so surrendered, and
shall be entitled to the benefits of this Indenture and of the Guarantees of the
Guarantor endorsed thereon to the same extent as the Debt Securities in exchange
for or upon transfer of which they were certified and delivered.
Section 10.12 Execution of Debt Securities and Trustee's Certificate:
(1) The Debt Securities may be engraved, lithographed, mimeographed, typewritten
or printed or partly engraved, lithographed, mimeographed, typewritten or
printed, and shall be signed on behalf of the Company in its corporate name
under its corporate seal by its President, one of its Vice Presidents or its
Secretary, manually or by facsimile signature. Such seal may be in the form of a
facsimile of the Company's seal and may be imprinted or impressed upon the Debt
Securities. The Debt Securities may be delivered to the Trustee for
certification by it whereupon, subject to the provisions of this Article 2, the
Trustee shall certify and deliver the same. If the officer who has signed any of
the Debt Securities, manually or by facsimile signature, ceases to be such
officer of the Company before the Debt Securities so signed or sealed have been
certified or delivered by the Trustee or issued by the Company, such Debt
Securities may, nevertheless, be certified, delivered, and issued and, upon such
certification, delivery, and issue, shall be binding upon the Company as though
the person who signed and sealed the same had continued to be such officer of
the Company, and also any Debt Securities may be signed and sealed on behalf of
the Company by such persons as at the actual date of the relevant authorizing
Board Resolution of the Company shall be a proper officer of the Company
although at the Original Issue Date of such Debt Securities any such person
shall not have been such an officer of the Company.
(2) Only such of the Debt Securities as shall bear thereon a certificate in the
form herein provided for, executed by or on behalf of the Trustee, shall be or
become valid or obligatory for any purpose or entitled to the benefits of this
Indenture, and such certificate of the Trustee shall be conclusive evidence that
the Debt Securities so certified have been duly certified and delivered
hereunder and are entitled to the benefits of this Indenture.
(3) The countersignature of the Trustee on the Debt Security certificates issued
hereunder shall not be construed as a representation or warranty by the Trustee
as to the validity of this Indenture or the Debt Security certificates (except
the due countersigning thereof) and the Trustee shall in no respect be liable or
answerable for the use made of the Debt Security certificate or any of them or
for the consideration therefor except as otherwise specified herein.
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Section 10.13 Lost, Destroyed, Stolen or Mutilated Debt Securities: If any Debt
Security becomes mutilated and in the absence of notice that such Debt
Securities have been acquired by a bona fide purchaser within the meaning of the
Business Corporations Act (Alberta), the Company, at the expense of the Holder,
shall execute and the Trustee shall thereupon certify and deliver a new Debt
Security in exchange and substitution for the Debt Security so mutilated, but
only upon surrender for cancellation of the Debt Security so mutilated. If any
Debt Security is lost, destroyed or stolen, evidence of such loss, destruction
or theft may be submitted to the Company and the Trustee and, if such evidence
is satisfactory to both and indemnity satisfactory to them is given and in the
absence of notice that such Debt Securities have been acquired by a bona fide
purchaser within the meaning of the Business Corporations Act (Alberta), the
Company, at the expense of the Holder, shall execute and the Trustee shall
thereupon certify and deliver a new Debt Security in lieu of and in substitution
for the Debt Security so lost, destroyed or stolen. The Company may require
payment of a reasonable charge for each new Debt Security issued under this
Section and of the expenses which may be incurred by the Company and the Trustee
in connection therewith. Any Debt Security issued under this Section in lieu of
any Debt Security alleged to be lost, destroyed or stolen shall constitute an
original additional contractual obligation on the part of the Company whether or
not the Debt Security so alleged to be lost, destroyed or stolen is at any time
enforceable by anyone and shall be equally and proportionately entitled to the
benefits of this Indenture with all other Debt Securities issued under this
Indenture and any such Debt Security shall have the Guarantee of the Guarantor
endorsed thereon. If any Holder does not receive any cheque sent in payment for
interest on a Debt Security, or if any such cheque is lost or destroyed, the
Trustee, upon being furnished with such evidence, shall issue or cause to be
issued to such Holder a replacement cheque for the amount of such cheque.
Section 10.14 Annual Rates of Interest: For the purposes of the Interest Act
(Canada), whenever interest payable pursuant to any Debt Security is calculated
on the basis of a period other than a calendar year (the "subject period"), each
rate of interest determined pursuant to such calculation expressed as an annual
rate is equivalent to such rate as so determined multiplied by the actual number
of days in the calendar year in which the same is to be ascertained and divided
by the number of days in the subject period.
Section 10.15 Book-Entry System:
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(1) Despite any other provision of this Indenture, the Company may elect to have
Debt Securities issued hereunder represented in the form of a typewritten fully
registered global security held by, or on behalf of, CDS (or such other person
as the Company may designate as Depositary or successor Depositary, in which
case references to CDS in this Section 2.15 shall be deemed to refer to such
other Depositary) as Depositary of the global security (for its Participants)
and registered on the register maintained by the Trustee pursuant to Section 2.4
in the name of CDS or its nominee, and it is expressly acknowledged that any
such registrations of ownership and transfers of such Debt Security, or
interests of Participants therein, will be made by CDS only through the Book-
Entry System. Subject to this Section 2.15, the rights of the holder of any
beneficial interest in the Debt Securities represented by a global security
(including the right to receive a certificate or other instrument evidencing an
ownership interest in such Debt Security) shall be limited to those established
by any agreement between the Company and CDS, by applicable law and agreements
between CDS and its Participants and between such Participants and the holder of
such beneficial interest. Accordingly, except as provided herein, neither the
Company nor the Trustee shall be under any obligation to deliver, nor shall the
holder of such beneficial interest have any right to require the delivery of, a
certificate evidencing a Debt Security to the holder of the beneficial interest
in such Debt Security. In the event of any conflict between this Indenture and
any agreement between the Company and CDS, the terms of any such agreement shall
prevail, but after the occurrence of an Event of Default, holders of beneficial
interests in the Debt Securities of any series may at any time determine (by an
instrument in writing signed in one or more counterparts by such holders of such
series or by Participants on their behalf, representing beneficial interests
aggregating not less than 51% in principal amount of the global security in
respect of such series, and delivered to the Company, the Trustee and CDS) that
the continuation of the holding of the Debt Securities by a book-entry only
global security is no longer in the best interests of such holders. Upon any
such determination by the holders of beneficial interests in the Debt Securities
of such series, or if required to do so by law, or if the Book-Entry System
ceases to exist, or if the Company determines that CDS is no longer willing or
able to discharge properly its responsibilities as the Depositary and the
Company is unable to locate a qualified successor within 90 days, or if the
Company at its option elects to terminate the Book Entry System for any reason,
(a) the Trustee shall notify CDS and shall request CDS to notify the
Participants of the availability of definitive fully registered Debt
Securities;
(b) the Trustee shall request CDS to deliver the global security to the
Trustee and the Trustee shall thereupon reduce the holdings of CDS on
the register maintained hereunder to nil in respect of the Debt
Security represented by the global security;
(c) the Company shall issue or cause to be issued in accordance with and
subject to the provisions of this Indenture, in exchange for the
global security, Debt Securities in definitive form in an aggregate
amount equal to the amount of the global security registered in the
names of the Participants as advised by CDS in accordance with their
proportionate interest in the global security as recorded in the
records
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maintained by CDS as at the date of the issue of the Debt Securities
in definitive form; and
(d) after such replacement of the global security by definitive Debt
Securities, all payments in respect of the Debt Securities in
definitive form shall be made to the registered holders thereof in
accordance with the terms and conditions of the Debt Securities in
definitive form and the provisions of this Indenture and in all other
respects such registered holders shall be the holders thereof for all
purposes hereunder.
All expenses of the Trustee and CDS relating to the foregoing shall be paid by
the Company.
(2) Any notice required or permitted to be given to a holder of Debt Securities
while the Debt Securities are represented by a global security held by, or on
behalf of, CDS or its nominee as part of the Book-Entry System, shall be
provided to CDS.
ARTICLE 11
COVENANTS OF THE COMPANY
Section 11.1 Covenants of the Company: The Company covenants with the Trustee
for the benefit of the Holders that:
(a) Payment of Principal, Interest and Premium, if any, on outstanding
Debt Securities: So long as any Debt Securities remain outstanding it
will duly and punctually pay or cause to be paid to every Holder the
principal of and premium (if any) and interest on the Debt Securities
in accordance with the terms and subject to the conditions of the
Indenture and of the Debt Securities.
(b) Maintenance of Office or Agency:
(i) It will maintain or cause to be maintained an office or agency at
the principal office of the Trustee in Toronto, and in such other
place or places as may be required by this Indenture or as the
Company and the Trustee may agree upon, where the Debt Securities
may be presented for transfer and exchange as in this Indenture
provided, and where notices and demands to and upon the Company
in respect of the Debt Securities or of this Indenture may be
served; and
(ii) It will also maintain or cause to be maintained an office or
agency in Toronto, and in such other place or places as may be
required by this Indenture or as
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the Company and the Trustee may agree upon, where the Debt
Securities may be presented for payment.
(c) Corporate Existence: Subject to Article 11, and so long as any Debt
Securities remain outstanding, it will at all times maintain its
corporate existence; will carry on and conduct its business in a
proper, efficient and business-like manner and in accordance with good
business practice; will keep or cause to be kept proper books of
account; and will, if and whenever required in writing by the Trustee,
file with the Trustee copies of all annual information forms and other
periodic reports of the Company filed by the Company pursuant to the
Securities Act (Ontario).
(d) To Perform Obligations: Subject to the terms hereof, it will do,
observe and perform or cause to be done, observed and performed all of
its obligations and all matters and things necessary or expedient to
be done, observed or performed by virtue of any applicable law for the
purpose of creating, performing or maintaining the trusts herein
referred to and will do, observe and perform all the obligations
hereby imposed on it.
(e) Not to Accumulate Interest: To prevent any accumulation after
Maturity of unpaid interest, it shall not directly or indirectly
extend or assent to the extension of time for payment of interest
payable hereunder or be a party to or approve any such arrangement by
purchasing or funding any interest or in any other manner. If the
time for payment of any interest is so extended, whether for a
definite period or otherwise, such interest shall not be entitled, in
case of default hereunder, to the benefit of this Indenture except
subject to the prior payment in full of the principal of all Debt
Securities issued hereunder then outstanding and of all matured
interest on such Debt Securities, the payment of which has not been so
extended.
(f) Good Standing Certificate: So long as any of the Debt Securities
remain outstanding, it will deliver to the Trustee within four months
(or such longer period as the Trustee may in its discretion consent
to) after the end of each of the Company's fiscal years, and at any
other time if reasonably required by the Trustee, a Company
Certificate that the Company has complied with all requirements
applicable to it contained in this Indenture the non-compliance with
which would, with the giving of notice, lapse of time or otherwise,
constitute an Event of Default on the part of the Company, or, if such
is not the case, specifying the requirement which has not been
complied with and giving particulars of such non-compliance.
(g) Additional Instruments: Upon request of the Trustee from time to time,
it shall execute and deliver all such additional instruments and will
do all such additional acts as may reasonably be necessary or proper
to carry out more effectually the purposes of this Indenture.
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(h) Financial Statements: It shall file with the Trustee (i) within four
months after the close of each fiscal year (which, until the Company
otherwise notifies the Trustee, shall be deemed to be the 12 months
ending December 31), beginning with the fiscal year ended December 31,
1998, audited financial statements of the Company for such fiscal
year, and (ii) within two months of the end of each fiscal quarter,
beginning with the fiscal quarter immediately following the first
issuance of Debt Securities, unaudited financial statements of the
Company for such fiscal quarter.
(i) Restrictions on Secured Funded Debt: It shall not, nor shall it permit
any Restricted Subsidiary which is a Subsidiary of the Company to,
incur, issue, assume, guarantee or create any Secured Funded Debt,
without effectively providing concurrently with the incurrence,
issuance, assumption, guaranty or creation of any such Secured Funded
Debt that the outstanding Debt Securities (together with, if the
Company shall so determine, any other Indebtedness of the Company or
such Restricted Subsidiary then existing or thereafter created which
is not subordinated to the outstanding Debt Securities) shall be
secured equally and ratably with (or prior to) such Secured Funded
Debt, so long as such Secured Funded Debt shall be secured by a Lien,
unless, after giving effect thereto, the sum of the aggregate amount
of all outstanding Secured Funded Debt of the Guarantor and its
Restricted Subsidiaries (including the Company) would not exceed an
amount equal to the sum of (i) U.S.$20,000,000 and (ii) 15% of
Consolidated Net Tangible Assets of the Guarantor and Restricted
Subsidiaries; provided, however, that this paragraph (i) shall not
apply to, and there shall be excluded from Secured Funded Debt in any
computation under this paragraph (i), Funded Debt secured by Permitted
Liens.
Section 11.2 Performance of Covenants by Trustee: If the Company fails to
perform any of its covenants contained in this Indenture, the Trustee may notify
the Holders of such failure on the part of the Company and may itself perform
any of such covenants capable of being performed by it, but shall be under no
obligation to do so. All sums expended or advanced by the Trustee shall be
repayable as provided in Section 3.3. No such performance or advance by the
Trustee shall be deemed to relieve the Company of any default hereunder or if
its continuing obligations under the covenants herein contained.
Section 11.3 Trustee's Remuneration and Expenses: The Company covenants with
the Trustee that it will pay to the Trustee from time to time reasonable
remuneration for its services hereunder and will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in the administration or execution of the trusts
hereby created (including the reasonable compensation and the disbursements of
its Counsel and all other advisers and assistants not regularly in its employ),
both before any default hereunder and thereafter until all duties of the Trustee
under the trusts hereof shall be finally and fully performed, except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
Any amount due under this Section 3.3 and unpaid 30 days after request for such
payment shall bear interest from
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the expiration of such 30 days at a rate per annum equal to the then current
rate charged by the Trustee from time to time, payable on demand.
ARTICLE 12
GUARANTEE OF DEBT SECURITIES
Section 12.1 Guarantee of Debt Securities:
(1) The Guarantor covenants with the Trustee on behalf of the Holders that the
Company will pay, and hereby unconditionally guarantees, as provided in the
Guarantee to be endorsed on each Debt Security pursuant to Section 4.2, the due
and punctual payment of the principal of and premium (if any) and interest on
each Debt Security certified by or on behalf of the Trustee, when and as the
same shall become due and payable after any applicable grace period, whether at
their respective due dates, on redemption or on a declaration or otherwise, in
accordance with the terms of such Debt Security and this Indenture (the
"Obligations"); provided, however, that payment of interest on overdue
instalments of interest is hereby guaranteed only to the extent permitted by
applicable law. In case of default by the Company in the payment of any such
principal, premium, or interest, the Guarantor agrees duly and punctually to pay
the same without demand after the expiry of any applicable grace period. The
Guarantor hereby agrees that its obligations under each Guarantee and this
Indenture shall be unconditional, irrespective of any invalidity, illegality,
irregularity or unenforceability of any such Debt Security or this Indenture as
regards the Company (other than by reason of lack of genuineness), or the
absence of any action to enforce the same, the recovery of any judgment against
the Company or any action to enforce the same or any circumstances which might
otherwise constitute a legal or equitable discharge or defence of a guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger, amalgamation, insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to any Debt Security or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that its obligations
under this Section 4.1 and each Guarantee will not be discharged as to any Debt
Security except by payment in full of the principal of and premium (if any) and
interest on such Debt Security.
(2) The obligation of the Guarantor under this Section 4.1 and each Guarantee
shall be a continuing obligation, shall cover all the Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Holders
of any Debt Security.
(3) In addition to the guarantee contained in each Guarantee and this Indenture,
the Guarantor hereby covenants and agrees to indemnify and save the Holders of
any Debt Security harmless against all costs, losses, expenses and damages they
may suffer as a result of the Company's default in the performance of any of the
Obligations.
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(4) The Guarantor shall not be or become liable hereunder or under any Guarantee
to make any payment of principal, premium or interest in respect of which the
Company is in default if the default of the Company in respect of which the
Guarantor would otherwise be or become liable hereunder or under any guarantee
has been waived or directed to be waived pursuant to the provisions in that
behalf contained in this Indenture; but no waiver or consent of any kind
whatsoever shall release, alter or impair the unconditional obligation of the
Guarantor hereunder or under any Guarantee after giving effect to such waiver or
consent.
(5) The Guarantor shall be subrogated to all rights of the Holder of each Debt
Security against the Company in respect of any amount paid by the Guarantor
pursuant to the provisions of any Guarantee, but 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) and
interest on all Debt Securities has been paid in full or duly provided for.
(6) If any moneys become payable by the Guarantor hereunder the Trustee shall be
entitled to enforce and receive payment thereof by the Guarantor, for the
benefit of the Holders of the Debt Securities, and shall be entitled to recover
judgment against the Guarantor for any portion of the same remaining unpaid; and
the Trustee shall have further remedies with respect to the Guarantor similar to
the remedies granted to it in Article 7 with respect to the Company. The whole
of the moneys from time to time received by the Trustee hereunder shall be
applied by the Trustee in accordance with Section 7.6.
(7) The obligations of the Guarantor under each Guarantee shall constitute
senior direct obligations of the Guarantor and shall rank pari passu with all
senior debt of the Guarantor for borrowed money.
(8) Payments in respect of the Debt Securities, if any, by the Guarantor will be
made without withholding for, or on account of, any present or future taxes
imposed by or on behalf of Canada, the United States or any political
subdivision thereof unless such taxes are required by law or by the
administration thereof to be withheld or deducted, in which case the Guarantor
will pay such additional amounts as will result (after the withholding or
deduction of such taxes) in the payment to the holders of the Debt Securities of
the amounts that would otherwise have been payable pursuant to the Guarantee but
no such additional amount will be payable with respect to the Guarantor's
Guarantee of any Debt Security (a) which is held by a person who is subject to
any such taxes by reason of such person being connected with Canada or the
United States (as the case may be) otherwise than merely by the holding or use
outside Canada or the United States (as the case may be) or ownership as a non-
resident of Canada or the United States (as the case may be) of the Debt
Security and the guarantee in respect thereof, (b) which is held by or on behalf
of a Person who is not dealing at arm's length with the Company or the Guarantor
or (c) which is presented for payment more than 30 days after the date on which
such payment became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later, except to the extent that the Holder
thereof would have been entitled to receive payment of such additional amount if
the Holder had presented such Debt Security for payment on the last day of such
30-day period.
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Section 12.2 Execution and Delivery of Guarantee:
(1) To evidence its guarantee to the Holders of Debt Securities specified in
Section 4.1, the Guarantor shall endorse upon each Debt Security duly issued
hereunder a Guarantee substantially in the form set out in Schedule I with such
appropriate insertions, omissions, substitutions (including replacing the term
"Note" with such term as properly describes the Debt Security in question) and
variations as the officers of the Guarantor executing the same may approve, such
approval to be conclusively evidenced by the certification of the Debt Security.
