AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 10, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BETZDEARBORN INC.
(Exact name of Registrant as specified in its charter)
Pennsylvania 23-1503731
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4636 Somerton Road
Trevose, Pennsylvania 19053-6783
(215) 355-3300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
Linda R. Hansen, Esquire
Vice President, Secretary and General Counsel
BetzDearborn Inc.
4636 Somerton Road
Trevose, Pennsylvania 19053-6783
(215) 355-3300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------
Please send copies of all communications
to:
<TABLE>
<S> <C>
George L. James III Robert M. Jones, Jr., Esq.
Senior Vice President and Chief Financial Officer Drinker Biddle & Reath LLP
BetzDearborn Inc. Philadelphia National Bank Building
4636 Somerton Road 1345 Chestnut Street
Trevose, Pennsylvania 19053-6783 Philadelphia, Pennsylvania 19107-3496
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective depending upon
market conditions and other factors.
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If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are being
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. [ ]
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Proposed
Class of Securities Maximum Aggregate Amount of
to be Registered Offering Price (1) Registration Fee
- ------------------- ------------------ ----------------
<S> <C> <C>
Debt Securities(2)
Common Stock, $.10 par value(2)
Preferred Stock, $.10 par value(2)(3)
Depositary Shares(3)
Warrants(4)
Total........................................ $400,000,000(5)(6) $118,000
</TABLE>
(1) Estimated for the sole purpose of computing the registration fee pursuant
to Rule 457(o).
(2) Also includes, as applicable, such indeterminate amounts of Debt Securities
or indeterminate number of shares of Preferred Stock or Common Stock as may
be issued upon conversion of or exchange for any Debt Securities or
Preferred Stock that provide for conversion or exchange into other
securities.
(3) Also includes or represents, as applicable, such indeterminate number of
Depositary Shares to be evidenced by Depositary Receipts as may be issued
pursuant to a Deposit Agreement. In the event the Company elects to offer
to the public fractional interests in shares of the Preferred Stock
registered hereunder, Depositary Receipts will be distributed to those
persons purchasing such fractional interests and shares of Preferred Stock
will be issued to the Depositary under the Deposit Agreement. No separate
consideration will be received for the Depositary Shares.
(4) Warrants may be sold separately or with Debt Securities, Preferred Stock or
Common Stock.
(5) Such amount represents the total of the aggregate principal amount of the
Debt Securities issued at their principal amount, the aggregate issue price
(rather than the principal amount) of any Debt Securities issued at an
original issue discount, the aggregate liquidation preference of any
Preferred Stock, the aggregate amount used when computing the registration
fee pursuant to Rule 457(c) for any Common Stock, the aggregate issue price
of any Warrants and the aggregate exercise price of any Warrants.
(6) No separate consideration will be received for the Debt Securities,
Preferred Stock, Common Stock or the Depositary Shares issuable upon
conversion of or in exchange for Debt Securities or Preferred Stock.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED MARCH ___, 1998
PROSPECTUS
[LOGO]
U.S. $400,000,000
BETZDEARBORN INC.
DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES
COMMON STOCK, AND WARRANTS
--------------------
BetzDearborn Inc. (the "Company") may from time to time offer together
or separately, in one or more supplements to this Prospectus (each, a
"Prospectus Supplement"), (i) its debt securities (the "Debt Securities"),
which, unless otherwise specified in a Prospectus Supplement, will be unsecured
and will rank equally with all other unsecured and unsubordinated indebtedness
of the Company, (ii) shares of its common stock, par value $.10 per share (the
"Common Stock"), (iii) shares of its preferred stock, par value $.10 per share
(the "Preferred Stock"), which may be issued in the form of Depositary Shares
(as defined herein) evidenced by Depositary Receipts (as defined herein) and
(iv) warrants to purchase such securities of the Company as shall be designated
by the Company at the time of the offering (the "Warrants"), in amounts, at
prices and on terms to be determined at the time of offering. The Debt
Securities, Preferred Stock, Common Stock, Depositary Shares and Warrants are
collectively called the "Securities."
