<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------
THE VALSPAR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 36-2443580
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 1101 Third Street South Identification No.)
Minneapolis, Minnesota 55415
(612) 332-7371
</TABLE>
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
Paul C. Reyelts
Senior Vice President, Finance
Chief Financial Officer
The Valspar Corporation
1101 Third Street South
Minneapolis, Minnesota 55415
(612) 332-7371
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
Rolf Engh, Esq. Richard D. McNeil, Esq.
Senior Vice President, General Counsel and Secretary Martin R. Rosenbaum, Esq.
The Valspar Corporation Lindquist & Vennum P.L.L.P.
1101 Third Street South 4200 IDS Center
Minneapolis, MN 55415 Minneapolis, Minnesota 55402
(612) 332-7371 (612) 371-3211
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after this Registration Statement becomes effective. If the only securities
being registered on this Form are being offered pursuant to dividend or interest
reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earliest effective registration statement
for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
------------------------------
CALCULATION OF REGISTRATION FEE(1)
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities(2)................................ $300,000,000 (2) (2) $83,400
</TABLE>
(1) Estimated in accordance with Rule 457 solely for the purpose of calculating
the registration fee.
(2) Includes such indeterminate number of debt securities as may be issued at
indeterminable prices, but with an aggregate initial offering price not to
exceed $300,000,000. Also includes such additional principal amount as may
be necessary such that if debt securities are issued with original issue
discount, the aggregate initial offering price of all debt securities will
equal $300,000,000 less the dollar amount of other securities previously
issued.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
["V" LOGO APPEARS HERE]
The Valspar Corporation
1101 Third Street South
Minneapolis, Minnesota 55415
(612) 332-7371
$300,000,000
DEBT SECURITIES
------------------------
We will provide the specific terms of these securities in supplements to this
prospectus. You should read this prospectus and the prospectus supplement
carefully before you invest.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated , 1999
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, we intend to sell debt securities either separately or in
units, in one or more offerings up to a total dollar amount of $300,000,000.
This prospectus provides you with a general description of those securities.
Each time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. When we refer in
this prospectus to the prospectus supplement, we mean the specific prospectus
supplement that applies to the series of Debt Securities (as defined below) we
are offering to you. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read this prospectus and
the prospectus supplement together with the additional information described
under the heading "Where You Can Find More Information."
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about
our company and the securities offered under this prospectus. That registration
statement can be read at the SEC web site or at the SEC offices mentioned under
the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file with the SEC at its public reference facilities at 450
Fifth Street, N.W., Washington, D.C. 20549, 7 World Trade Center, Suite 1300,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. You can also obtain copies of the documents
at prescribed rates by writing to the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
facilities. Our SEC filings are also available at the office of the New York
Stock Exchange. For further information on obtaining copies of our public
filings at the New York Stock Exchange, you should call (212) 656-5060.
We "incorporate by reference" into this prospectus the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. Information that we file subsequently with
the SEC will automatically update this prospectus. We incorporate by reference
the documents listed below, and any filings we make with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 after the
initial filing of the registration statement that contains this prospectus and
before the time that we sell all the securities offered by this prospectus:
- Annual report on Form 10-K for the year ended October 30, 1998 (including
information specifically incorporated by reference into our Form 10-K from
our 1998 annual report to shareholders and our definitive notice and proxy
statement for our 1999 annual meeting of shareholders held on February 24,
1999);
- Quarterly report on Form 10-Q for the quarter ended January 29, 1999;
- Current report on Form 8-K dated March 15, 1999, as amended by Form 8-K/A
dated May 12, 1999.
2
<PAGE>
You may request a copy of these filings at no cost, by writing to or
telephoning us at the following address.
Secretary
The Valspar Corporation
1101 Third Street South
Minneapolis, Minnesota 55415
(612) 332-7371
You should rely only on the information included or incorporated by
reference in this prospectus or the prospectus supplement. We have not
authorized anyone else to provide you with different information. We may only
use this prospectus to sell securities if we also deliver a prospectus
supplement. We are only offering these securities in states where the offer is
permitted. You should not assume that the information in this prospectus or the
prospectus supplement is accurate as of any date other than the dates on the
front of those documents. Information on our Web site is not a part of this
prospectus or a prospectus supplement.
THE COMPANY
We operate in one business segment, the manufacture and distribution of
paints and coatings. Our products include:
- paints, varnishes and stains, primarily for the do-it-yourself market
- coatings and inks for rigid packaging, principally food and beverage cans,
for global customers
- industrial coatings for metal, wood and plastic for original equipment
manufacturers
- resins and colorants for our use and for other paint and coatings
manufacturers
- coatings for refinishing vehicles
- high performance floor coatings
When we refer to "our company," we," "our" and "us" in this prospectus under
the headings "The Company" and "Use of Proceeds," we mean The Valspar
Corporation and its subsidiaries. When we use these terms in other places in
this prospectus, we refer only to The Valspar Corporation unless the context
indicates that we mean something else.
3
<PAGE>
USE OF PROCEEDS
Unless the prospectus supplement states otherwise, the net proceeds from the
sale of the offered securities will be added to our general funds and may be
used to:
- repay bank debt;
- finance acquisitions of companies and other assets; and
- provide working capital.
Until the net proceeds have been used, they will be invested in short-term
marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FISCAL YEAR ENDED QUARTER ENDED
------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
OCTOBER 28, OCTOBER 27, OCTOBER 25, OCTOBER 31, OCTOBER 30, JANUARY 30,
1994 1995 1996 1997 1998 1998
------------- ------------- ------------- ------------- ------------- ---------------
Ratio of Earnings to Fixed
Charges........................ 24.8x 17.1x 25.0x 18.3x 11.1x 7.9x
<CAPTION>
<S> <C>
JANUARY 29,
1999
---------------
Ratio of Earnings to Fixed
Charges........................ 5.7x
</TABLE>
For purposes of calculating the ratios, fixed charges consist of interest
expense, amortized expenses related to debt and estimated interest portion of
operating leases. The ratio of earnings to fixed charges is calculated as
follows:
(income before income taxes) + (fixed charges)
(fixed charges)
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the Debt
Securities. The prospectus supplement will describe the specific terms of the
Debt Securities offered through that prospectus supplement and any general terms
outlined in this section that will not apply to those Debt Securities.
The Debt Securities will be issued under an indenture (the "INDENTURE")
between us and the trustee named in the prospectus supplement (the "TRUSTEE").
As used in this prospectus, "DEBT SECURITIES" means the debentures, notes, bonds
and other evidences of indebtedness that we issue and the Trustee authenticates
and delivers under the Indenture.
We have summarized certain terms and provisions of the Indenture in this
section. The summary is not complete. We have also filed the form of the
Indenture as an exhibit to the registration statement. You should read the form
of Indenture for additional information before you buy any Debt Securities. The
summary that follows includes references to section numbers of the Indenture so
that you can more easily locate these provisions. Capitalized terms used but not
defined in this summary have the meanings specified in the Indenture.
GENERAL
The Debt Securities will be our direct unsecured obligations. The Indenture
does not limit the amount of Debt Securities that we may issue and permits us to
issue Debt Securities from time to time. Debt Securities issued under the
Indenture will be issued as part of a series that has been established by us
pursuant to the Indenture. (Section 302) Unless a prospectus supplement relating
to Debt Securities states otherwise, the Indenture and the terms of the Debt
Securities will not contain any covenants designed to afford holders of any Debt
Securities protection in a highly leveraged or other transaction involving us
that may adversely affect holders of the Debt Securities.
4
<PAGE>
A prospectus supplement relating to a series of Debt Securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
- the title and type of the Debt Securities;
- any limit on the total principal amount of the Debt Securities;
- the price at which the Debt Securities will be issued;
- the date or dates on which the principal of and premium, if any, on the
Debt Securities will be payable;
- the maturity date of the Debt Securities;
- if the Debt Securities will bear interest:
- the interest rate on the Debt Securities;
- the date from which interest will accrue;
- the record and interest payment dates for the Debt Securities;
- the first interest payment date; and
- any circumstances under which we may defer interest payments;
- any optional redemption provisions that would permit us or the Holders (as
defined below) of Debt Securities to elect redemption of the Debt
Securities prior to their final maturity;
- any sinking fund provisions that would obligate us to redeem the Debt
Securities prior to their final maturity;
- the currency or currencies in which the Debt Securities will be
denominated and payable, if other than U.S. dollars;
- any provisions that would permit us or the Holders of the Debt Securities
to elect the currency or currencies in which the Debt Securities are paid;
- whether the Debt Securities will be subordinated to our other debt;
- any changes to or additional Events of Default;
- any changes to or additional covenants;
- whether the Debt Securities will be issued in whole or in part in the form
of Global Securities and, if so, the Depositary for those Global
Securities (a "GLOBAL SECURITY" means a Debt Security that we issue in
accordance with the Indenture to represent all or part of a series of Debt
Securities);
- any special tax implications of the Debt Securities; and
- any other terms of the Debt Securities.
A "HOLDER," means the person in whose name a Note is registered in the Note
Register. (Section 101)
PAYMENT AND TRANSFER
In the prospectus supplement, we will designate a "PLACE OF PAYMENT" where
you can receive payment of the principal of and any premium and interest on the
Debt Securities or transfer the Debt Securities. Even though we will designate a
Place of Payment, we may elect to pay any interest on the Debt Securities by
mailing a check to the person listed as the owner of the Debt Securities in the
Note
5
<PAGE>
Register or by wire transfer to an account designated by that person. (Section
307) There will be no service charge for any registration of transfer or
exchange of the Debt Securities, but we may require you to pay any tax or other
governmental charge payable in connection with a transfer or exchange of the
Debt Securities.
DENOMINATIONS
Unless the prospectus supplement states otherwise, the Debt Securities will
be issued only in registered form, without coupons, in denominations of $1,000
each or multiples of $1,000.
ORIGINAL ISSUE DISCOUNT
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities and sold at a substantial discount below their stated principal
amount. If a Debt Security is an "ORIGINAL ISSUE DISCOUNT SECURITY," that means
that an amount less than the principal amount of the Debt Security will be due
and payable upon a declaration of acceleration of the maturity of the Debt
Security pursuant to the Indenture. (Section 301) The prospectus supplement will
describe the federal income tax consequences and other special factors which
should be considered prior to purchasing any Original Issue Discount Securities.
CONSOLIDATION, MERGER OR SALE
The Indenture generally permits a consolidation or merger between us and
another corporation. It also permits the sale or transfer by us of all or
substantially all of our property and assets and the purchase by us of all or
substantially all of the property and assets of another corporation. These
transactions are permitted if:
- the resulting or acquiring corporation (if other than us) assumes all of
our responsibilities and liabilities under the Indenture, including the
payment of all amounts due on the Debt Securities and performance of the
covenants in the Indenture; and
- immediately after the transaction, no Event of Default exists.
If we consolidate or merge with or into any other corporation or sell all or
substantially all of our assets according to the terms and conditions of the
Indenture, the resulting or acquiring corporation will be substituted for us in
the Indenture with the same effect as if it had been an original party to the
Indenture. As a result, the successor corporation may exercise our rights and
powers under the Indenture, in our name or in its own name and we will be
released from all our liabilities and obligations under the Indenture and under
the Debt Securities. (Sections 801 and 802)
MODIFICATION AND WAIVER
Under the Indenture, certain of our rights and obligations and certain of
the rights of Holders of the Debt Securities may be modified or amended with the
consent of the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of each series of Debt Securities affected by the
modification or amendment. The following modifications and amendments will not
be effective against any Holder without its consent:
- a change in the stated maturity date of any payment of principal or
interest;
- a change in the rate of interest;
- a reduction in certain payments due on the Debt Securities;
- a change in the Place of Payment or currency in which any payment on the
Debt Securities is payable;
6
<PAGE>
- a limitation of a Holder's right to sue us for the enforcement of certain
payments due on the Debt Securities;
- a reduction in the percentage of Outstanding Debt Securities required to
consent to a modification, waiver or amendment of the Indenture;
- a modification of any of the foregoing requirements or a reduction in the
percentage of Outstanding Debt Securities required to waive compliance
with certain provisions of the Indenture or to waive certain defaults
under the Indenture. (Section 902)
EVENTS OF DEFAULT
"EVENT OF DEFAULT," when used in the Indenture with respect to any series of
Debt Securities, means any of the following:
- failure to pay interest on any Debt Security of that series for 10 days
after the payment is due;
- failure to pay the principal of or any premium on any Debt Security of
that series when due;
- failure to perform any other covenant in the Indenture that applies to
Debt Securities of that series for 30 days after we have received written
notice of the failure to perform in the manner specified in the Indenture;
- default in payment of principal amount of $10 million or more under any
Indebtedness for borrowed money (including other series of Debt
Securities), or default under any mortgage, lien or other similar
encumbrance, indenture or instrument (including the Indenture) which
secures any Indebtedness for borrowed money, and which results in
acceleration of the maturity of an outstanding principal amount of
Indebtedness greater than $10 million, unless such default is cured or
such acceleration is rescinded;
- certain events in bankruptcy, insolvency or reorganization;
- a final judgment for payment of money in excess of $10 million is entered
against us and the judgment is unsatisfied for 60 days without a stay of
execution or;
- any other Event of Default that may be specified for the Debt Securities
of that series when that series is created. (Section 501)
If an Event of Default for any series of Debt Securities occurs and
continues, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Outstanding Debt Securities of the series may declare the entire
principal of all the Debt Securities of that series to be due and payable
immediately. If such a declaration occurs, the Holders of a majority of the
aggregate principal amount of the Outstanding Debt Securities of that series
can, subject to certain conditions, rescind the declaration. (Section 502)
The prospectus supplement relating to each series of Debt Securities which
are Original Issue Discount Securities will describe the particular provisions
that relate to the acceleration of maturity of a portion of the principal amount
of such series when an Event of Default occurs and continues.
An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under the Indenture. The Indenture requires us to file an
Officers' Certificate with the Trustee each quarter that states that certain
defaults do not exist under the terms of the Indenture. (Section 1011) The
Trustee may withhold notice to the Holders of Debt Securities of any default
(except defaults in the payment of principal, premium, or interest) if it
considers such withholding of notice to be in the best interests of the Holders.
(Section 602)
7
<PAGE>
Other than its duties in the case of a default, a Trustee is not obligated
to exercise any of its rights or powers under the Indenture at the request,
order or direction of any Holders, unless the Holders offer the Trustee
reasonable indemnification. (Section 603) If reasonable indemnification is
provided, then, subject to certain other rights of the Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
may, with respect to the Debt Securities of that series, direct the time, method
and place of:
- conducting any proceeding for any remedy available to the Trustee; or
- exercising any trust or power conferred upon the Trustee. (Section 512)
The Holder of a Debt Security of any series will have the right to begin any
proceeding with respect to the Indenture or for any remedy only if:
- the Holder has previously given the Trustee written notice of a continuing
Event of Default with respect to that series;
- the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series have made a written request of,
and offered reasonable indemnification to, the Trustee to begin such
proceeding;
- the Trustee has not started such proceeding within 60 days after receiving
the request; and
- the Trustee has not received directions inconsistent with such request
from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series during those 60 days. (Section
507)
However, the Holder of any Debt Security will have an absolute right to receive
payment of principal of and any premium and interest on the Debt Security when
due and to institute suit to enforce such payment. (Section 508)
PLAN OF DISTRIBUTION
We may sell the securities offered pursuant to this prospectus through
agents, through underwriters or dealers or directly to one or more purchasers.
Underwriters, dealers and agents that participate in the distribution of the
securities offered pursuant to this prospectus may be underwriters as defined in
the Securities Act of 1933 and any discounts or commissions received by them
from us and any profit on the resale of the offered securities by them may be
treated as underwriting discounts and commissions under the Securities Act. Any
underwriters or agents will be identified and their compensation (including
underwriting discount) will be described in the prospectus supplement. The
prospectus supplement will also describe other terms of the offering, including
any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which the offered securities may be listed.
The distribution of the securities offered under this prospectus may occur
from time to time in one or more transactions at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
If the prospectus supplement indicates, we will authorize dealers or our
agents to solicit offers by certain institutions to purchase offered securities
from us pursuant to contracts that provide for payment and delivery on a future
date. We must approve all institutions, but they may include, among others:
- commercial and savings banks;
- insurance companies;
8
<PAGE>
- pension funds;
- investment companies; and
- educational and charitable institutions.
The institutional purchaser's obligations under the contract are only
subject to the condition that the purchase of the offered securities at the time
of delivery is allowed by the laws that govern the purchaser. The dealers and
our agents will not be responsible for the validity or performance of the
contracts.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make as a result of those
certain civil liabilities.
When we issue the securities offered by this prospectus, they may be new
securities without an established trading market. If we sell a security offered
by this prospectus to an underwriter for public offering and sale, the
underwriter may make a market for that security, but the underwriter will not be
obligated to do so and could discontinue any market making without notice at any
time. Therefore, we cannot give any assurances to you concerning the liquidity
of any security offered by this prospectus.
Underwriters and agents and their affiliates may be customers of, engage in
transactions with, or perform services for us or our subsidiaries in the
ordinary course of their businesses.
LEGAL OPINIONS
Lindquist & Vennum P.L.L.P. will issue an opinion about the legality of the
securities offered by this prospectus. Any underwriters will be represented by
their own legal counsel.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included or incorporated by reference in our
Annual Report on Form 10-K for the year ended October 30, 1998, as set forth in
their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. Our financial statements and schedule
are incorporated by reference in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
PricewaterhouseCoopers LLP, independent auditors, have audited the combined
financial statements of the Dexter Coatings Acquired Entities, included in our
Form 8-K/A dated May 12, 1999 as of and for the year ended December 31, 1998 as
set forth in their report, which is incorporated by reference in this prospectus
and elsewhere in the registration statement. These financial statements are
incorporated by reference in reliance on PricewaterhouseCoopers LLP's report,
given on the authority of that firm as experts in accounting and auditing.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered:
<TABLE>
<S> <C>
Registration Fee.................................................. $ 83,400
Legal Fees and Expenses*.......................................... 60,000
Trustee Fees and Expenses*........................................ 20,000
Accounting Fees and Expenses*..................................... 25,000
Blue Sky and Legal Investment Fees and Expenses*.................. 10,000
Printing and Engraving Fees*...................................... 20,000
Rating Agency Fees*............................................... 100,000
Miscellaneous*.................................................... 31,600
---------
Total............................................................. $ 350,000
---------
---------
</TABLE>
* Estimated pursuant to instruction to Item 511 of Regulation S-K.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under provisions of the By-laws of the Registrant, directors and officers
will be indemnified for any and all judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys fees, in connection with
threatened, pending or completed actions, suits or proceedings, whether civil,
or criminal, administrative or investigative (other than an action arising by or
in the right of the Registrant), if such director or officer has been wholly
successful on the merits or otherwise, or is found to have acted in good faith
and in a manner he or she reasonably believes to be in or not opposed to the
best interests of the Registrant, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In addition, directors and officers will be indemnified for reasonable expenses
in connection with threatened, pending or completed actions or suits by or in
the right of Registrant if such director or officer has been wholly successful
on the merits or otherwise, or is found to have acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Registrant, except in the case of certain findings by a court
that such person is liable for negligence or misconduct in his or her duty to
the Registrant unless such court or the Delaware Court of Chancery also finds
that such person is nevertheless fairly and reasonably entitled to indemnity.
The Registrant's Certificate of Incorporation also eliminates the liability of
directors of the Registrant for monetary damages to the fullest extent
permissible under Delaware law.
Section 145 of the Delaware General Corporation Law states:
(a) A corporation shall have the power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action arising by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction,
II-1
<PAGE>
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expense which the Court of Chancery or
such other court shall deem proper.
Pursuant to the terms of forms of underwriting agreements and form of
selling agency agreement filed as Exhibits 1(a) and 1(b) to this Registration
Statement, the directors and officers of the Registrant will be indemnified
against certain civil liabilities that they may incur under the Securities Act
of 1933 in connection with this Registration Statement and the related
prospectus and prospectus supplement.
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<S> <C>
1(a) Form of Underwriting Agreement
1(b) Form of Selling Agency Agreement
4(a) Form of Indenture
4(b) Form of Note
4(c) Form of Original Issue Discount Note
5 Opinion of Lindquist & Vennum P.L.L.P., counsel to the Registrant
12 Ratio of Earnings to Fixed Charges
23(a) Consent of Lindquist & Vennum P.L.L.P., counsel to the Registrant (included
as part of Exhibit 5)
23(b) Consent of Ernst & Young LLP
23(c) Consent of PricewaterhouseCoopers LLP
24 Powers of Attorney (included with signature page)
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-2
<PAGE>
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) That, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(e) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration
II-3
<PAGE>
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(f) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis and the State of Minnesota, on the 14th
day of May, 1999.
THE VALSPAR CORPORATION
By /s/ RICHARD M. ROMPALA
-----------------------------------------
Richard M. Rompala, Chairman of the Board,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of The Valspar Corporation, a Delaware corporation (the "Corporation"), does
hereby make, constitute and appoint Paul C. Reyelts and Deborah D. Weiss or any
one of them, the undersigned's true and lawful attorneys-in-fact, with power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as director and/or officer of
the Corporation to one or more Registration Statements, on Form S-3, or other
applicable forms, and all amendments, including post-effective amendments,
thereto, to be filed by the Corporation with the Securities and Exchange
Commission ("SEC") in connection with the registration under the Securities Act
of 1933, as amended, of debt securities or other securities of the Corporation,
and to file the same, with all exhibits thereto and other supporting documents,
with the SEC.
The undersigned also grants to said attorneys-in-fact, and each of them,
full power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted. This Power of Attorney shall remain in effect until revoked in writing
by the undersigned.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 14th day of May, 1999 by the
following persons in the capacities indicated:
NAME TITLE
- --------------------------- ------------------------------
Chairman of the Board,
/s/ RICHARD M. ROMPALA President and Chief
- --------------------------- Executive Officer (Principal
Richard M. Rompala Executive Officer)
Senior Vice President and
/s/ PAUL C. REYELTS Chief Financial Officer
- --------------------------- (Principal Financial
Paul C. Reyelts Officer)
/s/ KATHLEEN P. PEPSKI Vice President and Controller
- --------------------------- (Principal Accounting
Kathleen P. Pepski Officer)
/s/ SUSAN S. BOREN Director
- ---------------------------
Susan S. Boren
II-5
<PAGE>
NAME TITLE
- --------------------------- ------------------------------
II-6
<PAGE>
- --------------------------- Director
Jeffrey H. Curler
/s/ THOMAS R. MCBURNEY Director
- ---------------------------
Thomas R. McBurney
/s/ KENDRICK B. MELROSE Director
- ---------------------------
Kendrick B. Melrose
/s/ GREGORY R. PALEN Director
- ---------------------------
Gregory R. Palen
/s/ LAWRENCE PERLMAN Director
- ---------------------------
Lawrence Perlman
Director
- ---------------------------
Edward B. Pollak
Director
- ---------------------------
Michael P. Sullivan
/s/ C. ANGUS WURTELE Director
- ---------------------------
C. Angus Wurtele
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<S> <C>
1(a) Form of Underwriting Agreement
1(b) Form of Selling Agency Agreement
4(a) Form of Indenture
4(b) Form of Note
4(c) Form of Original Issue Discount Note
5 Opinion of Lindquist & Vennum P.L.L.P., counsel to the Registrant
12 Ratio of Earnings to Fixed Charges
23(a) Consent of Lindquist & Vennum P.L.L.P., counsel to the Registrant (included as part of Exhibit 5)
23(b) Consent of Ernst & Young LLP
23(c) Consent of PricewaterhouseCoopers LLP
24 Powers of Attorney (included with signature page)
</TABLE>
II-7
<PAGE>
Exhibit 1(a)
FORM OF UNDERWRITING AGREEMENT
THE VALSPAR CORPORATION
_______________, 1999
To: The Representatives named in Schedule I hereto of the Underwriters named in
Schedule II hereto
Dear Sirs:
The Valspar Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule II hereto (the "Underwriters"), the
principal amount set forth in Schedule II hereto of its debt securities
identified on Schedule I hereto (the "Securities"), to be issued under an
indenture, dated as of May , 1999, as amended or supplemented from time to time
(the "Indenture") between the Company and _____________, as Trustee (the
"Trustee"), less the principal amount of Securities covered by Delayed Delivery
Contracts (as defined in Section 3 hereof), if any, as provided in Section 3
hereof and as may be specified in Schedule II hereto (any Securities to be
covered by Delayed Delivery Contracts being herein sometimes referred to as
"Contract Securities" and the Securities to be purchased by the Underwriters
(after giving effect to the deduction, if any, for Contract Securities) being
herein sometimes referred to as "Underwriters' Securities"). If the firm or
firms listed in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms "Underwriters" and "Representatives" as used
herein shall each be deemed to refer to such firm or firms.