The form of Guarantee may include a corresponding French text. In the event of
any contradiction, discrepancy or difference between the English language text
and the French language text of the form of Guarantee, the English language text
shall govern, except where applicable law otherwise requires. Each Guarantee
shall be executed on behalf of the Guarantor by its Chief Executive Officer,
President or one of its Vice Presidents manually or by facsimile signature, and
shall have a facsimile of the corporate seal of the Guarantor affixed thereto or
imprinted or otherwise reproduced thereon. If any officer of the Guarantor who
has signed any Guarantee, manually or by facsimile signature, ceases to be such
officer before the Debt Security on which such Guarantee is endorsed has been
certified by or on behalf of the Trustee or issued by the Company, such Debt
Security, with such Guarantee endorsed thereon, nevertheless may be certified,
delivered and issued as though the person who signed such Guarantee had not
ceased to be such officer; and any Guarantee may be signed and sealed on behalf
of the Guarantor by such Person as, at the actual date of the Board Resolution
of the Guarantor or at any subsequent time, is a proper officer of the
Guarantor, although at the Original Issue Date of the Debt Security any such
Persons was not such officer of the Guarantor.
(2) The Guarantor agrees that the certification by the Trustee, in the manner
provided in this Indenture, of any Debt Security (whether in global form or
definitive form), shall be conclusive evidence that the Guarantee endorsed upon
such Debt Security has been duly executed and delivered and is a valid
obligation of the Guarantor. The Guarantor agrees that the issuance by the
Company of a Debt Security and the delivery of such Debt Security by the
Trustee, after certification by the Trustee in the manner provided in this
Indenture, shall be deemed delivery by the Guarantor of the Guarantee appearing
upon such Debt Security.
ARTICLE 13
COVENANTS OF THE GUARANTOR
Section 13.1 Covenants of the Guarantor: The Guarantor covenants with the
Trustee for the benefit of the Holders that:
(a) Financial Statements and Statement as to Compliance: It shall file
with the Trustee (i) within four months after the close of each
fiscal year (which, until the Guarantor otherwise notifies the
Trustee, shall be deemed to be the 12 months ending December
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31), beginning with the fiscal year ended December 31, 1998, audited
financial statements of the Guarantor for such fiscal, and (ii) within
two months of the end of each fiscal quarter, beginning with the
fiscal quarter immediately following the first issuance of Debt
Securities, an audited financial statement of the Guarantor for such
fiscal quarter. This covenant shall be deemed to be satisfied by the
filing with the Trustee within the time specified of a copy of the
Guarantor's Annual Report on Form 10-K for such fiscal year or the
Guarantor's quarterly report on Form 10-Q for such fiscal quarter (as
the case may be) in each case as filed by the Guarantor with the
United States Securities and Exchange Commission.
(b) Corporate Existence: Subject to Article 11, and so long as any Debt
Securities remain outstanding, it shall do or cause to be done all
things necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and franchises;
but the Guarantor shall not be required to preserve any such right or
franchise if the Guarantor determines that the preservation thereof is
no longer desirable in the conduct of the business of the Guarantor
and that the loss thereof is not disadvantageous in any material
respect to the Holders.
(c) To Perform Obligations: Subject to the terms hereof, it will do,
observe and perform or cause to be done, observed and performed all of
its obligations and all matters and things necessary or expedient to
be done, observed or performed by virtue of any applicable law for the
purpose of creating, performing or maintaining the trusts herein
referred to and will do, observe and perform all the obligations
hereby imposed on it.
(d) Good Standing Certificate: So long as any of the Debt Securities
remain outstanding, it shall deliver to the Trustee within four months
(or such longer period as the Trustee may in its discretion consent
to) after the end of each of the Guarantor's fiscal years, a
certificate of the Guarantor that the Guarantor has complied with all
requirements applicable to it contained in this Indenture the non-
compliance with which would, with the giving of notice, lapse of time
or otherwise, constitute an Event of Default on the part of the
Guarantor, or, if such is not the case, specifying the requirement
which has not been complied with and giving particulars of such non-
compliance.
(e) Additional Instruments: Upon request of the Trustee from time to time,
it shall execute and deliver all such additional instruments and will
do all such additional acts as may reasonably be required or proper to
carry out most effectively the purpose of this Indenture.
(f) Restrictions on Secured Funded Debt: It shall not, nor will it permit
any Restricted Subsidiary to, incur, issue, assume, guarantee or
create any Secured Funded Debt, without effectively providing
concurrently with the incurrence, issuance, assumption, guaranty or
creation of any such Secured Funded Debt that the outstanding Debt
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Securities (together with, if the Guarantor shall so determine, any
other Indebtedness of the Guarantor or such Restricted Subsidiary then
existing or thereafter created which is not subordinated to the
outstanding Debt Securities) shall be secured equally and ratably with
(or prior to) such Secured Funded Debt, so long as such Secured Funded
Debt shall be secured by a Lien, unless, after giving effect thereto,
the sum of the aggregate amount of all outstanding Secured Funded Debt
of the Guarantor and its Restricted Subsidiaries would not exceed an
amount equal to the sum of (i) U.S.$20,000,000 and (ii) 15% of
Consolidated Net Tangible Assets of the Guarantor and Restricted
Subsidiaries; provided, however, that this paragraph (f) shall not
apply to, and there shall be excluded from Secured Funded Debt in any
computation under this paragraph (f), Funded Debt secured by Permitted
Liens.
ARTICLE 14
REDEMPTION AND PURCHASE OF DEBT SECURITIES
Section 14.1 Redemption of Debt Securities at Option of Company: The Company,
when not in default hereunder, shall have the right at its option to redeem,
either in whole or in part, from time to time before Stated Maturity, any Debt
Security which by its terms is made so redeemable at such Redemption Price, at
such Redemption Date, and on such terms and conditions as shall have been
determined by or pursuant to this Indenture. If less than all of the Debt
Securities with like tenor and terms are to be redeemed, the Corporation shall
in each such case, at least 15 Business Days before the date upon which the
notice of redemption is required to be given, notify the Trustee in writing of
its intention to redeem Debt Securities and of the aggregate principal amount of
Debt Securities so to be redeemed. The Debt Securities so to be redeemed may be
selected by lot by the Trustee or may be selected on a pro rata basis (to the
nearest multiple of $1,000 or, if the Debt Securities are denominated in United
States dollars, U.S.$1,000) in accordance with the principal amount of Debt
Securities registered in the name of each Holder of the Debt Securities so to be
redeemed may be selected by such other means as the Trustee may deem equitable.
For this purpose the Trustee may make regulations with regard to the manner in
which such Debt Securities may be so selected and regulations so made shall be
valid and binding upon all Holders of Debt Securities.
Section 14.2 Notice of Redemption: The Company shall give to the Holder notice
of its intention to redeem any Debt Security in whole or in part in the manner
provided in Section 13.2 not less than 30 nor more than 60 days before the date
fixed for redemption. Each notice of redemption shall state the Redemption Date,
and, if less than the whole principal amount of any Debt Security is to be
redeemed, the distinctive number of such Debt Security and the portion of the
principal amount thereof which is to be redeemed. Each notice shall also state
that the interest on the Debt Security designated for redemption (or, in the
case of any Debt Security which is to be redeemed in part only, that the
interest on the part to be redeemed) shall cease on the Redemption Date and that
on the Redemption Date there will become due and payable on the Debt Security
the applicable Redemption Price thereof and interest accrued thereon to the
Redemption Date.
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Section 14.3 Upon Due Publication of Notice, Debt Securities Called for
Redemption to Become Due and Payable on Redemption Date, Interest to Cease After
Redemption Date, Company to Deposit Funds Sufficient for Redemption: Upon notice
of redemption being duly given as set out herein, the Debt Securities so to be
redeemed shall become due and payable at the Redemption Price, on the Redemption
Date specified in such notice, at any of the places where the principal of such
Debt Securities is expressed to be payable in the same manner and with the same
effect as if the Redemption Date were the Stated Maturity of the Debt
Securities; and on the date so designated (unless the Company shall make default
in making the deposit required by this Section 6.3) interest on the Debt
Securities so designated for redemption (or, in the case of a partial
redemption, on the portion thereof to be redeemed) shall cease to accrue and,
upon surrender for payment of any Debt Securities specified in such notice, such
Debt Securities (or such specified portions) shall be paid by the Company at the
Redemption Price. The Company shall deposit with the Trustee on or before each
Redemption Date an amount sufficient to redeem all Debt Securities which the
Company has elected to redeem on such date. Promptly upon the making of such
deposit and after notice of redemption has been duly given as provided herein,
the Company shall file with the Trustee a Company Certificate and an Opinion of
Counsel each stating that, in the opinion of the signers, all conditions
precedent in connection with such redemption have been complied with.
Section 14.4 Surrender of Debt Securities for Cancellation: If the principal
moneys due upon any Debt Security issued hereunder shall become payable by
redemption or otherwise before its Stated Maturity, the Person presenting such
Debt Security for payment must surrender the same for cancellation, but the
Company shall nevertheless pay the interest accrued and unpaid thereon if the
date fixed for payment is not an Interest Payment Date.
Section 14.5 Purchase of Debt Securities: The Company shall have the right to
purchase, at any time, Debt Securities in the open market or by tender or by
private contract at such price or prices and upon such terms and conditions as
the Company in its absolute discretion may determine, subject, however, to any
applicable law restricting the purchase of Debt Securities and to such
restrictions or conditions, if any, as determined at the time of the issue of
the Debt Securities and as shall have been expressed in the Debt Securities or
the supplemental indenture authorizing or providing for their issue. Debt
Securities so purchased by the Company may be held or resold or, at the
discretion of the Company, may be surrendered to the Trustee for cancellation.
ARTICLE 15
REMEDIES
Section 15.1 Event of Default:
(1) "Event of Default", wherever used herein, means with respect to any series
of Debt Securities (provided, however, that the definition of Event of Default
in respect of a particular series of Debt
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Securities may be amended pursuant to an indenture supplemental hereto), 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
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest upon such series of Debt
Securities when due and payable, and continuance of such default for a
period of 30 days;
(b) default in the payment of the principal of (or premium, if any, on)
the Debt Securities of such series at Maturity;
(c) default in the deposit of sinking fund or other payment (other than
interest) required pursuant to the terms of such series when due;
(d) default in the performance, or breach, of any covenant or warranty of
the Company or the Guarantor in this Indenture (other than a covenant
or warranty a default in the performance of which or the breach of
which is specifically dealt with elsewhere in this Section 7.1), and
continuance of such default or breach for a period of 60 days after
there has been given, to the Company and the Guarantor by the Trustee
or to the Company, the Guarantor and the Trustee by the Holders of 25%
or more in aggregate principal amount of the outstanding Debt
Securities of such series, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder;
(e) a default or defaults under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness (including this Indenture), whether such
Indebtedness now exists or shall hereafter be created, which default
or defaults shall have resulted in such Indebtedness, in an aggregate
principal amount exceeding U.S.$60,000,000, individually or in the
aggregate, having been declared due and payable prior to such date on
which it would otherwise have become due and payable, without such
Indebtedness having been discharged, or such acceleration having been
rescinded or annulled, or there having been deposited in trust a sum
of money sufficient to discharge in full such Indebtedness, within a
period of 30 days after there shall have been given, by registered
mail, to the Company and the Guarantor by the Trustee or to the
Company, the Guarantor and the Trustee by the Holder or Holders of at
least 25% in aggregate principal amount of the Debt Securities of such
series a written notice specifying such default and requiring the
Company and the Guarantor to cause such Indebtedness to be discharged,
cause to be deposited in trust a sum sufficient to discharge in full
such Indebtedness, or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default"
hereunder; provided, however, that the Trustee shall not be deemed to
have knowledge of such default unless either (A) the Trustee shall
have actual knowledge of such default or (B) the Trustee shall have
received written notice thereof from the Company, from the Guarantor,
from the holder of any
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such Indebtedness or from any trustee under any such mortgage,
indenture or other instrument;
(f) the entry by a court of competent jurisdiction of (A) a decree or
order for relief in respect of the Company or the Guarantor in an
involuntary case or proceeding under any applicable Canadian or United
States federal, provincial or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging
the Company or the Guarantor a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or the
Guarantor under any applicable Canadian or United States federal,
provincial or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or the Guarantor or of any substantial part of its
property (including without limitation any such proceeding under the
Companies' Creditors Arrangement Act (Canada)), 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;
(g) the commencement by the Company or the Guarantor of a voluntary case
or proceeding under any applicable Canadian or United States federal,
provincial 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 Company or the Guarantor in an
involuntary case or proceeding under any applicable Canadian or United
States federal, provincial 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 Canadian or United States federal,
provincial or state law, or the consent by it to the filing of any
such petition or to the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or the Guarantor or of any substantial part of its
property (including without limitation the Companies' Creditors
Arrangement Act (Canada)), or the making by the Company or the
Guarantor 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 Company
or the Guarantor in furtherance of any such action; or
(h) if a custodian, a receiver or a receiver and manager is appointed for
the Company or the Guarantor or an encumbrancer takes possession of
the property of the Company or the Guarantor or any part which is, in
the opinion of Counsel, a substantial part thereof and continues to be
in possession thereof for a period of 60 days.
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(2) The Guarantor shall provide notice to the Trustee forthwith upon any
Indebtedness being declared due and payable in circumstances that, after notice
and lapse of time, would give rise to the Event of Default referred to in
paragraph 7.1(1)(e). The Company shall provide notice to the Trustee forthwith
upon any Indebtedness of the Company (or of any Restricted Subsidiary which is a
Subsidiary of the Company) being declared due and payable in circumstances that,
after notice and lapse of time, would give rise to the Event of Default referred
to in paragraph 7.1(1)(e). The Trustee shall provide the notice referred to in
paragraph 7.1(1)(e) forthwith after receiving any notice from the Guarantor or
the Company which is given under this Subsection 7.1(2).
Section 15.2 Acceleration of Maturity; Rescission and Annulment:
(1) If an Event of Default occurs in respect of a particular series of Debt
Securities and is continuing, then and in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Debt Securities
outstanding of such series may declare the principal of (and premium, if any,
payable in respect of such series of Debt Securities) and interest on all the
Debt Securities of such series to be due and payable immediately, by a notice in
writing to the Company and the Guarantor (and to the Trustee if given by
Holders), and upon any such declaration such principal (and such premium, if
any), and interest shall become immediately due and payable.
(2) At any time after such 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 more than 50% in
principal amount of the Debt Securities of such series outstanding, by written
notice to the Company, the Guarantor and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Company or the Guarantor has paid or deposited with the Trustee a
sum sufficient to pay:
(i) all overdue instalments of interest, if any, on all Debt
Securities of such series,
(ii the principal of (and premium, if any, payable in respect of)
any Debt Securities of such series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate or the respective rates borne by the Debt
Securities of such series,
(iii) to the extent that payment of such interest is lawful, interest
upon overdue instalments of interest, if any, at the rate or the
respective rates borne by the Debt Securities of such series,
and
(iv) 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
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(b) all Events of Default, other than the non-payment of the principal of
the Debt Securities of such series which have become due solely by
such acceleration, have been cured or waived as provided in Section
7.13;
but no such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 15.3 Collection of Indebtedness and Suits for Enforcement by Trustee:
(1) If:
(a) default is made in the payment of any instalment of interest on any
Debt Securities of a particular series or in the payment or
satisfaction of any sinking fund obligation when such interest or
sinking fund obligation, as the case may be, becomes due and payable
and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, payable in respect of) any Debt Securities of a particular series
at the Maturity thereof,
the Company shall, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities, the whole amount then due and payable, whether
on a declaration pursuant to Section 7.2 or otherwise, on such Debt Securities
for principal (and premium, if any, payable in respect of any such Debt
Securities) and interest, with interest on the overdue principal (and premium,
if any, payable in respect of any such Debt Securities) and, to the extent that
payment of such interest is permitted by applicable law, upon overdue interest,
at the rate or respective rates borne by the Debt Securities, and, in addition
thereto, such further amount as is sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and Counsel.
(2) 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 deems most
effective 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 15.4 Trustee May File Proof of Claim: If proceedings for the
receivership, insolvency, liquidation, bankruptcy, winding-up, re-organization,
arrangement, adjustment or composition of the Company or the Guarantor under any
applicable law are pending, or if a receiver, or a receiver and manager, or
trustee has been appointed for the property of the Company or the Guarantor, or
in case of any other judicial proceedings relating to the Company or the
Guarantor, its creditors or its property, the Trustee (regardless whether the
principal of the Debt Securities is then due and payable as therein expressed or
by declaration or otherwise and regardless whether the Trustee has made any
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demand on the Company or the Guarantor for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of principal (and
premium, if any, payable in respect of any Debt Securities), and
interest owing and unpaid in respect of the Debt Securities and to
file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and Counsel) and of the Holders allowed in
such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, receiver and manager, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, if
the Trustee consents to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and Counsel, and
any other amounts due to the Trustee under Section 3.3. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Debt Securities or the rights of any
Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 15.5 Trustee May Enforce Claims Without Possession of Debt Securities:
All rights of action and claims under this Indenture or the Debt Securities or
Guarantees may be prosecuted and enforced by the Trustee without the possession
of any of the Debt 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 in respect of which such judgement has
been recovered.
Section 15.6 Application of Moneys 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 payable in respect of any Debt
Securities, if any) or interest, upon presentation of the Debt 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 to the Trustee under Section
3.3;
SECOND: Subject to the provisions of Subsection 3.1(e) and as hereinafter
in this Section provided, to the payment of the principal of all
of the Debt Securities, and thereafter to the payment of the
premium (if any) on the Debt Securities
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and lastly to the payment of accrued and unpaid interest and
interest on overdue interest and premium (if any) on the Debt
Securities (or, if the Holders by Extraordinary Resolution have
directed payments in any other order of priority among principal,
premium (if any) or interest or without priority as among
principal, premium (if any) or interest, then such moneys shall
be applied in accordance to such direction); but no payments
shall be made pursuant to this Section 7.6 in respect of the
principal, premium or interest of any Debt Security held,
directly or indirectly, by or for the benefit of the Company or
any Affiliate until after the payment in full of the principal,
premium, if any, and interest of all Debt Securities which are
not so held.
Section 15.7 Limitation on Suits: No Holder of any series of Debt Securities
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver, or a receiver
and manager, or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee, the
Company and the Guarantor of a continuing Event of Default in respect
of a particular series of Debt Securities;
(b) the Holders of not less than 25% in principal amount of the
outstanding Debt Securities of such series have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(c) 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;
(d) the Trustee for 30 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 30 day period by the Holders of a majority in
principal amount of the outstanding Debt Securities of such series;
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 seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders.