The Securities offered pursuant to this Prospectus may be issued in one
or more series or issuances and will be limited to U.S. $400,000,000 aggregate
public offering price (or, in the case of Debt Securities, its equivalent (based
on the applicable exchange rate at the time of issue) if issued with principal
amounts denominated in one or more foreign currencies, or such greater amount if
issued at an original issue discount, as shall result in aggregate proceeds of
U.S. $400,000,000 to the Company). Certain specific terms of the particular
Securities in respect of which this Prospectus is being delivered are set forth
in the accompanying Prospectus Supplement including, where applicable, (i) in
the case of Debt Securities, the specific designation, the aggregate principal
amount, the denomination, the maturity, the premium, if any, the interest rate
(which may be fixed, floating or adjustable rate), if any, the time and method
of calculating payment of interest, if any, the place or places where principal
of, premium, if any, and interest, if any, on such Debt Securities will be
payable, the currency in which principal of, premium, if any, and interest, if
any, on such Debt Securities will be payable, any terms of redemption at the
option of the Company or of the holder, any sinking fund provisions, the terms
for any conversion or exchange into other Securities, the initial public
offering price and other specific terms, (ii) in the case of Common Stock, the
aggregate number of shares offered and the initial public offering price, (iii)
in the case of Preferred Stock, the specific designation, the stated value and
liquidation preference per share, the aggregate number of shares offered, any
dividend rights (including the method of calculating payment of dividends), the
place or places where dividends will be payable, any redemption, voting and
other rights, any terms for conversion or exchange into other Securities or
property, the initial public offering price and other specific terms and any
other terms not set forth herein, (iv) in the case of Depositary Shares, the
fractional share of Preferred Stock represented by each such Depositary Share,
<PAGE>
(v) in the case of Warrants, the duration, purchase price, exercise price and
detachability of such Warrants and a description of the securities for which
each Warrant is exercisable and (vi) the methods of distribution and other
specific terms of the Securities, as applicable. If so specified in the
applicable Prospectus Supplement, Debt Securities of a series may be issued in
whole or in part in the form of one or more temporary or permanent global
securities ("Global Securities").
The Company's Common Stock is listed on the New York Stock Exchange
under the trading symbol "BTL." Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on such exchange, subject to official notice of
issuance.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------
The Company may sell the Securities to or through underwriters, through
dealers or agents, directly to purchasers or through a combination of such
methods. See "Plan of Distribution." The accompanying Prospectus Supplement sets
forth the names of any underwriters, dealers or agents, if any, involved in the
sale of the Securities in respect of which this Prospectus is being delivered
and any applicable fee, commission or discount arrangements with them. The
accompanying Prospectus Supplement states whether the Securities will be listed
on any national securities exchange. If the Securities are not listed on any
national securities exchange, there can be no assurance that there will be a
secondary market for any such Securities.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
--------------------
The date of this Prospectus is March 10, 1998
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained or
incorporated by reference in this Prospectus and the accompanying Prospectus
Supplement, and if given or made such information or representations must not be
relied upon as having been authorized by the Company or any agent, underwriter
or dealer. This Prospectus and the accompanying Prospectus Supplement do not
constitute an offer of any securities other than those to which they relate, or
an offer to sell or a solicitation of an offer to buy those securities to which
they relate in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction. The delivery of this Prospectus
and/or the accompanying Prospectus Supplement at any time does not imply that
the information herein or therein is correct as of any time subsequent to its
date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, Suite 1300, New
York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can also be
obtained at prescribed rates by writing to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
The Commission also maintains a site on the world wide web at http://www.sec.gov
that contains reports, proxy and information statements and other information
filed electronically by the Company. In addition, such reports, proxy statements
and other information may be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, 7th Floor, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus and any accompanying Prospectus
Supplement do not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Securities offered hereby, reference is made to the Registration
Statement and the exhibits and the financial statements, notes and schedules
filed as a part thereof or incorporated by reference therein, which may be
inspected at the public reference facilities of the Commission, at the addresses
set forth above. Statements made in this Prospectus and any Prospectus
Supplement concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission.
This Prospectus contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company.
Prospective investors are cautioned that such statements are only predictions
and that actual events or results could differ materially. In evaluating such
statements, prospective investors should specifically consider any factors
identified in this Prospectus and in the documents incorporated by reference
herein.
The logo for "BetzDearborn" appearing on the front cover page of this
Prospectus is a trademark of BetzDearborn Inc.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(2) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A dated November 23, 1992; and
(3) The Company's Current Reports on Form 8-K, filed with the
Commission on February 17, 1998 and March 9, 1998;
All documents 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
hereof and prior to the termination of the offering of the Securities shall
hereby be deemed to be incorporated by reference into this Prospectus and to be
a part hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus and
any accompanying Prospectus Supplement to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein or in any accompanying Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus or any
accompanying Prospectus Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus and any accompanying Prospectus
Supplement is delivered, on written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus and any accompanying Prospectus Supplement (without exhibits to such
documents other than exhibits specifically incorporated by reference into such
documents). Requests for such copies should be directed to, Attention: Investor
Relations, telephone 215-953-2355, BetzDearborn Inc., 4636 Somerton Road,
Trevose, Pennsylvania 19053-6783.