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No.333-
_______), including a prospectus for use in connection with the
Securities under the Securities and Exchange Act of 1933, as amended
(the "Act") in respect of the Securities, has been filed with the
Securities and Exchange Commission (the "Commission") in the form
heretofore delivered to you and, excluding exhibits to such
registration statement, but including all documents incorporated by
reference therein, to you for each of the other Underwriters; such
registration statement, in such form, has been declared effective by
the Commission; no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission; no
amendment or supplement thereto or to any document incorporated by
reference therein has heretofore been filed with the Commission; such
prospectus included for use in connection with the Securities under
the Act meets the requirements of the Act and the rules and
1
<PAGE>
regulations thereunder for use of such prospectus in connection with
the Securities; and a supplemented prospectus relating to the
Securities, in the form heretofore delivered to you, is now proposed
to be filed with the Commission pursuant to Rule 424 under the Act
(any such prospectus, accompanied by a preliminary prospectus
supplement relating to the Securities, being hereinafter called a
"Preliminary Prospectus"; such registration statement, including all
exhibits thereto and the documents incorporated therein by reference
as amended at the time each such registration statement became
effective, being hereinafter called the "Registration Statement"; and
such prospectus, accompanied by a definitive prospectus supplement
relating to the Securities being hereinafter called the "Prospectus";
and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus, shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference);
(b) No order preventing or suspending the use of any
Preliminary Prospectus or Prospectus has been issued by the
Commission and each Preliminary Prospectus or Prospectus, at the time
of filing thereof, conformed in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by an Underwriter through you expressly for use therein;
(c) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and any further
documents so filed and incorporated by reference, when they are filed
with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein;
(d) The Registration Statement, as of the applicable
effective date, conformed and the Prospectus and any amendments or
supplements to the Registration Statement or the
2
<PAGE>
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder and did not and
will not, as of the applicable effective date of the Registration
Statement and any amendment thereto and as of the applicable filing
date of the Prospectus or any supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through you expressly for use
therein;
(e) Since the respective dates as of which information is
given in the Registration Statement and in the Prospectus, there have
not been, and prior to the Time of Delivery (as defined in Section 4
hereof) there will not be, any material adverse change in or
affecting the general affairs, financial position or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus;
(f) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction where, in light of the nature of the business
transacted or the property owned by it, such qualification is
necessary and the failure so to qualify might permanently impair
title to property material to its operation or its right to enforce a
material contract against others or expose it to substantial
liabilities in such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of
each other jurisdiction where, in light of the nature of the business
transacted or the property owned by it, such qualification is
necessary and the failure so to qualify might permanently impair
title to property material to its operation or its right to enforce a
material contract against others or expose it to substantial
liabilities in such jurisdiction;
(h) The Company has an authorized capitalization as set
forth or incorporated in the Prospectus, and all of the issued shares
of capital stock of the Company have been duly
3
<PAGE>
and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
wholly owned subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable, and are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(i) The Securities have been duly authorized, and, when
issued and delivered pursuant to this Agreement, and, in the case of
any Contract Securities, pursuant to Delayed Delivery Contracts (as
defined in Section 3 hereof) with respect to such Contract
Securities, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the Indenture;
the Indenture has been duly authorized, executed and delivered and
constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Securities and the Indenture will conform to the
description thereof in the Prospectus; and in the event any of the
Securities are purchased pursuant to Delayed Delivery Contracts, each
of such Delayed Delivery Contracts has been duly authorized by the
Company and, when executed and delivered by the Company and the
purchaser named therein, will constitute a valid and legally binding
agreement of the Company enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(j) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities, the
Indenture, each of the Delayed Delivery Contracts, if any, and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
provisions of the Company's Charter or By-laws or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or
any of their properties; and no consent, approval authorization,
order, registration or qualification of or with any court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation of the other transactions contemplated
by this Agreement or any Delayed Delivery Contract or the Indenture,
except such as have been obtained, or will have been obtained at the
Time of Delivery, under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the purchase and/or distribution of the Securities by
the Underwriters;
4
<PAGE>
(k) There are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the
subject, other than as set forth in the Prospectus and other than
litigation or governmental proceedings incident to the kind of
business conducted by the Company and its subsidiaries which, if
determined adversely to the Company and its subsidiaries, would not
individually or in the aggregate have a material adverse effect on
the financial position, shareholders' investment or results of
operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and
(l) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent
public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price set forth in Schedule I hereto the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule II
hereto, which principal amount shall be subject to reduction pursuant to section
3 hereof.
3. Upon the authorization by the Company of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus. The Company may
specify in Schedule I hereto that the Underwriters are authorized to solicit
offers to purchase Securities from the Company pursuant to delayed delivery
contracts (herein called "Delayed Delivery Contracts"), substantially in the
form of Schedule IV attached hereto, but with such changes therein as the
Underwriters and the Company may authorize or approve. If so specified, the
Underwriters will endeavor to make such arrangements, and as compensation
therefor the Company will pay to the Underwriters, for their respective
accounts, at the time specified in Section 4 hereof, such commission, if any, as
may be set forth in Schedule I. Delayed Delivery Contracts, if any, are to be
with the investors of the types described in the Prospectus and subject to other
conditions therein set forth. The Underwriters will not have any responsibility
in respect of the validity or performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be deducted from the
principal amount of Securities to be purchased by each Underwriter as set forth
in Schedule II hereto shall be, in each case, the principal amount of Contract
Securities which the Company has been advised by the Underwriters have been
attributed to such Underwriter, provided, that if the Company has not been so
advised, the amount of Contract Securities to be so deducted shall be, in each
case, that proportion of Contract Securities which the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule II hereto
bears to the total principal amount of the Securities set forth in Schedule II
hereto (rounded as the Underwriters may determine). The total principal amount
of Underwriters' Securities to be purchased by all the Underwriters hereunder
shall be the total principal amount of Securities set forth in Schedule II
hereto less the principal amount of the Contract Securities. The Company will
deliver to the Underwriters not later than 3:30 p.m., New York City time, on the
third business day preceding the Time of Delivery (or such other time and date
as the
5
<PAGE>
Underwriters and the Company may agree upon in writing) a written notice setting
forth the principal amount of Contract Securities.
4. Underwriters' Securities to be purchased by each Underwriter
hereunder shall be delivered by or on behalf of the Company to you for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor in same-day funds, at the office of
___________________, ___________________________________________,
____________________________________, at ____ a.m., ___________________ time, on
[Closing Date], or at such other time and date as you and the Company may agree
upon in writing, such time and date being herein called the "Time of Delivery".
The Underwriters' Securities will be delivered by the Company to you in the form
of a Global Security, representing all of the Securities, which will be
deposited by you on behalf of the Underwriters, with The Depository Trust
Company, or its nominee, for credit to the respective accounts of the
Underwriters.
Concurrently with the delivery of any Contract Securities to the
purchasers thereof pursuant to Delayed Delivery Contracts, the Company will
deliver to the Underwriters for their respective accounts a check payable to the
order of [lead Underwriter] in the amount of any compensation payable by the
Company to the Underwriters in respect of any Delayed Delivery Contracts as
provided in Section 3 hereof and in Schedule I hereto.
5. The Company agrees with each of the Underwriters:
(a) To make no further amendment or supplement to the
Registration Statement or to the Prospectus prior to the Time of
Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you promptly of any such
amendment or supplement after the Time of Delivery and furnish
you with copies thereof and to file promptly all reports and
definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the
Securities; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration
Statement has become effective or any supplement to the
Prospectus or any amended Prospectus has been filed, of the
issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or
supplementing of the Registration Statement or of the Prospectus
or for additional information; and in the event of the issuance
of any stop order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and
sale under the securities laws of such
6
<PAGE>
jurisdictions as you may request and to comply with such laws so
as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete
the distribution, provided, that in connection therewith the
Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in
such quantities as you may from time to time reasonably request,
and if the delivery of a prospectus is required at any time prior
to the expiration of nine months after the time of issue of the
Prospectus and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to
notify you and upon your request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or
effect such compliance; and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as
many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement, an
earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act; and
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
(except as otherwise expressly provided in Section 5(c) hereof) amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing this Agreement, the
Indenture, any Delayed Delivery Contracts, and the Blue Sky and Legal Investment
Memoranda; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the cost of preparing the
Securities; (vi) the fees and expenses of the Trustee and any agent of the
Trustee and
7
<PAGE>
the fees and disbursements of counsel for the Trustee and any such agent in
connection with the Indenture and the Securities; and (vii) all of the other
costs and expenses incident to the performance of its obligations hereunder and
under any Delayed Delivery Contracts which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) ________________, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to the validity of the Indenture, the
Securities, the Delayed Delivery Contracts, if any, the
Registration Statement, the Prospectus, and other related matters
as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Rolf Engh, Senior Vice President and Secretary of the
Company, shall have furnished to you his written opinion, dated
the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the state of Delaware, with power and authority (corporate
and other) to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction where, in
light of the nature of the business transacted or the
property owned by it, such qualification is necessary and
the failure so to qualify might in such counsel's opinion
permanently impair title to property material to its
operations or its right to enforce a material contract
against others or expose it to substantial liabilities in
such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates
of officers of
8
<PAGE>
the Company, provided, that such counsel shall state that he
believes that both you and he are justified in relying upon
such opinions and certificates);
(iii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation, and has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction where, in
light of the nature of the business transacted or the
property owned by it, such qualification is necessary and
the failure so to qualify might in such counsel's opinion
permanently impair title to property material to its
operations or its right to enforce a material contract
against others or expose it to substantial liabilities in
such jurisdiction; all of the issued shares of capital stock
of each subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable; and all of the
outstanding shares of capital stock of each such subsidiary
are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company
or its subsidiaries, provided, that such counsel shall state
that he believes that both you and he are justified in
relying upon such opinions and certificates); and
(iv) To the best of such counsel's knowledge there are no
legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is
the subject, other than as set forth in the Prospectus and
other than litigation or governmental proceedings which
individually and in the aggregate are not material to the
Company and its subsidiaries; and to the best of such
counsel's knowledge no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(d) Lindquist & Vennum, P.L.L.P., counsel for the Company, shall
have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the state of Delaware, with power and authority (corporate
and other) to own its properties and conduct its business as
described in the Prospectus;
(ii) To the best of such counsels' knowledge there are no
legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is
the subject, other than as set forth or incorporated in the
Prospectus and other than litigation or governmental
proceedings which
9
<PAGE>
individually and in the aggregate are not material to the
Company and its subsidiaries; and to the best of such
counsels' knowledge no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(iii) This Agreement has been duly authorized, executed and
delivered by the Company; and in the event any of the
Securities are to be purchased pursuant to Delayed Delivery
Contracts, each of the Delayed Delivery Contracts has been
duly authorized, executed and delivered by the Company and,
assuming such contract has been duly executed and delivered
by the purchaser named therein, constitutes a valid and
legally binding agreement of the Company enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors'
rights and to general equity principles; and any Delayed
Delivery Contracts conform to the description thereof in the
Prospectus;
(iv) The Securities have been duly authorized; the
Underwriters' Securities have been duly executed,
authenticated, issued and delivered and constitute valid and
legally binding obligations of the Company entitled to the
benefits provided by the Indenture; the Contract Securities,
if any, when executed, authenticated, issued and delivered
pursuant to the Indenture and the Delayed Delivery
Contracts, if any, will constitute valid and legally binding
obligations of the Company entitled to the benefits provided
by the Indenture; and the Securities and the Indenture
conform to the descriptions thereof in the Prospectus;
(v) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and
legally binding instrument, enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;
(vi) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities,
the Indenture, each of the Delayed Delivery Contracts and
this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of
the property or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the
property or assets of the
10
<PAGE>
Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the
Company's Charter or By-laws or any statute or any order,
rule or regulation applicable to the Company and known to
such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body is required for the issue and sale of the Securities or
the consummation of the other transactions contemplated by
this Agreement or the Indenture or any of the Delayed
Delivery Contracts, except such as have been obtained under
the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws
in connection with the purchase and/or distribution of the
Securities by the Underwriters;
(vii) The documents incorporated by reference in the
Prospectus (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied
as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the
Commission thereunder; and such counsel have no reason to
believe that any of such documents, when they were so filed,
contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such documents were so filed, not misleading (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion);
(viii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the
financial statements or financial schedules therein, as to
which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Act and the Trust Indenture Act and the rules and
regulations thereunder; such counsel have no reason to
believe that the Registration Statement contained as of its
effective date or that the Prospectus contained as of the
date of the supplement comprising a part thereof, or that
either the Registration Statement or the Prospectus contains
as of the Time of Delivery (or that any further amendment or
supplement thereto made by the Company prior to the Time of
Delivery contained as of its date or contains as of the Time
of Delivery) an untrue statement of material fact or that
the Registration Statement omitted as of such effective
date, or that the Prospectus omits as of the Time of
Delivery to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and such counsel does not know of any contracts
or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or
11
<PAGE>
required to be described in the Registration Statement or in
the Prospectus which are not filed or incorporated by
reference or described as required; and
(ix) The Company has an authorized capitalization as set
forth in the Prospectus;
(e) At the Time of Delivery, Ernst & Young LLP, shall have
furnished to you a letter or letters, dated the Time of Delivery,
in form and substance satisfactory to you, to the effect set
forth in Schedule III hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, other than as set forth or
contemplated in the Prospectus; and (ii) since the respective
dates as of which information is given in the Prospectus there
shall not have been any decrease in the capital stock or any
increase in the long-term debt (excluding capital leases) of the
Company or any of its subsidiaries or a change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders'
investment or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in your judgment so material and adverse
as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms
and in the manner contemplated in the Prospectus;
(g) On or after the date of this Agreement, there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York
Stock Exchange; (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York
State authorities; or (iii) an outbreak or escalation of
international military hostilities involving the United States or
the declaration by the United States of a national emergency or
war, the effect of any such event specified in this clause (iii)
in your judgment makes it impractical or inadvisable to proceed
with the public offering or the delivery of the Underwriters'
Securities on the terms and in the manner contemplated by the
Prospectus; and
(h) On or after the date of this Agreement (i) no downgrading
shall have occurred in the rating accorded the Company's debt
securities or preferred stock by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has
under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities
or preferred stock the effect of which, in any event specified in
clause (i) or (ii), in
12
<PAGE>
your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the
terms and in the manner contemplated in the Prospectus; and
(i) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the
Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of
the Time of Delivery and as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to
the Time of Delivery and the Company also shall have furnished to
you a certificate of officers of the Company satisfactory to you
as to the matters set forth in subsections (a), (f) and (h) of
this Section.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement in the form in which it was initially
declared effective, or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any
such action or claim; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the
Registration Statement or such Prospectus or any such amendment
or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through
you expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement in the form in which it was initially declared
effective, or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or such Prospectus or any
such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will
reimburse the
13
<PAGE>
Company for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any
such action or claim.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from
the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to
14
<PAGE>
information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute
are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning
of the Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company
within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Underwriters' Securities which it has agreed to
purchase hereunder, you may in your discretion arrange for you or
another party or other parties to purchase such Underwriters'
Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange
for the purchase of such Underwriters' Securities, then the
Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties
satisfactory to you to purchase such Underwriters' Securities on
such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the
purchase of such Underwriters' Securities, or the Company
notifies you that it has so arranged for the purchase of such
Underwriters' Securities, you or the Company shall have the right
to postpone the Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements,
15
<PAGE>
and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under the
Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Underwriters' Securities of a defaulting Underwriter or
Underwriters by you and the Company as provided in subsection (a)
above, the aggregate principal amount of such Underwriters'
Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Securities, then the
Company shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of Underwriters'
Securities which such Underwriter agreed to purchase hereunder
and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of
Securities which such Underwriter agreed to purchase hereunder)
of the Underwriters' Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If after giving effect to any arrangements for the purchase
of the Underwriters' Securities of a defaulting Underwriter or
Underwriters by you and the Company as provided in subsection (a)
above the aggregate principal amount of Underwriters' Securities
which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall
not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Underwriters'
Securities of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for
the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof; but if for any other
reason the Underwriters' Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through
you for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery
16
<PAGE>
of the Securities, but the Company shall then be under no further liability to
any Underwriter except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by [lead Underwriter] on behalf of you as the
Representatives and may assume that such statement, request, notice or agreement
has been duly authorized by such Underwriter.
All statements, requests, notices and agreements hereunder shall be
in writing or by telegram if promptly confirmed in writing, and if to the
Underwriters, shall be sufficient in all respects if delivered or sent by
registered mail to you as the Representatives in care of [name and address of
lead Underwriter], Attention: __________________; and if to the Company, shall
be sufficient in all respects if delivered or sent by registered mail to The
Valspar Corporation,1101 Third Avenue South, Minneapolis, Minnesota 55415,
Attention: Treasurer; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by registered mail to
such Underwriter at its address set forth in its Underwriters' Questionnaire or
telex constituting such Questionnaire delivered to the Company.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence in connection with this Agreement.
15. This Agreement shall be construed in accordance with the laws of
the State of Minnesota.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us two counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company.
It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of a
telex, copies of which, to the extent practicable and upon request, shall be
submitted to the Company for examination, but without warranty on your part as
to the authority of the senders thereof.
17
<PAGE>
Very truly yours,
THE VALSPAR CORPORATION
By
----------------------------------------
Accepted as of the date hereof at New York,
New York:
[REPRESENTATIVE(S)]
By
----------------------------------------
On behalf of each of the Underwriters
18
<PAGE>
SCHEDULE I
Underwriting Agreement dated [pricing date]
Registration Statement No. 333-____________
Representatives:
Description of Securities:
Title:
Maturity:
Interest Rate:
Interest Payment Dates:
Aggregate principal amount and currency:
Purchase price and currency: $______________ plus accrued interest from [initial
interest accrual date]
Sinking fund provisions: [The Securities shall not be entitled to any sinking
fund.]
Redemption provisions: [The Securities are not redeemable prior to maturity.]
Other provisions: [Defeasance provisions set forth in Articles Four and Fifteen
of the Indenture shall apply to the Securities]
Closing Date, Time and Location: [Closing Date] at ____ a.m. at the office of
- ----------------------, -------------------------------------------,
- ---------------------------, --------.
S-I-1
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF SECURITIES
UNDERWRITER TO BE PURCHASED
<S> <C> <C>
$
$
$
$
Total $
</TABLE>
S-II-1
<PAGE>
SCHEDULE III
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules examined by them and included or
incorporated by reference in the Registration Statement or Prospectus comply as
to form in all material respects with the applicable accounting requirements of
the Act or the Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon, copies
of which have been furnished to the Representatives;
(iii) In their opinion, the unaudited selected financial information
with respect to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual Report
on Form 10-K for the most recent fiscal year agrees with the corresponding
amounts (after restatement where applicable) in the audited consolidated
financial statements for such fiscal years which were included or incorporated
by reference in the Company's Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
changes in financial position included or incorporated by reference
in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act as its applies to Form 10-Q and the related published rules and
regulations thereunder or are not in conformity with generally
accepted accounting principles for interim financial statements
applied on a basis substantially consistent with the basis for the
audited consolidated statements of income, consolidated
S-III-1
<PAGE>
balance sheets and consolidated statements of changes in financial
position included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis substantially
consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published rules
and regulations thereunder;
(E) as of a specified date not more than five days prior to
the date of such letter, when compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, there have been
o any changes in the consolidated capital stock (other than
issuances of capital stock upon the exercise of stock
options, pursuant to performance shares or restricted stock
awards and upon the conversion of convertible securities,
in each case which were outstanding on the date of the
latest balance sheet included or incorporated by reference
in the Prospectus), or
o any increase in the consolidated long-term debt (excluding
capital leases) of the Company and its subsidiaries, or
o any decrease in consolidated working capital greater than
___% of the Company's most recent fiscal year-end total
consolidated assets (treating all commercial paper as a
current liability), or
o any decreases in consolidated shareholders' investment
greater than ____% of the Company's most recent fiscal
year-end total consolidated assets (excluding decreases
resulting from normally recurring dividends), or
S-III-2
<PAGE>
o any decreases or increases in other items specified by the
Representatives
in each case except for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E), when compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, there were
o any decreases in consolidated net sales or earnings before
income taxes and extraordinary charges, or
o any decreases in the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or
o any increases in any items specified by the Representatives
in each case except for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(v) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
S-III-3
<PAGE>
SCHEDULE IV
DELAYED DELIVERY CONTRACT
The Valspar Corporation
Attention: Treasurer
1101 Third Street
Minneapolis, MN 55415
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from The Valspar
Corporation (hereinafter called the "Company"), and the Company agrees to sell
to the undersigned, $__________ [name of security] (hereinafter called
the "Securities"), offered by the Company's Prospectus dated _________ and
Prospectus Supplement dated _____________, receipt of a copy of which is hereby
acknowledged, at a purchase price of _______% of the principal amount thereof,
plus accrued interest from the date from which interest accrues as set forth
below, and on the further terms and conditions set forth in this contract.
The undersigned will purchase the Securities from the Company on
_______, ____ (the "Delivery Date") and interest on the Securities so purchased
will accrue from _______, ____.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by wire
transfer to a bank account specified by the Company, on the Delivery Date upon
delivery to the undersigned of the Securities then to be purchased by the
undersigned in definitive fully registered form and in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for the Securities on the Delivery Date shall be subject to the
condition that the purchase of the Securities to be made by the undersigned
shall not on the Delivery Date be prohibited under the laws of the jurisdiction
to which the undersigned is subject. The obligation of the undersigned to take
delivery of and make payment for the Securities shall not be affected by the
failure of any purchaser to take delivery of and make payment for the Securities
pursuant to other contracts similar to this contract.
The undersigned understands that underwriters (the "Underwriters")
are also purchasing Securities from the Company, but that the obligations of the
undersigned hereunder are not contingent on such purchases. Promptly after
completion of the sale to the Underwriters the Company will mail or deliver to
the undersigned at its address set forth below notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.
S-IV-1
<PAGE>
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Securities
hereby agreed to be purchased by it under the laws of the jurisdiction to which
the undersigned is subject.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
This contract may be executed by either of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
It is understood that the acceptance by the Company of any Delayed
Delivery contract (including this contract) is in the Company's sole discretion
and that, without limiting the foregoing, acceptances of such contracts need not
be on a first-come, first-served basis. If this contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below and
mail or deliver one of the counterparts hereof to the undersigned at its address
set forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered by the Company.
Yours very truly,
By: _________________________________
(Signature)
_________________________________
(Name and Title)
_________________________________
(Address)
Accepted: ____________________, ____
THE VALSPAR CORPORATION
By: ________________________________
[Title]
S-IV-2
<PAGE>
Exhibit 1(b)
FORM OF SELLING AGENCY AGREEMENT
THE VALSPAR CORPORATION
____% Medium-Term Notes Series ___
[Addressee] May _____, 1999
New York, New York
Dear Sirs:
The Valspar Corporation, a Delaware corporation (the "Company"),
confirms its agreement with each of you with respect to the issue and sale by
the Company of up to the aggregate principal amount set forth in Schedule I
hereto of its ___% Medium-Term Notes, Series ___, (the "Notes"). The Notes will
be issued under an indenture dated as of May __, 1999 between the Company and
______________________, as trustee (the "Trustee") (the "Indenture"). Unless
otherwise specifically provided for and set forth in a supplement to the
Prospectus referred to below, the Notes in minimum denominations of $1,000 and
in denominations exceeding such amount by integral multiples of $1,000, will be
issued only in fully registered form and will have the maturities, annual
interest rates and, if appropriate, other terms set forth in such supplement to
the Prospectus. The Notes will be issued, and the terms thereof established, in
accordance with the Indenture and the Medium-Term Notes Administrative
Procedures attached hereto as Exhibit A (the "Procedures"). The Procedures may
only be amended by written agreement of the Company and you after notice to, and
with the approval of, the Trustee. For the purposes of this Agreement, the term
"Agent" shall refer to any of you acting solely in the capacity as agent for the
Company pursuant to Section 2(a) and not as principal (collectively, the
"Agents"), the term the "Purchaser" shall refer to one of you acting solely as
principal pursuant to Section 2(b) and not as agent, and the term "you" shall
refer to all of you collectively whether at any time any of you is acting in
both such capacities or in either such capacity. In acting under this Agreement,
in whatever capacity, each of you is acting individually and not jointly.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each of you as set forth below in this Section 1.
Certain terms used in this Section 1 are defined in paragraphs (a) and (e)
hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on such Form (File Number: 333________), which has become effective for the
registration under the Act of $300,000,000 aggregate principal amount of debt
securities (the "Securities"), including the Notes. The registration statement,
as amended as of the Execution Time, meets the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and complies in all other material respects
with said Rule. The Company has included in such
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<PAGE>
registration statement, or has filed or will file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act, a supplement to the
form of prospectus included in such registration statement relating to the Notes
and the plan of distribution thereof (the "Prospectus Supplement"). In
connection with the sale of Notes the Company proposes to file with the
Commission pursuant to the applicable paragraph of Rule 424(b) under the Act
further supplements to the Prospectus Supplement (each a "Pricing Supplement"),
specifying the interest rates, maturity dates and, if appropriate, other similar
terms of the Notes sold pursuant hereto or the offering thereof. If the Rule 434
Delivery Alternative is used, the Company will also file the Rule 434 Term Sheet
in accordance with Rule 434. As filed, such Rule 434 Term Sheet shall contain
all the information required by Rule 434, and except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. Upon your request, but not
without your agreement, the Company will also file a Rule 462(b) Registration
Statement in accordance with Rule 462(b).
(b) As of the Execution Time, on the respective Effective Date of
the registration statement referred to in paragraph (a) above, on the dates
of each post-effective amendment thereto, when any supplement to the
Prospectus is filed with the Commission, as of the date of a Terms Agreement
and at the date of delivery by the Company of any Notes sold hereunder (a
"Closing Date"), (i) the registration statement, as amended as of any such
time, and the Prospectus, as supplemented as of any such time, and the
Indenture will comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939 (the "Trust
Indenture Act"), as amended and the Securities Exchange Act of 1934 (the
"Exchange Act") and the respective rules thereunder; (ii) the registration
statement, as amended as of any such time, did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and (iii) the Prospectus, as supplemented as of any
such time, will not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as
to (i) that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or omitted
from the Registration Statement or the Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any or all of you specifically for use in
connection with the preparation of the Registration Statement or the
Prospectus (or any supplement thereto).
(c) As of the time any Notes are issued and sold hereunder, the
Indenture will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms and such Notes will have been
duly authorized, and, when issued to and paid for by the purchasers thereof,
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture.
2
<PAGE>
(d) The Company has complied with the provisions of the Laws of
Florida, Chapter 92-198 Securities Business with Cuba.
(e) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean, with respect
to the registration statement referred to in paragraph (a) above, each date that
such registration statement, any post-effective amendment or amendments thereto
and any Rule 462(b) Registration Statement became or become effective.