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Section 15.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest: Notwithstanding any other provision in this Indenture, the Holder of
any Debt Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any, payable in respect of
any Debt Security) and interest on such Debt Security on the respective Stated
Maturities expressed in such Debt Security (or, in the case of redemption, on a
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
Section 15.9 Restoration of Rights and Remedies: If the Trustee or any Holder
has instituted any proceedings 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 the Company, the Guarantor, the Trustee and the Holders shall,
subject to any determination in such proceeding, 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 15.10 Rights and Remedies Cumulative: No right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 15.11 Delay or Omission not Waiver: No delay or omission of the Trustee
or any Holder 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 15.12 Control by Holders: The Holders of Debt Securities of a
particular series shall have the right to direct, by Extraordinary Resolution,
the time, method and place of conducting any proceeding for any remedy in
respect of such series available to the Trustee or exercising any trust or power
conferred on the Trustee, but:
(a) such direction shall not conflict with any rule of law or with this
Indenture; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 15.13 Waiver of Past Defaults: The Holders of Debt Securities of a
particular series may waive, by Extraordinary Resolution, any past default
hereunder and its consequences. Upon any such waiver, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed
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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 15.14 Undertaking for Costs: All parties to this Indenture agree, and
each Holder of any Debt Security by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable counsel fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 25% in principal amount of the
outstanding Debt Securities of a particular series of Debt Securities, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any, payable in respect of any Debt Security) or
interest on any Debt Security on or after the respective Stated Maturities
expressed in such Debt Security (or, in the case of redemption, on or after the
Redemption Date).
Section 15.15 Waiver of Stay or Extension of Laws: Each of the Company 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 of 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 Company 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.
Section 15.16 Notice of Payment by Trustee: Not less than 21 days' notice shall
be given by the Trustee of any payment to be made under this Article to the
Holders. Such notice shall state the time when and place where such payment is
to be made and also the liability under this Indenture upon which it is to be
applied. After the day so fixed, unless payment has been duly demanded and have
been refused, the Holders will be entitled to interest only on the balance (if
any) of the principal moneys, premium (if any) payable in respect of any Debt
Security, and interest due to them, respectively, on the Debt Securities, after
deduction of the respective amounts payable in respect thereof on the day so
fixed.
Section 15.17 Trustee May Demand Production of Debt Securities: The Trustee
shall have the right at the time it makes any payment of principal, interest or
premium required by this Article to demand of the Person claiming such payment
the production of the actual Debt Security under which such Person claims such
payment be made, and may cause to be endorsed on the same a memorandum of the
amount so paid and the date of payment, but the Trustee may, in its discretion,
dispense with such production and endorsement in any special case, upon such
indemnity being given to it and to the Company as it shall deem sufficient.
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Section 15.18 Trustee Appointed Attorney: Each of the Company and the Guarantor
hereby irrevocably appoints the Trustee to be its attorney for and in the name
and on behalf of it to execute any deeds, documents, transfers, conveyances,
assignments, assurances and consents, and to do all things which it ought to
execute and do hereunder and generally to use its name in the exercise of all or
any of the powers hereby conferred on the Trustee, with full powers of
substitution and revocation.
ARTICLE 16
THE TRUSTEE
Section 16.1 Indenture Legislation:
(1) The expression "Indenture Legislation" means the provisions, if any, of the
Business Corporations Act (Alberta), the Business Corporations Act (Ontario),
both as amended or reenacted, and any other statute of Canada or any province
thereof, and of any regulations under any such statute, relating to trust
indentures and to the rights, duties and obligations of trustees under trust
indentures and of corporations issuing debt obligations under trust indentures,
to the extent that such provisions are at the time in force and applicable to
this Indenture or the Company.
(2) The Company and the Trustee agree that each will at all times in relation to
this Indenture and any action to be taken hereunder observe and comply with and
be entitled to the benefits of Indenture Legislation.
(3) If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with any mandatory requirement of Indenture Legislation, such
mandatory requirement shall prevail.
Section 16.2 Standard of Care of Trustee: In the exercise of the rights,
duties and obligations prescribed for or conferred on or vested in the Trustee
by this Indenture, the Trustee shall exercise that degree of care, diligence and
skill that a reasonably prudent trustee would exercise in comparable
circumstances.
Section 16.3 Trustee to Give Notice of Event of Default: Subject to Subsection
7.1(2), within 30 days after the Trustee becomes aware of the occurrence of an
Event of Default in respect of a particular series of Debt Securities, the
Trustee shall give notice thereof to the Holders in the manner provided in
Section 13.2, unless such Event of Default is no longer continuing at the time
such notice is given or the Trustee in good faith determines that the
withholding of such notice is in the best interests of the Holders of such
series of Debt Securities and so advises the Company in writing.
Section 16.4 Trustee Not Ordinarily Bound: Except as otherwise specifically
provided herein, the Trustee shall not, subject to the provisions of Indenture
Legislation, be bound to give notice to any
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person of the execution hereof, nor to do, observe or perform or see to the
observance or performance by the Company of any of the obligations herein
imposed upon the Company or of the covenants on the part of the Company herein
contained, nor in any way to supervise or interfere with the conduct of the
Company's business, unless the Trustee shall have been required to do so in
writing by the Holders of not less than 25% of the aggregate principal amount of
the Debt Securities then outstanding or by an Extraordinary Resolution of the
Holders passed in accordance with the provisions contained in Article 9 and then
only after it shall have been indemnified to its satisfaction against all
actions, proceedings, claims and demands to which it may render itself liable
and all costs, charges, damages and expenses which it may incur by so doing.
Section 16.5 Conditions Precedent to Trustee's Ob1igations to Act Hereunder:
(1) Except as provided in Subsection 7.1(2) and Sections 8.3 and 8.15, the
Trustee shall not be bound to give any notice or do or take any act, action or
proceeding by virtue of the powers conferred on it hereby unless and until it
has been required so to do under the terms hereof and provided with such
evidence of compliance with every covenant, condition or other requirement
specified herein, to be furnished to the Trustee in connection with such notice,
act, action or proceeding or in connection with the exercise of its rights and
duties hereunder and such other evidence of compliance with the provisions of
this Indenture as the Trustee may reasonably require; nor shall the Trustee be
required to take notice of any default hereunder, other than payment of any
moneys required by any provision hereof to be paid to it, unless and until
notified in writing of such default, which notice shall distinctly specify the
relevant default and, in the absence of any such notice, the Trustee may for all
purposes of this Indenture conclusively assume that the Company is not in
default hereunder and that no default has been made with respect to the payment
of principal, premium, interest or sinking fund payment on or for the Debt
Securities or in the observance or performance of any of the covenants,
agreements or conditions contained herein. Any such notice or requisition shall
in no way limit any discretion herein given to the Trustee to determine whether
or not the Trustee shall take action with respect to any default or take action
without any such requisition.
(2) The obligation of the Trustee to commence or continue any act, action or
proceeding for the purpose of enforcing any rights of the Trustee or the Holders
hereunder shall be conditional upon the Holders furnishing, when required by
notice in writing by the Trustee, sufficient funds to commence or continue such
act, action or proceeding and indemnity reasonably satisfactory to the Trustee
to protect and hold harmless the Trustee against the costs, charges, and
expenses and liabilities to be incurred thereby and any loss and damage it may
suffer by reason thereof.
(3) The Trustee will disburse monies according to this Indenture only to the
extent that monies have been deposited with it. None of the provisions contained
in this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of its duties or in the
exercise of any of its rights or powers unless indemnified as aforesaid.
(4) The Trustee may, before commencing or at any time during the continuance of
any such act, action or proceeding, require the Holders at whose instance it is
acting to deposit with the Trustee the Debt Securities held by them, for which
Debt Securities the Trustee shall issue receipts.
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Section 16.6 Delegation; Experts and Advisers:
(1) The Trustee may delegate to any Person the performance of any of the trusts
and powers vested in it by this Indenture and any such delegation may be made
upon such terms and conditions and subject to such regulations, not including
however any power to sub-delegate, as the Trustee may think to be in the
interests of the Holders.
(2) The Trustee may employ or retain such Counsel, auditors, accountants,
appraisers or other experts or advisers, whose qualifications give authority to
any opinion or report made by them, as it may reasonably require for the purpose
of determining and discharging its duties hereunder.
(3) The Trustee may pay reasonable remuneration for all services performed for
it in the discharge of the trusts hereof by any such agent or attorney, or
expert or adviser, without taxation for costs or fees of any Counsel, solicitor
or attorney, such remuneration to be repaid to the Trustee by the Company in
accordance with Section 3.3.
(4) The Trustee may act and rely on the opinion or advice of or information
obtained from any Counsel, auditors, accountants, appraisers or other experts or
advisers.
Section 16.7 Documents, Money Etc. Held by Trustee:
(1) Any securities, documents of title or other instruments that may at any time
be held by the Trustee subject to the trusts hereof may be placed in the deposit
vaults of the Trustee or of any Canadian chartered bank or trust company or
deposited for safekeeping with any such bank or trust company.
(2) The Trustee shall not be responsible or liable in any manner whatsoever for
the sufficiency, correctness, genuineness or validity of any security deposited
with it.
(3) Any monies held by the Trustee subject to the trusts hereof, pending the
application or withdrawal thereof under any provisions of this Indenture, may be
deposited in the name of the Trustee in any Canadian chartered bank at the rate
of interest, if any, then current on similar deposits or, at the direction of
the Company, may be (i) deposited in the deposit department of the Trustee or
any other Canadian chartered bank or loan or trust company authorized to accept
deposits under the laws of Canada or any province thereof, or (ii) invested and
reinvested in securities issued or guaranteed by the Government of Canada or a
province thereof or in obligations, maturing not more than one year from the
date of investment, of any Canadian chartered bank or loan or trust company.
Section 16.8 Action by Trustee to Protect Interests: The Trustee shall have
power to institute and to maintain such actions and proceedings as it may
consider necessary or expedient to preserve, protect or enforce its interests
and the interests of the Holders.
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Section 16.9 Trustee Not Required to Give Security or Ensure Use of Proceeds:
(1) The Trustee shall not be required to give any bond or security in respect of
the execution of the trusts and powers of this Indenture or otherwise in respect
of the premises.
(2) The Trustee shall not be responsible for ensuring that the proceeds of any
issuance of Debt Securities are used in the manner contemplated by the
prospectus or other document pursuant to which such Debt Securities were offered
to the purchasers thereof.
Section 16.10 Payments by Trustee: The forwarding of a cheque by the Trustee
will satisfy and discharge the liability of any amounts due to the extent of the
sum or sums represented thereby (plus the amount of any tax deducted or withheld
as required by law) unless such cheque is not honoured on presentation; provided
that in the event of the non-receipt of such cheque by the payee, or the loss or
destruction thereof, the Trustee, upon being furnished with reasonable evidence
of such non-receipt, loss or destruction and indemnity reasonably satisfactory
to it, will issue to such payee a replacement cheque for the amount of such
cheque.
Section 16.11 Financial Statements: Upon receipt of financial statements
required to be delivered to the Trustee, the Trustee shall, while such
statements are current, maintain custody of same and make same available for
inspection by Holders on their reasonable request. No obligation shall rest
with the Trustee to analyze such statements, or evaluate the performance of the
Company or the Guarantor as indicated therein, in any manner whatsoever.
Section 16.12 Trustee Has No Conflict of Interest:
(1) The Trustee represents to the Company that at the time of the execution and
delivery by it of this Indenture there exists no material conflict of interest
in the role of the Trustee as a fiduciary hereunder; but if, notwithstanding the
foregoing, such a material conflict of interest exists at the time of the
execution and delivery of this Indenture, the validity and enforceability of
this Indenture and the Debt Securities issued hereunder shall not be affected in
any manner whatsoever by reason only that such material conflict of interest
exists. If, after the time of the execution and delivery of this Indenture, the
Trustee ascertains that, notwithstanding the foregoing, a material conflict of
interest existed at such time, or that a material conflict of interest has
arisen subsequently to the appointment of the Trustee, the Trustee shall, within
90 days after ascertaining that it has such a material conflict of interest,
either eliminate such material conflict of interest or resign in the manner and
with the effect specified in Section 8.15.
(2) Subject always to the provisions of Subsection 8.12(1), the Trustee, in its
personal or any other capacity, may buy, lend upon and deal in securities of the
Company and generally may contract and enter into financial transactions with
the Company or any Affiliate without being liable to account for any profit made
thereby.
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Section 16.13 Protection of the Trustee:
(1) In the exercise of its rights, duties and obligations hereunder, the Trustee
may, if it is acting in good faith, act and rely upon the truth of the
statements and the accuracy of the opinions expressed in the evidence of
compliance furnished in accordance with Section 1.2, 3.1 and 5.1 pursuant to any
covenant, condition or other requirement of this Indenture, or required by the
Trustee to be furnished to it in the exercise of its rights and duties under
this Indenture where the Trustee examines the evidence of compliance furnished
to it in order to determine whether such evidence indicates compliance with the
applicable requirements of this Indenture.
(2) The Trustee shall have the right to consult with and obtain advice from
Counsel, in the event of any questions as to any of the provisions hereof or its
duties hereunder and it shall incur no liability and it shall be fully protected
if it in good faith acts or refrains from acting, in either case in accordance
with any opinion or instruction of such Counsel. The cost of such services shall
be repaid to the Trustee by the Company in accordance with Section 3.3.
Section 16.14 Indemnification of the Trustee: The Company and the Guarantor,
jointly and severally, shall at all times indemnify and save harmless the
Trustee and its officers, directors, employees and agents from and against any
and all liabilities, losses, costs, including legal costs, claims, actions or
demands whatsoever which may be brought against the Trustee or which it may
suffer or incur as a result or arising out of the performance of its duties and
obligations under this Indenture, save only in the event of negligence or wilful
misconduct of the Trustee. It is understood and agreed that this
indemnification shall survive the termination or the discharge of this Indenture
or the resignation of the Trustee.
Section 16.15 Replacement of the Trustee: The Trustee may resign its trust and
be discharged from all further duties and liabilities hereunder by giving to the
Company 60 days notice in writing or such shorter notice as the Company may
accept as sufficient. The Holders by Extraordinary Resolution shall have power
at any time to remove the Trustee and to appoint a new Trustee. In the event of
the Trustee resigning or being removed as aforesaid or being dissolved, becoming
bankrupt, going into liquidation or otherwise becoming incapable of acting
hereunder, the Company shall promptly appoint a new Trustee unless a new Trustee
has already been appointed by the Holders; failing such appointment by the
Company, the retiring Trustee or any Holder may apply to a Judge of the Ontario
Court of Justice at the Company's expense, on such notice as such Judge may
direct, for the appointment of a new Trustee; but any new Trustee so appointed
by the Company or by the Court shall be subject to removal as aforesaid by the
Holders. Any new Trustee appointed under any provision of this Section 8.15
shall be a Corporation authorized to carry on the business of a trust company in
the Province of Ontario and shall have a combined capital and surplus of at
least $10,000,000, according to its most recent published financial statements,
prepared in accordance with accounting principles generally accepted in Canada.
On any new appointment the new Trustee shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named herein as
Trustee, without any further assurance, conveyance, act or deed; but there shall
be immediately executed, at the expense of the Company, all such conveyances or
other instruments as
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may, in the Opinion of Counsel, be necessary or advisable for the purpose of
assuring the same to the new Trustee.
Section 16.16 Acceptance of Trust:
(1) The Trustee hereby accepts the trusts in this Indenture declared and
provided for and agrees to perform the same upon the terms and conditions
hereinbefore set forth.
(2) Any corporation into or with which the Trustee may be merged or consolidated
or amalgamated, or any corporation resulting therefrom to which the Trustee
shall be a party, or any corporation succeeding to the trust business of the
Trustee shall be the successor to the Trustee hereunder without any further act
on its part or any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor trustee under Section 8.15.
ARTICLE 17
MEETINGS OF HOLDERS
Section 17.1 Right to Convene Meetings: The Trustee may at any time from time
to time, and shall on receipt of a Company Request or a written request signed
by the Holders of not less than 25 % in principal amount of the Debt Securities
then outstanding and upon being funded and indemnified to its reasonable
satisfaction by the Company or by the Holders, as the case may be, signing such
request against the costs which may be incurred in connection with the calling
and holding of such meeting, convene a meeting of the Holders. In the event of
the Trustee failing within 30 days after receipt of any such request and such
indemnity to give notice convening a meeting, the Company or such Holders, as
the case may be, may convene such meeting. Every such meeting shall be held in
the City of Toronto or at such other place as may be approved or determined by
the Trustee.
Section 17.2 Notice of Meetings: At least 30 days' notice of any meeting shall
be given to the Holders in the manner provided in Section 13.2 and a copy
thereof shall be sent by mail to the Trustee (unless the meeting has been called
by the Trustee), to the Company (unless the meeting has been called by the
Company) and to the Guarantor. Such notice shall state the time when and the
place where the meeting is to be held and shall state briefly the general nature
of the business to be transacted thereat and it shall not be necessary for any
such notice to set out the terms of any resolution to be proposed or any of the
provisions of this Article.
Section 17.3 Chair: Some Person, who need not be a Holder, nominated in
writing by the Trustee shall be chair of the meeting and if no Person is so
nominated, or if the Person so nominated is not present within 15 minutes from
the time fixed for the holding of the meeting, the Holders present in person or
by proxy shall choose some Person present to be chair.
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Section 17.4 Quorum: Subject to the provisions of Section 9.12, at any meeting
of the Holders a quorum shall consist of Holders present in person or by proxy
and representing at least 25% in principal amount of the outstanding Debt
Securities. If a quorum of the Holders is not present within 30 minutes from the
time fixed for holding any meeting, the meeting, if summoned by the Holders or
pursuant to a request of the Holders, shall be dissolved; but in any other case
the meeting shall be adjourned to the same day in the next week (unless such day
is not a Business Day in which case it shall be adjourned to the next following
Business Day) at the time and place designated by the chair of the meeting and
no notice shall be required to be given in respect of such adjourned meeting. At
the adjourned meeting the Holders present in person or by proxy shall form a
quorum and may transact the business for which the meeting was originally
convened notwithstanding that they may not represent 25% of the principal amount
of the outstanding Debt Securities.
Section 17.5 Power to Adjourn: The chair of any meeting at which a quorum of
the Holders is present may, with the consent of the Holders of a majority in
principal amount of the Debt Securities represented thereat, adjourn any such
meeting and no notice of such adjournment must be given except such notice, if
any, as the meeting may prescribe.