-3-
<PAGE>
THE COMPANY
The Company's business is the engineered chemical treatment of water,
wastewater and process systems operating in a wide variety of industrial and
commercial applications, with particular emphasis on the chemical, petroleum
refining, paper, automotive, electric utility and steel industries. The Company
produces and sells a wide range of specialty chemical products, and provides the
technical expertise necessary to utilize these products effectively. The Company
also develops chemical treatment programs for use in boilers, cooling systems,
heat exchangers, paper and petroleum process streams and both influent and
effluent systems. The Company monitors changing water, process and plant
operating conditions so as to prescribe the appropriate chemical treatment
programs to solve problems such as corrosion, scale, deposit formation and a
variety of process problems.
The Company was incorporated in Pennsylvania in 1957 and has its
principal executive offices at 4636 Somerton Road, Trevose, Pennsylvania
19053-6783, telephone number (215) 355-3300.
USE OF PROCEEDS
Except as set forth in a Prospectus Supplement, the Company intends to
use the net proceeds from the sale of the Securities for general corporate
purposes, which may include, without limitation, working capital, capital
expenditures, investments in or loans to subsidiaries, the repayment or
refinancing of debt, including outstanding commercial paper, future business
acquisitions, the satisfaction of other obligations or for such other purposes
as may be specified in the applicable Prospectus Supplement.
-4-
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges and earnings to combined fixed charges and preferred
stock dividends for the years indicated.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges................... 3.7 4.1 19.2 22.8 20.4
Ratio of earnings to combined fixed
charges and preferred stock
dividends................................... 3.2 3.3 8.4 9.4 8.1
</TABLE>
For purposes of calculating the ratio of earnings to fixed charges and
the ratio of earnings to combined fixed charges and preferred stock dividends,
earnings consist of income from continuing operations before accounting changes,
income taxes, minority interest and fixed charges. For purposes of calculating
both ratios, fixed charges include interest expense, capitalized interest,
amortization of debt expense and that portion of rental expense deemed to be
representative of an interest factor.
DESCRIPTION OF DEBT SECURITIES
Except as provided in any accompanying Prospectus Supplement, the
following description sets forth certain general terms and provisions of the
Debt Securities to which any Prospectus Supplement may relate. The particular
terms of the Debt Securities offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to the Debt
Securities will be described in the Prospectus Supplement relating to such Debt
Securities.
The Debt Securities will be issued under the Indenture, dated as of
________, 1998 (the "Indenture"), between the Company and The Bank of New York,
as trustee (the "Trustee"). The following statements are subject to the detailed
provisions of the Indenture, a copy of which is incorporated by reference into
the Registration Statement. Whenever particular provisions of the Indenture or
terms defined therein are referred to herein or in the Prospectus Supplement,
such provisions or terms are incorporated by reference as a part of the
statements made, and the statements are qualified in their entirety by such
reference. References in italics are to the Indenture. Capitalized terms used
but not otherwise defined herein have the meaning given to them in the
Indenture.
GENERAL
The Indenture does not limit the amount of debt, either secured or
unsecured, that may be issued by the Company under the Indenture or otherwise.
Debt Securities may be issued from time to time and will be offered to
the public on terms determined by market conditions at the time of sale. The
Debt Securities may be issued in one or more series with the same or various
maturities, at par or a premium or with an original issue discount.
-5-
<PAGE>
Reference is made to the Prospectus Supplement for the following terms
of the Debt Securities offered thereby: (i) the designation of and any limit
upon the aggregate principal amount of such Debt Securities; (ii) the percentage
of their principal amount at which such Debt Securities will be issued; (iii)
the date or dates on which such Debt Securities will mature (which may be fixed
or extendible); (iv) the currency of denomination of such Debt Securities, which
may be in Dollars or in any Foreign Currency or composite currency, including
ECUs; (v) the designation of the currency or currencies in which payment of the
principal of, and premium, if any, and the interest on, such Debt Securities
will be made and whether, in the event the currency of denomination is other
than Dollars but the payment of principal thereof, and premium, if any, and
interest thereon is payable in Dollars, payment of the principal of, and
premium, if any, or the interest on such Debt Securities, at the election of a
Holder thereof, may instead be payable in the currency of denomination; (vi) the
rate or rates (which may be fixed or floating) per annum, if any, at which such
Debt Securities will bear interest or the method of determining such rate or
rates; (vii) the times at which any such interest will be payable and the record
dates with respect thereto; (viii) any index used to determine the amounts of
payments of principal of, and premium, if any, and interest on such Debt
Securities; (ix) any redemption or repayment terms or any other specific terms
associated with such Debt Securities; and (x) the extent to which, if at all,
the Debt Securities may be secured or subordinated to other obligations of the
Company.
One or more series of Debt Securities may be sold at a substantial
discount from their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market. One or more series of Debt
Securities may be floating rate debt securities. Federal income tax consequences
and special considerations applicable to any such series will be described in
the Prospectus Supplement relating thereto.