"Execution Time" shall mean the date and time that this Agreement is executed
and delivered by the parties hereto. "Basic Prospectus" shall mean the form of
basic prospectus relating to the Securities contained in the Registration
Statement at the Effective Date. "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement. If the Rule 434 Delivery Alternative
is used, such term shall also include the Basic Prospectus and the Rule 434 Term
Sheet, taken together. "Registration Statement" shall mean, collectively, the
registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information and Rule 434 Information deemed to
be included therein at the Effective Date as provided by Rule 430A and Rule 434,
respectively. "Rule 415", "Rule 424", "Rule 430A, "Rule 434", "Rule 462(b)"
and "Regulation S-K" refer to such rules under the Act. "Rule 430A
Information" means information with respect to the Securities and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Rule 434 Delivery Alternative" shall mean the
delivery alternative permitted by Rule 434. "Rule 434 Information" shall mean
any information to be included in a Rule 434 Term Sheet. "Rule 434 Term Sheet"
shall mean the term sheet or abbreviated term sheet delivered by the
Underwriters to investors and filed by the Company with the Commission pursuant
to Rule 434. "Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the final Delayed Offering covered by the initial Registration Statement. Any
reference herein to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, the Prospectus Supplement or the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to Purchaser. (a) Subject to the terms and conditions
set forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
3
<PAGE>
On the basis of the representations and warranties, and subject to
the terms and conditions set forth herein, each of the Agents agrees, as agent
of the Company, to use its best efforts to solicit offers to purchase the Notes
from the Company upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Procedures. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company, but such Agent shall not, except as otherwise provided in this
Agreement, have any liability to the Company in the event any such purchase is
not consummated for any reason. Except as provided in Section 2(b), under no
circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission on the Closing Date
with respect to each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Schedule
I hereto of the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures,
offers for the purchase of Notes may be solicited by an agent as agent for the
Company at such time and in such amounts as such Agent deems advisable. The
Company may from time to time offer Notes for sale otherwise than through an
Agent; provided, however, that so long as this Agreement shall be in effect the
Company shall not solicit or accept offers to purchase Notes through any agent
(excluding the Company's or its subsidiaries' employees) other than an Agent.
(b) Subject to the terms and conditions set forth herein, whenever
the Company and any of you determines that the Company shall sell Notes directly
to any of you as principal, each such sale of Notes shall be made in accordance
with the terms of this Agreement and a supplemental agreement relating to such
sale. Each such supplemental agreement (which may be either an oral agreement
confirmed in writing or a written agreement) is herein referred to as a "Terms
Agreement." Each Terms Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto and shall specify the principal amount of each such
Note, the aggregate principal amount of all such Notes, the maturity date of
such Notes, the rate at which interest will be paid on such Notes, the dates on
which interest will be paid on such Notes and the record date with respect to
each such payment of interest, the Closing Date for such Notes, the place of
delivery of the Notes and payment therefor, the method of payment and any
requirements for the delivery of opinions of counsel, certificates from the
Company or its officers or a letter from the Company's independent public
accountants, as described in Section 6(b). Any such Terms Agreement may also
specify the period of time referred to in Section 4(m). Any written Terms
Agreement may be in the form attached hereto as Exhibit B. The Purchaser's
commitment to purchase Notes shall be deemed to
4
<PAGE>
have been made on the basis of the representation and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to a Terms Agreement shall be made not later than the Closing Date agreed to in
such Terms Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set forth in the
Procedures unless otherwise agreed to between the Company and the Purchaser in
such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of Note of
identical maturity and (ii) may be resold by such Agent at varying prices from
time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes purchased, a Purchaser may use a selling or dealer group and may reallow
any portion of the discount or commission payable pursuant hereto to dealers or
purchasers.
3. Offering and Sale of Notes. Each Agent shall communicate to the
Company, orally or in writing, each offer (unless previously rejected by such
Agent as provided below) to purchase Notes on terms previously communicated by
the Company to such Agent, and the Company shall have the sole right to accept
such offers to purchase Notes and may refuse any proposed purchase of Notes in
whole or in part for any reason. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any such offer received by it in
whole or in part. Each Agent and the Company agree to perform the respective
duties and obligations specifically provided to be performed by them in the
Procedures.
4. Agreements. The Company agrees with each of you that:
(a) Prior to the termination of the offering of the Notes (including
by way of resale by a Purchaser of Notes), the Company will not file any
amendment of the Registration Statement or supplement to the Prospectus (except
for (i) a periodic or current report filed under the Exchange Act, (ii) a
Supplement relating to any offering of, or a change in the maturity dates,
interest rates, issuance prices or other similar terms of, any Notes or (iii) a
supplement relating to an offering of Securities other than the Notes) or any
Rule 462(b) Registration Statement unless the Company has furnished each of you
a copy for your review prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or supplement or Rule
462(b) Registration Statement. Subject to the foregoing sentence, the Company
will cause each supplement to the Prospectus to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to you of such filing. If the
Rule 434 Delivery Alternative is used, the Company will also cause the Rule 434
Term Sheet, properly completed, to be filed with the Commission pursuant to Rule
434 within the time period prescribed and will provide evidence satisfactory to
the Agents of such timely filing. Upon your request, the Company will cause the
Rule 462(b) Registration Statement, properly completed, to be filed with the
Commission pursuant to Rule 462(b) and will provide evidence satisfactory to the
5
<PAGE>
Agents of such filing. The Company will promptly advise each of you (i) when the
Prospectus, any supplement thereto (except for a supplement relating to an
offering of Securities other than the Notes), any Rule 434 Term Sheet or any
Rule 462(b) Registration Statement, shall have been filed with the Commission
pursuant to Rule 424(b), (ii) when, prior to the termination of the offering of
the Notes, any amendment of the Registration Statement shall have been filed or
become effective, (iii) of any request by the Commission for any amendment of
the Registration Statement or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Notes for sale in any jurisdiction or the initiation or threatening of
any reasonable proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof;
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the Registration
Statement or to supplement the Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company promptly will (i) notify
each of you to suspend solicitation of offers to purchase Notes (and, if so
notified by the Company, each of you shall forthwith suspend such solicitation
and ceasing using the Prospectus as then supplemented), (ii) prepare and file
with the Commission, subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such statement or
omission or effect such compliance and (iii) supply any supplemented Prospectus
to each of you in such quantities as you may reasonably request. If such
amendment or supplement, and any documents, certificates and opinions furnished
to each of you pursuant to paragraph (g) of this Section 4 in connection with
the preparation or filing of such amendment or supplement are reasonably
satisfactory in all respects to you, you will, upon the filing of such amendment
or supplement with the Commission and upon the effectiveness of an amendment to
the Registration Statement, if such an amendment is required, resume your
obligation to solicit offers to purchase Notes hereunder.
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to each of you copies of
such documents. In addition, on or prior to the date on which the Company makes
any announcement to the general public concerning earnings or concerning any
other event which is required to be described, or which the Company proposes to
describe, in a document filed pursuant to the Exchange Act, the Company will
furnish to each of you the information contained or to be contained in such
announcement. The Company also will furnish to each of you copies of all
material press releases or material announcements furnished to news or wire
services. The Company will promptly notify each of you by telephone or telecopy
of (i) any decrease in the rating of the Notes or any other debt securities of
the Company by Moody's Investors Service Inc. ("Moody's") or Standard & Poor's
Corporation ("S&P") or (ii) any written notice received from S&P
6
<PAGE>
or Moody's of any intended or contemplated decrease in any such rating or of a
possible change in any such rating that does not indicate the direction of the
possible change;
(d) As soon as practicable, the Company will make generally available
to its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act;
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus may be required by the Act, as many copies
of the Prospectus and any supplement thereto as you may reasonably request;
(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as any of you may designate, will
maintain such qualifications in effect so long as required for the distribution
of the Notes and will arrange for the determination of the legality of the Notes
for purchase by institutional investors;
(g) The Company shall furnish to each of you such documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to time and at
any time prior to the termination of this Agreement reasonably request;
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expense incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the reasonable fees and disbursements, including fees of counsel, incurred in
compliance with Section 4(f), the fees and disbursements of the Trustee and the
fees of any agency that rates the Notes, (ii) reimburse each of you, upon
request, on a monthly basis for all out-of-pocket expenses, if any, incurred by
you and approved by the Company in advance, in connection with this Agreement
and (iii) pay the reasonable fees and expenses of your counsel incurred in
connection with this Agreement and approved by the Company in advance (which
approval may be oral);
(i) Each acceptance by the Company of an offer to purchase Notes will
be deemed to be an affirmation that its representations and warranties contained
in Section 1 of this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at the time of delivery
to the purchaser of the Notes relating to such acceptance, as though made at and
as of such time (it being understood that for purposes of the foregoing
affirmation and covenant such representations and warranties shall relate to the
Registration Statement and Prospectus as amendment or
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supplemented at each such time). Each such acceptance by the Company of an offer
for the purchase of Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that, as of the settlement
date for the sale of such Notes, after giving effect to the issuance of such
Notes, of any other Notes to be issued on or prior to such settlement date and
of any other Securities to be issued and sold by the Company on or prior to such
settlement date, the aggregate amount of Securities (including any Notes) which
have been issued and sold by the Company will not exceed the amount of
Securities registered pursuant to the Registration Statement. The Company will
inform you promptly upon your inquiry of the aggregate amount of Securities
registered under the Registration Statement which remain unsold;
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates (whether pursuant to a sinking fund or
otherwise) or other similar terms of any Notes sold pursuant hereto), the
Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the chairman of the board, or the
president and the principal financial or accounting officer of the Company,
dated the date of the effectiveness of such amendment or the date of the filing
of such supplement, in form reasonably satisfactory to you, of the same tenor as
the certificate referred to in Section 5(d) but modified to relate to the last
day of the fiscal quarter for which financial statements of the Company were
last filed with the Commission and to the Registration Statement and the
Prospectus as amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement;
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates or other similar terms of any Notes sold
pursuant hereto), the Company shall furnish or cause to be furnished promptly to
each of you a written opinion of counsel of the Company in form reasonably
satisfactory to each of you, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, of the same tenor as the
opinion referred to in Section 5(b) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement or, in lieu of
such opinion, counsel last furnishing such an opinion to you may furnish each of
you with a letter to the effect that you may rely on such last opinion to the
same extent as though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement);
(l) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Registration Statement or the Prospectus, the Company shall
cause Ernst & Young LLP, its independent public accountants, promptly to furnish
each of you a letter, dated the date of the effectiveness of such amendment or
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the date of the filing of such supplement, in form reasonably satisfactory to
each of you, of the same tenor as the letter referred to in Section 5(e) with
such changes as may be necessary to reflect the amended and supplemental
financial information included or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented to the date of such
letter; provided, however, that, if the Registration Statement or the Prospectus
is amended or supplemented solely to include or incorporate by reference
financial information as of and for a fiscal quarter, Ernst & Young LLP may
limit the scope of such letter, which shall be reasonably satisfactory in form
to each of you, to the unaudited financial statements, the related "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
any other information of an accounting, financial or statistical nature included
in such amendment or supplement, unless, in the reasonable judgment of any of
you, such letter should cover other information; and
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance of any of its debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement, other than borrowings under its revolving credit agreements and lines
of credit and issuances of its commercial paper.
5. Conditions to the Obligations of the Agents. The obligations of
each Agent to solicit offers to purchase the Notes shall be subject to the
accuracy in all material respects of the representations and warranties on the
part of the Company contained in Section 1 hereof as of the Execution Time, on
the Effective Date, as of the date any supplement to the Prospectus is filed
with the Commission and as of each Closing Date, to the accuracy in all material
respects of the statements of the Company made in any certificates delivered
pursuant to the provisions of this Section 5, to the performance in all material
respects by the Company of its obligations hereunder and to satisfaction of the
following additional conditions in all material respects:
(a) If filing of the Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectus and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b), or if the filing of the Rule 434 Term
Sheet is required pursuant to Rule 434, the Rule 434 Term Sheet will
be filed in the manner and within the time period required by Rule
434; and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened;
(b) The Company shall have furnished to each Agent the
opinion of the Senior Vice President, General Counsel and Secretary
of the Company, dated the Execution Time, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of the state of Delaware, with full corporate
power to own its properties and conduct its business as
described in the Prospectus and is qualified to do business
as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification
wherein it owns or leases material properties or conducts
material business except
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where the failure to so qualify would not have a material
adverse effect on the Company and its subsidiaries taken as
a whole. The Company's significant subsidiaries (as defined
in Rule 405 under the Securities Act) (the "Subsidiaries")
are duly incorporated and validly existing as corporations
in good standing under the laws of the jurisdiction in
which it is organized, each with full corporate power and
authority to own its properties and conduct business as
described in the Prospectus, and are duly qualified to do
business as foreign corporations and are in good standing
under the laws of each jurisdiction which requires such
qualification wherein each such Subsidiary owns or leases
material properties or conducts material business except
where the failure to so qualify would not have a material
adverse effect on the operations of the Company and its
subsidiaries taken as a whole;
(ii) all the outstanding shares of capital stock
of the Subsidiaries have been duly and validly authorized
and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are
owned by the Company, either directly or through wholly
owned subsidiaries, free and clear of any perfected
security interest and, to the knowledge of such counsel,
after due inquiry, any other security interests, claims,
liens or encumbrances;
(iii) the Company's authorized equity
capitalization is as incorporated in the Prospectus; and
the Notes conform to the description thereof contained in
the Prospectus (subject to the insertion in the Notes of
the maturity dates, the interest rates and other similar
terms thereof which will be described in supplements to the
Prospectus as contemplated by the fourth sentence of
Section 1(a) of this Agreement);
(iv) the Indenture has been duly authorized,
executed and delivered, has duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance
with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights
generally from time to time in effect); and the Notes have
been duly authorized and, when executed and authenticated
in accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof, will
constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture;
(v) to the knowledge of such counsel, after due
inquiry, there is no pending or threatened action, suit or
proceeding before any court or governmental agency,
authority or body or any arbitrator involving the Company
or any of its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character
required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not
described or filed
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as required; and the statements included or incorporated in
the Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters;
(vi) the Registration Statement has become
effective under the Act; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b),
or if the Rule 434 Delivery Alternative was used, the
required filing of the Rule 434 Term Sheet has been made in
the manner and time period required by Rule 434; to the
best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement
and the Prospectus (other than the financial statements and
other financial and statistical information contained
therein as to which such counsel need express no opinion)
comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act and
the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe that
the Registration Statement at the Effective Date or at the
Execution Time contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein
not misleading or that the Prospectus includes any untrue
statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein except such as have been obtained under
the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the sale of the
Notes as contemplated by this Agreement and such other
approvals (specified in such opinion) as have been
obtained;
(ix) neither the execution and delivery of the
Indenture, the issue and sale of the Notes, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach of, or constitute a
default under the Certificate of Incorporation or Bylaws of
the Company or the terms of any indenture or other material
agreement or instrument known to such counsel and to which
the Company or any of its subsidiaries is a party or bound,
or any judgment, order or decree known to such counsel to
be applicable to the Company or any of its subsidiaries of
any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over
the Company or any of its subsidiaries; and
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<PAGE>
(x) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
state of Delaware, Minnesota or the United States, to the extent
deemed proper and specified in such opinion, upon the opinion of
other counsel of good standing believed to be reliable and who are
reasonably satisfactory to counsel for the Agents and (B) as to
matter of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.
(c) The Agents shall have received from ______________,
counsel for the Agents, such opinion or opinions, dated the Execution
Time, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, the Prospectus and other
related matters as the Agents may reasonably require, and the Company
shall have furnished to such counsel such documents as they
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters;
(d) The Company shall have furnished to the Agents a
certificate of the Company, signed by the president and the principal
financial or accounting officer of the Company, dated the Execution
Time, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus and
this Agreement and that:
(i) the representations and warranties in Section
1 hereof of the Company in this Agreement are true and
correct in all material respects on and as of the date
hereof with the same effect as if made on the date hereof
and the Company has substantially complied with all the
agreements and satisfied all the conditions on its part to
be performed or satisfied as a condition to the obligation
of the Agents to solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus, there has been no
material adverse change in the condition (financial or
other), earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus;
(e) At the Execution Time, Ernst & Young LLP shall have
furnished to the Agents a letter or letters (which may refer to
letters previously delivered to the Agents), dated as of the
Execution Time, in form and substance reasonably satisfactory to the
Agents, confirming that they are independent accountants within the
meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and
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<PAGE>
stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all
material respects with the applicable accounting
requirements of the Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of the amounts
included or incorporated in the Registration Statement and
the Prospectus in response to Item 301 of Regulation S-K
and of the latest unaudited financial statements made
available by the Company and its subsidiaries; their
limited review in accordance with standards established by
the American Institute of Certified Public Accountants of
the unaudited interim financial information as indicated in
their reports incorporated in the Registration Statement
and the Prospectus; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to
the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and
executive committees of the Company and the Subsidiaries;
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent audited financial
statements included or incorporated in the Registration
Statement and the Prospectus, nothing came to their
attention which caused them to believe that:
(1) the amounts in the "Selected
Financial Data", if any, included or incorporated
in the Registration Statement and the Prospectus
do not agree with the corresponding amounts in
the audited financial statements from which such
amounts were derived;
(2) any unaudited financial statements
included or incorporated in the Registration
Statement and the Prospectus do not comply in
form in all material respects with applicable
accounting requirements and with the published
rules and regulations of the Commission with
respect to financial statements included or
incorporated in quarterly reports on Form 10-Q
under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied
on a basis substantially consistent with that of
the audited financial statements included or
incorporated in the Registration Statement and
the Prospectus;
(3) with respect to the period
subsequent to the date of the most recent
financial statements (other than any capsule
information), audited or unaudited, in or
incorporated in the Registration Statement
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<PAGE>
and the Prospectus, there were any changes, at a
specified date not more than five business days
prior to the date of the letter, in the aggregate
long-term debt due within one year and long-term
debt (exclusive of current portion) of the
Company and its consolidated subsidiaries or
common stock of the Company or decreases in the
shareholders' equity of the Company and its
consolidated subsidiaries as compared with the
amounts shown on the most recent consolidated
balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for
the period from the date of the most recent
financial statements included or incorporated in
the Registration Statement and the Prospectus to
the date of the most recently available monthly
unaudited financial information there were any
decreases relating to continuing operations, as
compared with the corresponding period in the
preceding year in total revenue or earnings
before income taxes or in the total or per share
amounts of net earnings of the Company and its
consolidated subsidiaries, except in all
instances for changes or decreases set forth in
such letter, in which case the letter shall be
accompanied by an explanation by the Company as
to the significance thereof unless said
explanation is not deemed necessary by the
Agents; or
(4) the amounts included in any
unaudited "capsule" information included or
incorporated in the Registration Statement and
the Prospectus do not agree with the amounts set
forth in the unaudited financial statements for
the same periods or were not determined on a
basis substantially consistent with that of the
corresponding amounts in the audited financial
statements included or incorporated in the
Registration Statement and the Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and
the Prospectus and in Exhibit 12 to the Registration
Statement, including the information included or
incorporated in Items 1, 2, 5, 6, 7 and 11 of the Company's
Annual Report on Form 10-K, incorporated in the
Registration Statement and the Prospectus, and the
information included in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
included or incorporated in the Company's Quarterly Reports
on Form 10-Q, incorporated in the Registration Statement
and the Prospectus, agrees with the accounting records of
the Company and its subsidiaries, excluding any questions
of legal interpretation; and
(iv) if unaudited pro forma financial statements
are included or incorporated in the Registration Statement
and the Prospectus, on the basis of a
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<PAGE>
reading of the unaudited pro forma financial statements,
carrying out certain specified procedures, inquiries of
certain officials of the Company who have responsibility
for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial
statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such statements; and
(f) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents,
certificates and opinions of counsel as the Agents may reasonably
request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be in
all material respects reasonably satisfactory in form and substance to the
Agents and their counsel, this agreement and all obligations of any Agent
hereunder may be canceled at any time by such Agent. Notice of such cancellation
shall be given to the Company in writing or by telephone or telegraph confirmed
in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of _________________________, counsel for the Agents,
at _______________________, on the date hereof.
6. Conditions to the Obligations of the Purchaser. The obligations of
the Purchaser to purchase any Notes will be subject to the accuracy in all
material respects of the representations and warranties on the part of the
Company in Section 1 of this Agreement as of the date of the Terms Agreement and
as of the Closing Date for such Notes, to the performance and observance in all
material respects by the Company of all covenants and agreements herein
contained on its part to be performed and observed and to satisfaction of the
following additional conditions precedent in all material respects:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened;
(b) To the extent agreed to between the Company and the
Purchaser in a Terms Agreement and except to the extent modified by
such Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as of
the Closing Date, to the effect set forth in Section 5(d) (except
that references to the Prospectus shall be to the Prospectus as
supplemented at the time of execution of the Terms Agreement), (ii)
the opinion of counsel for the Company, dated as of the Closing Date,
to the effect set forth in Section 5(b), (iii) the opinion of counsel
for the Purchaser, dated as of the Closing Date, to the effect set
forth in Section 5(c), and (iv) letter of Ernst & Young, dated as of
the Closing Date, to the effect set forth in Section 5(e); and
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(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request, including any
further items specified in Exhibit B.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement and an applicable Terms
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement or such Terms Agreement and required to be delivered
to the Purchaser pursuant to the terms hereof and thereof shall not be in all
material respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the Purchaser
thereunder and with respect to the Notes subject thereto may be canceled at, or
at any time prior to, the respective Closing Date by the Purchaser. Notice of
such cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to Purchase. (a)
The Company agrees that any person who has agreed to purchase and pay for any
Note, including the Purchaser and any person who purchases pursuant to a
solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if (a) at the Closing Date therefor, any condition set forth in
Section 5 or 6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to purchase and
pay for any Note pursuant to a solicitation by any of the Agents shall have the
right to refuse to purchase such note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the judgment of the Agent
which presented the offer to purchase such Note being substituted for any
judgment of a Purchaser required therein), the effect of which is, in the
judgment of the Agent which presented the offer to purchase such Note, so
material and adverse as to make it impractical to proceed with the sale and
delivery of such Note (it being understood that under no circumstance shall any
such Agent have any duty or obligation under this Agreement to the Company or to
any such person to exercise the judgment permitted to be exercised under this
Section 7(b) and Section 9(b)).
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each of you, the directors, officers and employees
of each of you and each person who controls each of you within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which you, they or any of you or them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement as originally filed or in any
amendment thereof, or in the Prospectus or any preliminary Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse as incurred each such indemnified party for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the Company will not be liable in any
16
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such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any of you
specifically for use in connection with the preparation thereof, and (ii) such
indemnity with respect to the Prospectus or any preliminary Prospectus shall not
inure to the benefit of any of you (or any person controlling any of you) from
whom the person asserting any such loss, claim, damage or liability purchased
the Notes which are the subject thereof if such person did not receive a copy of
the Prospectus (or the Prospectus as supplemented) excluding documents
incorporated therein by reference at or prior to the confirmation of the sale of
such Notes to such person in any case where such delivery is required by the Act
and the untrue statement or omission of a material fact contained in the
Prospectus or any preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented). This indemnity agreement will be in addition to any
liability which the Company may otherwise have. If the Company shall default in
its obligations to deliver Notes to a purchaser whose offer it has accepted, the
Company shall indemnify and hold each of you harmless against any loss, claim or
damage arising from or as a result of such default by the Company.
(b) Each of you agrees to indemnify and hold harmless the Company,
each of its employees and directors, each of its officers who signs the
Registration Statement and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to you, but only with reference to written
information relating to such of you furnished to the Company by or on behalf of
such of you specifically for use in the preparation of the documents referred to
in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which you may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page and under the
heading "Underwriting" or "Plan of Distribution", of any preliminary Prospectus
and the Prospectus constitute the only information furnished in writing by or on
behalf of any of you for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Agents, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party (i) will not relieve it
from liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
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party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel and an additional local counsel, if needed, approved by you in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party or (iv) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 8 is due in accordance with its terms, but is held by a court to
be unavailable in whole or in part to hold harmless an indemnified party for any
reason (other than an act or omission or such indemnified party), the Company
and each of you agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively, "Losses") to which the
Company and one or more of you may be subject in such proportion so that each of
you is responsible for that portion as is appropriate to reflect the relative
benefits received by the Company and each of you from the offering of the Notes
from which such Losses arise; provided, however, that in no case shall any of
you be responsible for any amount in excess of the commissions received by such
of you in connection with the Notes from which such Losses arise (or, in the
case of Notes sold pursuant to a Terms Agreement, the aggregate commissions that
would have been received by such of you if such commissions had been payable).
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and each of you shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and of each of you in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) of the Notes from which such Losses arise, and benefits received by
each of you shall be deemed to be equal to the total commissions received by
such of you in connection with the Notes from which such Losses arise (or, in
the case of Notes sold pursuant to a Terms Agreement, the aggregate commissions
that would have been received by such of you if such commissions had been
payable). Relative fault shall be determined by reference to whether any alleged
untrue statement or omission relates to information provided by the Company or
any of you. The Company and each of you agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the
18
<PAGE>
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls any of you within the meaning of the
Act or the Exchange Act and each director, officer and employee of any of you
shall have the same rights to contribution as you and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director, officer and employee of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from other obligation it or they may have hereunder
or otherwise than under this paragraph (d).