Section 17.6 Show of Hands: Every question submitted to a meeting shall be
decided in the first place by a majority of the votes given on a show of hands
except that votes on Extraordinary Resolutions shall be given in the manner
hereinafter provided. At any such meeting, unless a poll is duly demanded as
herein provided, a declaration by the chair that a resolution has been carried
or carried unanimously or by a particular majority or lost or not carried by a
particular majority shall be conclusive evidence of the fact.
Section 17.7 Poll: On every Extraordinary Resolution, and on any other question
submitted to a meeting, after a vote by show of hands, when demanded by the
chair or by a Holder or a proxy for a Holder, a poll shall be taken in such
manner and either at once or after an adjournment, as the chair shall direct.
Questions other than Extraordinary Resolutions shall, if a poll is taken, be
decided by the votes of the Holders of a majority in principal amount of the
Debt Securities represented at the meeting and voted on the poll.
Section 17.8 Voting: On a show of hands every person who is present and
entitled to vote, whether as a Holder or as proxy for one or more Holders or
both, shall have one vote. On a poll each Holder present in person or
represented by a proxy duly appointed by an instrument in writing shall be
entitled to one vote in respect of each $1,000 (or, if the Debt Securities are
denominated in United States dollars, U.S.$1,000) principal amount of Debt
Securities of which such Holder is then the Holder. A proxy need not be a
Holder. In the case of joint Holders of a Debt Security, any one of them present
in person or by proxy at the meeting may vote in the absence of the other or
others; but in case more than one of them is present in person or by proxy, they
shall vote together in respect of the Debt Securities of which they are joint
Holders.
Section 17.9 Evidence of Ownership: The Company and the Trustee may treat the
registered Holder of any Debt Security as the owner thereof without actual
production of such Debt Security
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for the purpose of any request, requisition, direction, consent, instrument or
other document as aforesaid.
Section 17.10 Company, Guarantor and Trustee May Be Represented: The Company,
the Guarantor and the Trustee, by their respective employees, officers and
directors, and the legal and other advisers of the Company, the Guarantor and
the Trustee may attend any meeting of the Holders, but shall have no vote as
such.
Section 17.11 Powers Exercisable by Extraordinary Resolution: In addition to
the powers conferred upon them by Section 7.12 or any other provisions of this
Indenture or by law, a meeting of the Holders shall have the following powers,
subject to Section 12.2, exercisable from time to time by Extraordinary
Resolution:
(a) power to sanction any modification, abrogation, alteration, compromise
or arrangement of the rights of the Holders generally and/or the
Trustee against the Company and/or the Guarantor, whether such rights
arise under this Indenture or the Debt Securities or otherwise;
(b) power to assent to any modification of or change in or addition to or
omission from the provisions contained in this Indenture which shall
be agreed to by the Company and the Guarantor and to authorize the
Trustee to concur in and execute any indenture supplemental hereto
embodying any such modification, change, addition or omission;
(c) power to sanction any scheme for the reconstruction or reorganization
of the Company or the Guarantor or for the consolidation, amalgamation
or merger of the Company or the Guarantor with any other Corporation
or for the sale, lease, transfer or other disposition of the
undertaking, property and assets of the Company or the Guarantor or
any part thereof, but no such sanction is necessary in respect of any
such transaction if the provisions of Section 11.1 or 11.3, as the
case may be, have been complied with;
(d) power to direct or authorize the Trustee to exercise any power, right,
remedy or authority given to it by this Indenture or the Debt
Securities in any manner specified in any such Extraordinary
Resolution or to refrain from exercising any such power, right, remedy
or authority;
(e) power to waive and direct the Trustee to waive any default hereunder
and/or to cancel any declaration made by the Trustee pursuant to
Section 7.2 either unconditionally or upon any condition specified in
such Extraordinary Resolution;
(f) power to restrain any Holder from taking or instituting any suit,
action or proceeding for the purpose of enforcing payment of the
principal of or interest (or premium, if any) on the Debt Securities,
or for the execution of any trust or power hereunder;
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(g) power to direct any Holder who, as such, has brought any action, suit
or proceeding, to stay or discontinue or otherwise deal with the same
upon payment, if the taking of such suit, action or proceeding has
been permitted by Section 7.7, of the costs, charges and expenses
reasonably and properly incurred by such Holder in connection
therewith;
(h) power to assent to any compromise or arrangement with any creditor or
creditors or any class or classes of creditors, whether secured or
otherwise, and with holders of any shares or other securities of the
Company or the Guarantor;
(i) power to commence, carry on and settle any action against the Trustee
in respect of the performance of its duties hereunder;
(j) power to appoint a committee with power and authority (subject to such
limitation, if any, as may be prescribed in such Extraordinary
Resolution) to exercise, and to direct the Trustee to exercise, on
behalf of the Holders, such of the powers of the Holders as are
exercisable by Extraordinary Resolution or other resolution as shall
be included in the resolution appointing the committee. The
Extraordinary Resolution making such appointment may provide for
payment of the expenses and disbursements of and compensation to such
committee and the Trustee. Such committee shall consist of such number
of Persons as shall be prescribed in the resolution appointing it and
the members need not be themselves Holders. Every such committee may
elect its chair and may make regulations respecting its quorum, the
calling of its meeting, the filling of vacancies occurring in its
number and its procedure generally. Such regulations may provide that
the committee may act at a meeting at which a quorum is present or may
act by minutes signed by the number of members thereof necessary to
constitute a quorum. All acts of any such committee within the
authority delegated to it shall be binding upon all Holders. Neither
the committee nor any member thereof shall be liable for any loss
arising from or in connection with any action taken or omitted to be
taken by them in good faith;
(k) power to remove the Trustee from office and to appoint a new Trustee
or Trustees in accordance with Section 8.15; and
(l) power to amend, alter or repeal any Extraordinary Resolution
previously passed or approved by the Holders or by any committee
appointed pursuant to this Indenture.
Section 17.12 "Extraordinary Resolution" at Adjourned Meeting:
(1) If, at any meeting of Holders convened for the purpose of voting upon an
Extraordinary Resolution, the Holders of more than 50% in principal amount of
the Debt Securities outstanding are not present in person or by proxy within 30
minutes after the time appointed for the meeting, then the meeting, if convened
by or on the requisition of Holders, shall be dissolved; but in any other case
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it shall stand adjourned to such date, being not less than 21 nor more than 60
days later, and to such place and time as may be appointed by the chair. Not
less than 10 days' notice shall be given of the time and place of such adjourned
meeting in the manner provided in Section 13.2. Such notice shall state that at
the adjourned meeting the Holders present in person or by proxy shall form a
quorum but it shall not be necessary to set out the purposes for which the
meeting was originally called or any other particulars. At the adjourned meeting
the Holders present in person or by proxy shall form a quorum and may transact
the business for which the meeting was originally convened and a resolution
proposed at such adjourned meeting and passed by the requisite vote shall be an
Extraordinary Resolution within the meaning of this Indenture, notwithstanding
that the Holders of in excess of 50% in principal amount of the Debt Securities
then outstanding are not present in person or by proxy at such adjourned
meeting.
(2) Votes on an Extraordinary Resolution shall always be given on a poll and no
demand for a poll on an Extraordinary Resolution is necessary.
Section 17.13 Powers Cumulative: It is hereby declared and agreed that any one
or more of the powers and/or any combination of the powers in this Indenture
stated to be exercisable by the Holders by Extraordinary Resolution or otherwise
may be exercised from time to time and the exercise of any one or more of such
powers or any combination of powers from time to time shall not be deemed to
exhaust the right of the Holders to exercise the same or any other such power or
powers or combination of powers thereafter from time to time.
Section 17.14 Minutes: Minutes of all resolutions and proceedings at every
meeting as aforesaid shall be made and duly entered in books to be from time to
time provided for that purpose by the Trustee at the expense of the Company, and
any such minutes as aforesaid, if signed by the chair of the meeting at which
such resolutions were passed or proceedings had, or by the chair of the next
succeeding meeting of the Holders, shall be prima facie evidence of the matters
therein stated and, until the contrary is proved, every such meeting, in respect
of the proceedings of which minutes shall have been made, shall be deemed to
have been duly held and convened, and all resolutions passed thereat or
proceedings had to have been duly passed and had.
Section 17.15 Instruments in Writing: All actions that may be taken and all
powers that may be exercised by the Holders under this Indenture at a meeting
held as hereinbefore in this Article provided may also be taken and exercised by
the Holders of not less than 66 2/3% of the principal amount of all the
outstanding Debt Securities, by an instrument in writing signed in one or more
counterparts and the expression "Extraordinary Resolution" when used in this
Indenture shall include an instrument so signed.
Section 17.16 Serial Meetings:
(1) If any business to be transacted at a meeting of Holders or any action to be
taken or power to be exercised by instrument in writing under Section 9.15
especially affects the rights of the Holders of Debt Securities of one or more
series in a manner or to an extent substantially different
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from that in or to which it affects the rights of Holders of Debt Securities of
any other series (as to which an Opinion of Counsel shall be binding on all
Holders, the Trustee, the Company and the Guarantor for all purposes hereof)
then:
(a) reference to such fact, indicating each series so especially affected,
shall be made in the notice of such meeting and the meeting shall be
and is herein called a "serial meeting"; and
(b) the Holders of a series so especially affected shall not be bound by
any action taken at a serial meeting or by instrument in writing under
Section 9.15 unless in addition to compliance with the other
provisions of this Article:
(i) at such serial meeting:
(A) there are present in person or by proxy Holders of at least
25% (or for the purpose of passing an Extraordinary
Resolution more than 50%) in principal amount of the
outstanding Debt Securities of such series, subject to the
provisions of this Article as to a quorum at adjourned
meetings; and
(B) the resolution is passed by the favourable votes of the
Holders of more than 50% in principal amount of Debt
Securities of such series voted on the resolution (or in the
case of an Extraordinary Resolution not less than 66 2/3%
of the principal amount of Debt Securities of such series
voted on the resolution); or
(ii) in the case of action taken or power exercised by instrument in
writing under Section 9.15, such instrument is signed in one or
more counterparts by the Holders of not less than 66 2/3% in
principal amount of the outstanding Debt Securities of such
series.
(2) If, in the Opinion of Counsel, any business to be transacted at any meeting
of Holders, or any action to be taken or power to be exercised by instrument in
writing under Section 9.15 does not affect the rights of the Holders of one or
more series, the provisions of this Article shall apply as if the Debt
Securities of such series were not outstanding and no notice of any such meeting
need be given to the Holders of such series. Without limiting the generality of
the foregoing, a proposal to modify or terminate any covenant or agreement which
by its terms is effective only so long as Debt Securities of a particular series
are outstanding shall be deemed not to affect the rights of the Holders of any
other series.
(3) A proposal (i) to extend the maturity of Debt Securities of any particular
series or reduce the principal amount thereof or the rate of interest or
redemption premium (if any) thereon, (ii) to modify or terminate any covenant or
agreement which by its terms is effective only so long as Debt
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Securities of a particular series are outstanding, or (iii) to reduce with
respect to Holders of any particular series any percentage stated in Sections
1.1, 7.1, 7.2, 7.7, 9.4, 9.12 or 9.15 or in this Section 9.16 shall be deemed to
especially affect the rights of the Holders of such series, in a manner
substantially different from that in which it affects the rights of Holders of
any other series, whether or not a similar extension, reduction, modification or
termination is proposed with respect to Debt Securities of any or all other
series.
Section 17.17 Binding Effect of Resolutions: Except as provided in Sections
12.2 and 9.16, every resolution and every Extraordinary Resolution passed in
accordance with the provisions of this Article 9 at a meeting of Holders shall
be binding upon all the Holders, whether present at or absent from such meeting'
and every instrument in writing signed by Holders in accordance with Section
9.15 shall be binding upon all the Holders, whether signatories thereto or not,
and each and every Holder and the Trustee (subject to the provisions for its
indemnity herein contained) shall be bound to give effect accordingly to every
such resolution, Extraordinary Resolution and instrument in writing.
Section 17.18 Regulations:
(1) The Trustee or the Company with the approval of the Trustee may from time to
time make and from time to time vary such regulations as it shall from time to
time think fit providing for and governing:
(i) the voting by proxy by Holders and the form of instrument appointing
proxies where authorized under such regulations and the manner in
which the same shall be executed, and for the production of the
authority of any person signing on behalf of the giver of such proxy;
(ii) the deposit of instruments appointing proxies at such place as the
Trustee, the Company or the Holders convening the meeting, as the
case may be, may, in the notice convening the meeting, direct and the
time, if any, before the holding of the meeting or any adjournment
thereof by which the same shall be deposited; and
(iii) the deposit of instruments appointing proxies at some approved place
or places other than the place at which the meeting is to be held and
enabling particulars of such instruments appointing proxies to be
mailed, cabled, telegraphed or sent by telex or telecopier before the
meeting to the Company or to the Trustee at the place where the same
is to be held and for the voting of proxies so deposited as though
the instruments themselves were produced at the meeting.
(2) Any regulations made pursuant to this Section 9.18 shall be binding and
effective and the votes given in accordance therewith shall be valid and shall
be counted. Save as such regulations may provide, the only persons who shall be
recognized at any meeting as the holders of any Debt
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Securities, or as entitled to vote or be present at the meeting in respect
thereof, shall be Holders and Persons whom Holders have by instrument in writing
duly appointed as their proxies.
ARTICLE 18
SATISFACTION AND DISCHARGE
Section 18.1 Cancellation and Destruction:Promptly after payment thereof, all
Debt Securities shall be delivered to the Trustee and cancelled by it. If
required by the Company in writing, the Trustee shall furnish to the Company a
destruction certificate setting out the designating numbers and denominations of
the Debt Securities so destroyed.
Section 18.2 Non-Presentation of Debt Securities: If the Holder of any Debt
Security fails to present the same for payment on the date on which the
principal thereof, the premium (if any) thereon and/or the interest thereon or
represented thereby becomes payable either at Maturity or on redemption or
otherwise or shall not accept payment on account thereof and given such receipt
therefor, if any, as the Trustee may require:
(a) the Company shall be entitled to pay to the Trustee and direct it to
set aside; or
(b) in respect of moneys in the hands of the Trustee which may or should
be applied to the payment of the Debt Securities, the Company shall be
entitled to direct the Trustee to set aside;
the principal moneys and the premium (if any) and/or the interest, as the case
may be, in trust to be paid to the Holder of such Debt Security upon due
presentation or surrender thereof in accordance with the provisions of this
Indenture; and upon such setting aside the principal moneys and premium (if any)
and/or the interest payable on or represented by each Debt Security in respect
of which such moneys have been set aside shall be deemed to have been paid and
the Holder thereof shall thereafter have no right in respect thereof except that
of receiving payment of the moneys so set aside by the Trustee upon due
presentation and surrender thereof, subject always to the provisions of Section
10.3.
Section 18.3 Repayment of Unclaimed Moneys: Any moneys set aside under Section
10.2 and not claimed by and paid to Holders of Debt Securities as provided in
Section 10.2 within six years after the date of such setting aside shall be
repaid to the Company by the Trustee on demand by the Company and thereupon the
Trustee shall be released from all further liability with respect to such moneys
and thereafter the Holders of the Debt Security in respect of which such moneys
were so repaid to the Company shall have no rights in respect thereof except to
obtain payment of the moneys due thereon from the Company.
<PAGE>
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Section 18.4 Discharge: Upon proof being given to the reasonable satisfaction
of the Trustee that all the Debt Securities and the premium (if any) thereon and
interest (including interest on amounts in default) thereon and other moneys
hereby secured have been paid or satisfied, and upon payment of all costs,
charges and expenses properly incurred by the Trustee in relation to this
Indenture and all interest thereon and the remuneration of the Trustee, or upon
provisions satisfactory to the Trustee being made therefor, the Trustee shall,
at the request and at the expense of the Company, execute and deliver to the
Company and the Guarantor such deeds or other instruments as shall be necessary
or appropriate to evidence the satisfaction and discharge from the trusts and
provisions herein contained and to release each of the Company and the Guarantor
from its covenants herein contained except those relating to the indemnification
of the Trustee.
Section 18.5 Protection of Purchasers: No purchaser from the Company or its
successors and assigns shall be obliged to inquire into the necessity,
expediency, authority or regularity of or for such deeds or other instruments or
release or reconveyance or the application of any moneys or securities provided
or set aside for the payment of any outstanding Debt Securities or interest
thereon.
Section 18.6 Defeasance: If, at any time after the date hereof, the Company
shall: (a) deposit with the Trustee, in trust for the sole benefit of the
holders of the Debt Securities of a series pursuant to the terms of an
irrevocable trust agreement in form and substance satisfactory to Counsel to the
Trustee, (i) funds in Canadian dollars as will, and/or (ii) direct unconditional
obligations of the Government of Canada denominated in Canadian dollars as will,
or will together with the income thereon without consideration of any
reinvestment thereof, be sufficient, in the opinion of an independent chartered
accountant (which may include the Company's Auditors or the Guarantor's
Auditors) acceptable to the Trustee, to pay all sums due for the principal of,
premium, if any, and interest, if any, on the Debt Securities of such series and
for the payment of any taxes arising with respect to such deposited funds,
obligations and/or other securities, as the same shall become due from time to
time; and (b) pay all costs, charges and expenses incurred or to be incurred by
the Trustee in relation thereto or in carrying out the provisions of this
Indenture, this Indenture shall cease to be of further effect with respect to
such Debt Securities (except as to (A) rights of registration of transfer,
substitution and exchange of such Debt Securities, (B) rights of Holders to
receive payments of the principal of, premium, if any, and interest, if any, on
such Debt Securities as they shall become due from time to time and other
rights, duties and obligations of Holders as beneficiaries hereof with respect
to the amounts so deposited with the Trustee, and (C) the rights, obligations
and immunities of the Trustee hereunder (for which purposes the Debt Securities
of the series in question shall be deemed outstanding)), and the Trustee, on the
written request of the Company, accompanied by a Company Certificate, shall
execute and deliver to the Company such instruments as shall be requisite to
evidence the satisfaction of this Indenture with respect to such Debt
Securities.
ARTICLE 19
<PAGE>
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CONSOLIDATION, AMALGAMATION, MERGER,
CONVEYANCE OR TRANSFER OF COMPANY OR GUARANTOR
Section 19.1 The Company May Consolidate on Certain Terms: The Company shall
not amalgamate with, enter into a reorganization or reconstruction involving,
consolidate with or merge into any other Corporation or sell, transfer, or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, unless:
(a) the Corporation formed by such consolidation or amalgamation or into
which the Company is merged or the Person which acquires by sale,
transfer or otherwise the properties and assets of the Company
substantially as an entirety shall be a Corporation organized and
existing under the laws of Canada or one of its provinces or the
United States of America or one of its states, and shall expressly
assume, by an indenture supplemental hereto in form satisfactory to
Counsel, executed and delivered to the Trustee, prior to or
contemporaneously with the consummation of such transaction, the due
and punctual payment of the principal of and premium (if any) and
interest on all the Debt Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed
or observed;
(b) 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;
(c) if, as a result of any such amalgamation, reorganization,
reconstruction, consolidation or merger or such conveyance, transfer
or lease, properties or assets of the Company would become subject to
a mortgage, pledge, lien, security interest or other encumbrance which
would not be permitted by this Indenture, the Company or such
successor Person, as the case may be, shall take such steps as shall
be necessary effectively to secure the Debt Securities equally and
ratably with (or prior to) all indebtedness secured thereby; and
(d) the Company has delivered to the Trustee a Company Certificate and an
Opinion of Counsel each stating that such consolidation, amalgamation,
merger, sale, or transfer and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Nothing contained in this Indenture or in any of the Debt Securities
shall prevent the Company from acquiring all or any part of the property of any
other Corporation (whether or not affiliated with the Company).