Any series of Debt Securities may be issued in whole or in part in
book-entry form. The Prospectus Supplement relating to a series of Debt
Securities which may be issued in book-entry form will specify the terms and
procedures relating thereto. Unless otherwise indicated in the Prospectus
Supplement, Debt Securities, to the extent evidenced in registered form will be
issued in denominations of $1,000 and integral multiples thereof. The Prospectus
Supplement relating to a series of Debt Securities denominated in a composite
currency or any Foreign Currency or Currencies will specify the denominations
thereof. Unless otherwise indicated in the Prospectus Supplement relating
thereto, principal, and premium, if any, and interest are to be payable at the
principal corporate trust office of the Trustee in New York, New York or at any
paying agency maintained at the time by the Company for such purpose. At the
option of the Company, payment of interest may be made by check mailed to the
address of the person entitled thereto as it appears on the register for Debt
Securities. Debt Securities may be presented for registration of transfer or
exchange at such office of the Trustee or at such other location or locations as
may be established pursuant to the Indenture, subject to the limitations
provided in the Indenture, without any service charge but, the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security may not be transferred except as a whole
by the Depositary for such Global Security to a nominee of such Depositary or by
a nominee of such Depositary to a successor Depositary or any nominee of such
successor.
The specific terms of the depositary arrangement with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided herein, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Debt
Securities of such series in definitive form and will not be
-6-
<PAGE>
considered the owners or holders thereof under the Indenture governing such Debt
Securities.
Payments of principal, any premium on, and any interest on, individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the Company, the Trustee for such Debt Securities, any
paying agent, nor the security registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities
or its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Security or Securities representing such
series of Debt Securities. Further, if the Company so specifies with respect to
the Debt Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable to
the Company, the Trustee and the Depositary for such Global Security, receive
individual Debt Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities.
-7-
<PAGE>
In any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery of individual Debt Securities of the
series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and integral
multiples thereof.
LIMITATION ON LIENS
The Company agrees that neither it nor any Restricted Subsidiary will
issue, assume or guarantee any notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed ("Debt") secured by a mortgage,
lien, pledge or other encumbrance ("Mortgages") upon any Restricted Property
without effectively providing that the Debt Securities (together with, if the
Company so determines, any other indebtedness or obligation then existing or
thereafter created ranking equally with the Debt Securities) shall be secured
equally and ratably with (or prior to) such Debt so long as such Debt shall be
so secured, except that this restriction will not apply to: (a) Mortgages
affecting property of a corporation existing at the time it becomes a Subsidiary
or at the time it is merged into or consolidated with the Company or a
Subsidiary; (b) Mortgages on property existing at the time of acquisition
thereof or incurred to secure payment of the purchase price thereof or to secure
Debt incurred prior to, at the
-8-
<PAGE>
time of, or within 180 days after the acquisition for the purpose of financing
all or part of the purchase price; (c) Mortgages on any property to secure all
or part of the cost of improvement or construction thereon or Debt incurred to
provide funds for such purpose in a principal amount not exceeding the cost of
such improvements or construction; (d) Mortgages which secure only indebtedness
owing by a Subsidiary to the Company or a Subsidiary; (e) certain
Mortgage-to-government entities, including pollution control or industrial
revenue bond; (f) Mortgages required by any contract or statute in order to
permit the Company or a Subsidiary to perform any contract or subcontract made
by it with or at the request of the United States of America, any state or any
department, agency or instrumentality or political subdivision of either; and
(g) subject to certain conditions, any extension, renewal or replacement of any
Mortgage referred to in the foregoing clauses (a) through (f). Notwithstanding
the foregoing, the Company and any one or more Restricted Subsidiaries may,
without securing the Debt Securities, issue, assume or guarantee Debt which
would otherwise be subject to the foregoing restrictions in an aggregate
principal amount which, together with all other such Debt of the Company and its
Restricted Subsidiaries which would otherwise be subject to the foregoing
restrictions (not including Debt permitted to be secured under clauses (a) to
(g) inclusive above) and the aggregate Value of Sale and Lease-Back Transactions
(other than those in connection with which the Company has voluntarily retired
Funded Debt) does not at any one time exceed 10% of the Consolidated Net
Tangible Assets of the Company and its consolidated Subsidiaries. (Sections
5.03, 5.04 and 5.05).