9. Termination. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated by
either the Company as to any of you insofar as this Agreement relates to such of
you, giving written notice of such termination to such of you or the Company, as
the case may be. This Agreement shall so terminate at the close of business on
the first business day following the receipt of such notice by the party to whom
such notice is given. In the event of such termination, no party shall have any
liability to the other party hereto, except as provided in Section 2(a), Section
4(h), Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for any Note to be purchased thereunder, if prior to
such time (i) there shall have occurred, subsequent to the agreement to purchase
such Note, any change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its subsidiaries, taken
as a whole, the effect of which is, in the judgment of the Purchaser, so
material and adverse as to make it impractical to proceed with the offering or
delivery of such Note, (ii) there shall have been, subsequent to the agreement
to purchase such Note, any decrease in the rating of any of the Company's debt
securities by Moody's or S&P or any formal notice given of any intended or
contemplated decrease in any such rating, (iii) trading in the Company's Common
Stock shall have been suspended by the Commission or the New York Stock Exchange
(other than temporarily pending an announcement or development) or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (iv) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (v) there shall have occurred any material outbreak or material
escalation of hostilities, declaration by the United States of war or other
calamity or crisis, the effect of which on financial markets is such as to make
it, in the judgment of the Purchaser, impracticable to proceed with the offering
or delivery of such Notes as contemplated by the Prospectus (exclusive of any
supplement subsequent to such event).
10. Survival of Certain Provisions. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any
19
<PAGE>
investigation made by or on behalf of you or the Company or any of the
directors, officers, employees or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Notes. The provisions
of Sections 4(h) and 8 hereof shall survive the termination or cancellation of
this Agreement. The provisions of this Agreement (including without limitation
Section 7 hereof) applicable to any purchase of a Note for which an agreement to
purchase exists prior to the termination hereof shall survive any termination of
this Agreement. If at the time of termination of this Agreement any Purchaser
shall own any Notes purchased pursuant to a Terms Agreement with the intention
of selling them, the provisions of Section 4 shall remain in effect until such
Notes are resold.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to any of you, will be mailed, delivered
or telegraphed and confirmed to such of you, at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telecopied and confirmed to it at 1101 Third Avenue South, Minneapolis,
Minnesota 55415, attention of the Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors, the directors,
officers, employees, and controlling persons referred to in Section 8 hereof
and, to the extent provided in Section 7, any person will have any right or
obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
THE VALSPAR CORPORATION
By
--------------------------
Its
--------------------------
The foregoing Agreement is hereby confirmed and accepted as of the date hereof.
-----------------------------
-----------------------------
-----------------------------
Agent
20
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SCHEDULE I
Selling Agency Agreement dated May _______, 1999
Registration Statement No. 333-__________ ("Registration Statement")
Aggregate Amount of the Securities registered under Registration Statement:
$300,000,000
The Company agrees to pay each Agent a commission equal to the following
percentage of the principal amount of each Note sold by each Agent:
Maturity Range of Notes % of Principal Amount
----------------------- ---------------------
From _____ years to less than _____ years............................... .____%
From _____ years to less than _____ years............................... .____%
From _____ years to less than _____ years............................... .____%
_____ years up to and including _____ years ............................ .____%
Unless otherwise specified in the applicable Terms Agreement, the
discount or commission payable to a Purchaser shall be determined on the basis
of the commission schedule set forth above.
Address for notices:
Notices to Agent shall be directed to it at _______________________,
Attention Medium Term Notes Department.
Notices to The Valspar Corporation shall be directed to it at 1101
Third Street South, Minneapolis, Minnesota 55415, Attention Treasurer.
The Company may satisfy its obligation under subsection (c) of
Section 4 of the Selling Agency Agreement to furnish to each of the Agents
copies of all documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act by promptly furnishing
such documents to _______________________ Attention: _____________________.
S-I-1
<PAGE>
EXHIBIT A
MEDIUM TERM NOTES ADMINISTRATIVE PROCEDURES
A-1
<PAGE>
5-11-99
Exhibit 4(a)
------------
THE VALSPAR CORPORATION
as Issuer
to
--------------------------------
as Trustee
INDENTURE
Debt Securities
____________, 1999
<PAGE>
Debt Securities
THE VALSPAR CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939, as amended,
and Indenture, dated as of ____________, 199__
<TABLE>
<CAPTION>
Trust Indenture Act Indenture
Section Section
------- -------
<S> <C> <C>
ss.310 (a)(1) ................................................................................ 608
ss.310 (a)(2) ................................................................................ 608
ss.310 (a)(3) ................................................................................ Inapplicable
ss.310 (a)(4) ................................................................................ Inapplicable
(b) ................................................................................ 605
................................................................................ 609
ss.311 ................................................................................ 605
ss.312 (a) ................................................................................ 701
................................................................................ 702
(b) ................................................................................ 702
(c) ................................................................................ 702
ss.313 (a) ................................................................................ 703
(b)(1) ................................................................................ Inapplicable
(b)(2) ................................................................................ 703
(c) ................................................................................ 703
(d) ................................................................................ 703
ss.314 (a) ................................................................................ 704
................................................................................ 1011
(b) ................................................................................ Inapplicable
(c)(1) ................................................................................ 102
(c)(2) ................................................................................ 102
(c)(3) ................................................................................ Inapplicable
(d) ................................................................................ Inapplicable
(e) ................................................................................ 102
ss.315 (a) ................................................................................ 601
................................................................................ 603
(b) ................................................................................ 602
(c) ................................................................................ 601
(d) ................................................................................ 601
................................................................................ 603
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ss.316 (a)(1)(A).................................................................................. 512
(a)(1)(B).................................................................................. 513
(a)(2) ................................................................................ Inapplicable
(b) ................................................................................ 508
(c) ................................................................................ 104
ss.317 (a)(1) ................................................................................ 503
(a)(2) ................................................................................ 504
(b) ................................................................................ 1003
ss.318 (a) ................................................................................ 108
</TABLE>
- ------------------------------------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE ONE - DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION.....................................................................1
Section 101. Definitions..............................................................................1
Acceleration Event..........................................................................2
Acquired Indebtedness.......................................................................2
Act.........................................................................................2
Affiliate ..................................................................................2
Authenticating Agent........................................................................2
Authorized Newspaper........................................................................2
Board of Directors..........................................................................3
Board Resolution............................................................................3
Business Day................................................................................3
Certificate of Authentication...............................................................3
Certificated Note...........................................................................3
Commission..................................................................................3
Company ....................................................................................3
Company Request.............................................................................3
Company Order...............................................................................3
Consolidated................................................................................3
Consolidated Subsidiary.....................................................................3
Corporate Trust Office......................................................................4
Corporation.................................................................................4
Defaulted Interest..........................................................................4
Definitive Notes............................................................................4
Depository..................................................................................4
Derivative Obligations......................................................................4
Event of Default............................................................................4
Global Note.................................................................................4
Government Obligations......................................................................4
Holder......................................................................................5
Independent Public Accountants..............................................................5
Initial Interest Accrual Date...............................................................5
Interest Payment Date.......................................................................5
Issue Date..................................................................................5
Legal Holiday...............................................................................6
Maturity....................................................................................6
Money.......................................................................................6
Note" or "Notes.............................................................................6
Note Register" and "Note Registrar..........................................................6
Office or Agency............................................................................6
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
Officers' Certificate.......................................................................6
Opinion of Counsel..........................................................................6
Original Issue Discount Note................................................................6
Outstanding.................................................................................6
Paying Agent................................................................................7
Periodic Offering...........................................................................7
Person......................................................................................7
Place of Payment............................................................................7
Predecessor Note............................................................................8
Regular Record Date.........................................................................8
Responsible Officer.........................................................................8
Restricted Payment..........................................................................8
Restrictive Legend..........................................................................8
Securities Act..............................................................................8
Senior Indebtedness.........................................................................8
Special Record Date.........................................................................8
Stated Maturity.............................................................................9
Subsidiary..................................................................................9
Transfer Restrictions.......................................................................9
Trust Indenture Act.........................................................................9
Trustee.....................................................................................9
United States...............................................................................9
Vice President..............................................................................9
Voting Stock................................................................................9
Section 102. Compliance Certificates and Opinions..............................................9
Section 103. Form of Documents Delivered to Trustee...........................................10
Section 104. Acts of Holders..................................................................11
Section 105. Notices, Etc. to Trustee and Company.............................................12
Section 106. Notice to Holders of Notes; Waiver...............................................13
Section 107. Language of Notices..............................................................13
Section 108. Conflict with Trust Indenture Act................................................13
Section 109. Effect of Headings and Table of Contents.........................................14
Section 110. Successors and Assigns...........................................................14
Section 111. Separability Clause..............................................................14
Section 112. Benefits of Indenture............................................................14
Section 113. Governing Law....................................................................14
Section 114. Legal Holidays...................................................................14
Section 115. Schedules........................................................................15
Section 116. Counterparts.....................................................................15
ARTICLE TWO - FORM OF NOTES.....................................................................................15
Section 201. Forms Generally..................................................................15
Section 202. Global Notes.....................................................................15
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
ARTICLE THREE - THE NOTES.......................................................................................16
Section 301. Title and Terms; Issuable in Series..............................................16
Section 302. Currency; Denominations..........................................................19
Section 303. Execution, Authentication, Delivery and Dating...................................19
Section 304. Temporary Notes..................................................................22
Section 305. Registration, Transfer and Exchange..............................................22
Section 306. Mutilated, Destroyed, Lost and Stolen Notes......................................24
Section 307. Payment of Interest; Rights to Interest Preserved................................25
Section 308. Persons Deemed Owners............................................................26
Section 309. Cancellation.....................................................................27
Section 310. Authentication and Delivery of the Notes.........................................27
Section 311. Computation of Interest..........................................................27
ARTICLE FOUR- SATISFACTION AND DISCHARGE........................................................................28
Section 401. Satisfaction and Discharge of Indenture..........................................28
Section 402. Application of Trust Money.......................................................29
ARTICLE FIVE - REMEDIES.........................................................................................29
Section 501. Events of Default................................................................29
Section 502. Acceleration of Maturity; Rescission and Annulment...............................31
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee..................32
Section 504. Trustee May File Proofs of Claim.................................................33
Section 505. Trustee May Enforce Claims without Possession of Notes...........................34
Section 506. Application of Money Collected...................................................34
Section 507. Limitations on Suits.............................................................35
Section 508. Unconditional Right of Holders to Receive Principal and Interest.................36
Section 509. Restoration of Rights and Remedies...............................................36
Section 510. Rights and Remedies Cumulative...................................................36
Section 511. Delay or Omission Not Waiver.....................................................36
Section 512. Control by Holders of Notes......................................................37
Section 513. Waiver of Past Defaults..........................................................37
Section 514. Waiver of Stay or Extension Laws.................................................37
ARTICLE SIX - THE TRUSTEE.......................................................................................38
Section 601. Certain Duties and Responsibilities..............................................38
Section 602. Notice of Defaults...............................................................39
Section 603. Certain Rights of Trustee........................................................39
Section 604. Not Responsible for Recitals or Issuance of Notes................................40
Section 605. May Hold Notes...................................................................41
Section 606. Money Held in Trust..............................................................41
Section 607. Compensation and Reimbursement...................................................41
Section 608. Corporate Trustee Required; Eligibility..........................................42
</TABLE>
vi
<PAGE>
<TABLE>
<S> <C>
Section 609. Resignation and Removal; Appointment of Successor................................42
Section 610. Acceptance of Appointment by Successor...........................................44
Section 611. Merger, Conversion, Consolidation or Succession to Business......................45
Section 612. Appointment of Authenticating Agent..............................................45
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY..................................................................................47
Section 701. Company to Furnish Trustee Names and Addresses of Holders........................47
Section 702. Preservation of Information; Communications to Holders...........................47
Section 703. Reports by Trustee...............................................................47
Section 704. Reports by Company...............................................................48
ARTICLE EIGHT - CONSOLIDATION, MERGER AND SALES.................................................................49
Section 801. Company May Consolidate, Etc., Only on Certain Terms.............................49
Section 802. Successor Person Substituted for Company.........................................50
ARTICLE NINE - SUPPLEMENTAL INDENTURES..........................................................................50
Section 901. Supplemental Indentures without Consent of Holders...............................50
Section 902. Supplemental Indentures with Consent of Holders..................................51
Section 903. Execution of Supplemental Indentures.............................................52
Section 904. Effect of Supplemental Indentures................................................52
Section 905. Reference in Notes to Supplemental Indentures....................................52
Section 906. Record Date......................................................................52
ARTICLE TEN - COVENANTS.........................................................................................53
Section 1001. Payment of Principal and Interest................................................53
Section 1002. Maintenance of Office or Agency..................................................53
Section 1003. Money for Note Payments to Be Held in Trust......................................53
Section 1004. Corporate Existence..............................................................54
Section 1005. Maintenance of Properties........................................................55
Section 1006. Restrictions on Dividends and Other Payments.....................................55
Section 1007. Insurance........................................................................56
Section 1008. Payment of Taxes and Other Claims................................................56
Section 1009. Books and Records................................................................56
Section 1010. Statement by Officers as to Default..............................................57
Section 1011. Waiver of Certain Covenants......................................................57
EXHIBIT A - FORM OF NOTE.......................................................................................A-1
EXHIBIT B - FORM OF ORIGINAL ISSUE DISCOUNT NOTE...............................................................B-1
</TABLE>
vii
<PAGE>
INDENTURE, dated as of ___________, 199__ (the "Indenture"), between
THE VALSPAR CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (hereinafter called the "Company"), having
executive offices located at 1101 Third Street, Minneapolis, Minnesota 55415 and
_____________________________________________, a _________________________
(hereinafter called the "Trustee"), having its principal corporate trust office
at __________________________________________________________________.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its ____________
Notes (hereinafter called the "Notes"), to be issued in one or more series as
herein provided. All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture
Act of 1939, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder that are required to be part of this
Indenture and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders (as hereinafter defined) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders from time to
time of the Notes or of series thereof, as follows:
ARTICLE ONE - DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
Except as otherwise expressly provided in this Indenture or unless
the context otherwise requires, for all purposes of this Indenture:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act (as hereinafter defined), either directly or by
reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles in the United States and,
1
<PAGE>
except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles
as are generally accepted in the United States at the date of such
computation;
(4) the words "herein", "hereof", "hereto" and "hereunder"
and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision; and
(5) the word "or" is always used inclusively (for example,
the phrase "A or B" means "A or B or both", not "either A or B but
not both").
Certain terms used principally in certain Articles hereof are defined
in those Articles.
"Acceleration Event" has the meaning specified in Section 502.
"Acquired Indebtedness" means indebtedness of a Person existing at
the time such Person becomes a Subsidiary of the Company or assumed in
connection with the acquisition by the Company or a Subsidiary of the Company of
assets from such Person, and not incurred in connection with, or in anticipation
of, such Person becoming a Subsidiary of the Company or such acquisition.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 612 to act on behalf of the Trustee to authenticate Notes of
one or more series.
"Authorized Newspaper" means a newspaper, in an official language of
the place of publication or in the English language, customarily published on
each day that is a Business Day in the place of publication, whether or not
published on days that are Legal Holidays in the place of publication, and of
general circulation in each place in connection with which the term is used or
in the financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
2
<PAGE>
"Board of Directors" means the board of directors of the Company or
any committee of that board duly authorized to act generally or in any
particular respect for the Company hereunder.
"Board Resolution" means a copy of one or more resolutions, certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, delivered to the Trustee. Where any provision hereof
refers to action to be taken pursuant to a Board Resolution (including
establishment of any series of the Notes and the forms and terms thereof), such
action may be taken by any committee, officer or employee of the Company
authorized to take such action (generally or in any particular respect) by a
Board Resolution.
"Business Day", with respect to any Place of Payment or other
location, means each Monday, Tuesday, Wednesday, Thursday and Friday that is not
a Legal Holiday in such Place of Payment or other location.
"Certificate of Authentication" means the certificate set forth in
Exhibit A, Exhibit B or Section 612.
"Certificated Note" means a Note which is not a Global Note.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934 or,
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person, and any other obligor upon the
Notes.
"Company Request" and "Company Order" mean, respectively, a written
request or order, as the case may be, signed in the name of the Company by the
Chairman of the Board, a Vice Chairman of the Board, the Chief Executive
Officer, the President, a Vice President, the Chief Financial Officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company, or by another officer of the Company duly authorized to sign by a
Board Resolution, and delivered to the Trustee.
"Consolidated" when used in conjunction with any other defined term
means the aggregate amount of the items included within the defined term of the
Company on a consolidated basis, eliminating inter-company items.
"Consolidated Subsidiary" means a Subsidiary of the Company the
financial statements of which are included in the financial statements of the
Company and its Subsidiaries.
3
<PAGE>
"Corporate Trust Office" means the principal corporate trust office
of the Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of original execution of this
Indenture is located at ___________________________.
"Corporation" includes corporations, associations, companies and
business trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Definitive Notes" means Notes that are in the form of the Note
attached hereto as Exhibit A or Exhibit B and that do not include the
information called for by footnotes 1 and 2 thereof.
"Depository" means, with respect to any Notes of any series issued in
the form of one or more Global Notes, the Person designated as Depository by the
Company in or pursuant to this Indenture, which Person must be, to the extent
required by applicable law or regulation, a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and any successor to such Person.
If at any time there is more than one such Person, "Depository" shall mean, with
respect to any Notes of any series, the qualifying entity which has been
appointed with respect to such Notes of such series.
"Derivative Obligations" means any obligations of the Company to make
payment pursuant to the terms of any securities contracts and foreign currency
exchange contracts, derivative instruments, such as swap agreements (including
interest rate and currency and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts other than obligations on account of indebtedness for money
borrowed ranking pari passu with or subordinate to the Notes.
"Event of Default" has the meaning specified in Section 501.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
the Note attached hereto as Exhibit A or Exhibit B evidencing all or part of a
series of Notes, issued to the Depositary or its nominee for such series, and
registered in the name of such Depositary or nominee.
"Government Obligations" means direct obligations of the United
States of America, or any Person controlled or supervised by and acting as an
agency or instrumentality of such government, in each case where the payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by such government and which are not callable or redeemable at the
option of the issuer or issuers thereof, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the
4
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holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of or other amount with respect to the Government Obligation evidenced
by such depository receipt.
"Holder", when used with respect to the Notes, means the Person in
whose name a Note is registered in the Note Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of any particular series of Notes established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument due to the appointment of
one or more separate Trustees for any one or more separate series of Notes
pursuant to Section 610, the term "Indenture" shall mean, with respect to such
series of Notes for which any such Person is Trustee, this instrument as
originally executed or as it may from time to time be supplemented or amended by
one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of any particular
series of Notes for which such Person is Trustee established as contemplated by
Section 301, exclusive, however, of any provisions or terms which relate solely
to other series of Notes for which such Person is not Trustee, regardless of
when such terms or provisions were adopted, and exclusive of any provisions or
terms adopted by means of one or more indentures supplemental hereto executed
and delivered after such Person had become such Trustee but to which such
person, as such Trustee, was not a party.
"Independent Public Accountants" means a nationally recognized firm
of accountants that, with respect to the Company, are independent public
accountants within the meaning of the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the Commission thereunder, who may be
the independent public accountants regularly retained by the Company or who may
be other independent public accountants. Such accountants or firm shall be
entitled to rely upon any Opinion of Counsel as to the interpretation of any
legal matters relating to the Indenture or certificates required to be provided
hereunder.
"Initial Interest Accrual Date" as to any Note means the date from
which interest shall begin to accrue in connection with the original issuance of
such Note, which shall be the date as of which such Note originally issued by
the Company to the initial purchaser thereof shall be dated, and which shall be
the date upon which it was originally sold to such initial purchaser as
designated by the Company Order requesting authentication and delivery thereof.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
"Issue Date" means the date on which the Notes are originally issued
in accordance with the terms of this Indenture.
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"Legal Holiday" with respect to any Place of Payment or other
location, means a Saturday, a Sunday or a day on which banking institutions or
trust companies in such Place of Payment or other location are not authorized or
obligated to be open.
"Maturity" means the date on which the principal of the Notes or an
installment of principal becomes due and payable as provided in this Indenture,
whether at the Stated Maturity or by declaration of acceleration.
"Money" with respect to any payment, deposit or other transfer
pursuant to or contemplated by the terms hereof, means United States dollars or
other equivalent unit of legal tender for payment of public or private debts in
the United States of America.
"Note" or "Notes" means any note or notes of any series, as the case
may be, authenticated and delivered under this Indenture; provided, however,
that if at any time there is more than one Person acting as Trustee hereunder,
the term "Notes" as to which such Person is Trustee shall mean Notes
authenticated and delivered hereunder, exclusive, however, of Notes of any
series as to which such Person is not Trustee.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 305.
"Office or Agency" means an office or agency of the Company
maintained or designated in a Place of Payment for the Notes pursuant to Section
1002 or any other office or agency of the Company maintained or designated for
the Notes pursuant to Section 1002 or, to the extent designated or required by
Section 1002 in lieu of such office or agency, the Corporate Trust Office of the
Trustee.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, that complies with the
requirements of Section 314(e) of the Trust Indenture Act and is delivered to
the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel for the Company or other counsel who shall be
reasonably acceptable to the Trustee, that complies with the requirements of
Section 314 (e) of the Trust Indenture Act.
"Original Issue Discount Note" means any Note which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to any Notes, means, as of the
date of determination, all Notes of any series theretofore authenticated and
delivered under this Indenture, except:
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(1) any Note theretofore canceled by the Trustee or the Note
Registrar or delivered to the Trustee or the Note Registrar
for cancellation;
(2) any Note or portion thereof for whose payment at the
Maturity thereof Money in the necessary amount has been
theretofore deposited pursuant hereto with the Trustee or
any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders
of the Notes;
(3) any Note with respect to which the Company has effected
defeasance pursuant to Clauses (1)(b) and (3) of Section
401 hereof; and
(4) any Note which has been paid pursuant to Section 306 or in
exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture,
unless there shall have been presented to the Trustee proof
satisfactory to it that such Note is held by a bona fide
purchaser in whose hands such Note is a valid obligation of
the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes of any series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes of
such series owned by the Company or any other obligor upon such Notes or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in making any such determination or relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which
the Trustee knows to be so owned shall be so disregarded. Notes so owned which
shall have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee (a) the pledgee's right
so to act with respect to such Notes and (b) that the pledgee is not the Company
or any other obligor upon the Notes or any Affiliate of the Company or such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Note on behalf of the Company.
"Periodic Offering" means an offering of Notes of a series from time
to time the specific terms of which Notes, including without limitation the rate
or rates of interest (or formula for determining the rate or rates of interest),
if any, thereon, and the Stated Maturity or Maturities thereof, are to be
determined by the Company or its agents upon the issuance of such Notes.
"Person" means any individual, Corporation, partnership, joint
venture, joint stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment" has the meaning set forth in Section 301.
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"Predecessor Note" of a Note means every previous Note evidencing all
or a portion of the same debt as that evidenced by such particular Note; and,
for the purposes of this definition, any Note authenticated and delivered under
Section 306 in exchange for or in lieu of a lost, destroyed, mutilated or stolen
Note shall be deemed to evidence the same debt as the lost, destroyed, mutilated
or stolen Note.
"Regular Record Date" for the interest payable on any Note of any
series on any Interest Payment Date therefor means the date specified in Exhibit
A or Exhibit B as the "Regular Record Date".
"Responsible Officer" means any officer of the Trustee in its
Corporate Trust Office and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Restricted Payment" has the meaning specified in Section 1006.
"Restrictive Legend" has the meaning set forth in Section 305(b).
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means, the principal of, premium, if any, and
interest on (1) (a) all indebtedness of the Company for money borrowed
(including indebtedness of others guaranteed by the Company) other than the
Notes, whether outstanding on the date hereof or thereafter created, assumed or
incurred, and (b) any amendments, renewals, extensions, modifications and
refundings of any such indebtedness, unless in the case of either (a) or (b) in
the instrument creating or evidencing any such indebtedness or pursuant to which
it is outstanding it is provided that such indebtedness is not Senior
Indebtedness, and (2) Derivative Obligations. For the purposes of this
definition, "indebtedness for money borrowed" is defined as (a) any obligation
of the Company for the repayment of borrowed money, whether or not evidenced by
bonds, debentures, notes or other written instruments, (b) any deferred payment
obligation of the Company for the payment of the purchase price of property or
assets evidenced by a note or similar instrument, and (c) any obligation of the
Company for the payment of rent or other amounts under a lease of property or
assets which obligation is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Company under generally accepted
accounting principles; provided, however, that the foregoing shall not include
any obligation that constitutes a trade payable or accrued liability arising in
the ordinary course of business.
"Special Record Date" for the payment of any Defaulted Interest on
any Note means a date fixed by the Trustee pursuant to Section 307.
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"Stated Maturity" with respect to any Note or any installment of
principal thereof or interest thereon means the date established by this
Indenture or any supplemental indenture as the fixed date on which the principal
of such Note or such installment of principal or interest is due and payable.
"Subsidiary" means any Corporation of which at the time of
determination the Company or one or more Subsidiaries owns or controls directly
or indirectly more than 50% of the shares of Voting Stock.
"Transfer Restrictions" has the meaning set forth in Section 305(b).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Act or provision, as the case may be, as
amended or replaced from time to time or as supplemented from time to time by
rules or regulations adopted by the Commission under or in furtherance of the
purposes of such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean each Person who is then a Trustee hereunder, and if at any
time there is more than one such Person, "Trustee" as used with respect to the
Notes of any series shall mean the Trustee with respect to Notes of that series.
"United States" except as otherwise provided herein, means the United
States of America (including the states thereof and the District of Columbia),
its territories and possessions and other areas subject to its jurisdiction.
"Vice President" when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "Vice President".
"Voting Stock" means stock of a Corporation of the class or classes
having general voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of such Corporation,
provided that, for the purposes hereof, stock which carries only the right to
vote conditionally on the happening of an event shall not be considered Voting
Stock whether or not such event shall have happened.
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such
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application or request as to which the furnishing of such documents or any of
them is specifically required by any provision of this Indenture relating to
such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such condition or covenant and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, such individual has made such examination or
investigation as is necessary to enable such individual to express an
informed opinion as to whether or not such condition or covenant has
been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of counsel or Opinion of Counsel or
representation of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
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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 or any Note, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders.