Section 19.2 Successor Corporation Substituted: Upon any consolidation,
amalgamation, or merger, or any sale or transfer of the properties and assets of
the Company substantially as an entirety in accordance with Section 11.1, the
successor Corporation formed by such consolidation
<PAGE>
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or amalgamation or into which the Company is merged or to which such sale or
transfer is made shall succeed to, and be substituted for and may exercise every
right and power of and shall be subject to all the obligations of, the Company
under this Indenture and the Debt Securities with the same effect as if such
successor Corporation had been named as the Company herein and in the Debt
Securities. The Company shall thereupon be relieved of any further obligation
hereunder and under the Debt Securities; the Company, as the predecessor
Corporation, may thereupon or at any time thereafter be dissolved, wound up or
liquidated; and such changes in phraseology and form (but not in substance) may
be made in the Debt Securities thereafter to be issued as may be appropriate.
Section 19.3 The Guarantor May Consolidate on Certain Terms: The Guarantor
shall not consolidate with or merge into any other Corporation or sell,
transfer, or otherwise dispose of its properties and assets substantially as an
entirety to any Person, unless:
(a) the Corporation formed by such consolidation or into which the
Guarantor is merged or the Person which acquires by sale, transfer or
otherwise the properties and assets of the Guarantor substantially as
an entirety shall be a Corporation organized and existing under the
laws of the United States of America or one of its states, and shall
expressly assume, by an indenture supplemental hereto in form
satisfactory to Counsel, executed and delivered to the Trustee prior
to or contemporaneously with the consummation of such transaction, the
obligations of the Guarantor hereunder and under the Guarantees;
(b) 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;
(c) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Guarantor
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by this Indenture, the
Guarantor or such successor Person, as the case may be, shall take
such steps as shall be necessary effectively to secure the Debt
Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(d) the Guarantor has delivered to the Trustee a Guarantor Certificate and
an Opinion of Counsel stating that such consolidation, merger, sale,
or transfer and such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
Nothing contained in this Indenture or in any of the Debt Securities
or Guarantees shall prevent the Guarantor from acquiring all or any part of the
property of any other Corporation (whether or not affiliated with the
Guarantor).
<PAGE>
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Section 19.4 Successor Corporation Substituted: Upon any consolidation or
merger, or any sale, lease or transfer of the properties and assets of the
Guarantor substantially as an entirety in accordance with Section 11.3, the
successor Corporation formed by such consolidation or into which the Guarantor
is merged or to which such sale, lease or transfer is made shall succeed to, and
be substituted for and may exercise every right and power of and be subject to
all the obligations of, the Guarantor under this Indenture and the Guarantees
with the same effect as if such successor Corporation had been named as the
Guarantor herein and in the Guarantees. The Guarantor shall thereupon be
relieved of any further obligation or liability hereunder and under the
Guarantees; and the Guarantor, as the predecessor Corporation, may thereupon or
at any time thereafter be dissolved, wound up or liquidated; and such changes in
phraseology and form (but not in substance) may be made in the Guarantees
endorsed on the Debt Securities thereafter to be issued as may be appropriate.
ARTICLE 20
SUPPLEMENTAL INDENTURES
Section 20.1 Supplemental Indentures Without Consent of Holders: Without the
consent of any Holder, the Company and the Guarantor, when authorized by Board
Resolutions of the Company and the Guarantor, respectively, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to authorize and set out or provide for the terms and provisions of
any Debt Securities and the Guarantees to be endorsed thereon; or
(b) to evidence the succession of another Corporation to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Debt Securities contained in accordance with the
provisions of this Indenture; or
(c) to evidence the succession of another Corporation to the Guarantor and
the assumption by any such successor of the covenants of the Guarantor
herein and in the Guarantees contained in accordance with the
provisions of this Indenture; or
(d) to add to the covenants of the Company or the Guarantor, for the
benefit of the Holders, and/or to provide for Events of Default in
addition to those herein specified, or to surrender any right or power
herein conferred upon the Company; or
(e) to make any changes or corrections in this Indenture which, according
to the advice of Counsel, are required for the purpose of curing or
correcting any ambiguity or defective or inconsistent provisions or
clerical omission or mistake or manifest error contained herein or in
any deed or indenture supplemental or ancillary hereto, but
<PAGE>
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only if, in the opinion of the Trustee, the rights of the Trustee and
of the Holders are in no way prejudiced thereby; or
(f) to make such provisions not inconsistent with this Indenture as may be
necessary or desirable with respect to matters or questions arising
hereunder, including the making of any modifications in the form of
the Debt Securities which do not affect the substance thereof and
which, in the opinion of the Trustee, relying in part on the advice of
Counsel, it may be expedient to make, but only if the Trustee is of
the opinion, relying in part on the advice of Counsel, that such
provisions and modifications will not be prejudicial to the interests
of the Holders; or
(g) to make such provisions as may be necessary or desirable for the
purpose of incorporating, reflecting or complying with applicable
legislation including, without limiting the generality of the
foregoing, such modifications or additions to or deletions from this
Indenture as shall be necessary to effect the qualification of this
Indenture under the United States Trust Indenture Act of 1939, as the
same may from time to time be amended or re-enacted, (the "Trust
Indenture Act"), and to add to this Indenture such other provisions as
may be expressly permitted by the Trust Indenture Act and as may be
necessary to have a trustee (which shall be a Corporation organized
and doing business under the laws of the United States of America or
any State thereof, authorized under such laws to exercise corporate
trust powers) accept an appointment as Trustee under this Indenture.
Section 20.2 Supplemental Indentures With Consent of Holders: Upon delivery of
an Extraordinary Resolution to the Company and the Trustee, the Company and the
Guarantor, when authorized by Board Resolutions of the Company and the
Guarantor, respectively, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of the Debt Securities
under this Indenture as provided for in such Extraordinary Resolution; but no
such supplemental indenture shall, without the consent of the Holder of each
outstanding Debt Security, release the Guarantor from its obligations under
Section 4.1 of the Guarantees. It shall not be necessary for any Extraordinary
Resolution under this Section 12.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if the substance
thereof is approved.
Section 20.3 Execution of Supplemental Indentures: In executing or accepting
the additional trusts created by any supplemental indenture permitted by this
Article or the modification thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel, stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and that such
supplemental indenture is a valid and binding obligation of the Company and the
Guarantor in accordance with its terms. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
<PAGE>
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Section 20.4 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 Debt Securities theretofore or
thereafter certified and delivered hereunder shall be bound thereby.
ARTICLE 21
NOTICES
Section 21.1 Notice to Company: Any notice to the Company under the provisions
of this Indenture shall be valid and effective if delivered personally to an
officer (other than an Assistant Vice-President) of the Company or if delivered
by facsimile, courier or registered letter (postage prepaid), addressed to the
Company c/o Case Corporation, Law Department, 700 State Street, Racine
Wisconsin, 53404, U.S.A., to the attention of Ms. Dawn Beck, fax: (414) 636-
7188. A copy of any such notice shall also be given to the Guarantor in the
manner provided in Section 13.4. Notice delivered by facsimile or courier shall
be deemed to have been effectively given when such notice should have reached
the addressee in the ordinary course. Notice by mail shall be deemed to have
been effectively given on the fourth Business Day following the date of mailing
thereof. The Company may from time to time notify the Trustee in writing of a
change of address which thereafter, until changed by like notice, shall be the
address of the Company for all purposes of this Indenture.
Section 21.2 Notice to Holders: All notices to be given hereunder with respect
to the Debt Securities shall be deemed to be validly given to the Holders if
sent by mail (postage prepaid) by letter or circular addressed to such Holders
at their post office addresses appearing in the registers hereinbefore
mentioned. Any notice so given by mail shall be deemed to have been given on the
day of mailing. Accidental error or omission in giving notice or accidental
failure to mail notice to any Holder shall not invalidate any action or
proceeding founded thereon. All notices with respect to any Debt Security may
be given to whichever one of the Holders thereof (if more than one) is named
first in the registers hereinbefore mentioned, and any notice so given shall be
sufficient notice to all Holders of and/or persons interested in such Debt
Security.
Section 21.3 Notice to Trustee: Any notice to the Trustee under the provisions
of this Indenture shall be valid and effective if delivered personally to an
officer of the Trustee or if delivered by facsimile, courier or registered
letter (postage prepaid), addressed to the Trustee at Montreal Trust Company of
Canada, 151 Front Street West, Suite 605, Toronto, Ontario M5J 2N1, to the
attention of the Manager, Corporate Trust Services, fax: (416) 981-9777. Notice
delivered by facsimile or courier shall be deemed to have been effectively given
when such notice should have reached the addressee in the ordinary course.
Notice by mail shall be deemed to have been effectively given on the fourth
Business Day following the date of mailing thereof. The Trustee may from time
to time notify the Company, the Guarantor and the Holders in writing of a change
of address which
<PAGE>
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thereafter, until changed by like notice, shall be the address of the Trustee
for all purposes of this Indenture.
Section 21.4 Notice to the Guarantor: Any notice to the Guarantor under the
provisions of this Indenture shall be valid and effective if delivered
personally to an officer of the Guarantor or if given by facsimile, courier or
registered letter (postage prepaid), addressed to the Guarantor c/o Case
Corporation, Law Department, 700 State Street, Racine, Wisconsin 53404, U.S.A.,
to the attention of Ms. Dawn Beck, fax: (414) 636-7188. A copy of any such
notice shall also be given to the Company in the manner provided in Section
13.1. Notice delivered by facsimile or courier shall be deemed to have been
effectively given when such notice should have reached the addressee in the
ordinary course. Notice by mail shall be deemed to have been effectively given
on the fourth Business Day following the date of mailing thereof. The Guarantor
may from time to time notify the Trustee in writing of a change of address which
thereafter, until changed by like notice, shall be the address of the Guarantor
for all purposes of this Indenture.
Section 21.5 Mail Service Interruption: If the Trustee determines that mail
service is or is threatened to be interrupted at the time when the Trustee is
required or elects to give any notice to Holders hereunder, the Trustee shall,
despite the provisions hereof, give such notice by means of publication in The
Globe & Mail, national edition, or any other English language daily newspaper or
newspapers of general circulation in Canada and in a French language daily
newspaper of general circulation in Quebec, once in each of two successive
weeks, and notice so published shall be deemed to have been given on the latest
date on which the first publication has taken place. If, by reason of any actual
or threatened interruption of mail service due to strike, lock-out or otherwise,
any notice to be given to the Trustee, the Company or the Guarantor would be
unlikely to reach its destination in a timely manner, such notice shall be valid
and effective only if delivered personally or by facsimile or courier in
accordance with Sections 13.1, 13.3 or 13.4, as the case may be.
<PAGE>
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ARTICLE 22
EXECUTION
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CASE CREDIT LTD.
By:____________________________
CASE CREDIT CORPORATION
By:____________________________
MONTREAL TRUST COMPANY OF CANADA
By:____________________________
By:____________________________
<PAGE>
SCHEDULE I
(FORM OF GUARANTEE)
GUARANTEE OF CASE CREDIT CORPORATION
FOR VALUE RECEIVED, CASE CREDIT CORPORATION (the "Guarantor", which
term includes any successor corporation under the Indenture referred to in the
Note upon which this guarantee is endorsed (the "Indenture")), a corporation
duly organized and existing under the laws of the State of Delaware, hereby
unconditionally guarantees to the Holder of the Note upon which this Guarantee
is endorsed (the "Note") the due and punctual payment of the principal of,
premium (if any) and interest on the Note, when and as the same shall become due
and payable after any applicable grace period, whether at their respective due
dates, on redemption or on a declaration or otherwise, in accordance with the
terms of the Note and of the Indenture (the "Obligations"); provided, however,
that payment of interest on overdue instalments of interest is hereby guaranteed
only to the extent permitted by applicable law. In case of default by Case
Credit Ltd. (the "Company") in the payment of any such principal, premium or
interest, the Guarantor agrees duly and punctually to pay the same without
demand after the expiry of any applicable grace period. The Guarantor hereby
agrees that its obligations hereunder and under the Indenture shall be
unconditional, irrespective of any invalidity, illegality, irregularity or
unenforceability of the Note or the Indenture as regards the Company (other than
by reason of lack of genuineness), or the absence of any action to enforce the
same, the recovery of any judgment against the Company or any action to enforce
the same or any circumstance which might otherwise constitute a legal or
equitable discharge or defence of a guarantor. The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger, amalgamation, insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest or notice with
respect to the Note or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged except by
payment in full of the principal of, premium (if any) and interest on the Note.
The obligation of the Guarantor under this Guarantee shall be a
continuing obligation, shall cover all the Obligations, and shall apply to and
secure any ultimate balance due or remaining unpaid to the Holder of the Note.
In addition to the guarantee contained in this Guarantee and the
Indenture, the Guarantor hereby covenants and agrees to indemnify and save the
Holder of the Note harmless against all costs, losses, expenses and damages it
may suffer as a result of the Company's default in performance of any of the
Obligations.
The Guarantor shall not be or become liable under this Guarantee to
make any payment of principal, premium or interest in respect of which the
Company shall be in default if the default of the Company in respect of which
the Guarantor would otherwise be or become liable under this Guarantee shall
have been waived or directed to be waived pursuant to the provisions in that
behalf contained in the Indenture, but no waiver or consent of any kind
whatsoever shall release,
<PAGE>
alter or impair the unconditional obligation of the Guarantor hereunder after
giving effect to such waiver or consent.
The Guarantor shall be subrogated to all rights of the Holder of the
Note against the Company in respect of any amount paid by the Guarantor pursuant
to the provisions of this Guarantee, 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 all Notes issued under the Indenture shall have been paid in full or
duly provided for.
No remedy for the enforcement of the rights of the Holder of the Note
to receive payment of the principal of and/or premium and/or interest on the
Note, under the Note, the Indenture and hereunder, shall be exclusive of or
dependent on any other remedy.
This Guarantee has been given in accordance with the terms of the
Indenture and is subject to all applicable provisions thereof and the same shall
be deemed to be incorporated herein.
The Guarantor hereby certifies and warrants that all acts, conditions
and things required to be done and performed and to have happened prior to the
creation and issuance of this Guarantee to constitute the same a valid and
legally binding obligation of the Guarantor enforceable in accordance with its
terms have been done and performed and have happened in due and strict
compliance with all applicable laws.
This Guarantee shall be construed in accordance with and governed by
the laws of the Province of Ontario.
This Guarantee shall not be valid or become obligatory for any purpose
until the Note shall have been certified by or on behalf of the Trustee under
the Indenture.
IN WITNESS WHEREOF, CASE CREDIT CORPORATION has caused this Guarantee
to be signed in its corporate name by the facsimile signature of its President
and has caused a facsimile of its corporate seal to be affixed hereto or
imprinted or otherwise reproduced hereon, and the same to be attested by the
facsimile signature of its Secretary.
This Guarantee shall be deemed to be dated the Original Issue Date of
the Note.
CASE CREDIT CORPORATION
By:_______________________________
President c/s
Attest:____________________
Secretary
<PAGE>
CASE CREDIT LTD.
and
CASE CREDIT CORPORATION
as Guarantor
and
MONTREAL TRUST COMPANY OF CANADA
as Trustee
FIRST SUPPLEMENTAL INDENTURE
Providing for Issuance of Series A Medium-Term Notes
Dated as of November 10, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
ARTICLE 1
INTERPRETATION........................................................... 2
Section 1.1 Part of Original Indenture.................................. 2
Section 1.2 Definitions................................................. 3
ARTICLE 2
SERIES A MEDIUM-TERM NOTES............................................... 7
Section 2.1 Issue of Series A Notes:.................................... 7
Section 2.2 Terms of Series A Notes..................................... 7
Section 2.3 Form of Series A Notes...................................... 8
Section 2.4 Certification and Delivery of Series A Notes................ 8
Section 2.5 Interest on Series A Notes.................................. 9
Section 2.6 Conversion................................................. 15
Section 2.7 Amortizing Notes and Extendible Notes...................... 15
Section 2.8 Rule 144A Notes............................................ 15
Section 2.9 Special Transfer Provisions................................ 16
ARTICLE 3
EXECUTION............................................................... 18
Section 3.1 Acceptance of Trust........................................ 18
Section 3.2 Counterparts............................................... 18
</TABLE>
Schedule I: Series A Medium-Term Note (Fixed Rate Note)
Schedule II: Series A Medium-Term Note (Floating Rate Note)
Schedule III: Additional Provisions for Series A Notes transferred pursuant to
Rule 144A
Schedule IV: Form of Certificate to be delivered on transfers pursuant to
Regulation S
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE made as of the 10th day of November,
1998.
B E T W E E N:
CASE CREDIT LTD., a corporation existing under the laws of the
Province of Alberta
(the "Company")
- and -
CASE CREDIT CORPORATION, a corporation organized and existing under
the laws of the State of Delaware
(the "Guarantor")
- and -
MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated under
the laws of Canada
(the "Trustee")
WHEREAS:
(A) under an indenture made as of November 10, 1998 between the Company, the
Guarantor and the Trustee (the "Original Indenture"), the creation and
issue of Debt Securities from time to time without limitation as to the
principal amount was provided for;
(B) the Company has duly authorized the creation and issue of Debt Securities,
in the form of Series A Medium-Term Notes ("Series A Notes"), pursuant to
the provisions of the Original Indenture, upon the terms set forth in this
First Supplemental Indenture;
<PAGE>
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(C) the Guarantor has authorized the entering into of the Guarantee to be
endorsed on the Series A Notes;
(D) all acts and things necessary have been done and performed to authorize the
execution of this First Supplemental Indenture to make the same effective
and binding upon the Company and the Guarantor and to make the Series A
Notes, when certified by the Trustee and issued as provided in this First
Supplemental Indenture, valid, binding and legal obligations of the Company
with the benefits and subject to the terms of the Original Indenture as
amended in this First Supplemental Indenture;
(E) all acts and things necessary have been done and performed to make the
Guarantee to be endorsed on the Series A Notes, when executed by the
Guarantor and endorsed on Series A Notes executed by the Company and
certified by or on behalf of the Trustee as provided in this First
Supplemental Indenture, valid, binding and legal obligations of the
Guarantor with the benefits and subject to the terms of the Original
Indenture as amended in this First Supplemental Indenture; and
(F) the foregoing recitals (A) to (E) and any statements of fact contained
therein are and shall be deemed to be made by the Company and/or the
Guarantor (as the case may be) and not the Trustee;
NOW THEREFORE THIS INDENTURE WITNESSES and it is hereby covenanted,
agreed and declared as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Part of Original Indenture: The Original Indenture is part of this
First Supplemental Indenture and by this reference is incorporated herein with
the same effect as though at length set forth herein; and in this First
Supplemental Indenture, subject to Section 1.2 hereof and unless there is
something in the subject matter or context inconsistent therewith, the
expressions herein contained shall have the same meaning as corresponding
expressions in the Original Indenture. The Holders of the Series A Notes shall
be entitled to the same rights and benefits under the Original Indenture as any
other Holder of Debt Securities, except as such rights and benefits are
specifically supplemental or amended hereby.