The Company agrees that if, upon any consolidation or merger of the
Company with or into any other corporation, or upon any sale or conveyance of
all or substantially all of its property to any other corporation, any of the
Restricted Property of the Company or of any Restricted Subsidiary would
thereupon become subject to any mortgage, lien or pledge, the Company will first
secure the Debt Securities equally and ratably with any other obligations of the
Company or any Restricted Subsidiary then entitled thereto, by a direct lien on
all such property prior to all liens other than any theretofore existing
thereon. (Section 12.02)
The term "Restricted Property" means any of the Company's or a
Subsidiary's manufacturing and processing plants for the production of specialty
chemical products (other than such determined by the Board of Directors not to
be a plant of material importance to the Company and its subsidiaries taken as a
whole), and any shares of capital stock or indebtedness of a Restricted
Subsidiary. The term "Restricted Subsidiary" means any Subsidiary which owns
Restricted Property unless substantially all such Subsidiary's physical
properties are located outside the continental United States. The term
"Subsidiary" means any corporation at least a majority of the outstanding
securities of which having ordinary voting power to elect a majority of the
board of directors of such corporation is at the time owned or controlled
directly or indirectly by the Company or one or more Subsidiaries or by the
Company and one or more Subsidiaries. The term "Consolidated Net Tangible
Assets" means the total amount of assets (less applicable reserves and other
properly deductible items) after deducting therefrom (i) all current liabilities
(excluding any thereof which are by their terms extendible or renewable at the
option of the obligor thereon to a time more than 12 months after the time as of
which the amount thereof is being computed), and (ii) all goodwill, trade names,
trademarks, patents, purchased technology, unamortized debt discount and other
like intangible assets, all as set forth on the most recent quarterly balance
sheet of the Company and its consolidated Subsidiaries and computed in
accordance with generally accepted accounting principles. (Article One)
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EVENT RISK
The Indenture does not contain any limitation on the aggregate amount
of Debt that may be assumed by the Company and does not offer any credit or
event risk protection to holders of Debt Securities in the event that the
Company engages in or is the subject of a highly leveraged action. The Indenture
provisions described under "Limitation on Liens," however, may have the effect
of inhibiting the Company from engaging in, or preventing the Company from being
the subject of, some types of highly leveraged transactions.
LIMITATION ON SALE AND LEASE-BACK
The Company agrees that neither it nor any Restricted Subsidiary will
enter into any Sale and Lease-Back Transaction with respect to any Restricted
Property with any person (other than the Company or a Subsidiary) unless either
(a) the Company or such Restricted Subsidiary would be entitled, pursuant to the
above provisions, to incur Debt in a principal amount equal to or exceeding the
Value of such Sale and Lease-Back Transaction secured by a Mortgage on the
property to be leased without equally and ratably securing the Debt Securities,
or (b) the Company, during or immediately after the expiration of four months
after the effective date of such transaction, applies to the voluntary
retirement of its Funded Debt an amount equal to the greater of: (1) the net
proceeds of the sale of the property leased in such transaction or (2) the fair
value in the opinion of the Board of Directors of the leased property at the
time such transaction was entered into (subject to credits for certain voluntary
retirements of Funded Debt, including the Debt Securities). (Sections 5.04 and
5.05)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Trustee, without the consent of any Holders of any series of Securities at the
time outstanding, to modify the Indenture to (i) evidence the succession of
another corporation to the Company and its assumption of the covenants and
obligations of the Company set forth in the Indenture; (ii) expand the covenants
of the Company for the protection of the Holders of any series of Securities and
to make the occurrence of a default in any such additional covenants an Event of
Default; (iii) convey, assign or mortgage to the Trustee any property or assets
that the Company may desire or be required to convey, assign or mortgage in
accordance with certain provisions of the Indenture; (iv) establish the form or
terms of Securities of any series; (v) cure any ambiguity and correct any
inconsistencies among provisions in the Indenture or any supplemental indenture;
(vi) provide for the acceptance of appointment under the Indenture by a
successor trustee with respect to the Securities of one or more series; (vii)
provide for the documentation necessary for the issuance of Securities outside
the United States; and (viii) conform the Indenture to the provisions of the
Trust Indenture Act of 1939, as then in effect. (Section 11.01)
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than 50% in principal
amount of the Debt Securities of each series affected by the modification or
amendment at the time outstanding, to modify the Indenture or any supplemental
indenture or the rights of the Holders of the Debt Securities; provided that no
such modification may without the consent of the Holder of each outstanding Debt
Security thereby affected (a) extend the fixed maturity of any Debt Security, or
reduce the rate of interest of, or any premium payable upon the redemption of,
any Debt Security, or extend the time of payment of principal or interest
thereon or reduce the principal amount thereof or the time during which a
premium is payable thereon, or change
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the currency in which the Debt Security or any premium or interest thereon is
payable, or reduce the amount of principal of an original issue discount
security that would be due and payable upon acceleration or provable upon
bankruptcy, change the place of payment where, or the currency or currencies or
currency unit or units in which, any Debt Security or any premium or interest
thereon is payable, impair the right to institute suit for the enforcement of
any such payment on or after the maturity thereof, affect adversely the terms,
if any, of conversion of any Debt Security into stock or other securities of the
Company or of any other corporation, change any obligation of the Company, with
respect to outstanding Debt Securities, to maintain an office or agency in the
places and for the purposes specified in the Indenture, (b) reduce the aforesaid
percentage of Debt Securities, the consent of the Holders of which is required
for any such modification, or the consent of the Holders of which is required
for any waiver of certain provisions of or defaults under the Indenture or (c)
modify the provisions heretofore described in this paragraph, except to increase
any percentage described above or to provide that certain other provisions of
the Indenture cannot be modified or waived without the consent of the Holders of
all outstanding Debt Securities of such series so affected. (Section 11.02)
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to a particular
series of Debt Securities as being any one of the following events and such
other event as may be established for the Debt Securities of such series: (a)
default for 30 days in any payment of interest on such series; (b) default in
any payment of principal, and premium, if any, on such series as and when the
same shall become due and payable, either at Maturity, upon redemption, by
declaration or otherwise; (c) default for 30 days in the payment of any sinking
fund installment when due; (d) default for 90 days after appropriate notice in
performance of any other covenant in the Indenture applicable to that series;
(e) the acceleration of the maturity of indebtedness of the Company or its
wholly-owned subsidiaries for borrowed money, other than the Debt Securities,
provided that the amount due and payable by reason of such acceleration equals
$25,000,000 or more; or (f) certain events of bankruptcy, insolvency or
reorganization. No event of Default with respect to a particular series of Debt
Securities issued under the Indenture necessarily constitutes an Event of
Default with respect to any other series of Debt Securities issued thereunder.