(1) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing. Except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such
agent, or of the holding by any Person of a Note, shall be sufficient
for any purpose of this Indenture and (subject to Section 315 of the
Trust Indenture Act) conclusive in favor of the Trustee and the
Company and any agent of the Trustee or the Company, if made in the
manner provided in this Section.
Without limiting the generality of this Section, unless
otherwise provided in or pursuant to this Indenture, a Holder,
including a Depository that is a Holder of a Global Note, may make,
give or take, by a proxy, or proxies, duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or
other action provided in or pursuant to this Indenture to be made,
given or taken by Holders, and a Depository that is a Holder of a
Global Note may provide its proxy or proxies to the beneficial owners
of interests in any such Global Note through such Depository's
standing instructions and customary practices.
The Trustee shall fix a record date for the purpose of
determining the Persons who are beneficial owners of interest in any
Global Note held by a Depository entitled under the procedures of
such Depository to make, give or take, by a proxy or proxies duly
appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in or pursuant to
this Indenture to be made, given or taken by Holders. If such a
record date is fixed, the Holders on such record date or their duly
appointed proxy or proxies, and only such Persons, shall be entitled
to make, give or take such request, demand, authorization, direction,
notice, consent, waiver or other action, whether or not such Holders
remain Holders after such record date. No such request, demand,
authorization, direction, notice, consent, waiver or other action
shall be valid or effective if made, given or taken more than 90 days
after such record date.
(2) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any reasonable manner
which the Trustee deems sufficient and in
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accordance with such reasonable rules as the Trustee may determine;
and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of
Notes held by any Person, and the date of the commencement and the
date of the termination of holding the same, shall be proved by the
Note Register.
(4) If the Company shall solicit from the Holders of any
Notes of any series any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company may at its option
(but is not obligated to), by Board Resolution, fix in advance a
record date for the determination of Holders of Notes of such series
entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date,
but only the Holders of Notes of such series of record at the close
of business on such record date shall be deemed to be Holders for the
purpose of determining whether Holders of the requisite proportion of
Outstanding Notes of such series have authorized or agreed or
consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding
Notes of such series shall be computed as of such record date;
provided that no such authorization, agreement or consent by the
Holders of Notes of any series on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions
of this Indenture not later than six months after the record date.
(5) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Note shall bind
every future Holder of the same Note and the Holder of every Note
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or suffered
to be done by the Trustee, any Note Registrar, any Paying Agent or
the Company in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 105. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee or any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed,
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first-class postage prepaid, or sent by facsimile and U.S. mail,
first-class postage prepaid, to the Company addressed to the
attention of its Chief Financial Officer at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the
Trustee by the Company.
Section 106. Notice to Holders of Notes; Waiver.
Except as otherwise expressly provided in this Indenture, where this
Indenture provides for notice to Holders of Notes of any series of any event,
such notice shall be sufficiently given to Holders of Notes of such series if in
writing and mailed, first-class postage prepaid, to each Holder of a Note of a
series affected by such event, at such Holder's address as it appears in the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice.
In any case where notice to Holders of Notes of any series is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Note of a series shall affect the
sufficiency of such notice with respect to other Holders of Notes of such
series. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given or provided. In case by reason of
the suspension of regular mail service or by reason of any other cause it shall
be impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Notes shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 107. Language of Notices.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
duties under any required provision of the Trust Indenture Act, such required
provision shall control.
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Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture or in the Notes of any series
shall be invalid, illegal or unenforceable, either wholly or partially, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and such provisions shall be given
effect to the fullest extent permitted by law.
Section 112. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Note Registrar, any
Paying Agent, any Authenticating Agent and their respective successors hereunder
and the Holders of Notes, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
Section 113. Governing Law.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of Minnesota applicable to agreements made
or instruments entered into and, in each case, performed in said state.
Section 114. Legal Holidays.
In any case where any Interest Payment Date or Stated Maturity of any
Note shall be a Legal Holiday at any Place of Payment, then (notwithstanding any
other provision of this Indenture) payment need not be made at such Place of
Payment on such date, but may be made on the next succeeding day that is a
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date or at the Stated Maturity, and no interest shall
accrue on the amount payable on such date or at such time for the period from
and after such Interest Payment Date or Stated Maturity, as the case may be.
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Section 115. Schedules.
Any Schedules attached hereto are by this reference made a part
hereof with the same effect as if herein set forth in full.
Section 116. Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
ARTICLE TWO - FORM OF NOTES
Section 201. Forms Generally.
Each Note of any series issued pursuant to this Indenture, including
Global Notes, shall be in substantially the form included in Exhibit A or
Exhibit B hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture or any indenture
supplemental hereto and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rule or regulation of any stock
exchange or national market system or as may, consistently herewith, be
determined by the officers executing such Note as evidenced by their execution
of such Note. The Notes shall be issuable without coupons in fully registered
form only. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The Notes shall be printed, lithographed or engraved or produced by
any combination of these methods on a steel engraved border or steel engraved
borders or may be produced in any other manner, all as determined by the
officers of the Company executing such Notes, as evidenced by their execution of
such Notes.
Section 202. Global Notes.
Notes issued hereunder may be issued as one or more Global Notes.
Ownership of beneficial interests in a Global Note will be limited to persons
who have accounts with the Depository ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in a Global
Note will be shown on, and the transfer of the ownership interests will be
effected only through, records maintained by the Depository or its nominee (with
respect to interests of participants) and the records of participants (with
respect to interests of persons other than participants). Any endorsement of any
Note in global form to reflect the amount, or any increase or decrease in the
amount, or changes in the rights of Holders, of Outstanding Notes represented
thereby shall be made in such manner and by such Person or Persons as shall be
specified therein or in the Company Order to be delivered pursuant to Section
303 or 304 with respect thereto.
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Subject to the provisions of Section 303 and, if applicable, Section 304, the
Trustee shall deliver and redeliver any Global Note in permanent global form in
the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 303 or 304 has been, or simultaneously is, delivered, any instructions
by the Company with respect to a Global Note shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.
ARTICLE THREE - THE NOTES
Section 301. Title and Terms; Issuable in Series.
The Notes may be issued in one or more series. There shall be
established, without the approval of any Holders or the Trustee, by or pursuant
to authority granted by one or more Board Resolutions, and, subject to Section
303, there shall be set forth in an Officers' Certificate, or established in one
or more indentures supplemental hereto, prior to the initial issuance of Notes
of any series, all or any of the following, as applicable:
(1) the title of the Notes of the series (which shall
distinguish the Notes of the series from Notes of any other series);
(2) any limit upon the aggregate principal amount of the
Notes of the series which may be authenticated and delivered
hereunder (except for Notes authenticated and delivered upon
registration of transfer of, or in lieu of, other Notes of the series
pursuant to Sections 304, 305, or 306 and except for any Notes which,
pursuant to Section 303, are deemed never to have been authenticated
and delivered hereunder) and the absence of such limitation shall
mean that the Company may issue from time to time additional Notes of
such series without limitation as to aggregate principal amount;
(3) the Person to whom any interest on a Note of the series
shall be payable, if other than the Person in whose name that Note
(or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest;
(4) the date or dates, or the method by which such date or
dates are determined or extended, on which the principal or
installments of principal and premium, if any, of the Notes of the
series is or are payable;
(5) the rate or rates (which may be fixed or variable) at
which the Notes of the series shall bear interest, if any, or the
method by which such rate or rates shall be determined, the date or
dates from which such interest shall accrue, the Interest Payment
Dates on which such interest shall be payable, the Regular Record
Date for the interest payable on any Interest Payment Date and the
circumstances, if any in which the Company
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may defer interest payments and the basis upon which interest shall
be calculated if other than that of a 360-day year of twelve 30-day
months;
(6) the place or places, if any, where the principal of
(and premium, if any) and interest on Notes of the series shall be
payable, any Notes of the series may be surrendered for registration
of transfer or exchange and notices and demands to or upon the
Company with respect to the Notes of the series and this Indenture
may be served, other than or in addition to the Corporate Trust
Office of the Trustee;
(7) whether the Notes of the series will be convertible
into shares of capital stock and/or exchangeable for other
securities, and if so, the terms and conditions upon which such Notes
will be so convertible or exchangeable, and any deletions from or
modifications or additions hereto to permit or to facilitate the
issuance of such convertible or exchangeable Notes or the
administration thereof;
(8) the identity of each Note Registrar and Paying Agent,
if other than or in addition to the Trustee;
(9) if the amount of principal of or any premium or
interest on any Notes of the series may be determined by reference to
an index or pursuant to a formula, the manner in which such amounts
shall be determined;
(10) the applicability of, and any addition to or change
in, the definitions currently set forth herein;
(11) if other than denominations of $1,000 or any amount in
excess thereof which is an integral multiple of $1,000, the
denominations in which Notes of the series shall be issuable;
(12) any other event or events of default applicable with
respect to Notes of the series in addition to or in lieu of those
provided in Section 501 or any event or events of default provided in
Section 501 which will not be applicable to Notes of the series, and
any change in the right of the Trustee or the Holders to declare the
principal of or any premium or interest on such Notes due and
payable;
(13) whether the Notes of the series will be Original Issue
Discount Notes and, if so, the portion of the principal amount of
Notes of the series which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502;
(14) whether the Notes of the series shall be issued in
whole or in part in the form of one or more Global Notes and, if so,
(a) the Depositary with respect to such Global Note or Notes and (b)
the circumstances under which any such Global Note may be exchanged
for
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Notes registered in the name of, and any transfer of such Global Note
may be registered to, a Person other than such Depositary or its
nominee, if other than set forth in Section 305;
(15) if applicable, the period or periods within which or
the date or dates on which, the price or prices at which and the
terms and conditions upon which Notes of the series may be redeemed,
in whole or in part, at the option of the Company or the Holder;
(16) any other covenant or warranty included for the
benefit of the Notes of the series in addition to (and not
inconsistent with) those set forth herein for the benefit of Notes of
all series, or any other covenant or warranty included for the
benefit of Notes of the series in lieu of any covenant or warranty
set forth herein for the benefit of Notes of all series, or any
provision that any covenant or warranty set forth herein for the
benefit of Notes of all series shall not be for the benefit of Notes
of such series, or any combination of such covenants, warranties or
provisions and the applicability, if any, of the provisions of
Section 1012 to such covenants and warranties;
(17) whether or not the Notes of the series will be
subordinated in right of payment to Senior Indebtedness and the terms
of any such subordination; and
(18) any other terms of the series (which terms shall not
be inconsistent with the provisions hereof, except as permitted by
Section 901(5)).
All Notes of any one series (other than Notes offered in a Periodic
Offering) shall be substantially identical except as to denomination and except
as may otherwise be provided by or pursuant to the Board Resolution referred to
above and, subject to Section 303, set forth, or determined in the manner
provided, in the Officers' Certificate referred to above or in any such
indenture supplemental hereto. All Notes of any one series need not be issued at
the same time. Unless otherwise provided, Notes of a single series may have
different terms, and a series may be reopened, without the consent of the
Holders of Notes of such series, for issuance of additional Notes of such
series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
With respect to Notes of a series offered in a Periodic Offering,
such Board Resolution and Officers' Certificate or supplemental indenture may
provide general terms or parameters for Notes of such series and provide either
that the specific terms of particular Notes of such series shall be specified in
a Company Order or that such terms shall be determined by the Company or its
agents in accordance with other procedures specified in a Company Order as
contemplated by Section 303.
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The principal of and interest on the Notes of any series shall be
payable at the Office or Agency of the Company in Minneapolis, Minnesota ("Place
of Payment") maintained for such purposes pursuant to Section 1002; provided,
however, that, at the option of the Company, payment of interest may be made
(subject to collection) (i) by check mailed to the address of the Person
entitled thereto as such address shall appear on the Note Register or (ii) by
wire transfer to an account maintained by the Person entitled thereto as
specified in the Note Register.
Section 302. Currency; Denominations.
The principal of and interest on the Notes of each series shall be
payable in United States dollars or other equivalent unit of legal tender for
payment of public or private debts in the United States of America. In the
absence of any specification with respect to the Notes of any series, Notes
shall be issuable in fully registered form only without coupons in denominations
of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
Notes shall be executed on behalf of the Company by its Chairman of
the Board, one of its Vice Chairmen of the Board, its Chief Executive Officer,
its President, its Chief Financial Officer, its Treasurer or one of its Vice
Presidents under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery
hereof, the Company may deliver Notes of any series executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, or, in the case of Notes offered in a
Periodic Offering, from time to time in accordance with such other procedures
(including, without limitation, the receipt by the Trustee of electronic
instructions from the Company or its duly authorized agents, promptly confirmed
in writing by the Company) acceptable to the Trustee as may be specified from
time to time by a Company Order for establishing the specific terms of
particular Notes being so offered, and the Trustee in accordance with the
Company Order shall authenticate and deliver such Notes. If the form or forms or
terms of the Notes of the series have been established by or pursuant to one or
more Board Resolutions as permitted by Section 301, in authenticating such Notes
and accepting the additional responsibilities hereunder in relation to such
Notes, the Trustee shall be entitled to receive, and (subject to Section 601)
shall be fully protected in relying upon
(a) an Opinion of Counsel stating:
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(1) that the form or forms of such Notes have been
established in conformity with the provisions thereof,
(2) that the terms of such Notes have been established in
conformity with the provisions thereof,
(3) that authentication and delivery of such Notes and the
execution and delivery of the supplemental indenture, if any, by the
Trustee will not violate the terms hereof,
(4) that the Company has the corporate power to issue, and
has duly authorized, such Notes;
(5) that such Notes, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and other laws of general applicability
relating to or affecting the enforcement of creditors' rights and to
general equity principles; and
(6) that the issuance of such Notes will not contravene the
certificate of incorporation or bylaws of the Company or result in
any violation of any of the terms or provisions of any law or
regulation or of any indenture, mortgage or other agreement known to
such Counsel by which the Company or its assets is bound, the
violation of which would have a material adverse effect on the
Company and its subsidiaries taken as a whole;
(b) an executed supplemental indenture, if any;
(c) a copy of the Board Resolution; and
(d) an Officers' Certificate;
provided, however, that, with respect to Notes of a series offered in a Periodic
Offering, the Trustee shall be entitled to receive such Opinion of Counsel in
connection only with the first authentication of each form of Notes of such
series and that the opinions described in clauses (a)(2) and (a)(5) above may
state, respectively, that
(2) if the terms of such Notes are to be established
pursuant to a Company Order or pursuant to such procedures as may be
specified from time to time by a Company Order, all as contemplated
by a Board Resolution or action taken pursuant thereto, such terms
will have been duly authorized by the Company and established in
conformity with the provisions hereof; and
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(5) that such Notes, when executed by the Company,
completed, authenticated and delivered by the Trustee in accordance
herewith, and issued and delivered by the Company and paid for, all
in accordance with any agreement of the Company relating to the
offering, issuance and sale of such Notes, will be duly issued
hereunder and will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting generally the enforcement of creditors'
rights and to general principles of equity.
With respect to Notes of a series offered in a Periodic Offering, the
Trustee may rely conclusively, as to the authorization by the Company of any of
such Notes, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel, Company
Order and other documents delivered pursuant to Section 301 and this Section, as
applicable, in connection with the first authentication of a form of Notes of
such series and it shall not be necessary for the Company to deliver such
Opinion of Counsel and other documents (except as may be required by the
specified other procedures, if any, referred to above) at or prior to the time
of authentication of each Note of such series unless and until the Trustee
receives actual notice that such Opinion of Counsel or other documents have been
superseded or revoked, and may assume compliance with any conditions specified
in such Opinion of Counsel (other than any conditions to be performed by the
Trustee). If such form or forms or terms have been so established, the Trustee
shall not be required to authenticate such Notes if the issue of such Notes
pursuant hereto will affect the Trustee's own rights, duties or immunities under
the Notes and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
The Company may establish by Company Order that the Notes of any
series to be issued hereunder shall be in the form of one or more Global Notes.
The Company shall execute and the Trustee shall, in accordance with this Section
and the Company Order with respect to such Notes, authenticate and deliver one
or more Global Notes in permanent form that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of the
Outstanding Notes to be represented by such Global Note or Notes, (ii) shall be
registered in the name of the Depository for such Global Note or Notes or the
nominee of such Depository, (iii) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instruction and (iv) shall bear a
legend substantially to the following effect: "Unless and until it is exchanged
in whole or in part for Notes in certificated form, this Note may not be
transferred except as a whole by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository" or to such other effect as the
Depository and the Trustee may agree.
Each Note of a series shall be dated the date of its authentication.
No Note of any series shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Note a Certificate of Authentication substantially in the form provided for
in Exhibit A, Exhibit B or Section 612 executed by or on
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behalf of the Trustee by the manual signature of one of its authorized officers
or by an Authenticating Agent. Such certificate upon any Note of any series
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
Section 304. Temporary Notes.
Pending the preparation of Definitive Notes of any series, the
Company may execute and deliver to the Trustee and, upon Company Order, the
Trustee shall authenticate and deliver, in the manner provided in Section 303,
temporary Notes in lieu thereof which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Notes of any series in lieu of
which they are issued, in registered form and with such appropriate insertions,
omissions, substitutions and other variations as the officers of the Company
executing such Notes may determine, as conclusively evidenced by their execution
of such Notes.
Except in the case of temporary Global Notes, which shall be
exchanged in accordance with the provisions thereof, if temporary Notes of any
series are issued, the Company shall cause Definitive Notes to be prepared
without unreasonable delay. After the preparation of Definitive Notes, such
temporary Notes shall be exchangeable for such Definitive Notes upon surrender
of such temporary Notes at an Office or Agency for such Notes, without charge to
any Holder thereof. Upon surrender for cancellation of any one or more temporary
Notes, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Unless otherwise provided in or pursuant to this Indenture with
respect to a temporary Global Note, until so exchanged the temporary Notes shall
in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
Section 305. Registration, Transfer and Exchange.
The Company shall cause to be kept a register (herein sometimes
referred to as the "Note Register") at an Office or Agency maintained pursuant
to Section 1002 in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Notes of any
series and of transfers of the Notes. The Trustee is hereby initially appointed
as Note Registrar for the Notes. In the event that the Trustee shall cease to be
Note Registrar it shall have the right to examine the Note Register at all
reasonable times.
Upon surrender for registration of transfer of any Note of any series
at the Office or Agency of the Company, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes, denominated as authorized in this
Indenture, of a like aggregate principal amount bearing a number not
contemporaneously outstanding and containing identical terms and provisions.
At the option of the Holder, Notes of any series (except a Global
Note representing all of the Outstanding Notes) may be exchanged for other
Notes, in any authorized denominations, and of a
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like aggregate principal amount, upon surrender of the Notes to be exchanged at
such Office or Agency. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Notes
which the Holder making the exchange is entitled to receive.
Whenever any Notes are surrendered for exchange as contemplated by
the immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive.
No beneficial owner of an interest in a Global Note will be able to
transfer that interest except in accordance with the applicable procedures of
the Depository (in addition to any other procedures specified herein).
Notwithstanding the foregoing, except as otherwise provided in or
pursuant to this Indenture, no Global Note of any series shall be exchangeable
in whole or in part for Definitive Notes unless (i) the Depository is at any
time unwilling, unable or ineligible to continue as Depository and a successor
depository is not appointed by the Company within 90 days of the date the
Company is so informed in writing, (ii) the Company executes and delivers to the
Trustee a Company Order to the effect that such Global Note shall be so
exchangeable, or (iii) an Event of Default has occurred and is continuing with
respect to the Global Note of any series which entitles the Holders to
accelerate the maturity thereof. If the beneficial owners of interests in a
Global Note of any series are entitled to exchange such interests for Definitive
Notes of such series of like tenor and principal amount of any authorized form
and denomination as contemplated by Section 303, then without unnecessary delay
but in any event not later than the earliest date on which such interests may be
so exchanged, the Company shall deliver to the Trustee Definitive Notes in such
form and denominations as are required by or pursuant to this Indenture,
containing identical terms and in aggregate principal amount equal to the
principal amount of such Global Note, executed by the Company. On or after the
earliest date on which such interests may be so exchanged, such Global Note
shall be surrendered by the Depository in accordance with instructions given to
the Trustee and the Depository (which instructions shall be in writing but need
not be contained in or accompanied by an Officers' Certificate or be accompanied
by an Opinion of Counsel) as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose.
Promptly following any such exchange in part, such Global Note shall be returned
by the Trustee to such Depository in accordance with the instructions of the
Company referred to above. If a Note is issued in exchange for any portion of a
Global Note after the close of business at the Office or Agency for such Note
where such exchange occurs on or after (i) any Regular Record Date for such Note
and before the opening of business at such Office or Agency on the next Interest
Payment Date, or (ii) any Special Record Date for such Note and before the
opening of business at such Office or Agency on the related proposed date for
payment of interest or Defaulted Interest, as the case may be, interest shall
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Note, but shall be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such Global Note shall be
payable in accordance with the provisions of this Indenture.
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Notwithstanding any other provision of this Indenture, a Global Note
of any series may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary.
All Notes of any series issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company evidencing the
same debt and entitling the Holders thereof to the same benefits under this
Indenture as the Notes surrendered upon such registration of transfer or
exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Note Registrar for such
Note) be duly endorsed by, or be accompanied by a written instrument of transfer
in form satisfactory to the Company and the Note Registrar duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 304 or 905 not involving any transfer.
As used in this Section 305, the term "transfer" encompasses any
sale, pledge, transfer or other disposition of any Notes referred to herein.
Section 306. Mutilated, Destroyed, Lost and Stolen Notes.
If any mutilated Note, including a Global Note, is surrendered to the
Trustee, subject to the provisions of this Section, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new Note
containing identical terms and of like principal amount and bearing a number not
contemporaneously outstanding.
If there be delivered to the Company and to the Trustee (1) evidence
to their satisfaction of the destruction, loss or theft of any Note, including a
Global Note if the destroyed, lost or stolen Note was a Global Note, and (2)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and, upon the Company's request the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
destroyed, lost or stolen Note, a new Note of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing provisions of this Section, in case any
mutilated, destroyed, lost or stolen Note of any series has become or is about
to become due and payable for any reason, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
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Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Note shall constitute an additional original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes of that series duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant
to this Indenture, shall be exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
Section 307. Payment of Interest; Rights to Interest Preserved.
Unless otherwise provided as contemplated by Section 301, any
interest on any Note of any series which shall be payable and is punctually paid
or duly provided for on any Interest Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered as of the
close of business on the Regular Record Date for such interest.
Any interest on any Note of any series which shall be payable, but
shall not be punctually paid or duly provided for, on any Interest Payment Date
for such Note (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder thereof on the relevant Regular Record Date by virtue of
having been a Holder on such date; and such Defaulted Interest shall be paid by
the Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Person in whose name such Note of such series (or a
Predecessor Note thereof) shall be registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on such Note and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of Money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment. Such Money when so deposited
shall be held in trust for the benefit of the Person entitled to such
Defaulted Interest. Thereupon, the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause
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notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage
prepaid, to the Holder of such Note (or a Predecessor Note thereof)
at such Holder's address as it appears in the Note Register not less
than 10 days prior to such Special Record Date. In addition to the
mailing, the Trustee may, in its discretion, in the name and at the
expense of the Company cause a similar notice to be published at
least once in an Authorized Newspaper of general circulation in each
Place of Payment, but such publication shall not be a condition
precedent to the establishment of such Special Record Date and the
failure of a Holder to observe such published notice shall not
entitle such Holder to additional benefits or interest with respect
to such Holder's Notes. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Person in whose name such Note of such series (or a Predecessor Note
thereof) shall be registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of
any securities exchange or national market system on which the Notes
may be listed, and upon such notice as may be required by such
exchange or national market system, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.
At the option of the Company, interest on any Note may be paid (i) by
mailing a check to the address of the Person entitled thereto as such address
shall appear in the Note Register, or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Note Register.
Subject to the foregoing provisions of this Section and Section 305,
each Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer or
exchange, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Note is registered in the Note Register
as the owner of such Note for the purpose of receiving payment of principal of
and (subject to Sections 305 and 307) interest on such Note and for all other
purposes whatsoever, whether or not any payment with respect to such Note shall
be overdue, and neither the Company, nor the Trustee or any agent of the Company
or the Trustee shall be affected by notice to the contrary.
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Payments on Global Notes will be made to the Depository, or its
nominee, as the registered owner thereof. Neither the Company, the Trustee nor
any paying agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Notes or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
No holder of any beneficial interest in any Global Note held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Note or any Note represented thereby, and such Depositary may be
treated by the Company, the Trustee, and any agent of the Company or the Trustee
as the owner of such Global Note or any Note represented thereby for all
purposes whatsoever. Notwithstanding the foregoing, with respect to any Global
Note, nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by a Depositary Holder of such Global Note, or
impair, as between a Depositary and the owners of beneficial interests in such
Global Note, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominees) as Holder of such Global Note. None
of the Company, the Trustee, any Paying Agent or the Note Registrar will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Section 309. Cancellation.
All Notes surrendered for payment, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Notes, as well as Notes surrendered
directly to the Trustee for any such purpose, shall be canceled promptly by the
Trustee. The Company may at any time deliver to the Trustee for cancellation any
Notes previously authenticated and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Notes so delivered shall be
canceled promptly by the Trustee. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be destroyed by the Trustee, unless by a Company Order the Company directs
their return to it.
Section 310. Authentication and Delivery of the Notes.
Forthwith upon the execution and delivery of this Indenture, or from
time to time thereafter, Notes may be executed by the Company and delivered to
the Trustee for authentication, and shall thereupon be authenticated and
delivered by the Trustee upon Company Order, Board Resolution, or indentures
supplemental hereto.
Section 311. Computation of Interest.
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Except as otherwise specified pursuant to Section 301 for the Notes
of any series, interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. Interest shall be payable to and excluding any
Interest Payment Date and interest shall be payable to and excluding the
Maturity.