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Section 1.2 Definitions: For purposes of this First Supplemental Indenture and
the Recitals hereof, except as otherwise expressly provided or unless the
context otherwise provides:
(a) The definitions of "Business Day", "Interest Payment Date" and "Stated
Maturity" in Section 1.1 of the Original Indenture are replaced by the
following definitions, respectively:
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are
authorized or required by law or executive order to close in the city
of Toronto, Ontario or Racine, Wisconsin; provided, however, that, if
an Interest Rate Basis specified in a Floating Rate Note is LIBOR,
such day is also a London Business Day.
"Interest Payment Date" means any Stated Maturity on an instalment of
interest on a Debt Security, which shall, in the case of a Floating
Rate Note, be the date specified in paragraph 2.5(2)(g).
"Stated Maturity", when used with respect to any Debt Security or any
instalment of interest thereon, means the date specified in such Debt
Security as the fixed date on which the principal of such Debt
Security or such instalment of interest is due and payable, which
shall, in the case of a Floating Rate Note, be an Interest Reset Date.
(b) The following additional words and phrases shall have the following
meanings:
"Addendum" means an addendum attached to and forming part of a Series
A Note.
"Amortizing Note" means a Series A Note with respect to which payments
will be applied first to interest due and payable thereon and then to
the reduction of the unpaid principal amount thereof.
"Article", "Section", "Subsection" and "paragraph" followed by a
number means and refers to the specified Article, Section, Subsection
or paragraph of this First Supplemental Indenture unless otherwise
expressly stated.
"BA Rate", with respect to a Floating Rate Note, means the Interest
Rate Basis calculated in accordance with paragraph 2.5(2)(k).
"BA Rate Interest Determination Date", with respect to a Floating Rate
Note, has the meaning specified in paragraph 2.5(2)(k).
"Book Entry Notes" means Series A Notes issued in book-entry form and
constituting beneficial interests in the Global Note.
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"Calculation Agent" means the Calculation Agent specified in a
Floating Rate Note (or such successor thereto as is appointed by the
Company) to make calculations relating to such note, and if no
Calculation Agent is so specified, the Trustee.
"Calculation Date", with respect to a Floating Rate Note, has the
meaning specified in paragraph 2.5(2)(i).
"Cdn. Prime Rate", with respect to a Floating Rate Note, has the
meaning specified in paragraph 2.5(2)(n).
"Cdn. Prime Rate Interest Determination Date", with respect to a
Floating Rate Note, has the meaning specified in paragraph 2.5(2)(n).
"Certificated Note" means a Series A Note issued in certificated form.
"Day Count Convention" means the convention for counting days
specified in a Series A Note for the purpose of computing interest
payments for such note in accordance with Section 2.5.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is
specified in a Floating Rate Note as the method for calculating LIBOR,
the display on the Reuters Monitor Money Rates Service for the purpose
of displaying the London interbank rates of major banks for the
applicable Index Currency or (b) if "LIBOR Telerate" is specified in a
Floating Rate Note as the method for calculating LIBOR, or neither
"LIBOR Reuters" nor "LIBOR Telerate" is so specified, the display on
the Dow Jones Telerate Service for the purpose of displaying the
London interbank rates of major banks for the applicable Index
Currency.
"Exchange Rate Agent" means the Exchange Rate Agent specified in a
Series A Note (or such successor thereto as is appointed by the
Company) to make calculations relating to the conversion of amounts
relating to such note from one currency to another, and if no Exchange
Rate Agent is so specified, the Trustee.
"Extendible Note" means a Series A Note the maturity of which may be
extended, either in whole or in part, at the option of the Company,
for one or more periods up to but not beyond the note's final Maturity
Date.
"Fixed Rate Note" has the meaning specified in Subsection 2.3(1).
"Floating Rate Note" has the meaning specified in Subsection 2.3(1).
"Global Note" means any Series A Note held as a global security by or
on behalf of CDS in accordance with Section 2.15 of the Original
Indenture.
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"Index Currency" means the currency (including currency units)
designated in a Floating Rate Note as the currency for which LIBOR
shall be calculated, and if no such currency is so designated, the
Index Currency shall be Canadian dollars.
"Index Maturity" means the maturity period designated in a Floating
Rate Note as the maturity period for deposits in the Index Currency
used in the calculation of LIBOR.
"Initial Interest Rate", with respect to a Floating Rate Note, has the
meaning specified in paragraph 2.5(2)(a).
"Interest Determination Date", with respect to a Floating Rate Note,
has the meaning specified in paragraph 2.5(2)(h).
"Interest Rate Basis" or "Interest Rate Bases", with respect to a
Floating Rate Note, means the basis or bases upon which the interest
rate on such Floating Rate Note is calculated as determined in
accordance with Subsection 2.5(2).
"Interest Reset Date", with respect to a Floating Rate Note, means the
date upon which the interest rate on such Floating Rate Note is reset
as determined in accordance with Subsection 2.5(2).
"Interest Reset Period", with respect to a Floating Rate Note, means
the period from and including each Interest Reset Date with respect to
such note to and including the day preceding the next subsequent
Interest Reset Date with respect to such note, and the initial
Interest Reset Period with respect to a Floating Rate Note is the
period from the date of issue of such note to the day preceding the
first Interest Reset Date for such note.
"LIBOR", with respect to a Floating Rate Note, means the Interest Rate
Basis calculated in accordance with paragraph 2.5(2)(l).
"LIBOR Interest Determination Date", with respect to a Floating Rate
Note, has the meaning specified in paragraph 2.5(2)(l).
"London Business Day" means any day on which dealings in an Index
Currency are transacted in the London interbank market.
"Market Exchange Rate", with respect to payments made in Canadian
dollars, for a Specified Currency other than Canadian dollars, means
the noon dollar buying rate announced by the Bank of Canada for such
Specified Currency.
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"Maturity Date" has the meaning specified in paragraph 2.5(1)(a).
"Original Indenture" has the meaning specified in Recital (A) above.
"Principal Financial Centre" means the capital of the country of the
Index Currency, except that, with respect to United States dollars,
Deutsche marks, Dutch guilders, Italian lire, Swiss francs and ECUs,
the Principal Financial Centre shall be the city of New York,
Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively.
"Private Placement Legend" has the meaning specified on Subection
2.8(2).
"Prospectus Supplement" has the meaning specified in Subsection
2.1(1).
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Regulation S" means Regulation S under the Securities Act.
"Reuters CDOR Page" means the display designated as page "CDOR" on the
Reuters Monitor Money Rates Service (or such other page as may replace
the CDOR page on that service for the purpose of displaying banker's
acceptance rates of banks and investment dealers).
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Notes" has the meaning specified in Subsection 2.8(1).
"Series A Notes" has the meaning specified in Recital (B) above.
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated by the United
States Securities and Exchange Commission thereunder.
"Specified Currency" means the currency specified in a Series A Note
for issuance thereof and for payment of principal, premium, if any,
and/or interest, and if no such currency is specified, Canadian
dollars.
"Spread", with respect to a Floating Rate Note, means the number of
basis points to be added to or subtracted from the related Interest
Rate Basis or Interest Rate Bases applicable to such Floating Rate
Note.
"Spread Multiplier", with respect to a Floating Rate Note, means the
percentage of the related Interest Rate Basis applicable to such
Floating Rate Note by which such
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Interest Rate Basis will be multiplied to determine
the applicable interest rate on such Floating Rate Note.
"U.S. Person" means a person who is a "U.S. person" as defined in
Regulation S.
ARTICLE 2
SERIES A MEDIUM-TERM NOTES
Section 2.1 Issue of Series A Notes:
(1) The initial series of Debt Securities authorized to be issued hereunder
shall be designated as "Series A Medium-Term Notes" of the Company, shall
be payable as to principal, interest and premium, if any, in lawful money
of Canada, and subject to Subsection 2.1(2) shall be limited to
$750,000,000 in lawful money of Canada aggregate principal amount for
original issue. The Series A Notes shall be issued pursuant to the
Company's short form prospectus dated October 16 , 1998, as supplemented by
a prospectus supplement dated October 16, 1998 and the applicable pricing
supplement (the prospectus supplement and the pricing supplement
collectively, the "Prospectus Supplement"), as amended or supplemented from
time to time.
(2) The Company may, from time to time, increase the amount of Series A Notes
authorized to be issued hereunder on original issue from $750,000,000 in
lawful money of Canada aggregate principal amount by delivering to the
Trustee (i) a Board Resolution of the Company declaring that the amount of
Series A Notes authorized to be issued hereunder on original issue shall be
limited to the aggregate principal amount in lawful money of Canada set out
in such resolution, and (ii) a Board Resolution of the Guarantor consenting
to the increase in the aggregate principal amount of Series A Notes which
may be issued hereunder in accordance with the declaration set out in the
Board Resolution of the Company; and upon delivery to the Trustee of a
Board Resolution of the Company and a Board Resolution of the Guarantor as
provided for in this Subsection 2.1(2), the maximum aggregate principal
amount of Series A Notes that may be issued on original issue shall be the
amount in lawful money of Canada set out in such Board Resolutions.
Section 2.2 Terms of Series A Notes: The Series A Notes shall have the
following terms and conditions:
(a) Date and Interest. Each Series A Note shall be dated as of the
date of issue and shall bear interest, if any, from the time of
issue at the rate (either fixed or floating) determined by the
Company at the time of issue. Interest, if any, shall be payable
on the dates determined by the Company at the time of issue.
(b) Maturity. Each Series A Note shall mature on the date determined
by the Company at the time of issue, which date shall be more
than one year from the date of issue.
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(c) Currency. Each Series A Note shall be issued and payable in such
currency as is determined by the Company at the time of issue.
(d) Denominations. Series A Notes shall be issued in denominations of
$1,000 or more in Canadian currency or the equivalent thereof in other
currencies at the time of issue or in such other denominations
determined by the Company at the time of issue.
Section 2.3 Form of Series A Notes:
(1) Subject to Section 2.8, each Series A Note shall, at the option of the
Company, be issued in fully registered form as a Book Entry Note or as a
Certificated Note and in each case: (i) shall specify the applicable date
of issue, rate of interest (including, in the case of a Floating Rate Note,
the applicable Interest Rate Basis or Interest Rate Bases), date or dates
on which interest shall be payable, Maturity Date, currency in which the
Series A Note is to be issued and in which interest, premium (if any) and
principal shall be paid, and denomination; (ii) specify such other
provisions as are to govern the Series A Note; and (iii) be substantially
in the form set out in Schedule I attached hereto in the case of a fixed
rate Series A Note (a "Fixed Rate Note") or in the form of Schedule II
attached hereto in the case of a floating rate Series A Note (a "Floating
Rate Note"), in all cases with such appropriate additions and variations as
shall be required and as are consistent with the provisions set out in the
Prospectus Supplement, and shall bear such distinguishing letters and
numbers as the Trustee shall approve, or in such other form or forms as
may, from time to time, be approved by the Company.
(2) Any Global Note shall bear the following legend:
Unless this certificate is presented by an authorized
representative of The Canadian Depository for Securities Limited
("CDS") to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued in respect
thereof is registered in the name of CDS & CO., or in such other
name as is requested by an authorized representative of CDS (and
any payment is made to CDS & CO. or to such other entity as is
requested by an authorized representative of CDS), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered holder hereof, CDS & CO.,
has an interest herein.
Section 2.4 Certification and Delivery of Series A Notes: Series A Notes
may, from time to time be executed by the Company and delivered to the Trustee
for certification, and the Trustee shall thereupon certify and deliver the
Series A Notes as directed by a Company Certificate, after receipt by the
Trustee of the documents set out in Section 2.2 of the Original Indenture,
except that the Company Request referred to in paragraph 2.2(g) of the Original
Indenture shall also set out (i) whether such Series A Note is a Floating Rate
Note or a Fixed Rate Note; (ii) its principal amount; (iii) its issue price;
(iv) its Original Issue Date; (v) its Maturity Date; (vi) if it is redeemable at
the option of the Company, the Redemption Date or Dates and Redemption Price or
Prices; (vii) its
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Interest Payment Dates; (viii) if it is a Fixed Rate Note, its
rate of interest; (ix) if it is a Floating Rate Note, its Initial Interest Rate,
its Interest Reset Date or Interest Reset Dates, its Interest Reset Period and
interest payment period, its Spread (if any), its Spread Multiplier (if any),
its maximum interest rate (if any), and its minimum interest rate (if any); and
(x) the terms of any other special provisions relating to such Series A Notes.
Section 2.5 Interest on Series A Notes:
(1) The following terms and conditions shall apply to the determination of
interest on a Series A Note unless otherwise provided in such note:
(a) The Company will pay interest on a Series A Note on each Interest
Payment Date, commencing on the first Interest Payment Date next
succeeding the Original Issue Date, and on the Stated Maturity or
any prior date on which the principal, or an instalment of
principal, of such note becomes due or payable, whether by the
declaration of acceleration or otherwise (the Stated Maturity or
such prior date, as the case may be, is herein referred to as the
"Maturity Date"); provided, however, that if the Original Issue
Date falls between a Record Date and the related Interest Payment
Date or on an Interest Payment Date, interest payments will
commence on the second Interest Payment Date succeeding the
Original Issue Date. Interest on such note will accrue from and
including the immediately preceding Interest Payment Date in
respect of which interest has been paid or duly made available
for payment or, if no interest has been paid, from and including
the Original Issue Date, to but excluding such Interest Payment
Date or the Maturity Date, as the case may be. If any Interest
Payment Date or the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any,
and/or interest will be made on the next succeeding Business Day
as if made on the date such payment was due, and no interest
shall accrue on such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be,
to the date of such payment on the next succeeding Business Day.
The interest so payable on any Interest Payment Date will be paid
to the Holder of such note at the close of business on the Record
Date for such Interest Payment Date. Interest payable at the
Maturity Date will be payable to the Person to whom the principal
thereof shall be payable.
(b) Payments of principal of, and premium, if any, and interest on, a
Series A Note will be made to the Holder thereof in Canadian
dollars regardless of the Specified Currency stated therein
unless the Holder thereof makes the election described below. If
the Specified Currency is other than Canadian dollars, the
Exchange Rate Agent will convert all payments in respect thereof
into Canadian dollars in the manner described below; provided,
however, that the Holder may elect to receive payment of
principal of and premium, if any, and/or interest on such note in
the Specified Currency by submitting a written request for such
payment to the Trustee at its principal office in the City of
Toronto on or prior to the applicable Record Date or at least 15
calendar days prior to the Maturity Date, as the case may be.
Such written
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request may be mailed or hand delivered or sent by cable, telex
or other form of facsimile transmission. The Holder may elect to
receive payment in such Specified Currency for all such
principal, premium, if any, and interest payments and need not
file a separate election for each payment. The election will
remain in effect until revoked by written notice to the Trustee,
but written notice of any such revocation must be received by the
Trustee on or prior to the applicable Record Date or at least 15
calendar days prior to the Maturity Date, as the case may be.
Notwithstanding the foregoing, if the applicable Specified
Currency is not available for the payment of principal, premium,
if any, or interest with respect to such note due to the
imposition of exchange controls or other circumstances beyond the
control of the Company, the Company will be entitled to satisfy
its obligations to the Holder by making such payment in Canadian
dollars on the basis of the Market Exchange Rate on the second
Business Day prior to such payment or, if such Market Exchange
Rate is not then available, on the basis of the most recently
available Market Exchange Rate. Any payment made in Canadian
dollars under the circumstances set forth above where the
required payment is in a Specified Currency other than Canadian
dollars will not constitute a payment default under such note or
under the Indenture. All determinations referred to above made by
the Company or its agent (including the Exchange Rate Agent)
shall be at its sole discretion and shall, in the absence of
manifest error, be conclusive and for all purposes binding on the
Holder of such note.
(c) Interest payments for a Series A Note shall be computed and paid
on the basis of (i) a 360-day year of twelve 30-day months if the
Day Count Convention specified therein is "30/360" for the
relevant period, (ii) the actual number of days in the related
month and a 360-day year if the Day Count Convention specified
therein is "Actual/360" for the relevant period, (iii) the actual
number of days in the related year and month if the Day Count
Convention specified therein is "Actual/Actual" for the relevant
period, or (iv) such other basis as may be specified in a Series
A Note.
(2) The following terms and conditions shall apply to the determination of
interest on a Floating Rate Note unless otherwise provided in such note:
(a) A Floating Rate Note shall bear interest at the rate determined
by reference to the applicable Interest Rate Basis specified
therein (i) plus or minus the applicable Spread, if any, and/or
(ii) multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which
interest on the Floating Rate Note shall be payable shall be
reset as of each Interest Reset Date specified therein; provided,
however, that the interest rate in effect for the period from the
Original Issue Date to but excluding the first Interest Reset
Date will be the initial interest rate (the "Initial Interest
Rate"). Notwithstanding the foregoing, if a Floating Rate Note is
designated in such note as having an Addendum attached, such note
shall bear interest in accordance with the terms described in
such Addendum.
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(b) Interest on a Floating Rate Note will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may, as
described below, include (i) the BA Rate, (ii) LIBOR, (iii) the Cdn.
Prime Rate, or (iv) such other Interest Rate Basis or interest rate
formula as may be set forth therein and described in the applicable
Addendum.
(c) The interest rate on a Floating Rate Note in effect on each day shall
be the interest rate determined as of the most recent Interest
Determination Date.