In case an Event of Default shall occur and be continuing with respect to a
particular series of Debt Securities, the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Debt Securities then outstanding
of the series (or, in the case of defaults under (d) or (e), of the Debt
Securities of all series) may declare the principal or, in the case of Debt
Securities issued with original issue discount, the amount specified in the
terms thereof, of such series (or of all outstanding Debt Securities, as the
case may be) to be due and payable. Any Event of Default with respect to a
particular series of Debt Securities may be waived by the Holders of a majority
in aggregate principal amount of the outstanding Debt Securities of such series
(or of the outstanding Debt Securities of all series, in the case of defaults
under (d) or (e), except in each case a failure to pay principal, or premium, if
any, or interest on such Debt Securities. (Section 7.01)
If any Debt Securities are denominated in a coin or currency other than
that of the United States, then for purposes of determining whether the Holders
of the requisite principal amount of Debt Securities have taken any action as
described above, the principal amount of such Debt Securities shall be deemed to
be that amount of United States dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange into United States
dollars for the currency in which such Debt Securities are denominated as of the
date the taking of such action by the Holders of such requisite principal amount
is evidenced to the Trustee as provided in the Indenture.
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If any Debt Securities are original issue discount securities, then for
the purposes of determining whether the Holders of the requisite principal
amount of Debt Securities have taken any action described above, the principal
amount of such Debt Securities shall be deemed to be the portion of such
principal amount that would be due and payable at the time of the taking of such
action upon a declaration of acceleration of maturity thereof.
The Indenture requires the Company to file annually with the Trustee an
Officers' Certificate stating whether or not the signers thereof have knowledge
of any default of the Company under the Indenture and, if so, specifying each
such default of which the signers have knowledge and the nature thereof.
(Section 5.08)
Subject to the provisions of the Indenture relating to the duties of
the Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise any
of its rights or powers of the Indenture at the request, order or direction of
the Holders of the Debt Securities unless such Holders shall have offered to the
Trustee reasonable indemnity. (Sections 7.04, 8.01 and 8.02) Subject to such
provisions for indemnification and certain other rights of the Trustee, the
Indenture provides that the Holders of a majority in principal amount of the
outstanding Debt Securities of the particular series affected 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. (Sections 7.07 and 8.02)
LIMITATION ON CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
The Company may not consolidate with or merge into any corporation, or
convey or transfer its assets substantially as an entirety to any person, unless
(a) the successor corporation or transferee is a U.S. corporation that assumes
the Company's obligations on the Debt Securities and covenants under the
Indenture, and certain other conditions are met, except that no such assumption
will be required in any case where the Company transfers all or substantially
all its assets located in the United States to one or more wholly owned
Subsidiaries organized under the laws of the United States or any political
subdivision thereof; (b) the Company or the successor corporation, as the case
may be, is not, immediately after the merger or consolidation, or transfer of
assets, in default in the performance of any covenant or condition of the
Company under the Indenture; and (c) the Trustee, before executing any
supplemental indenture as required, receives, and will be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel, as conclusive
evidence that such consolidation, merger, conveyance or transfer complies with
the foregoing provisions relating to such transaction. In the case of any such
consolidation, merger, conveyance or transfer, the successor corporation will
succeed to and be substituted for the Company with the same effect as if it had
been named in the Indenture as the Company. (Article Twelve) To the extent any
such assets constitute Restricted Property, the Subsidiary to which they were
transferred would be a Restricted Subsidiary. See "Limitation on Liens."