ARTICLE FOUR - SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of further effect with respect to any series of Notes and the
Trustee, on receipt of such Company Order, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture as to such series of Notes, when
(1) either
(a) all Notes of such series theretofore
authenticated and delivered (other than (i) Notes which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Notes
for whose payment Money has theretofore been deposited in
trust with the Trustee or segregated and held in trust by
the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee for cancellation; or
(b) all Notes of such series not so theretofore
delivered to the Trustee for cancellation (i) have become
due and payable, or (ii) will become due and payable at
their Stated Maturity within one year, and the Company has
irrevocably deposited or caused to be deposited with the
Trustee, as trust funds and/or obligations in trust for
such purpose, Money and/or Government Obligations which
through the payment of interest and principal in respect
thereof in accordance with their terms, without
consideration of any reinvestment thereof, will provide not
later than the opening of business on the due dates of any
payment of principal and interest with respect thereto, or
a combination thereof, Money in an amount sufficient to pay
and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation,
including the principal thereof and interest thereon, to
the date of such deposit (in the case of Notes which have
become due and payable) or to the Maturity thereof, as the
case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company, including amounts owing to the
Trustee; and
(3) the Company has delivered to the Trustee a certificate
of Independent Public Accountants certifying as to the sufficiency of
the amounts deposited pursuant to subclause
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(b) of Clause (1) of this Section for payment of the principal and
interest on the dates such payments are due, and an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein providing for or relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series of Notes, the obligations of the Company and the Trustee to
the Holders of Notes of other series not so satisfied and discharged, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 612 and, if Money and/or
Government Obligations shall have been deposited with the Trustee pursuant to
subclause (b) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003, shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
Money and Government Obligations deposited with the Trustee pursuant to Section
401 and all Money received by the Trustee in respect of Government Obligations
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Notes of each series and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such Money has or Government Obligations have been deposited with
or received by the Trustee; but such Money and Government Obligations need not
be segregated from other funds of the Trustee except to the extent required by
law.
ARTICLE FIVE - REMEDIES
Section 501. Events of Default.
"Event of Default" wherever used herein with respect to Notes of any
series, and unless otherwise provided with respect to Notes of any series
pursuant to Section 301, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary 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):
(1) default in the payment of any interest on any Note of
such series when such interest becomes due and payable, and
continuance of such default for a period of 10 days; or
(2) default in the payment of the principal of any Note of
such series when it becomes due and payable at its Maturity; or
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(3) default in the performance, or breach, of any covenant
or warranty of the Company in this Indenture or the Notes of such
series (other than a covenant or warranty a default in the
performance or the breach of which is elsewhere in this Section
specifically dealt with or which expressly has been included herein
solely for the benefit of a series of one or more Notes other than
such series), and continuance of such default or breach for a period
of 30 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Notes 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; or
(4) default in the payment at stated maturity of any
indebtedness of the Company or any Subsidiary for money borrowed (not
described above in paragraph (1) or (2)) in principal amount due at
stated maturity in excess of $10,000,000, and such default shall
continue, without being cured, waived or consented to and without
such indebtedness being discharged, for a period of 30 days beyond
any applicable period of grace, provided, however, that the
provisions of this Section 501(4) shall not apply to any indebtedness
of the Company or any Subsidiary under which the rights and remedies
of the lender in the event of default are limited to repossession or
sale of property securing such obligation, with no recourse to the
Company or any Subsidiary; or
(5) the occurrence of an event of default as defined in any
mortgage, indenture or instrument under which there may be issued, or
by which there may be secured or evidenced, any indebtedness of the
Company or any Subsidiary for money borrowed (not described above in
paragraph (3)) (or the payment of which is guaranteed by the
Company), whether such indebtedness now exists or shall hereafter be
created, provided, however, that no such event of default shall
constitute an Event of Default hereunder unless such event of default
results in the acceleration of such indebtedness prior to its
expressed maturity, which together with the principal amount of any
such other indebtedness so caused to be accelerated, aggregates
$10,000,000 or more at any one point in time and such default shall
not have been cured or waived and such acceleration shall not have
been rescinded or annulled, provided, however, that the provisions of
this Section 501(5) shall not apply to any indebtedness of the
Company or any Subsidiary under which the rights and remedies of the
lender in the event of default are limited to repossession or sale of
property securing such obligation, with no recourse to the Company or
any Subsidiary; or
(6) the entry by a court or agency or supervisory authority
having competent jurisdiction of:
(a) a decree or order for relief in respect of
the Company or any Subsidiary in an involuntary proceeding
under any applicable bankruptcy, insolvency, reorganization
or other similar law and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
or
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(b) a decree or order adjudging the Company or
any Subsidiary to be insolvent, or approving a petition
seeking reorganization, arrangement, adjustment or
composition of the Company or any Subsidiary and such
decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(c) a decree or order appointing any Person to
act as a custodian, receiver, liquidator, assignee, trustee
or other similar official of the Company or any Subsidiary
or of any substantial part of the property of the Company
or any Subsidiary, as the case may be, or ordering the
winding up or liquidation of the affairs of the Company or
any Subsidiary and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
or
(7) the commencement by the Company or any Subsidiary of a
voluntary proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or of a voluntary proceeding
seeking to be adjudicated insolvent or the consent by the Company or
any Subsidiary to the entry of a decree or order for relief in an
involuntary proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
insolvency proceedings against it, or the filing by the Company or
any Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable law, or the consent by
the Company or any Subsidiary to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or similar official of the Company or
any Subsidiary or any substantial part of the property of the Company
or any Subsidiary or the making by the Company or any Subsidiary of
an assignment for the benefit of creditors, or the taking of
corporate action by the Company or any Subsidiary in furtherance of
any such action; or
(8) a final judgment, judicial decree or order for the
payment of money in excess of $10,000,000 shall be rendered against
the Company or any Subsidiary and such judgment, decree or order
shall continue unsatisfied for a period of 60 days without a stay of
execution; or
(9) any other Event of Default provided with respect to the
Notes of such series pursuant to Section 301.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default specified in Subsection 501(6) or Subsection
501(7) or any other Event of Default specified pursuant to Section 301 occurs
and is continuing (an "Acceleration Event"), then the Trustee or the Holders of
not less than 25% in principal amount of the outstanding Notes of any series may
declare the principal of all the Notes of such series, and the interest accrued
thereon, to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such amount shall become immediately due and payable; provided,
however, that any Event of Default specified in Subsection 501(7) shall result
in
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immediate and automatic acceleration of maturity of the outstanding Notes of
every series, and the principal of all the Notes of every series and the
interest accrued thereon shall be due and payable immediately without notice, as
if a declaration of acceleration, as contemplated in this Section 502, had been
made.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the Money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of not less
than a majority in principal amount of the Outstanding Notes of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a
sum of Money sufficient to pay
(a) all overdue installments of any interest on
all Notes of such series,
(b) the principal of any Notes of such series
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by such
Notes,
(c) to the extent that payment of such interest
is lawful, interest upon overdue installments of any
interest at the rate borne by such Notes, and
(d) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the non-payment of
the principal of and interest on Notes of such series which shall
have become due solely by reason of such Acceleration Event, shall
have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if an Event of Default occurs and is
continuing, the Company shall, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Notes, the whole amount of money then due
and payable (including any amount of money payable as a result of acceleration)
with respect to such Notes, with interest upon any overdue principal and, to the
extent that payment of such interest shall be legally enforceable, upon any
overdue installments of interest at the same rate of interest as is payable on
the principal amount of the Notes, and, in addition thereto, such further amount
of Money as shall be sufficient to cover the costs and expenses
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of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay the Money it is required to pay the
Trustee pursuant to the preceding paragraph forthwith upon the demand of the
Trustee, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the Money so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Notes and
collect the Money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Notes,
wherever situated.
If any Event of Default with respect to the Notes of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of such Notes by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the collection of all principal
and interest then due and payable hereunder (in the absence of any
acceleration), or the specific enforcement of any covenant or agreement in this
Indenture or such Notes or in aid of the exercise of any power granted herein or
therein, or to enforce any other proper remedy.
The rights and remedies under this Section 503 are in addition to the
other rights and remedies available under this Article 5 or otherwise legally
available.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
of any series or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes of
any series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of any overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Notes of
any series for which the Trustee acts as trustee 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 or counsel) and of the Holders of Notes of such
series allowed in such judicial proceeding, and
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(2) to collect and receive any Money or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Notes of such series to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders of Notes of such series, 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 the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Note of
any series any plan of reorganization, arrangement, adjustment or composition
affecting the Notes of such series or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a Note of
such series in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Notes.
All rights of action and claims under this Indenture or any of the
Notes of any series may be prosecuted and enforced by the Trustee without the
possession of any of the Notes 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 or
judgment, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
shall be for the ratable benefit of each and every Holder of a Note of such
series in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any Money collected by the Trustee with respect to any series of
Notes 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 interest, upon presentation of the Notes of
such series, and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and
any predecessor Trustee under Section 607;
SECOND: In the case where the Notes are subordinated to
Senior Indebtedness, to the payment of amounts then due and unpaid to
the holders of Senior Indebtedness, to the extent required by the
terms of subordination.
THIRD: In the case the principal of the Notes of such
series shall not have become due and payable, to the payment of the
amounts then due and unpaid upon the Notes of such
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series for interest in respect of which or for the benefit of which
such Money has been collected, in the order of the Maturity of the
installments of such interest, with interest, to the extent that such
interest is lawful and has been collected by the Trustee, upon
overdue installments of interest at the rate borne by the Notes, such
payments to be made ratably, without preference or priority of any
kind, according to the aggregate amounts due and payable on such
Notes for interest;
FOURTH: In the case the principal of the Notes of such
series shall have become due and payable, to the payment of the
amounts then due and unpaid upon the Notes for principal and interest
in respect of which or for the benefit of which such Money has been
collected, with interest, to the extent that such interest is lawful
and has been collected by the Trustee, upon overdue installments of
interest at the rate borne by the Notes, such payments to be made
ratably, without preference or priority of any kind, according to the
aggregate amounts due and payable on such Notes for principal and
interest, respectively; and
FIFTH: The balance, if any, to the Person or Persons
entitled thereto.
Section 507. Limitations on Suits.
No Holder of any Note of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Acceleration Event or Event of Default;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Notes of such series shall have made written request
to the Trustee to institute proceedings in respect of such
Acceleration Event or Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity satisfactory to the Trustee against the costs, fees,
expenses and liabilities to be incurred in compliance with such
request (including reasonable fees of counsel);
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Notes of such
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Note to
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accelerate amounts due under the Notes when the Trustee could not accelerate
such amounts or otherwise exercise any remedies which the Trustee could not have
exercised hereunder, or any right to affect, disturb or prejudice the rights of
any other Holders, or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 508. Unconditional Right of Holders to Receive Principal
and Interest.
Notwithstanding any other provision in this Indenture, but subject to
those limitations regarding acceleration which are applicable to the Trustee and
which are contained in Section 502, the Holder of any Note of any series shall
have the right, which is absolute and unconditional, to receive payment of the
principal of and (subject to Sections 305 and 307) interest on such Note on the
respective Stated Maturity or Maturities therefor specified in such Note 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 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Note of any series has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder 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 each such Holder shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 306, and subject to Sections 502 and 503, no right or remedy herein
conferred upon or reserved to the Trustee or to each and every Holder of a Note
is intended to be exclusive of any other right or remedy, and every right and
remedy, to the extent permitted by law, shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note of
any series 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 any Holder of a Note of any series may be
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exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
Section 512. Control by Holders of Notes.
The Holders of a majority in principal amount of the Outstanding
Notes of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Notes, provided
that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture,
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction, and
(3) subject to Section 601, the Trustee need not take any
action which might be unjustly prejudicial to the rights of the other
Holders of Notes not joining in such action.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series on behalf of the Holders of all the Notes of
such series may waive any past default hereunder and its consequences, except a
default
(1) in the payment of the principal of or interest on any
Note of such series, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Note of such series.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Waiver of Stay or Extension Laws.
The Company covenants that (to the extent that it may lawfully do so)
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not
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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.
ARTICLE SIX - THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
(1) With respect to Notes of any series, except during the
continuance of an Event of Default with respect to that series only,
(a) the Trustee undertakes to perform such duties, and only
such duties, as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(2) With respect to Notes of any series, in case an Event of Default
has occurred and is continuing with respect to that series only, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(3) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(a) this Subsection shall not be construed to limit the
effect of Subsection (1) of this Section;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount
of the Outstanding Notes of any series, relating to the time, method
and place of conducting any proceeding for any remedy available to
the Trustee, or exercising
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any trust or power conferred upon the Trustee, under this Indenture
with respect to the Notes of such series, provided such direction
shall not be in conflict with any rule of law or with this Indenture;
and
(d) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(4) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Notes of any series, the Trustee shall transmit to the Holders of
Notes of such series, in the manner and to the extent provided in Section 313
(b) of the Trust Indenture Act, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of or
interest on any Note of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders of Notes of such series; and provided, further, that in
the case of any default of the character specified in Section 501 (3) with
respect to Notes of such series, no such notice to Holders shall be given until
at least 30 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
Section 603. Certain Rights of Trustee.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon or other paper or
document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or a
Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
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(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence shall be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate and/or Opinion of Counsel;
(4) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Notes of any series
pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, fees,
expenses and liabilities which might be incurred by it, including
reasonable fees of counsel, in complying with such request or
direction;
(6) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, coupon or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine, during business
hours and upon reasonable notice, the books, records and premises of
the Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes of each series, except
the Trustee's Certificate of Authentication, shall be taken as the statements of
the Company and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Notes of any series,
except that the Trustee represents that it is duly authorized to execute and
deliver this Indenture, authenticate the Notes of any series and perform its
obligations hereunder. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of the Notes of any series
or the proceeds thereof. The Trustee shall not be responsible for any statement
made in any prospectus or similar document used to sell the Notes of any series.
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Section 605. May Hold Notes.
The Trustee, any Authenticating Agent, any Paying Agent, any Note
Registrar or any other Person that may be an agent of the Trustee or the
Company, in its individual or any other capacity, may become the owner or
pledgee of Notes and, subject to Sections 310(b) and 311 of the Trust Indenture
Act, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Authenticating Agent, Paying Agent, Note Registrar or such
other Person.
Section 606. Money Held in Trust.
Except as provided in Section 402 and Section 1003, Money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any Money received by it hereunder except as
otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable costs,
expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to the Trustee's negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to
hold them harmless against, any loss, liability or expense incurred
without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the trust
hereunder, including the costs and expenses of defending themselves
against any claim or liability in connection with the exercise or
performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of and interest on Notes of any series.
"Trustee" for the purposes of this Section includes any predecessor Trustee, but
negligence or bad faith of any Trustee shall not be attributed to any other
Trustee.
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When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or Section 501(7), the
expenses (including the reasonable compensation and the expenses and
disbursements of reasonable compensation and the expenses and disbursements of
its counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee and each predecessor Trustee.
Section 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, or any other person permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section 609. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee pursuant to Section 610.
(2) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 610 shall not have been
delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(3) The Trustee may be removed at any time with respect to
Notes of any series by Act of the Holders of a majority in principal
amount of the Outstanding Notes of such series delivered to the
Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the
obligations imposed upon it under Section 310(b)
of the Trust Indenture Act after written request
therefor
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by the Company or any Holder of a Note who has
been a bona fide Holder of a Note for at least
six months, or
(b) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall
be appointed or any public officer shall take
charge or control of the Trustee or of its
property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board
Resolution, may remove the Trustee, or (ii) subject to Section 315
(e) of the Trust Indenture Act, any Holder of a Note who has been a
bona fide Holder of a Note for at least six months may, on behalf of
such Holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(5) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to Notes of one or more series,
the Company, by or pursuant to a Board Resolution, shall promptly
appoint a successor Trustee with respect to the Notes of that or
those series (it being understood that any such successor Trustee may
be appointed with respect to the Notes of one or more or all of such
series and that at any time there shall be only one Trustee with
respect to the Notes of any particular series) and shall comply with
the applicable requirements of Section 610. If, within one year after
such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Notes of any series
shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Notes of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 610, become
the successor Trustee with respect to the Notes of such series and to
that extent supersede the successor Trustee appointed by the Company.
If no successor Trustee with respect to the Notes of any series shall
have been so appointed by the Company or the Holders of Notes of such
series and accepted appointment in the manner required by Section
610, any Holder of a Note of such series who has been a bona fide
Holder of a Note of such series for at least six months may, on
behalf of such Holder and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Notes of such series.
(6) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Notes of any series
and each appointment of a successor Trustee by mailing written notice
of such event by first-class mail, postage prepaid, to the Holders of
Notes of such series as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee
with respect to the Notes of such series and the address of its
Corporate Trust Office.
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Section 610. Acceptance of Appointment by Successor.
(1) In case of the appointment hereunder of a successor
Trustee with respect to all Notes, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
trusts and duties hereunder of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(2) In case of the appointment hereunder of a successor
Trustee with respect to the Notes of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee
with respect to the Notes of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (a) shall contain
such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Notes of that or those series to which the appointment of such
successor Trustee relates, (b) if the retiring Trustee is not
retiring with respect to all Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Notes of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring
Trustee and (c) shall add to or change any of the provisions hereof
as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each
such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any
other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and
each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Notes of that
or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Notes of that or those series
to which the appointment of such successor Trustee relates. Whenever
there is a successor Trustee with respect to one or more (but less
than all) series of Notes issued pursuant hereto, the terms
"Indenture" and "Notes" shall have the meanings specified in the
provisos to the respective definitions of those terms in Section 101
which contemplate such situation.
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(3) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in paragraphs (1) or (2) of this
Section, as the case may be.
(4) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
Section 611. Merger, Conversion, Consolidation or Succession to
Business.
Any Corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes of any series shall have been
authenticated but not delivered by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.
Section 612. Appointment of Authenticating Agent.
The Trustee may appoint one or more Authenticating Agents acceptable
to the Company with respect to one or more series of Notes which shall be
authorized to act on behalf of the Trustee to authenticate such Notes issued
upon original issue, exchange, registration of transfer, or pursuant to Section
306, and Notes so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of one or more series of Notes by the Trustee or the
Trustee's Certificate of Authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a Certificate of Authentication executed on behalf of
the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and,
except as provided in this Indenture, shall at all times be a Corporation that
would be permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a) (2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or
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consolidation to which such Authenticating Agent shall be a party, or any
Corporation succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, provided such Corporation shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Notes
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Note Register. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 607.
The provisions of Sections 308, 604 and 605 shall be applicable to
each Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more
series pursuant to this Section, the Notes of such series may have endorsed
thereon, in addition to or in lieu of the Trustee's Certificate of
Authentication, an alternate Certificate of Authentication in the following
form:
This is one of the Notes described herein.
_______________________________________________
As Authenticating Agent
By_____________________________________________
Authorized Signatory
Authentication Date
_______________________
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ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
In accordance with Section 312 (a) of the Trust Indenture Act, the
Company shall furnish or cause to be furnished to the Trustee
(1) semi-annually on January 1 and July 1 of each year, a
list, in each case in such form as the Trustee may reasonably
require, of the names and addresses of Holders of Notes of any series
for which the Trustee acts as trustee as of the applicable date, and
(2) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished,
provided, however, that so long as the Trustee is the Note Registrar no such
list shall be required to be furnished for Notes of any series for which the
Trustee acts as Note Registrar.
Section 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it
pursuant to Section 312 of the Trust Indenture Act.
Every Holder of Notes of any series, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company, the
Trustee, any Paying Agent nor any Note Registrar shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders of Notes in accordance with Section 312 of the Trust Indenture
Act, regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.
Section 703. Reports by Trustee.
(1) Within 60 days after May 15 of each year, if required
by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a
brief report dated as of such May 15 with respect to any of the
events specified in said Section 313 (a) which may have occurred
since the later of the immediately preceding May 15 and the date of
this Indenture.
(2) The Trustee shall transmit the reports required by
Section 313(b) of the Trust Indenture Act at the times specified
therein.
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(3) Reports pursuant to this Section shall be transmitted
in the manner and to the Persons required by Sections 313(c) and
313(d) of the Trust Indenture Act.
Section 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture Act,
shall:
(1) file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a Note listed and registered on a
national securities exchange or national market system as may be
prescribed from time to time in such rules and regulations; provided
that notwithstanding the requirements of such rules and regulations,
so long as any Note is Outstanding the Company shall file with the
Trustee at a minimum (a) as soon as practicable, but in any event no
more than ninety (90) days, after the end of each fiscal year, copies
of a balance sheet and statements of income and retained earnings of
the Company as of the end of and for such fiscal year, audited by
Independent Public Accountants, and (b) as soon as practicable, but
in any event no more than forty-five (45) days, after the end of each
quarterly fiscal period, except for the last quarterly fiscal period
in each fiscal year, a summary statement (which need not be audited)
of income and retained earnings of the Company for such period;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company, as the case may be, with the
conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations;
(3) transmit to the Holders of Notes of each series within
30 days after the filing thereof with the Trustee, in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act,
such summaries of any information, documents and reports required to
be filed by the Company pursuant to paragraphs (a) and (b) of this
Section as may be required by rules and regulations prescribed from
time to time by the Commission; provided that notwithstanding the
requirements of such rules and regulations, so long as the Company
has a class of securities registered pursuant to the Securities
Exchange Act of 1934, the Company shall transmit to the Holders of
Notes of each series, in the manner and to the
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extent provided in Section 313(c) of the Trust Indenture Act, the
information, documents and other reports of the Company as are
furnished to the holders of such class of securities registered under
the Securities Exchange Act of 1934; provided further that so long as
any Note is Outstanding, the Company shall transmit to the Holders of
Notes of each series at a minimum (a) as soon as practicable, but in
any event no more than ninety (90) days, after the end of each fiscal
year, copies of a balance sheet and statements of income and retained
earnings of the Company as of the end of and for such fiscal year,
audited by Independent Public Accountants, and (b) as soon as
practicable, but in any event no more than forty-five (45) days,
after the end of each fiscal quarterly period, except for the last
quarterly fiscal period in each fiscal year, a summary statement
(which need not be audited) of income and retained earnings of the
Company for such period; and
(4) furnish to the Trustee the Officers' Certificates and
notices required by Section 1010 hereof.
ARTICLE EIGHT - CONSOLIDATION, MERGER AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
Nothing contained in this Indenture shall prevent any consolidation
or merger of the Company with or into any other Person or Persons (whether or
not affiliated with the Company), or successive consolidations or mergers in
which the Company or its successor or successors shall be a party or parties, or
shall prevent any conveyance, transfer or lease of the property of the Company
as an entirety or substantially as an entirety, to any other Person (whether or
not affiliated with the Company); provided, however, that:
(1) in case the Company shall consolidate with or merge
into another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the entity formed
by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety
shall be a Person organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed
by the successor Person and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all the Notes and the performance of
every other covenant of this Indenture on the part of the Company to
be performed or observed;
(2) immediately after giving effect to such transaction, no
event which, after notice or lapse of time, or both, would become an
Event of Default shall have occurred and be continuing; and
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(3) either the Company or the successor Person shall have
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Section 802. Successor Person Substituted for Company.
Upon any consolidation or merger or any conveyance, transfer or lease
of the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
and thereafter, except in the case of a lease to another Person, the predecessor
Person shall be released from all obligations and covenants under this Indenture
and the Notes.
ARTICLE NINE - SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holder of Notes of any series, the Company
(when authorized by or pursuant to a Board Resolution) and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, which shall conform with the requirements of the Trust Indenture Act as
then in effect and be in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Notes; or
(2) to add to or change any of the provisions of this
Indenture to change or eliminate any restrictions on the payment of
principal of or interest on Notes of any series or to permit or
facilitate the issuance of Notes of any series in uncertificated
form, provided any such action shall not adversely affect the
interests of the Holders of Notes of any series in any material
respect; or
(3) to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture which shall not
adversely affect the interests of the Holders of Notes of any series
in any material respect; or
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(4) to supplement any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any Notes of any series pursuant to
Article Four; provided that any such action shall not adversely
affect the interests of any Holder of a Note of any series in any
material respect; or
(5) to add to the covenants of the Company for the benefit
of the Holders of the Notes of each series (as shall be specified in
such supplemental indenture or indentures) or to surrender any right
or power herein conferred upon the Company; or
(6) to evidence and provide acceptance of the appointment
of a successor Trustee hereunder.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Notes of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company (when authorized by or pursuant to a Board Resolution), and
the Trustee may enter into one or more indentures supplemental hereto (which
shall conform with the requirements of the Trust Indenture Act as then in
effect) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Notes of any series under this Indenture;
provided, however, that no such supplemental indenture, without the consent of
the Holder of each Outstanding Note affected thereby, shall
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any affected Note, or change the rate of
interest thereon, or change the Place of Payment, currency in which
the principal of or interest on any Note, is payable, or impair the
right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof, or
(2) reduce the percentage of principal amount of
Outstanding Notes of any series which is required for consent to any
such supplemental indenture, or for consent to any waiver (of
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, or
Section 513 or Section 1012, except to increase any such percentage
or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby.
A supplemental indenture which changes or eliminates any covenant or other
provision hereof which has expressly been included solely for the benefit of one
or more particular series of Notes, or which modifies the rights of the Holders
of Notes of such series with respect to such covenant or other
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provision, shall be deemed not to affect the rights hereunder of the Holders of
Notes of any other series.
It shall not be necessary for any Act of Holders of Notes under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
As a condition to executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trust created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Section 315 of the Trust Indenture Act)
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate each stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Note of the series affected thereby theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
Section 905. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes of any series so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
Section 906. Record Date.
If the Company shall solicit from the Holders of any series any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of such series entitled to consent to any
supplemental indenture, agreement or instrument or any waiver, and shall
promptly notify the Trustee of any such record date. If a record date is fixed
those Persons who were Holders of such series at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such supplemental indenture, agreement or instrument or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such
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record date. The record date shall be a date no more than 30 days prior to the
first solicitation of Holders generally in connection therewith and no later
than the date such solicitation is completed. No such consent shall be valid or
effective for more than six months after such record date. Subject to applicable
law, until any supplemental indenture, agreement, instrument or waiver becomes
effective, or a consent to it by a Holder of a Note of such series shall cease
to be valid and effective as set forth in the preceding sentence, such consent
is a continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note.