(d) The interest rate on a Floating Rate Note applicable to each Interest
Reset Period commencing on the Interest Reset Date with respect to such
Interest Reset Period will be the rate determined as of the applicable
Interest Determination Date. Each Interest Rate Basis shall be the rate
determined in accordance with the applicable provisions below. The rate
of interest on a Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually, annually or pursuant to such other
period as specified therein. Unless otherwise specified therein, the
Interest Reset Date(s) will be, if the Interest Reset Period set forth
therein is: (i) daily, each Business Day; (ii) weekly, the Wednesday of
each week; (iii) monthly, the third Wednesday of each month; (iv)
quarterly, the third Wednesday of March, June, September and December
of each year; (v) semiannually, the third Wednesday of the two months
specified therein; and (vi) annually, the third Wednesday of the month
specified therein. If any Interest Reset Date (which term includes the
first Interest Reset Date unless the context otherwise requires) would
otherwise be a day that is not a Business Day, such Interest Reset Date
shall be postponed to the next succeeding Business Day, except that if
an Interest Rate Basis shown therein is LIBOR and such Business Day
falls in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.
(e) Interest payable on a Floating Rate Note on any Interest Payment Date
shall be the amount of interest accrued from and including the
immediately preceding Interest Payment Date in respect of which
interest has been paid (or from and including the Original Issue Date
specified therein, if no interest has been paid), to but excluding the
related Interest Payment Date; provided, however, that interest payable
at Maturity will include interest accrued to but excluding the date of
Maturity. Accrued interest on a Floating Rate Note is calculated by
multiplying the face amount thereof by an accrued interest factor. Such
accrued interest factor is computed by adding the interest factor
calculated for each day in the period for which accrued interest is
being calculated. The interest factor for each such day shall be
computed by dividing the interest rate applicable to such day by 360 if
the Interest Rate Basis specified in such note is LIBOR, or by the
actual number of days in the year if the Interest Rate Basis specified
in such note is the BA Rate, or the Cdn. Prime Rate.
(f) A Floating Rate Note may also have either or both of the following:
(i) a maximum numerical limitation, or ceiling, on the rate at which
interest may accrue during any
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Interest Reset Period; and (ii) a minimum numerical limitation, or
floor, on the rate at which interest may accrue during any Interest
Reset Period. In addition to any maximum interest rate that may be
applicable to a Floating Rate Note, the maximum interest rate that may
be applicable to a Floating Rate Note will in no event be higher than
the maximum rate permitted by the laws of Canada.
(g) Interest on such note will be payable, where the rate of interest
resets: (i) daily, weekly or monthly, on the third Wednesday of each
month or on the third Wednesday of March, June, September and December
of each year, as specified in the applicable Prospectus Supplement;
(ii) quarterly, on the third Wednesday of March, June, September and
December of each year; (iii) semiannually, on the third Wednesday of
the months of each year specified in such note; and (iv) annually, on
the third Wednesday of the month specified in such note and, in each
case, on the Maturity Date (each, an "Interest Payment Date"). If any
Interest Payment Date for this Note (other than the Maturity Date)
would otherwise be a day that is not a Business Day, such Interest
Payment Date will be postponed to the next succeeding day that is a
Business Day, except that where LIBOR is the applicable Interest Rate
Basis, if such Business Day falls in the next succeeding calendar
month, such Interest Payment Date will be the immediately preceding
Business Day. If the Maturity Date of this Note falls on a day that is
not a Business Day, the required payment of principal, premium, if
any, and/or interest will be made on the next succeeding Business Day
as if made on the date such payment was due, and no interest shall
accrue on such payment for the period from and after the Maturity Date
to the date of such payment on the next succeeding Business Day.
(h) The "Interest Determination Date" with respect to the BA Rate and the
Cdn. Prime Rate will be the second Business Day immediately preceding
the applicable Interest Reset Date, and the "Interest Determination
Date" with respect to LIBOR will be the second London Business Day
immediately preceding the applicable Interest Reset Date.
(i) The "Calculation Date", if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day
after such Interest Determination Date, or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business
Day immediately preceding the applicable Interest Payment Date or the
Maturity Date, as the case may be. All calculations on a Floating Rate
Note shall be made by the Calculation Agent.
(j) All percentages resulting from any calculation on a Floating Rate Note
will be rounded to the nearest one hundred-thousandth of a percentage
point, with five one millionths of a percentage point rounded upwards
(e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all amounts used in or resulting from such calculation
will be rounded, in the case of United States or Canadian dollars, to
the nearest cent or, in the case of a Specified Currency other than
United
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States or Canadian dollars, to the nearest unit of the Specified
Currency (such unit being the smallest unit of the Specified Currency
in general use) (with one-half cent or one-half of the applicable unit
of Specified Currency being rounded upward).
(k) If an Interest Rate Basis for a Floating Rate Note is specified in
such note as the BA Rate, the BA Rate shall be determined on the
applicable Interest Determination Date (the "BA Rate Interest
Determination Date") as the rate (expressed as an annual percentage
rate based on a year of 365 or 366 days) determined by the Company to
be the average (rounded to the nearest one-hundred-thousandth of one
per cent, with .000005 being rounded up) of the bid quotations for
bankers' acceptances stamped by Schedule I Canadian chartered banks
denominated in Canadian dollars with a maturity approximately
coextensive with the Maturity applicable to such note, as set forth on
the Reuters CDOR Page at approximately 10:00 a.m. (Toronto time) on
the BA Rate Interest Determination Date. If on the BA Rate Interest
Determination Date only one or zero bid quotations are available on
the Reuters CDOR Page or if the Reuters CDOR Page is unavailable for
any reason, the BA Rate shall be the rate (expressed as an annual
percentage rate based on a year of 365 or 366 days) determined by the
Company to be the average (rounded to the nearest one-hundred-
thousandth of one per cent with .000005 being rounded up) of rates bid
by each of the three Schedule I Canadian chartered banks selected by
the Company (after consultation with the Trustee) at approximately
10:00 a.m. (Toronto time) on the BA Rate Interest Determination Date
for bankers' acceptances stamped by Schedule I Canadian chartered
banks denominated in Canadian dollars with a maturity approximately
coextensive with the Maturity applicable to such note. If on the BA
Rate Interest Determination Date only one or two such Schedule I
Canadian chartered banks provide bid quotations, then such bid or, the
average of such bids, as the case may be, shall be used for purposes
of determining the BA Rate.
(l) If an Interest Rate Basis for a Floating Rate Note is specified in
such note as LIBOR, LIBOR will be determined on the applicable
Interest Determination Date (a "LIBOR Interest Determination Date"),
on the basis of either: (i) if "LIBOR Reuters" is specified in such
note as the method for calculating LIBOR, the arithmetic mean of the
offered rates (unless the specified Designated LIBOR Page by its terms
provides only for a single rate, in which case such single rate shall
be used) for deposits in the Index Currency having the Index Maturity
designated in such note, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, that
appear on the Designated LIBOR Page specified in such note as of 11:00
a.m., London time, on such LIBOR Interest Determination Date, if at
least two such offered rates appear (unless, as aforesaid, only a
single rate is required) on such Designated LIBOR Page, or (ii) if
"LIBOR Telerate" is specified in such note as the method for
calculating LIBOR or if neither "LIBOR Reuters" nor "LIBOR Telerate"
is so specified, the rate for deposits in the Index Currency having
the Index Maturity designated in such note, commencing on the second
London Business Day immediately following such LIBOR Interest
Determination Date that
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appears on the Designated LIBOR Page specified in such note as of
11:00 a.m., London time, on such LIBOR Interest Determination Date. If
fewer than two such offered rates appear, or if no such rate appears,
as applicable, LIBOR in respect of the related LIBOR Interest
Determination Date will be determined in accordance with the
provisions described in the immediately succeeding paragraph.
(m) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be,
on the applicable Designated LIBOR Page as specified in the
immediately preceding paragraph, the Calculation Agent will request
the principal London offices of each of four major reference banks in
the London interbank market, as selected by the Calculation Agent
(after consultation with the Company), to provide the Calculation
Agent with its offered quotation for deposits in the Index Currency
for the period of the Index Maturity designated in such note,
commencing on the second London Business Day immediately following
such LIBOR Interest Determination Date, to prime banks in the London
interbank market at approximately 11:00 a.m., London time, on such
LIBOR Interest Determination Date and in a principal amount that is
representative for a single transaction in such Index Currency in such
market at such time. If at least two such quotations are provided,
LIBOR determined on such LIBOR Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR determined on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00
a.m., in the applicable Principal Financial Centre, on such LIBOR
Interest Determination Date by three major banks in such Principal
Financial Centre selected by the Calculation Agent (after consultation
with the Company) for loans in the Index Currency to leading European
banks, having the Index Maturity designated in such note and in a
principal amount that is representative for a single transaction in
such Index Currency in such market at such time; provided, however,
that if the banks so selected by the Calculation Agent are not quoting
as mentioned in this sentence, LIBOR determined as of such LIBOR
Interest Determination Date will be LIBOR in effect on such LIBOR
Interest Determination Date.
(n) If an Interest Rate Basis for a Floating Rate Note is specified in
such note as Cdn. Prime Rate, the Cdn. Prime Rate shall be determined
on the applicable Interest Determination Date (a "Cdn. Prime Rate
Interest Determination Date") as the rate (expressed as an annual
percentage rate based on a year of 365 or 366 days) determined by the
Company to be the average (rounded to the nearest one-hundred-
thousandth of one per cent, with .000005 being rounded up) of the
rates publicly quoted by the Schedule I Canadian chartered banks as
base rates for determining interest rates on Canadian dollar prime
rate loans in Canada prevailing at 10:00 a.m. (Toronto time) on the
Cdn. Prime Rate Interest Determination Date.
<PAGE>
-15-
(o) At the request of the Holder of a Floating Rate Note, the Calculation
Agent shall provide to such Holder the interest rate thereon then in
effect and, if determined, the interest rate which shall become
effective as of the next Interest Reset Date.
Section 2.6 Conversion: If so determined by the Company at the time of issue,
the Holder of a Series A Note may, but only upon notice from the Company,
convert all but not less than all of such Holder's notes into an equal aggregate
principal amount of a new series of notes issued by the Company. If given, such
notice from the Company shall be given not less than 30 days nor more than 60
days prior to the date of conversion.
Section 2.7 Amortizing Notes and Extendible Notes:
(1) The Company may issue Amortizing Notes and shall set forth in such notes a
table specifying repayment information with respect to such notes and any
additional terms and conditions thereof.
(2) The Company may issue Extendible Notes and shall set forth in such notes
the specific terms of the extension of such notes, including without
limitation the date or dates on which the Company's option to extend can be
exercised and whether the option can be exercised with respect to some but
not all of the outstanding principal balance of such notes, and any
additional terms and conditions thereof, including without limitation the
specific terms and conditions upon which the maturity of such notes may be
extended.
Section 2.8 Rule 144A Notes:
(1) Series A Notes offered and sold in reliance on Rule 144A ("Rule 144A
Notes") shall be issued as Certificated Notes and shall include the
language set out in Schedule III attached.
<PAGE>
-16-
(2) Rule 144A Notes shall bear the legend set forth below (the "Private
Placement Legend") on the face thereof.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER HEREOF, BY PURCHASING
SUCH NOTES, AGREES FOR THE BENEFIT OF THE COMPANY AND THE GUARANTOR THAT
SUCH NOTES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)
TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, OR (C) INSIDE THE UNITED STATES
(1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT OR (2) RULE 144
UNDER THE SECURITIES ACT, IF AVAILABLE, AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE, PLEDGE OR
TRANSFER PURSUANT TO CLAUSE (B) OR C(2) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM.
Section 2.9 Special Transfer Provisions:
(1) The following provisions shall apply with respect to the registration of
any proposed transfer of Rule 144A Notes:
(a) The Trustee shall register a transfer if such transfer is being made
by a proposed transferor who has checked the box provided for on the
form of Rule 144A Note stating, or has otherwise advised the Company
and the Trustee in writing, that the sale has been made in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Rule 144A Note, stating, or
has otherwise advised the Company and the Trustee in writing, that it
is purchasing the Rule 144A Notes for its own account or an account
with respect to which it exercises sole investment discretion and that
it, or the person on whose behalf it is acting with respect to any
such account, is a QIB, and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is
aware that
<PAGE>
-17-
the transferor is relying upon its foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
(b) The Trustee shall register the transfer upon receipt of a certificate
substantially in the form of Schedule IV hereto from the proposed
transferor. Upon such transfer, the Trustee shall, upon the written
request of the transferee, issue Certificated Notes in exchange for
such Rule 144A Notes, which Certificated Notes do not include the
additional language and the legend provided for in Section 2.8 hereof.
Section 2.11 of the Original Indenture (with any necessary
modifications) shall apply to any such exchange.
(2) In any circumstance in which it may be relevant for the Trustee to know
whether a Person is a U.S. Person or a Person in the United States or is
transferring Series A Notes for the account or benefit of a U.S. Person or
a Person in the United States, the Trustee shall only be required to refer
to (as applicable) the address of the transferring registered Holder as
shown in the register maintained by the Trustee or the address of the
transferee to whom the Series A Notes are to be registered.
(3) By its acceptance of any Rule 144A Note bearing the Private Placement
Legend, each Holder of such a Rule 144A Note acknowledges the restrictions
on transfer of such Rule 144A Note set forth in this First Supplemental
Indenture and in the Private Placement Legend and agrees that it will
transfer such Rule 144A Notes only as provided in this First Supplemental
Indenture.
(4) The Trustee shall retain copies of all letters, notices and other written
communications received pursuant to this Section 2.9. The Company shall
have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time upon the giving of
reasonable written notice to the Trustee.
<PAGE>
-18-
ARTICLE 3
EXECUTION
Section 3.1 Acceptance of Trust: The Trustee hereby accepts the trusts in
this First Supplemental Indenture declared and provided for and agrees to
perform the same upon the terms and conditions and subject to the provisions
herein and in the Original Indenture set forth.
Section 3.2 Counterparts: This First Supplemental Indenture may be executed
in several counterparts, each of which when so executed shall be deemed to be
original, and such counterparts together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CASE CREDIT LTD.
By:_______________________________________________
CASE CREDIT CORPORATION
By:_______________________________________________
MONTREAL TRUST COMPANY OF CANADA
By:_______________________________________________
By:_______________________________________________
<PAGE>
SCHEDULE I
REGISTERED
CASE CREDIT LTD.
SERIES A MEDIUM-TERM NOTE
(Fixed Rate Note)
No. CFX_________ CUSIP No._________
PRINCIPAL AMOUNT: DENOMINATIONS (if other than Cdn.
dollars or Cdn. dollar denominations of
Cdn.$1,000):
ORIGINAL ISSUE DATE: SPECIFIED CURRENCY:
Canadian Dollars:
[ ] Yes
[ ] No
Foreign Currency:
Exchange Rate Agent:
STATED MATURITY: INTEREST RATE:
INTEREST PAYMENT DATE(S): PAYMENTS OF PRINCIPAL AND ANY
PREMIUM AND INTEREST:
[ ] Canadian Dollars
[ ] Specified Currency
RECORD DATE(S): DAY COUNT CONVENTION:
[ ] 30/360 for the period
from to
[ ] Actual/360 for the period
from to
[ ] Actual/Actual for the period
from to
[ ] Other
OTHER PROVISIONS: ADDENDUM ATTACHED:
[ ] Yes
[ ] No
<PAGE>
-2-
CASE CREDIT LTD. (the "Company"), for value received, hereby promises
to pay to , or registered assigns, the principal sum of
(the "Principal Amount") on the Stated Maturity specified above (except to the
extent redeemed or repaid prior to the Stated Maturity), and to pay interest
thereon on the Interest Payment Dates specified above at the Interest Rate per
annum specified above from the Original Issue Date to but excluding the date on
which the principal hereof is paid or duly made available for payment. Reference
herein to "this Note", "hereof", "herein" and comparable terms shall include an
Addendum hereto if an Addendum is specified above.
This note is one of a duly authorized series of Series A Medium-Term
Notes (hereinafter called the "Notes") of the Company issued and to be issued
under an Indenture dated as of the10th day of November, 1998 as amended or
supplemented from time to time (herein called the "Indenture") between the
Company and Montreal Trust Company of Canada, as trustee, (herein called the
"Trustee" which term includes any successor trustee under the Indenture with
respect to the series of which this Note is a part), to which Indenture
reference is hereby made for a statement of the respective rights thereunder of
the Company, the Trustee and the Holders of the Notes and the terms upon which
the Notes are to be authenticated and delivered, all to the same effect as if
the provision of the Indenture were herein set forth, to all of which provisions
the Holder of this Note assents by acceptance hereof. The Notes are unsecured
general obligations of the Company constituting unsubordinated indebtedness and
will rank pari passu with all other unsecured and unsubordinated indebtedness of
the Company from time to time outstanding. This Note is one of the series of
Notes designated above, to be issued from time to time at an aggregate initial
offering price of up to $750,000,000 which amount may be increased if duly
authorized by the Company.
All terms used in this Note which are defined in the Indenture shall,
unless otherwise defined in this Note, have the meanings assigned to them in the
Indenture.
Unless otherwise provided above or in an Addendum hereto, this Note is
not subject to any sinking fund and is not redeemable at the option of the
Company prior to the Stated Maturity.
The Company may at any time purchase Notes at any price or prices in
the open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
If so specified above or in an Addendum hereto, the registered Holder
of this Note may, but only upon notice from the Company convert all but not less
than all of such holder's Notes into an equal aggregate principal amount of a
new series of notes issued by the Company. If given, such notice from the
Company shall be given not less than 30 days nor more than 60 days prior to the
date of conversion and in accordance with the provisions of the Indenture.
Any provisions contained or incorporated by reference herein with
respect to the calculation of the interest rate applicable to this Note, its
Interest Payment Dates, the Maturity Date or any other matter relating hereto
may be modified as specified in an Addendum relating hereto if so specified
above.
<PAGE>
-3-
If this Note is designated on the first page hereof under "Other
Provisions" as an Amortizing Note or as an Extendible Note, certain additional
provisions with respect to this Note will be specified above or in an Addendum
hereto.
If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of all the Notes of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture contains provisions making binding upon all Holders of
Debt Securities (as defined in the Indenture and including the Notes) issued
thereunder resolutions passed at meetings of such Holders held in accordance
with such provisions and instruments signed by the Holders of a specified
majority of Debt Securities outstanding, which resolutions or instruments may
have the effect of amending the terms of this Note or the Indenture.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place and rate herein described.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the security
register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Trustee in the City of Toronto, duly
endorsed or accompanied by a written instrument of transfer, in form
satisfactory to the Company and the security registrar, duly executed by the
Holder hereof or by its attorney duly authorized in writing, and thereupon one
or more new Notes of this series of authorized denominations, and for the same
aggregate principal amount and tenor, will be issued to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of like tenor as requested by the Holder hereof.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note shall be governed by and construed in accordance with the
laws of the Province of Ontario.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE>
-4-
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated: CASE CREDIT LTD.
[CORPORATE SEAL] By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series
designated and referred to in the within-
mentioned Indenture.