DEFEASANCE
If so specified in the Prospectus Supplement with respect to Debt
Securities of any series, the Company, at its option, (i) will be discharged
after 91 days from any and all obligations in respect of the Debt Securities of
such series (except for certain obligations to register the transfer or exchange
of Debt Securities of such series, replace stolen, lost or mutilated Debt
Securities of such series, maintain paying agencies, and hold moneys for payment
in trust) or (ii) will not be subject to provisions of the Indenture described
above under "Limitation on Liens," "Limitation on Sale and Lease-Back" and
"Limitation on
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Consolidation, Merger and Transfer of Assets" with respect to the Debt
Securities of such series, in each case if the Company deposits irrevocably with
the Trustee in trust, money in the currency in which the Debt Securities are
payable or, in the case of Debt Securities denominated in Dollars, U.S.
Government Obligations, which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount
sufficient to pay all the principal (including any mandatory sinking fund
payments) of or premium, if any, and interest on the Debt Securities of such
series on the dates such payments are due in accordance with the terms of such
Debt Securities. In case any Debt Securities of a series are to be redeemed
prior to their Stated Maturity, the Company must have given the Trustee such
irrevocable notices and instructions as are required for redemption pursuant to
the terms of the Debt Securities of such series. To exercise any such defeasance
option, the Company is required to deliver to the Trustee an Opinion of Counsel
to the effect that (a) if the Debt Securities of such series are then listed on
the New York Stock Exchange, such Debt Securities would not be delisted as a
result of the exercise of such option and (b) the deposit and related defeasance
would not cause the Holders of such series of Debt Securities to recognize
income, gain or loss for United States Federal income tax purposes and that the
holders of such series will be subject to United States Federal income tax in
the same amounts, in the same manner and at the same times as would have been
the case if such option had not been exercised. (Sections 14.01, 14.02 and
14.03)
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Trustee
currently serves as a lender in one of the Company's existing credit facilities
and may extend credit to the Company and its Subsidiaries in the future.
DESCRIPTION OF CAPITAL STOCK AND DEPOSITARY SHARES
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
Pursuant to the Restated Articles of Incorporation of the Company, the
authorized capital stock of the Company is 91,000,000 shares, consisting of:
(a) 1,000,000 shares of Preferred Stock, par value $.10 per
share (the "Preferred Stock"), 500,000 shares of which have been
designated as Series A ESOP Convertible Preferred Stock ("Series A
Preferred Stock"); and
(b) 90,000,000 shares of Common Stock, par value $.10 per
share (the "Common Stock").
As of February 28, 1998, the Company had outstanding 29,594,943 shares
of Common Stock and 474,400 shares of Series A Preferred Stock. At February 28,
1998, there were a total of 8,485,775 shares of Common Stock available for
issuance (i) pursuant to the Company's various option, incentive, stock purchase
and other benefit plans and (ii) upon conversion of the Series A Preferred
Stock. The Company intends to seek shareholder approval at its 1998 annual
meeting of shareholders to increase the total number of shares of authorized
Common Stock to 250,000,000.
No holder of any class of the Company's capital stock is entitled to
preemptive rights.
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In general, the classes of authorized capital stock are afforded
preferences with respect to dividends and liquidation rights in the order listed
above. The descriptions set forth below do not purport to be complete and are
qualified in their entirety by reference to (i) the Restated Articles of
Incorporation and, in the case of the Series A Preferred Stock, the Company's
Statement Affecting Class or Series of Shares (the "Statement Affecting Class")
and (ii) the Bylaws of the Company as currently in effect (the "Bylaws").
COMMON STOCK
Subject to the preferential rights of the Series A Preferred Stock and
any preferential rights of any other Preferred Stock created by the Board of
Directors, each outstanding share of Common Stock is entitled to such dividends
as the Board of Directors may declare from time to time out of funds legally
available therefor. Except as hereinafter described, holders of both Common
Stock and Preferred Stock (including the Series A Preferred Stock) are entitled
to one vote for each share of Common Stock or Preferred Stock (including the
Series A Preferred Stock), as applicable, but do not have any right to cumulate
votes in the election of directors. If, however, dividend arrearages on the
Preferred Stock accumulate in amounts specified in the Restated Articles of
Incorporation, holders of the Preferred Stock have the right to elect a
specified number of directors, voting as a class, to the extent specified in the
Restated Articles of Incorporation. In the event of liquidation, dissolution or
winding-up of the Company, holders of Common Stock will be entitled to receive
on a pro rata basis any assets remaining after provision for payment of
creditors and after payment of liquidation preferences to holders of the
Preferred Stock (including the Series A Preferred Stock, holders of which are
entitled to a liquidating distribution of $200 per share plus all accumulated
and unpaid dividends thereon to the date fixed for such distribution). The
Common Stock is listed on the New York Stock Exchange, under the symbol "BTL."