ARTICLE TEN - COVENANTS
Section 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and
interest on the Notes in accordance with the terms thereof and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment an Office or
Agency where Notes may be presented or surrendered for payment, where Notes may
be surrendered for registration, transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such Office or Agency. The Company
hereby initially designates the Corporate Trust Office of the Trustee as its
Office or Agency for each of the foregoing purposes. If at any time the Company
shall fail to maintain any such required Office or Agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
Section 1003. Money for Note Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
shall, on or before each due date of the principal of or interest on the Notes
of any series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum of Money sufficient to pay the principal or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and shall promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents, it shall,
on or prior to each due date of the principal of or interest on the Notes of any
series, deposit with any Paying Agent a sum of Money sufficient to pay the
principal or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled thereto, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
53
<PAGE>
The Company shall cause each Paying Agent other than the Trustee or
the Company to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the
principal of or interest on Notes of any series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as provided in this
Indenture;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Notes) in the making of any payment of
principal or interest on the Notes of any series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such Money.
Any Money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest on
any Note of any series and remaining unclaimed for five years after such
principal or interest shall have become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust Money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in an Authorized Newspaper in each Place of Payment, or to be
mailed to Holders of Notes, or both, notice that such Money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed balance of such
Money then remaining will be repaid to the Company.
Section 1004. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and its
Subsidiaries, and shall comply with all statutes, rules, regulations and orders
of and restrictions imposed by governmental and administrative authorities and
agencies
54
<PAGE>
applicable to the Company and its Subsidiaries; provided, however, that the
foregoing shall not obligate the Company to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries and
that the loss thereof is not disadvantageous in any material respect to any
Holder.
Section 1005. Maintenance of Properties.
The Company will:
(1) cause its properties and the properties of its
Subsidiaries (other than properties obtained by the Company or any
Subsidiary through foreclosure or other resolution of any loan or
properties subject to valid and binding leases with customers of the
Company or any Subsidiary) used or useful in the conduct of the
business of the Company and its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with
all necessary facilities and equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; provided,
however, that the foregoing shall not prevent the Company or a
Subsidiary from discontinuing the operation and maintenance of any of
its properties if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business and not
disadvantageous in any material respect to any Holder;
(2) take all appropriate steps to preserve, protect and
maintain the trademarks, trade names, copyrights, licenses and
permits used in the conduct of the business of the Company and its
Subsidiaries; provided, however, that the foregoing shall not prevent
the Company or a Subsidiary from selling, abandoning or otherwise
disposing of any such trademark, trade name, copyright, license or
permit if such sale, abandonment or disposition is, in the judgment
of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to any Holder; and
(3) The Company and each of its Subsidiaries shall comply
with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, noncompliance with which would
materially adversely affect the business, prospects, earnings,
properties, assets or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole; provided, however,
that the foregoing shall not require compliance with any statute,
law, ordinance, rule or regulation which is being contested in good
faith.
Section 1006. Restrictions on Dividends and Other Payments.
The Company shall not (i) declare or pay any dividend, either in cash
or property, on any shares of its capital stock (except dividends or other
distributions payable solely in shares of capital stock of the Company) or (ii)
purchase, redeem or retire any shares of its capital stock or any warrants,
rights or options to purchase or acquire any shares of its capital stock or
(iii) make any
55
<PAGE>
other payment or distribution, either directly or indirectly through any
Subsidiary, in respect of its capital stock (such dividends, purchases,
retirements, payments and distributions being herein collectively called
"Restricted Payments") if, after giving effect thereto, an Event of Default
shall have occurred or be continuing. Notwithstanding the foregoing, the Company
may make a previously declared Restricted Payment if the declaration of such
Restricted Payment was permitted under this Section when made. For purposes of
this Section, the amount of any Restricted Payment payable in property shall be
deemed to be the fair market value of such property as determined by the Board
of Directors of the Company.
Section 1007. Insurance.
Subject to the right to sell, abandon or otherwise dispose of any
building or property whenever in the opinion of the Company the retention
thereof is inadvisable or not necessary to the business of the Company and its
Subsidiaries, the Company will at all times cause all buildings, equipment and
other insurable properties owned or operated by it or any Subsidiary to be
properly insured and kept insured with responsible insurance carriers, or
adequately insured by means of proper inter-insurance contracts, against loss or
damage by fire and other hazards, to the extent that such properties are usually
insured by Corporations owning or operating properties of a similar character;
provided, however, that the foregoing shall not prevent the Company or any
Subsidiary from maintaining any self-insurance program if adequate reserves are
maintained in connection with such program.
Section 1008. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (2)
all lawful claims for labor, material and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which adequate reserves (in the good faith judgment of the
Company) have been established.
Section 1009. Books and Records.
The Company shall, and shall cause each Subsidiary to, at all times
keep proper books of record and account in which proper entries shall be made in
accordance with generally accepted accounting principles and, to the extent
applicable, regulatory accounting principles.
56
<PAGE>
Section 1010. Statement by Officers as to Default.
(1) The Company will deliver to the Trustee, within 45 days
after the end of each fiscal quarter, an Officers' Certificate,
stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (other than a
term, provision or condition specifically dealt with in Clause (2) of
this Section 1010) and, if the Company shall be in default,
specifying all such defaults and the nature and status thereof of
which they may have knowledge.
(2) The Company will deliver to the Trustee, within five
days after the occurrence thereof, written notice of any event which
after notice or lapse of time or both would become an Event of
Default pursuant to Clause (4) of Section 501.
Section 1011. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1004 through 1009 with
respect to the Notes of any series if before the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding Notes of
such series, by Act of such Holders, either shall waive such compliance in such
instance or generally shall have waived compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
* * * * *
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.
57
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
THE VALSPAR CORPORATION
By_________________________________________
Name:
Title:
Attest:
________________________________
_______________________________, as Trustee
By_________________________________________
Name:
Title:
Attest:
_________________________________
58
<PAGE>
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the ____ day of _________, 19____, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he is the ___________________ of THE VALSPAR CORPORATION, a Delaware
corporation, one of the persons described in and who executed the foregoing
instrument; and that he signed his name thereto by like authority.
______________________________________________
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the ________ day of __________________, 19____, before me personally
came ______________________________, to me known, who, being by me duly sworn,
did depose and say that he is ________________________ of _____________________,
a ________________________________, one of the persons described in and who
executed the foregoing instrument; and that he signed his name thereto by like
authority.
______________________________________________
Notary Public
[NOTARIAL SEAL]
59
<PAGE>
EXHIBIT A - FORM OF NOTE
THE VALSPAR CORPORATION
___% _____________ NOTE DUE ____
$________________________ No._____________________
The Valspar Corporation, a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to ______________________
________________________________________________________________________________
_______________________________________, or registered assigns, the principal
sum of ________________________ Dollars on _______________, and to pay interest
thereon at the rate of ____% per annum from the Initial Interest Accrual Date or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, on ____________________ of each year, commencing
_____________ (each an "Interest Payment Date"), until the principal hereof is
paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, except as provided in the Indenture hereinafter
referred to, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest, which will be the 15th day of the month in which the
relevant Interest Payment Date occurs. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and either may be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to the Holders not less than ten days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner, all as more fully provided in the Indenture. Payment of the
principal of and interest on this Note will be made at the office or agency of
the Company maintained for that purpose in Minneapolis, Minnesota, or in such
other office or agency as may be established by the Company pursuant to the
Indenture (initially the principal corporate trust office of the Trustee in
____________________ (the "Corporate Trust Office")), in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Note Register or
(ii) by wire transfer to an account maintained by the Person entitled thereto as
specified in the Note Register. Payments of principal and interest at maturity
will be made against presentation of this Note at the Corporate Trust Office (or
such other office as may be established pursuant to the Indenture), by check or
wire transfer.
A-1
<PAGE>
Reference is hereby made to the further provisions of this Note set
forth on the reverse side hereof, which further provisions shall for all
purposes have the same effect as though fully set forth at this place.
Unless the Certificate of Authentication hereon has been executed by
the Trustee or an Authenticating Agent under the Indenture referred to on the
reverse hereof by the manual signature of one of its authorized officers, 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 Note to be signed in
its name by the manual or facsimile signature of its Chief Executive Officer,
its President or one of its Vice Presidents and attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries.
Date:
THE VALSPAR CORPORATION
By:_______________________________________
Chief Financial Officer
ATTEST:
_____________________________
Secretary
[Form of Trustee's Certificate of Authentication]
This is one of the Notes described in the Indenture.
________________________________________
as Trustee
Authentication
Date:_____________ By______________________________________
Authorized Signatory
A-2
<PAGE>
(Reverse of Note)
THE VALSPAR CORPORATION
____% ____________NOTE DUE ____
[Unless and until it is exchanged in whole or in part for Definitive
Notes, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this Note
is presented by an authorized representative of the Depository to the issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of ______________ or such other name as may be
requested by an authorized representative of the Depository (and any payment is
made to _____________ or such other entity as may be requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, ____________, has an interest herein.](1)
This Note is one of a duly authorized issue of Series _____ Notes of the
Company ("Series _____ Notes") designated as its ____% ___________ Notes due
____ limited in aggregate principal amount to $__________ issued and to be
issued under an Indenture dated as of __________, 199__ and a supplemental
indenture dated ______________ (herein called the "Indenture"), between the
Company and ________________________________________, as Trustee (herein called
the "Trustee," which term includes any successor Trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Company, the
Trustee and the Holders of all series of Notes of the Company (collectively, the
"Notes"), and the terms upon which the Notes are, and are to be, authenticated
and delivered. The indebtedness of the Company evidenced by the Notes, including
the principal thereof and interest thereon (including post-default interest).
The Notes may not be redeemed by the Company prior to Maturity.
If an Acceleration Event with respect to the Series _____ Notes shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Series _____ Notes may declare the principal
of all Series _____ Notes due and payable in the manner and with the effect
provided in the Indenture. An "Acceleration Event" is an Event of Default
relating to bankruptcy, insolvency, or reorganization of the Company as more
specifically defined by the Indenture. The Indenture provides that such
declaration and its consequences may,
- --------------------------
(1)This paragraph should be included only for a Global Note.
A-3
<PAGE>
in certain events, be annulled by the Holders of a majority in principal amount
of the Outstanding Series _____ Notes.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of Series _____ Notes under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of Series _____ Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of Series _____ Notes at the
time Outstanding, on behalf of the Holders of all Series _____ Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provisions 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 times, places and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Note
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company to be maintained for that
purpose in _____________________________), or at such other office or agency as
may be established by the Company for such purpose pursuant to the Indenture
(initially the principal corporate trust office of the Trustee in
___________________), duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company, and duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
Series _____ Notes are issuable only in fully registered form,
without coupons, in denominations of $1,000 or any amount in excess thereof
which is an integral multiple of $1,000. As provided in the Indenture, and
subject to certain limitations therein set forth, Series ____ Notes are
exchangeable for a like aggregate principal amount of Series ____ Notes in
authorized denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
A-4
<PAGE>
Prior to the due presentment of this Note for registration of
transfer or exchange, the Company, the Trustee and any agent of the Company or
the Trustee may treat the Person 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.
Interest on Series ____ Notes shall be computed on the basis of a
360-day year of twelve 30- day months. Interest shall be payable to and
excluding any Interest Payment Date.
The Trustee, in its individual or any other capacity, may make loans
to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not the Trustee.
This Note shall not be valid until authenticated by the manual
signature of the Trustee or an Authenticating Agent.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
Each Holder of a Series ____ Note covenants and agrees by such
Holder's acceptance thereof to comply with and be bound by the foregoing
provisions.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
A-5
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's Soc. Sec. or Tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date: ___________________________
Your Signature:_____________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee
A-6
<PAGE>
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES(2)
The following exchanges of a part of the Global Note for Definitive
Notes have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease Amount of increase of this Global Note authorized officer
in in following such of
Principal Amount of Principal Amount of decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------ ------------------ --------------- ----------
<S> <C> <C> <C> <C>
</TABLE>
- ---------------------------
(2)This should be included only in a Global Note.
A-7
<PAGE>
EXHIBIT B - FORM OF ORIGINAL ISSUE DISCOUNT NOTE
[Face of Note]
CUSIP NO. PRINCIPAL AMOUNT:
REGISTERED NO.
THE VALSPAR CORPORATION
___________ NOTE, SERIES __
DUE ____________OR MORE FROM DATE OF ISSUE
If the registered owner of this Note (as indicated below) is Cede
& Co. and The Depository Trust Company is named below as Depositary, this Note
is a "Global Note", and unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
NewYork) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
If applicable, the following will be completed solely for purposes of
the U.S. Federal Income Tax "Original Issue Discount" rules, as that term
misdefined in Section 1273 of the Internal Revenue Code of 1986, as amended.
This information is provided solely for the purposes of applying the U.S.
Federal Income Tax Original Issue Discount ("OID") rules to the certificate and
is based on an interpretation of proposed Treasury regulations. The Issue Date
of this certificate is ____________. This certificate has been issued with
______ of OID per $1,000 of initial principal amount. The annual yield to
maturity is __% based on semiannual compounding. The amount of OID attributable
to the initial accrual period is ___________ per $1,000 of initial principal
amount, computed under the _______________ method as defined in proposed
Treasury regulations.
B-1
<PAGE>
The following summary of terms is subject to the information set
forth on the reverse hereof.
<TABLE>
<S> <C> <C>
ISSUE PRICE (As a %
percentage of principal
ORIGINAL ISSUE DATE amount) MATURITY DATE
INTEREST RATE PER INTEREST PAYMENT DEFAULT RATE (Only
ANNUM DATES applicable if Note issued at
original issue discount):
OID DEFAULT AMOUNT REDEEMABLE ON OR REDEEMABLE ON OR
(only applicable if Note AFTER (At option of the AFTER (At option of the
issued at original issue holder Holder) Company)
discount)
INITIAL REDEMPTION ANNUAL REDEMPTION SINKING FUND
PERCENTAGE: PERCENTAGE
REDUCTION:
DEPOSITARY (Only
applicable if Note is a
Global Note):
</TABLE>
THE VALSPAR CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to___________________________________
or registered assigns, the principal sum of ____________________________________
at the office or agency of the Company in the City of Minneapolis, Minnesota,
the City of ____________________or in the Borough of Manhattan, the City of New
York, on the maturity date shown above, or if such date is not a Business Day
(as defined below), the next succeeding Business Day ("Stated Maturity"), in
such coin or currency as at the time of payment shall be legal tender for the
payment of public and private debts in the United States of America, and to pay
interest on said principal sum at the rate per annum (computed on the basis of a
360-day year of twelve 30-day months) shown above, in like coin or currency,
semi-annually on
B-2
<PAGE>
each Interest Payment Date set forth above from and after the date of this Note
and at Maturity until payment of said principal sum has been made or duly
provided for. Unless this Note is a Note which has been issued upon transfer of,
in exchange for, or in replacement of a predecessor Note, interest on this Note
shall accrue from the Original Issue Date indicated above. If this Note has been
issued upon transfer of, in exchange for, or in replacement of a predecessor
Note, interest on this Note shall accrue from the last Interest Payment Date to
which interest was paid on such predecessor Note, or if no interest was paid on
such predecessor Note, from the Original Issue Date indicated above. The first
payment of interest on a Note originally issued and dated between a Regular
Record Date (as defined below) and an Interest Payment Date will be due and
payable on the Interest Payment Date following the next succeeding Regular
Record Date to the registered owner on such next succeeding Regular Record Date.
Subject to certain exceptions provided in the Indenture referred to on the
reverse hereof, the interest so payable on any Interest Payment Date will be
paid to the Person in whose name this Note is registered at the close of
business on the fourteenth calendar day next preceding such Interest Payment
Date (each such date a"Regular Record Date"), and interest payable at Maturity
(other than a Maturity date which is an Interest Payment Date) will be paid to
the Person to whom said principal sum is payable. Payment of interest on this
Note with respect to any Interest Payment Date will include interest accrued to
but excluding such Interest Payment Date. If the Company shall default in the
payment of interest due on any Interest Payment Date, then interest on this Note
shall accrue from the next preceding Interest Payment Date to which interest has
been paid, or if no interest has been paid on this Note, from the Original Issue
Date indicated above.
Payment of the principal of (and premium, if any) and any interest
due on this Note to the Holder hereof at Maturity will be paid, in immediately
available funds, upon presentation of this Note at the office or agency of the
Company maintained for that purpose in the City of Minneapolis, Minnesota, or
the City of ____________________, or, at the option of the Holder hereof, at the
office or agency to be maintained for that purpose in the Borough of Manhattan,
the City of New York. Payment of interest on this Note due on any Interest
Payment Date (other than interest on this Note due to the Holder hereof at
Maturity) will be payable at such office or agency of the Company, provided,
however, that, at the option of the Company, payment of interest may be paid by
check mailed to the Person entitled thereto at such Person's last address as it
appears in the Note Register or by wire transfer to such account as may have
been designated by such Holder as set forth herein.
Any such designation for wire transfer purposes shall be made by
filing the appropriate information with the Trustee at its Corporate Trust
Office in the City of ____________________ or its agency in the City of New York
and, unless revoked by written notice to the Trustee received by the Trustee on
or prior to the Regular Record Date immediately preceding the applicable
Interest Payment Date or the fifteenth calendar day preceding the date of
Maturity, as the case may be, shall remain in effect with respect to any further
payments with respect to this Note payable to such Holder.
If a payment with respect to this Note cannot be made by wire
transfer because the required designation has not been received by the Trustee
on or before the requisite date or for any other reason, a notice will be mailed
to the Holder at its registered address requesting a designation
B-3
<PAGE>
pursuant to which such wire transfer can be made and, upon the Trustee's receipt
of such a designation, such payment will be made within five Business Days of
such receipt. The Company will pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but any tax, assessment or
governmental charge imposed upon payments will be borne by the Holders of the
Notes in respect of which payments are made.
Any payment on this Note due on any day which is not a Business Day
in the City of New York or which is not a Business Day in the City of
Minneapolis, Minnesota, or the City of ____________________, need not be made on
such day, but may be made on the next succeeding Business Day, with the same
force and effect as if made on the due date, and no interest shall accrue for
the period from and after such date.
IF THIS NOTE IS A GLOBAL NOTE AS SPECIFIED ON THE FACE HEREOF, THE
FOLLOWING LEGEND IS APPLICABLE: "EXCEPT UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED ON THE REVERSE HEREOF, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY, ANOTHER NOMINEE OF THE DEPOSITARY, A SUCCESSOR OF THE DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR".
"Business Day" shall mean, as used herein with respect to any
particular location, each Monday, Tuesday, Wednesday, Thursday or Friday which
is not a day on which banking institutions in such location are generally
authorized or obligated by law or executive order to close.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
B-4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: THE VALSPAR CORPORATION
By:
(Title)
[SEAL] Attest:
(Title)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series
designated therein referred to in the
within-mentioned Indenture.
, as Trustee
By:
Authorized Signature
or
, as Trustee
By: ,
Authenticating Agent
By: ,
Authorized Signature
B-5
<PAGE>
[Reverse of Note]
THE VALSPAR CORPORATION
___________ NOTE, SERIES __
DUE _____________ OR MORE FROM DATE OF ISSUE
This Note is one of a duly authorized issue of securities of the
Company (hereinafter called the "Securities"), issued and to be issued in one or
more series under an Indenture dated as of ____________________ (hereinafter
called the "Indenture"), between the Company and ____________________________,as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Note is one of a series of the
Securities designated as the ___________ Notes, Series __ of the Company (the
"Notes"), due 9 months or more from date of issue. The Notes are limited to
$____________ in aggregate principal amount. The Notes may mature at different
times, bear interest, if any, at different rates, be redeemable by the Company
at different times or not at all, be repayable at the option of the Holder at
different times or not at all and issued at an original issue discount.
In case an Event of Default, as defined in the Indenture, with
respect to the Notes shall have occurred and be continuing, the principal hereof
may be declared, and upon such declaration shall become, due and payable in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
If so provided on the face of this Note, this Note may be redeemed by
the Company on and after the date so indicated on the face hereof. On and after
the date, if any, from which this Note may be redeemed, this Note may be
redeemed, in whole or in part, at the option of the Company at
B-6
<PAGE>
a redemption price equal to the product of the principal amount of this Note to
be redeemed multiplied by the Redemption Percentage, plus accrued interest, if
any, to the date of redemption. The Redemption Percentage shall initially equal
the Initial Redemption Percentage specified on the face of this Note, and shall
decline at each anniversary of the initial date that this Note is redeemable by
the amount of the Annual Redemption Percentage Reduction specified on the face
of this Note, until the Redemption Percentage is equal to 100%.
If so provided on the face of this Note, this Note will be repayable
in whole or in part in increments of $1,000, provided that the remaining
principal amount of any Note surrendered for partial repayment shall the at
least $100,000, on any Business Day on or after the date so indicated on the
face hereof under "Redeemable On or After (At Option of the Holder)", at the
option of the Holder, at 100% of the principal amount to be repaid, plus accrued
interest, if any, to the repayment date. In order for the exercise of the option
to be effective and the Notes to be repaid, the Company must receive at the
applicable address of the Trustee set forth below or at such other place or
places of which the Company shall from time to time notify the Holder of the
Note, on or before the fifteenth, but not earlier than the twenty-fifth calendar
day or, if such day is not a Business Day, the next succeeding Business Day,
prior to the repayment date, either (i) this Note, with the form below entitled
"Option to Elect Repayment" duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth (a) the name, address and
telephone number of the Holder of this Note, (b) the principal amount of this
Note and the principal amount of this Note to be repaid, (c) a statement that
the option to elect repayment is being exercised thereby, and (d) a guarantee
stating that the Company will receive this Note, with the form below entitled
"Option to Elect Repayment" duly completed, not later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter (and
this Note and form duly completed are received by the Company by such fifth
Business Day). Any such election shall be irrevocable. Deliveries shall be made
by hand, courier service, regular or registered mail, telegram or facsimile
transmission to __________________________, Attention: Corporate Trust Office,
__________________________________________, (or, at such other places as the
Company shall notify the Holders of the Notes). All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Company, whose determination will be final
and binding.
The Indenture contains provisions for defeasance at any time of
certain restrictive covenants and the related Events of Default, upon compliance
by the Company with certain conditions set forth therein, which provisions apply
to this Note.
If this Note is issued with an original issue discount, (i) if an
Event of Default with respect to the Notes shall have occurred and be
continuing, the amount of principal of this Note which may be declared due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture, shall be determined in the manner set forth under "OID Default
Amount" on the face hereof, and (ii) in the case of a default of payment in
principal upon acceleration, redemption, repayment at the option of the Holder
or at the Stated Maturity hereof, in lieu of any interest
B-7
<PAGE>
otherwise payable, the overdue principal of this Note shall bear interest at a
rate of interest per annum equal to the Default Rate stated on the face hereof
(to the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such acceleration, redemption, repayment at
the option of the Holder or Stated Maturity, as the case may be, to the date
payment has been made or duly provided for or such default has been waived in
accordance with the terms of the Indenture.
The Notes are issuable in global or definitive form without coupons
in denominations of $100,000 and integral multiples of $1,000 in excess thereof.
Upon due presentment for registration of transfer of this Note at the office or
agency of the Company in the City of Minneapolis, Minnesota, or the City
of____________________, or, at the option of the Holder hereof, at the office or
agency to be maintained for that purpose in the Borough of Manhattan, The City
of New York, a new Note or Notes in authorized denominations for an equal
aggregate principal amount and like interest rate and maturity will be issued to
the transferee in exchange herefor, subject to the limitations provided in the
Indenture and to the limitations described below if applicable, without charge
except for any tax or other governmental charge imposed in connection therewith.
If this Note is a Global Note (as specified on the face hereof), this
Note is exchangeable for definitive Notes in registered form only if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for this Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (y) the Company in its sole discretion determines that this Note shall
be exchangeable for definitive Notes in registered form and notifies the Trustee
thereof or (z) an Event of Default with respect to the Notes represented hereby
has occurred and is continuing. If this Note is exchangeable pursuant to the
preceding sentence, it shall be exchangeable for definitive Notes in registered
form, bearing interest (if any) at the same rate or pursuant to the same
formula, having the same date of issuance, redemption provisions, if any, Stated
Maturity and other terms and of differing denominations aggregating a like
amount.
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 premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
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 Person 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.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
B-8
<PAGE>
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the repayment date, to the undersigned, at
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Company must receive at the applicable
address of the Trustee set forth above or at such other place or places of which
the Company shall from time to time notify the holder of the within Note, on or
before the fifteenth, but not earlier than the twenty-fifth, calendar day or, if
such day is not a Business Day, the next succeeding Business Day, prior to the
repayment date (i) this Note, with this "Option to Elect Repayment" form duly
completed, or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth (a) the name, address and telephone number of
the holder of the Note, (b) the principal amount of the Note and the principal
amount of the Note to be repaid, (c) a statement that the option to elect
repayment is being exercised thereby, and (d) a guarantee stating that the Note
to be repaid with the form entitled "Option to Elect Prepayment" on the reverse
of the Note duly completed will be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and such Note and form duly completed are received by the Company by
such fifth Business Day).
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be an integral multiple
of$1,000, which the Holder elects to have repaid: ______________________; and
specify the denomination or denominations (which shall be $100,000 or an
integral multiple of $1,000 in excess thereof) of the Note or Notes to be issued
to the Holder for the portion of the within Note not being repaid (in the
absence of any specification, one such Note will be issued for the portion not
being repaid): _____________________
B-9
<PAGE>
Dated:
Notice: The signature to this Option to Elect
Repayment must correspond with the name as
written upon the face of the Note in every
particular without alteration or enlargement or
any other change whatsoever.