MONTREAL TRUST COMPANY OF CANADA,
as Trustee
By:
Authorized Signature
<PAGE>
-5-
GUARANTEE OF CASE CREDIT CORPORATION
FOR VALUE RECEIVED, CASE CREDIT CORPORATION (the "Guarantor", which
term includes any successor corporation under the Indenture referred to in the
Note upon which this guarantee is endorsed (the "Indenture")), a corporation
duly organized and existing under the laws of the State of Delaware, hereby
unconditionally guarantees to the Holder of the Note upon which this Guarantee
is endorsed (the "Note") the due and punctual payment of the principal of,
premium (if any) and interest on the Note, when and as the same shall become due
and payable after any applicable grace period, whether at their respective due
dates, on redemption or on a declaration or otherwise, in accordance with the
terms of the Note and of the Indenture (the "Obligations"); provided, however,
that payment of interest on overdue instalments of interest is hereby guaranteed
only to the extent permitted by applicable law. In case of default by Case
Credit Ltd. (the "Company") in the payment of any such principal, premium or
interest, the Guarantor agrees duly and punctually to pay the same without
demand after the expiry of any applicable grace period. The Guarantor hereby
agrees that its obligations hereunder and under the Indenture shall be
unconditional, irrespective of any invalidity, illegality, irregularity or
unenforceability of the Note or the Indenture as regards the Company (other than
by reason of lack of genuineness), or the absence of any action to enforce the
same, the recovery of any judgment against the Company or any action to enforce
the same or any circumstance which might otherwise constitute a legal or
equitable discharge or defence of a guarantor. The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger, amalgamation, insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest or notice with
respect to the Note or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged except by
payment in full of the principal of, premium (if any) and interest on the Note.
The obligation of the Guarantor under this Guarantee shall be a
continuing obligation, shall cover all the Obligations, and shall apply to and
secure any ultimate balance due or remaining unpaid to the Holder of the Note.
In addition to the guarantee contained in this Guarantee and the
Indenture, the Guarantor hereby covenants and agrees to indemnify and save the
Holder of the Note harmless against all costs, losses, expenses and damages it
may suffer as a result of the Company's default in performance of any of the
Obligations.
The Guarantor shall not be or become liable under this Guarantee to
make any payment of principal, premium or interest in respect of which the
Company shall be in default if the default of the Company in respect of which
the Guarantor would otherwise be or become liable under this Guarantee shall
have been waived or directed to be waived pursuant to the provisions in that
behalf contained in the Indenture, but no waiver or consent of any kind
whatsoever shall release, alter or impair the unconditional obligation of the
Guarantor hereunder after giving effect to such waiver or consent.
<PAGE>
-6-
The Guarantor shall be subrogated to all rights of the Holder of the Note
against the Company in respect of any amount paid by the Guarantor pursuant to
the provisions of this Guarantee, 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 all Notes issued under the Indenture shall have been paid in full or
duly provided for.
No remedy for the enforcement of the rights of the Holder of the Note to
receive payment of the principal of and/or premium and/or interest on the Note,
under the Note, the Indenture and hereunder, shall be exclusive of or dependent
on any other remedy.
This Guarantee has been given in accordance with the terms of the Indenture
and is subject to all applicable provisions thereof and the same shall be deemed
to be incorporated herein.
The Guarantor hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened prior to the
creation and issuance of this Guarantee to constitute the same a valid and
legally binding obligation of the Guarantor enforceable in accordance with its
terms have been done and performed and have happened in due and strict
compliance with all applicable laws.
This Guarantee shall be construed in accordance with and governed by the
laws of the Province of Ontario.
This Guarantee shall not be valid or become obligatory for any purpose
until the Note shall have been certified by or on behalf of the Trustee under
the Indenture.
IN WITNESS WHEREOF, CASE CREDIT CORPORATION has caused this Guarantee to be
signed in its corporate name by the facsimile signature of its President and has
caused a facsimile of its corporate seal to be affixed hereto or imprinted or
otherwise reproduced hereon, and the same to be attested by the facsimile
signature of its Secretary.
This Guarantee shall be deemed to be dated the Original Issue Date of the
Note.
CASE CREDIT CORPORATION
By:__________________________________
President c/s
Attest:________________________
Secretary
<PAGE>
-7-
ASSIGNMENT/TRANSFER FORM
------------------------
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto__________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite assignee's name and address including postal code
and insert assignee's Social Insurance Number)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
Dated:__________________________ _______________________________
Signature of transferring registered Holder*
Signature of transferring registered Holder guaranteed by:**
____________________________________
Signature of Guarantor
* NOTICE: The signature of the registered Holder to
this assignment must correspond with the name as
written upon the face of the within instrument in
every particular, without alteration or enlargement or
any change whatsoever.
** Signature must be guaranteed by an authorized officer
of a Canadian chartered bank or a major Canadian trust
company or by a medallion signature guarantee from a
member of a recognized Medallion Signature Guarantee Program.
<PAGE>
-8-
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
<PAGE>
SCHEDULE II
REGISTERED
CASE CREDIT LTD.
SERIES A MEDIUM-TERM NOTE
(Floating Rate Note)
No. CFLR _ CUSIP No. __________
PRINCIPAL AMOUNT: DENOMINATIONS (if other than Cdn. dollars
or Cdn. dollar denominations of Cdn.$1,000):
ORIGINAL ISSUE DATE: STATED MATURITY:
INTEREST PAYMENT PERIOD: INTEREST PAYMENT DATES:
INTEREST RATE BASIS: RECORD DATE(S):
INITIAL INTEREST RATE: INTEREST RESET DATE(S):
INTEREST RESET PERIOD: INTEREST DETERMINATION DATE(S):
OPTIONAL REPAYMENT DATE(S):
SPREAD (PLUS OR MINUS): SPREAD MULTIPLIER:
PAYMENT OF PRINCIPAL AND ANY SPECIFIED CURRENCY:
PREMIUM AND INTEREST: Canadian Dollars:
[ ] Canadian Dollars [ ] Yes
[ ] Specified Currency [ ] No
Foreign Currency:
Exchange Rate Agent:
DESIGNATED LIBOR PAGE
[ ] LIBOR Telerate
[ ] LIBOR Reuters
INDEX MATURITY: INDEX CURRENCY:
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE:
CALCULATION DATE: CALCULATION AGENT:
DAY COUNT CONVENTION:
[ ] 30/360 for the period
from to
[ ] Actual/360 for the period
from to
[ ] Actual/Actual for the period
from to
[ ] Other
OTHER PROVISIONS: ADDENDUM ATTACHED:
[ ] Yes
[ ] No
<PAGE>
-2-
CASE CREDIT LTD. (the "Company"), for value received, hereby promises to
pay to , or registered assigns, the principal sum
of (the "Principal Amount") on the Stated Maturity specified
above (except to the extent redeemed or repaid prior to the Stated Maturity),
and to pay interest thereon on the Interest Payment Dates specified above, at a
rate per annum equal to the Initial Interest Rate specified above from the
Original Issue Date to the first Interest Reset Date specified above and
thereafter at a rate per annum determined in accordance with the provisions
hereof and any Addendum relating hereto depending upon the Interest Rate Basis
or Bases, if any, and such other terms specified above, until but excluding the
date on which the principal hereof is paid or duly made available for payment.
Reference herein to "this Note", "hereof" "herein" and comparable terms shall
include an Addendum hereto if an Addendum is specified above.
This note is one of a duly authorized series of Series A Medium-Term Notes
(hereinafter called the "Notes") of the Company issued and to be issued under an
Indenture dated as of the 10th day of November, 1998 as amended or supplemented
from time to time (herein called the "Indenture") between the Company and
Montreal Trust Company of Canada, as trustee, (herein called the "Trustee",
which term includes any successor trustee under the Indenture with respect to
the series of which this Note is a part) to which Indenture reference is hereby
made for a statement of the respective rights thereunder of the Company, the
Trustee and the Holders of the Notes and the terms upon which the Notes are to
be authenticated and delivered, all to the same effect as if the provisions of
the Indenture were herein set forth to all of which provisions the Holders of
this Note assents by acceptance hereof. The Notes are unsecured general
obligations of the Company constituting unsubordinated indebtedness and will
rank pari passu with all other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding. This Note is one of the series of Notes
designated above, to be issued from time to time at an aggregate initial
offering price of up to $750,000,000 which amount may be increased if duly
authorized by the Company.
All terms used in this Note which are defined in the Indenture shall,
unless otherwise defined in this Note, have the meanings assigned to them in the
Indenture.
Unless otherwise provided above or in an Addendum hereto, this Note is not
subject to any sinking fund and is not redeemable at the option of the Company
prior to the Stated Maturity.
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
If so specified above or in an Addendum hereto, the registered Holder of
this Note may convert all but not less than all of such holder's Notes into an
equal aggregate principal amount of a new series of notes issued by the Company.
If given, such notice from the Company shall be given not less than 30 days nor
more than 60 days prior to the date of conversion and in accordance with the
provisions of the Indenture.
<PAGE>
-3-
If this Note is designated on the first page hereof under "Other
Provisions" as an Amortizing Note or as an Extendible Note, certain additional
provisions with respect to this Note will be specified above or in an Addendum
hereto.
If an Event of Default with respect to the Notes of this series shall occur
and be continuing, the principal of all the Notes of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions making binding upon all Holders of Debt
Securities (as defined in the Indenture and including the Notes) issued
thereunder resolutions passed at meetings of such Holders held in accordance
with such provisions and instruments signed by the Holders of a specified
majority of Debt Securities outstanding, which resolutions or instruments may
have the effect of amending the terms of this Note or the Indenture.
Any provision contained or incorporated by reference herein with respect to
the determination of an Interest Rate Basis, the calculation of the interest
rate applicable to this Note, the Interest Payment Dates, the Maturity Date or
any other variable term relating hereto may be modified as specified in an
Addendum relating hereto if so specified above.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place and rate herein described.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note may be registered on the security register of
the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Trustee in the City of Toronto, duly endorsed or
accompanied by a written instrument of transfer, in form satisfactory to the
Company and the security registrar, duly executed by the Holder hereof or by its
attorney duly authorized in writing, and thereupon one or more new Notes of this
series of authorized denominations, and for the same aggregate principal amount
and tenor, will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is exchangeable for a like aggregate principal amount of Notes
of like tenor as requested by the Holder hereof.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note shall be governed by and construed in accordance with the laws of
the Province of Ontario.
<PAGE>
-4-
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated: CASE CREDIT LTD.
[CORPORATE SEAL] By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series
designated and referred to in the within-
mentioned Indenture.
MONTREAL TRUST COMPANY OF CANADA,
as Trustee
By:
Authorized Signature
<PAGE>
-5-
GUARANTEE OF CASE CREDIT CORPORATION
FOR VALUE RECEIVED, CASE CREDIT CORPORATION (the "Guarantor", which term
includes any successor corporation under the Indenture referred to in the Note
upon which this guarantee is endorsed (the "Indenture")), a corporation duly
organized and existing under the laws of the State of Delaware, hereby
unconditionally guarantees to the Holder of the Note upon which this Guarantee
is endorsed (the "Note") the due and punctual payment of the principal of,
premium (if any) and interest on the Note, when and as the same shall become due
and payable after any applicable grace period, whether at their respective due
dates, on redemption or on a declaration or otherwise, in accordance with the
terms of the Note and of the Indenture (the "Obligations"); provided, however,
that payment of interest on overdue instalments of interest is hereby guaranteed
only to the extent permitted by applicable law. In case of default by Case
Credit Ltd. (the "Company") in the payment of any such principal, premium or
interest, the Guarantor agrees duly and punctually to pay the same without
demand after the expiry of any applicable grace period. The Guarantor hereby
agrees that its obligations hereunder and under the Indenture shall be
unconditional, irrespective of any invalidity, illegality, irregularity or
unenforceability of the Note or the Indenture as regards the Company (other than
by reason of lack of genuineness), or the absence of any action to enforce the
same, the recovery of any judgment against the Company or any action to enforce
the same or any circumstance which might otherwise constitute a legal or
equitable discharge or defence of a guarantor. The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger, amalgamation, insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest or notice with
respect to the Note or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged except by
payment in full of the principal of, premium (if any) and interest on the Note.
The obligation of the Guarantor under this Guarantee shall be a continuing
obligation, shall cover all the Obligations, and shall apply to and secure any
ultimate balance due or remaining unpaid to the Holder of the Note.
In addition to the guarantee contained in this Guarantee and the Indenture,
the Guarantor hereby covenants and agrees to indemnify and save the Holder of
the Note harmless against all costs, losses, expenses and damages it may suffer
as a result of the Company's default in performance of any of the Obligations.
The Guarantor shall not be or become liable under this Guarantee to make
any payment of principal, premium or interest in respect of which the Company
shall be in default if the default of the Company in respect of which the
Guarantor would otherwise be or become liable under this Guarantee shall have
been waived or directed to be waived pursuant to the provisions in that behalf
contained in the Indenture, but no waiver or consent of any kind whatsoever
shall release, alter or impair the unconditional obligation of the Guarantor
hereunder after giving effect to such waiver or consent.
<PAGE>
-6-
The Guarantor shall be subrogated to all rights of the Holder of the Note
against the Company in respect of any amount paid by the Guarantor pursuant to
the provisions of this Guarantee, 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 all Notes issued under the Indenture shall have been paid in full or
duly provided for.
No remedy for the enforcement of the rights of the Holder of the Note to
receive payment of the principal of and/or premium and/or interest on the Note,
under the Note, the Indenture and hereunder, shall be exclusive of or dependent
on any other remedy.
This Guarantee has been given in accordance with the terms of the Indenture
and is subject to all applicable provisions thereof and the same shall be deemed
to be incorporated herein.
The Guarantor hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened prior to the
creation and issuance of this Guarantee to constitute the same a valid and
legally binding obligation of the Guarantor enforceable in accordance with its
terms have been done and performed and have happened in due and strict
compliance with all applicable laws.
This Guarantee shall be construed in accordance with and governed by the
laws of the Province of Ontario.
This Guarantee shall not be valid or become obligatory for any purpose
until the Note shall have been certified by or on behalf of the Trustee under
the Indenture.
IN WITNESS WHEREOF, CASE CREDIT CORPORATION has caused this Guarantee to be
signed in its corporate name by the facsimile signature of its President and has
caused a facsimile of its corporate seal to be affixed hereto or imprinted or
otherwise reproduced hereon, and the same to be attested by the facsimile
signature of its Secretary.
This Guarantee shall be deemed to be dated the Original Issue Date of the
Note.
CASE CREDIT CORPORATION
By:__________________________________
President c/s
Attest:________________________
Secretary
<PAGE>
-7-
ASSIGNMENT/TRANSFER FORM
------------------------
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto _________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite assignee's name and address including postal code
and insert assignee's Social Insurance Number)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ___________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
Dated:______________________ _____________________________________________
Signature of transferring registered Holder*
Signature of transferring registered Holder guaranteed by:**
__________________________________
Signature of Guarantor
* NOTICE: The signature of the registered Holder to
this assignment must correspond with the name as
written upon the face of the within instrument in
every particular, without alteration or enlargement or
any change whatsoever.
** Signature must be guaranteed by an authorized officer
of a Canadian chartered bank or a major Canadian trust
company or by a medallion signature guarantee from a
member of a recognized Medallion Signature Guarantee Program.
<PAGE>
-8-
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
<PAGE>
SCHEDULE III
Additional Provisions for Series A Notes
transferred under Rule 144A
In connection with any transfer of this Note occurring prior to the date which
is two years after the later of the original issue date of the Notes and the
last day on which the Company or any Affiliate of the Company was the owner of
this Note (or any predecessor of such Note), the undersigned confirms that it
has not utilized any general solicitation or general advertising in connection
with and that such transfer is:
[Check One]
(1) [_] to the Company or a subsidiary thereof; or
(2) [_] pursuant to and in compliance with Rule 144A under the United States
Securities Act of 1933, as amended; or
(3) [_] outside the United States to a transferee who is not a "U.S. Person"
in compliance with Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof, provided, that if box (3) is checked, the Company or
the Trustee may require, prior to registering any such transfer of the Notes, in
its sole discretion, such written legal opinions, certifications and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to Regulation S under the United
States Securities Act of 1933, as amended.
If none of the foregoing boxes are checked, the Trustee or Registrar shall not
be obligated to register this Note in the name of any person other than the
Holder hereof.
Date:___________________ Your signature:_____________________________________
(Sign exactly as your name appears on
the other side of this Note)
Signature Guarantee:________________________________
<PAGE>
-2-
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the United States Securities Act of 1933,
as amended, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A
Date:______________ _________________________________________________
NOTICE: To be executed by an authorized signatory
<PAGE>
SCHEDULE IV
Form of Certificate
to be delivered on transfers
pursuant to Regulation S
Case Credit Ltd.
c/o Montreal Trust Company of Canada
(as registrar and transfer agent for the
Series A Medium-Term Notes of Case Credit Ltd.)
Corporate Trust Services
151 Front Street West, Suite 605
Toronto, ON M5J 2N1
Dear Ladies & Gentlemen:
Re: Case Credit Ltd. (the "Company")
Series A Medium-Term Notes (the "Notes")
- ----------------------------------------------------
In connection with our proposed sale of $. aggregate principal amount of the
Notes, we confirm that such sale has been effected pursuant to and in accordance
with Regulation S under the United States Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) either (a) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting
on our behalf knows that the transaction has been pre-arranged with a buyer
in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of 1933, as
amended.
In addition, if the sale is made during a restricted period and the provisions
of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable thereto, we
confirm that such sale has been made in accordance with the applicable
provisions of Rule 903(c)(2) or Rule 904(c)(1), as the case may be.
You, the Company and Case Credit Corporation are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any
<PAGE>
-2-
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:______________________________
Authorized Signature
<PAGE>
CASE CREDIT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
<TABLE>
<CAPTION>
Years Ended
December 31,
----------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net Income.................................................... $ 85 $ 82 $ 85
Add:
Interest expense............................................ 143 98 72
Amortization of capitalized debt expense.................... 2 1 2
Income tax expense and other taxes on income................ 46 40 45
Extraordinary loss.......................................... -- -- 3
---- ---- ----
Earnings as defined....................................... $276 $221 $207
==== ==== ====
Interest expense.............................................. $143 $ 98 $ 72
Amortization of capitalized debt expense...................... 2 1 2
---- ---- ----
Fixed charges as defined.................................. $145 $ 99 $ 74
==== ==== ====
Ratio of earnings to fixed charges............................ 1.90x 2.23x 2.80x
==== ==== ====
</TABLE>
35
<PAGE>
ARTHUR ANDERSEN LLP
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-K, into the Company's previously filed
Registration Statement File Nos. 333-52775 and 333-71443
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin,
February 26, 1999.