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
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT ACT: ______ Custodian _______
(Cust) (Minor)
Under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in the above
list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and
transfer(s)unto:
Please Insert Social Security or
Other Identifying Number of Assignee
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE)
B-10
<PAGE>
the within Note of THE VALSPAR CORPORATION and does hereby irrevocably
constitute and appoint _______________ attorney to transfer the said Note on the
books of the Company, with full power of substitution in the premises.
Dated:
NOTICE: The signature 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 whatever.
B-11
<PAGE>
Exhibit 4(b)
EXHIBIT A - FORM OF NOTE
THE VALSPAR CORPORATION
___% NOTE DUE ____
$________________________ No. ___________________
The Valspar Corporation, a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to
_________________________________________________________________
_______________________________________, or registered assigns, the principal
sum of ________________________ Dollars on _______________, and to pay interest
thereon at the rate of ____% per annum from the Initial Interest Accrual Date or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, on ____________________ of each year, commencing
_____________ (each an "Interest Payment Date"), until the principal hereof is
paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, except as provided in the Indenture hereinafter
referred to, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest, which will be the 15th day of the month in which the
relevant Interest Payment Date occurs. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and either may be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to the Holders not less than ten days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner, all as more fully provided in the Indenture. Payment of the
principal of and interest on this Note will be made at the office or agency of
the Company maintained for that purpose in Minneapolis, Minnesota, or in such
other office or agency as may be established by the Company pursuant to the
Indenture (initially the principal corporate trust office of the Trustee in
____________________ (the "Corporate Trust Office")), in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Note Register or
(ii) by wire transfer to an account maintained by the Person entitled thereto as
specified in the Note Register. Payments of principal and interest at maturity
will be made against presentation of this Note at the Corporate Trust Office (or
such other office as may be established pursuant to the Indenture), by check or
wire transfer.
Reference is hereby made to the further provisions of this Note set
forth on the reverse side
<PAGE>
hereof, which further provisions shall for all purposes have the same effect as
though fully set forth at this place.
Unless the Certificate of Authentication hereon has been executed by
the Trustee or an Authenticating Agent under the Indenture referred to on the
reverse hereof by the manual signature of one of its authorized officers, 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 Note to be signed in
its name by the manual or facsimile signature of its Chief Executive Officer,
its President or one of its Vice Presidents and attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries.
Date:
THE VALSPAR CORPORATION
By:
-----------------------------
Chief Financial Officer
ATTEST:
- ----------------------------
Secretary
[Form of Trustee's Certificate of Authentication]
This is one of the Notes described in the Indenture.
--------------------------------------
as Trustee
Authentication
Date: By
------------------ -----------------------------------
Authorized Signatory
<PAGE>
(Reverse of Note)
THE VALSPAR CORPORATION
____% ____________NOTE DUE ____
[Unless and until it is exchanged in whole or in part for Definitive
Notes, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this Note
is presented by an authorized representative of the Depository to the issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of ______________ or such other name as may be
requested by an authorized representative of the Depository (and any payment is
made to _____________ or such other entity as may be requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, ____________, has an interest herein.](1)
This Note is one of a duly authorized issue of Series Notes of the
Company ("Series _____ Notes") designated as its ____% ___________ Notes due
____ limited in aggregate principal amount to $__________ issued and to be
issued under an Indenture dated as of __________, 199__ and a supplemental
indenture dated ______________ (herein called the "Indenture"), between the
Company and ________________________________________, as Trustee (herein called
the "Trustee," which term includes any successor Trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Company, the
Trustee and the Holders of all series of Notes of the Company (collectively, the
"Notes"), and the terms upon which the Notes are, and are to be, authenticated
and delivered.
The indebtedness of the Company evidenced by the Notes, including the
principal thereof and interest thereon (including post-default interest), (1) is
expressly subordinated, to the extent and in the manner set forth in the
Indenture, in right of payment of the prior payment in full of all of the
Company's obligations to holders of Senior Indebtedness, and (2) is unsecured by
any collateral, including the assets of the Company or any of its Subsidiaries
or Affiliates. Each Holder of the Notes, by acceptance thereof, (a) agrees to
and shall be bound by such provisions of the Indenture and all other provisions
of the Indenture; (b) authorizes and directs the Trustee to take such action on
such Holder's behalf as may be necessary or appropriate to effectuate the
subordination of the Notes as provided in the Indenture; and (c) appoints the
Trustee as such Holder's attorney-in-fact for any and all such purposes.
The Notes may not be redeemed by the Company prior to Maturity.
- --------------
(1) This paragraph should be included only for a Global Note.
<PAGE>
If an Acceleration Event with respect to the Series _____ Notes shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Series _____ Notes may declare the principal
of all Series _____ Notes due and payable in the manner and with the effect
provided in the Indenture. An "Acceleration Event" is an Event of Default
relating to bankruptcy, insolvency, or reorganization of the Company as more
specifically defined by the Indenture. The Indenture provides that such
declaration and its consequences may, in certain events, be annulled by the
Holders of a majority in principal amount of the Outstanding Series _____ Notes.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of Series _____ Notes under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of Series _____ Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of Series _____ Notes at the
time Outstanding, on behalf of the Holders of all Series _____ Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provisions 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 times, places and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Note
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company to be maintained for that
purpose in _____________________________), or at such other office or agency as
may be established by the Company for such purpose pursuant to the Indenture
(initially the principal corporate trust office of the Trustee in
___________________), duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company, and duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
Series _____ Notes are issuable only in fully registered form,
without coupons, in denominations of $1,000 or any amount in excess thereof
which is an integral multiple of $1,000. As provided in the Indenture, and
subject to certain limitations therein set forth, Series ____ Notes are
exchangeable for a like aggregate principal amount of Series ____ Notes in
authorized denominations, as requested by the Holder surrendering the same.
<PAGE>
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to the due presentment of this Note for registration of
transfer or exchange, the Company, the Trustee and any agent of the Company or
the Trustee may treat the Person 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.
Interest on Series ____ Notes shall be computed on the basis of a
360-day year of twelve 30- day months. Interest shall be payable to and
excluding any Interest Payment Date.
The Trustee, in its individual or any other capacity, may make loans
to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not the Trustee.
This Note shall not be valid until authenticated by the manual
signature of the Trustee or an Authenticating Agent.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
Each Holder of a Series ____ Note covenants and agrees by such
Holder's acceptance thereof to comply with and be bound by the foregoing
provisions.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
(Insert assignee's Soc. Sec. or Tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee
<PAGE>
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES(2)
The following exchanges of a part of the Global Note for Definitive
Notes have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease Amount of increase
of this Global Note authorized officer
in in
following such of
Principal Amount of Principal Amount of
decrease Trustee or Note
Date of Exchange this Global Note this Global Note
(or increase) Custodian
- ---------------- ------------------- -------------------
------------------- ------------------
<S> <C> <C>
<C> <C>
</TABLE>
- -------------
(2) This should be included only in a Global Note.
<PAGE>
Exhibit 4(c)
[Face of Note]
CUSIP NO. PRINCIPAL AMOUNT:
REGISTERED NO.
THE VALSPAR CORPORATION
___________ NOTE, SERIES __
DUE ____________OR MORE FROM DATE OF ISSUE
If the registered owner of this Note (as indicated below) is Cede
&Co. and The Depository Trust Company is named below as Depositary, this Note is
a "Global Note", and unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
If applicable, the following will be completed solely for purposes of
the U.S. Federal Income Tax "Original Issue Discount" rules, as that term
misdefined in Section 1273 of the Internal Revenue Code of 1986, as amended.
This information is provided solely for the purposes of applying the U.S.
Federal Income Tax Original Issue Discount ("OID") rules to the certificate and
is based on an interpretation of proposed Treasury regulations. The Issue Date
of this certificate is ____________. This certificate has been issued with
______ of OID per $1,000 of initial principal amount. The annual yield to
maturity is __% based on semiannual compounding. The amount of OID attributable
to the initial accrual period is ___________ per $1,000 of initial principal
amount, computed under the _______________ method as defined in proposed
Treasury regulations.
<PAGE>
The following summary of terms is subject to the information set
forth on the reverse hereof.
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE ISSUE PRICE (As a % MATURITY DATE
percentage of principal
amount)
INTEREST RATE PER INTEREST PAYMENT DEFAULT RATE (Only
ANNUM DATES applicable if Note issued at
original issue discount):
OID DEFAULT AMOUNT REDEEMABLE ON OR REDEEMABLE ON OR
(only applicable if Note AFTER (At option of the AFTER (At option of the
issued at original issue holder Holder) Company)
discount)
INITIAL REDEMPTION ANNUAL REDEMPTION SINKING FUND
PERCENTAGE: PERCENTAGE
REDUCTION:
DEPOSITARY (Only
applicable if Note is a
Global Note):
</TABLE>
THE VALSPAR CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to___________________________________
or registered assigns, the principal sum of _________________________ at the
office or agency of the Company in the City of Minneapolis, Minnesota, the City
of ____________________ or in the Borough of Manhattan, the City of New York, on
the maturity date shown above, or if such date is not a Business Day (as defined
below), the next succeeding Business Day ("Stated Maturity"), in such coin or
currency as at the time of payment shall be legal tender for the payment of
public and private debts in the United States of America, and to pay interest on
said principal sum at the rate per annum (computed on the basis of a 360-day
year of twelve 30-day months) shown above, in like coin or currency,
semi-annually on
<PAGE>
each Interest Payment Date set forth above from and after the date of this Note
and at Maturity until payment of said principal sum has been made or duly
provided for. Unless this Note is a Note which has been issued upon transfer of,
in exchange for, or in replacement of a predecessor Note, interest on this Note
shall accrue from the Original Issue Date indicated above. If this Note has been
issued upon transfer of, in exchange for, or in replacement of a predecessor
Note, interest on this Note shall accrue from the last Interest Payment Date to
which interest was paid on such predecessor Note, or if no interest was paid on
such predecessor Note, from the Original Issue Date indicated above. The first
payment of interest on a Note originally issued and dated between a Regular
Record Date (as defined below) and an Interest Payment Date will be due and
payable on the Interest Payment Date following the next succeeding Regular
Record Date to the registered owner on such next succeeding Regular Record Date.
Subject to certain exceptions provided in the Indenture referred to on the
reverse hereof, the interest so payable on any Interest Payment Date will be
paid to the Person in whose name this Note is registered at the close of
business on the fourteenth calendar day next preceding such Interest Payment
Date (each such date a "Regular Record Date"), and interest payable at Maturity
(other than a Maturity date which is an Interest Payment Date) will be paid to
the Person to whom said principal sum is payable. Payment of interest on this
Note with respect to any Interest Payment Date will include interest accrued to
but excluding such Interest Payment Date. If the Company shall default in the
payment of interest due on any Interest Payment Date, then interest on this Note
shall accrue from the next preceding Interest Payment Date to which interest has
been paid, or if no interest has been paid on this Note, from the Original Issue
Date indicated above.
Payment of the principal of (and premium, if any) and any interest
due on this Note to the Holder hereof at Maturity will be paid, in immediately
available funds, upon presentation of this Note at the office or agency of the
Company maintained for that purpose in the City of Minneapolis, Minnesota, or
the City of ____________________, or, at the option of the Holder hereof, at the
office or agency to be maintained for that purpose in the Borough of Manhattan,
the City of New York. Payment of interest on this Note due on any Interest
Payment Date (other than interest on this Note due to the Holder hereof at
Maturity) will be payable at such office or agency of the Company, provided,
however, that, at the option of the Company, payment of interest may be paid by
check mailed to the Person entitled thereto at such Person's last address as it
appears in the Note Register or by wire transfer to such account as may have
been designated by such Holder as set forth herein.
Any such designation for wire transfer purposes shall be made by
filing the appropriate information with the Trustee at its Corporate Trust
Office in the City of ____________________ or its agency in the City of New York
and, unless revoked by written notice to the Trustee received by the Trustee on
or prior to the Regular Record Date immediately preceding the applicable
Interest Payment Date or the fifteenth calendar day preceding the date of
Maturity, as the case may be, shall remain in effect with respect to any further
payments with respect to this Note payable to such Holder.
If a payment with respect to this Note cannot be made by wire
transfer because the required designation has not been received by the Trustee
on or before the requisite date or for any other reason, a notice will be mailed
to the Holder at its registered address requesting a designation
<PAGE>
pursuant to which such wire transfer can be made and, upon the Trustee's receipt
of such a designation, such payment will be made within five Business Days of
such receipt. The Company will pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but any tax, assessment or
governmental charge imposed upon payments will be borne by the Holders of the
Notes in respect of which payments are made.
Any payment on this Note due on any day which is not a Business Day
in the City of New York or which is not a Business Day in the City of
Minneapolis, Minnesota, or the City of ____________________, need not be made on
such day, but may be made on the next succeeding Business Day, with the same
force and effect as if made on the due date, and no interest shall accrue for
the period from and after such date.
IF THIS NOTE IS A GLOBAL NOTE AS SPECIFIED ON THE FACE HEREOF, THE
FOLLOWING LEGEND IS APPLICABLE: "EXCEPT UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED ON THE REVERSE HEREOF, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY, ANOTHER NOMINEE OF THE DEPOSITARY, A SUCCESSOR OF THE DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR".
"Business Day" shall mean, as used herein with respect to any
particular location, each Monday, Tuesday, Wednesday, Thursday or Friday which
is not a day on which banking institutions in such location are generally
authorized or obligated by law or executive order to close.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: THE VALSPAR CORPORATION
By:
(Title)
[SEAL] Attest:
(Title)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
, as Trustee
By:
Authorized Signature
or
, as Trustee
By:
Authenticating Agent
By:
Authorized Signature
<PAGE>
[Reverse of Note]
THE VALSPAR CORPORATION
___________ NOTE, SERIES __
DUE _____________ OR MORE FROM DATE OF ISSUE
This Note is one of a duly authorized issue of securities of the
Company (hereinafter called the "Securities"), issued and to be issued in one or
more series under an Indenture dated as of ____________________ (hereinafter
called the "Indenture"), between the Company and ____________________________,as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Note is one of a series of the
Securities designated as the ___________ Notes, Series __ of the Company (the
"Notes"), due 9 months or more from date of issue. The Notes are limited to
$____________ in aggregate principal amount. The Notes may mature at different
times, bear interest, if any, at different rates, be redeemable by the Company
at different times or not at all, be repayable at the option of the Holder at
different times or not at all and issued at an original issue discount.
In case an Event of Default, as defined in the Indenture, with
respect to the Notes shall have occurred and be continuing, the principal hereof
may be declared, and upon such declaration shall become, due and payable in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
If so provided on the face of this Note, this Note may be redeemed by
the Company on and after the date so indicated on the face hereof. On and after
the date, if any, from which this Note may be redeemed, this Note may be
redeemed, in whole or in part, at the option of the Company at
<PAGE>
a redemption price equal to the product of the principal amount of this Note to
be redeemed multiplied by the Redemption Percentage, plus accrued interest, if
any, to the date of redemption. The Redemption Percentage shall initially equal
the Initial Redemption Percentage specified on the face of this Note, and shall
decline at each anniversary of the initial date that this Note is redeemable by
the amount of the Annual Redemption Percentage Reduction specified on the face
of this Note, until the Redemption Percentage is equal to 100%.
If so provided on the face of this Note, this Note will be repayable
in whole or in part in increments of $1,000, provided that the remaining
principal amount of any Note surrendered for partial repayment shall the at
least $100,000, on any Business Day on or after the date so indicated on the
face hereof under "Redeemable On or After (At Option of the Holder)", at the
option of the Holder, at 100% of the principal amount to be repaid, plus accrued
interest, if any, to the repayment date. In order for the exercise of the option
to be effective and the Notes to be repaid, the Company must receive at the
applicable address of the Trustee set forth below or at such other place or
places of which the Company shall from time to time notify the Holder of the
Note, on or before the fifteenth, but not earlier than the twenty-fifth calendar
day or, if such day is not a Business Day, the next succeeding Business Day,
prior to the repayment date, either (i) this Note, with the form below entitled
"Option to Elect Repayment" duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth (a) the name, address and
telephone number of the Holder of this Note, (b) the principal amount of this
Note and the principal amount of this Note to be repaid, (c) a statement that
the option to elect repayment is being exercised thereby, and (d) a guarantee
stating that the Company will receive this Note, with the form below entitled
"Option to Elect Repayment" duly completed, not later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter (and
this Note and form duly completed are received by the Company by such fifth
Business Day). Any such election shall be irrevocable. Deliveries shall be made
by hand, courier service, regular or registered mail, telegram or facsimile
transmission to __________________________, Attention: Corporate Trust Office,
__________________________________________, (or, at such other places as the
Company shall notify the Holders of the Notes). All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Company, whose determination will be final
and binding.
The Indenture contains provisions for defeasance at any time of
certain restrictive covenants and the related Events of Default, upon compliance
by the Company with certain conditions set forth therein, which provisions apply
to this Note.
If this Note is issued with an original issue discount, (i) if an
Event of Default with respect to the Notes shall have occurred and be
continuing, the amount of principal of this Note which may be declared due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture, shall be determined in the manner set forth under "OID Default
Amount" on the face hereof, and (ii) in the case of a default of payment in
principal upon acceleration, redemption, repayment at the option of the Holder
or at the Stated Maturity hereof, in lieu of any interest
<PAGE>
otherwise payable, the overdue principal of this Note shall bear interest at a
rate of interest per annum equal to the Default Rate stated on the face hereof
(to the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such acceleration, redemption, repayment at
the option of the Holder or Stated Maturity, as the case may be, to the date
payment has been made or duly provided for or such default has been waived in
accordance with the terms of the Indenture.
The Notes are issuable in global or definitive form without coupons
in denominations of $100,000 and integral multiples of $1,000 in excess thereof.
Upon due presentment for registration of transfer of this Note at the office or
agency of the Company in the City of Minneapolis, Minnesota, or the City
of____________________, or, at the option of the Holder hereof, at the office or
agency to be maintained for that purpose in the Borough of Manhattan, The City
of New York, a new Note or Notes in authorized denominations for an equal
aggregate principal amount and like interest rate and maturity will be issued to
the transferee in exchange herefor, subject to the limitations provided in the
Indenture and to the limitations described below if applicable, without charge
except for any tax or other governmental charge imposed in connection therewith.
If this Note is a Global Note (as specified on the face hereof), this
Note is exchangeable for definitive Notes in registered form only if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for this Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (y) the Company in its sole discretion determines that this Note shall
be exchangeable for definitive Notes in registered form and notifies the Trustee
thereof or (z) an Event of Default with respect to the Notes represented hereby
has occurred and is continuing. If this Note is exchangeable pursuant to the
preceding sentence, it shall be exchangeable for definitive Notes in registered
form, bearing interest (if any) at the same rate or pursuant to the same
formula, having the same date of issuance, redemption provisions, if any, Stated
Maturity and other terms and of differing denominations aggregating a like
amount.
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 premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
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 Person 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.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
OPTION TO ELECT REPAYMENT
<PAGE>
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the repayment date, to the undersigned, at
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Company must receive at the applicable
address of the Trustee set forth above or at such other place or places of which
the Company shall from time to time notify the holder of the within Note, on or
before the fifteenth, but not earlier than the twenty-fifth, calendar day or, if
such day is not a Business Day, the next succeeding Business Day, prior to the
repayment date (i) this Note, with this "Option to Elect Repayment" form duly
completed, or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth (a) the name, address and telephone number of
the holder of the Note, (b) the principal amount of the Note and the principal
amount of the Note to be repaid, (c) a statement that the option to elect
repayment is being exercised thereby, and (d) a guarantee stating that the Note
to be repaid with the form entitled "Option to Elect Prepayment" on the reverse
of the Note duly completed will be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and such Note and form duly completed are received by the Company by
such fifth Business Day).
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be an integral multiple
of$1,000, which the Holder elects to have repaid: ______________________; and
specify the denomination or denominations (which shall be $100,000 or an
integral multiple of $1,000 in excess thereof) of the Note or Notes to be issued
to the Holder for the portion of the within Note not being repaid (in the
absence of any specification, one such Note will be issued for the portion not
being repaid): _____________________
<PAGE>
Dated:
Notice: The signature to this Option to Elect
Repayment must correspond with the name as
written upon the face of the Note in every
particular without alteration or enlargement or
any other change whatsoever.
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
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT ACT: ______ Custodian _______
(Cust) (Minor)
Under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in the above
list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and
transfer(s) unto:
Please Insert Social Security or
Other Identifying Number of Assignee
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE)
<PAGE>
the within Note of THE VALSPAR CORPORATION and does hereby irrevocably
constitute and appoint _______________ attorney to transfer the said Note on the
books of the Company, with full power of substitution in the premises.
Dated:
NOTICE: The signature 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 whatever.
<PAGE>
Exhibit 5
May 14, 1999
The Valspar Corporation
1101 Third Street South
Minneapolis, Minnesota 55415
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as legal counsel to The Valspar Corporation (the
"Corporation") in the preparation of a Registration Statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
in connection with the proposed offer and sale of unsecured debt securities of
the Corporation having an aggregate initial offering price of up to $300,000,000
(the "Debt Securities").
The Debt Securities may be offered in separate series, in amounts, at
prices, and on terms to be set forth in the prospectus and one or more
supplements to the prospectus (collectively, the "Prospectus") constituting a
part of the Registration Statement, and in the Registration Statement.
The Debt Securities are to be in the forms filed as Exhibit 4 (b) to the
Registration Statement, with appropriate insertions, and are to be issued under
an indenture in the form filed as Exhibit 4(a) to the Registration Statement,
with appropriate insertions (the "Indenture"), to be entered into by the
Corporation and a trustee or trustees to be named by the Corporation.
We have examined or are otherwise familiar with the Corporation's
Certificate of Incorporation, By-laws, the Registration Statement, the
proceedings of the Corporation's Board of Directors and shareholders to date,
and such other documents, records and instruments as we have deemed necessary or
appropriate for the purposes of this opinion.
Based on the foregoing and the assumptions that follow, we are of the
opinion that:
(i) upon the execution and delivery by the Corporation of the Indenture,
the Indenture will become a valid and binding obligation of the Corporation;
(ii) upon (a) the execution and delivery by the Corporation of the
Indenture, (b) the completion of all required corporate proceedings relating to
the issuance of Debt Securities, (c)
<PAGE>
The Valspar Corporation
May 14, 1999
Page 2
the due execution and delivery of the Debt Securities, and (d) the due
authentication of the Debt Securities by a duly appointed trustee, such Debt
Securities will be valid and binding obligations of the Corporation.
The foregoing opinions assume that (a) the consideration for such Debt
Securities shall have been received by the Corporation in accordance with
applicable law; (b) the Indenture shall have been duly authorized, executed and
delivered by all parties thereto other than the Corporation; (c) the
Registration Statement shall have become effective under the Securities Act; and
(d) the Indenture shall have become qualified under the Trust Indenture Act of
1939, as amended. To the extent they relate to enforceability, each of the
foregoing opinions is subject to the limitation that the provisions of the
referenced instruments and agreements may be limited by bankruptcy or other laws
of general application affecting the enforcement of creditors' rights and by
general equity principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
We have also assumed (a) the accuracy and truthfulness of all public
records pertaining to the Corporation and of all certifications, documents and
other proceedings examined by us that have been produced by officials of the
Corporation acting within the scope of their official capacities, without
verifying the accuracy or truthfulness of such representations, and (b) the
genuineness of such signatures appearing upon such public records,
certifications, documents and proceedings. We express no opinion as to the laws
of any jurisdiction other than the laws of the State of Minnesota, the
corporation laws of the State of Delaware and the federal laws of the United
States of America. To the extent that the governing law provision of a document
may relate to the laws of a jurisdiction as to which we express no opinion, the
opinions set forth herein are given as if the law of Minnesota governs such a
document.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to being named in the Prospectus included therein
under the caption "Legal Opinions" with respect to the matters stated therein
without implying or admitting that we are an "expert" within the meaning of the
Securities Act, or other rules and regulations of the Securities and Exchange
Commission issued thereunder with respect to any part of the Registration
Statement, including this exhibit.
Very truly yours,
/s/ Lindquist & Vennum
LINDQUIST & VENNUM P.L.L.P.
<PAGE>
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FISCAL YEARS ENDED THREE MONTHS ENDED
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
OCTOBER 28 OCTOBER 27 OCTOBER 25 OCTOBER 31 OCTOBER 30 JANUARY 30 JANUARY 29
1994 1995 1996 1997 1998 1998 1999
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Adjusted Income:
Pre-tax income $76,394 $79,208 $93,043 $109,177 $118,788 $14,825 $15,994
Fixed Charges:
Interest Expense 2,504 4,216 3,029 5,294 10,707 1,885 3,154
Interest Portion of
Operating Leases 700 700 850 1,000 1,050 250 250
- --------------------------------------------------------------------------------------------------------------------------------
79,598 84,124 96,922 115,471 130,545 16,960 19,398
Ratio of earnings
to fixed charges 24.8x 17.1x 25.0x 18.3x 11.1x 7.9x 5.7x
</TABLE>
<PAGE>
Exhibit 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-000000) and related Prospectus of The
Valspar Corporation for the registration of $300,000,000 in various debt
securities (under a universal shelf registration) and to the incorporation by
reference therein of our report dated November 16, 1998, with respect to the
consolidated financial statements of The Valspar Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended October 30, 1998
and the related financial statement schedule included therein filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
/s/ Ernst & Young LLP
Minneapolis, Minnesota
May 12, 1999
<PAGE>
EXHIBIT 23(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of The Valspar Corporation of our report dated April 16,
1999 relating to the combined financial statements of Dexter Coatings Acquired
Entities, which appears in the Current Report on Form 8-K/A of The Valspar
Corporation dated May 12, 1999. We also consent to the reference to us under
the heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
May 14, 1999