The Common Stock Transfer Agent and Registrar is American Stock
Transfer and Trust Company, New York, New York.
PREFERRED STOCK
Preferred Stock Subject to Issuance
The Board of Directors of the Company is empowered, without approval of
the shareholders, to cause the Preferred Stock to be issued in one or more
series, and to determine the numbers of shares of each series and the rights,
preferences and limitations of each series. The specific matters that may be
determined by the Board of Directors include the dividend rights, redemption
rights, liquidation preferences, if any, conversion and exchange rights,
retirement and sinking fund provisions and other rights, qualifications,
limitations and restrictions of any wholly unissued series of Preferred Stock
(or of the entire class of Preferred Stock if none of such shares have been
issued), the number of shares constituting such series and the terms and
conditions of the issue thereof. The rights, preferences and limitations of any
series of Preferred Stock that the Board of Directors chooses to establish will
be set forth in an amendment to the Company's Restated Articles of
Incorporation. The particular terms of any series of Preferred Stock offered
hereby will be set forth in the Prospectus Supplement relating thereto. The
description of the terms of a particular series of Preferred Stock that will be
set forth in the applicable Prospectus Supplement does not purport to be
complete and is qualified in its entirety by reference to the amendment to the
Company's Restated Articles of Incorporation designating the terms of such
series.
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Outstanding Series A Preferred Stock
Each outstanding share of the Series A Preferred Stock is entitled to
cumulative, quarterly cash dividends when, as and if declared by the Board of
Directors, equal to $16.00 per share per annum, and no dividends may be paid on
any other class or series of stock that ranks on a parity with the Series A
Preferred Stock as to dividends unless dividends on the Series A Preferred Stock
are paid concurrently or prior thereto. The voting rights and liquidation
preference of the Series A Preferred Stock are as described above in "Common
Stock." Transfer of shares of Series A Preferred Stock may be made only to (i)
any successor to the trustee of the Company's Employee Stock Ownership Plan (the
"Plan") or (ii) any person, a transfer to whom would afford the Company a
federal income tax deduction under section 404(k) of the Internal Revenue Code
of 1986 ("Code") in the amount of the dividends paid to such person (each, a
"Permitted Transferee").
Holders of the Series A Preferred Stock may convert any or all of their
shares, at their option, into shares of Common Stock, at a conversion rate of
5.52 shares of Common Stock for each share of Series A Preferred Stock, subject
to adjustment in the case of certain dilutive events. The Company has the right
to issue cash in lieu of fractional shares. Upon conversion, the Company must
issue, together with each share of Common Stock, one right to purchase Common
Stock pursuant to a Rights Agreement between the Company and American Stock
Transfer & Trust Company. See "Rights Agreement." Shares of Series A Preferred
Stock are subject to automatic conversion in the event of transfer to any person
other than a Permitted Transferee.
The Series A Preferred Stock is redeemable, in whole or in part, at the
option of the Company for the amount payable upon liquidation. The Series A
Preferred Stock is also redeemable at the option of the holder when and to the
extent necessary for such holder to (i) provide for distributions required to be
made to participants under the Plan, (ii) make any payments of principal,
interest or premium due and payable under any indebtedness incurred by the
holder for the benefit of the Plan or (iii) meet the diversification
requirements of section 404(a)(28) of the Code. The Company may pay the
redemption price in cash or, except for a redemption pursuant to clause (iii),
in shares of Common Stock, or a combination thereof; when the Company pays in
shares, it must issue, with each such share, one right to purchase Common Stock
pursuant to the Rights Agreement.
In the event of a merger or similar business combination in which the
Company's Common Stock is exchanged solely for, or converted into, "qualified
employer securities" as defined in the Statement Affecting Class, the Series A
Preferred Stock will either (i) become preferred stock of the resulting entity
(with the same rights and preferences that it had before the transaction) or
(ii) be converted into or exchanged for the securities or cash receivable by a
holder of the number of shares of Common Stock into which the shares of Series A
Preferred Stock were convertible immediately prior to the transaction. A similar
provision for conversion applies to the Series A Preferred Stock in the event of
a merger or similar combination in which the Company's Common Stock is exchanged
for, or converted into, cash or securities that are not "qualified employer
securities." If the Company enters into an agreement providing for the latter
type of merger or combination, the holders of the Series A Preferred Stock may
elect to redeem their shares.
DEPOSITARY SHARES
General
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The Company may, at its option, elect to offer receipts for fractional
interests ("Depositary Shares") in Preferred Stock, rather than full shares of
Preferred Stock. In such event, receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent a fraction (to be set forth in the
Prospectus Supplement relating to a particular series of Preferred Stock) of a
share of a particular series of Preferred Stock, will be issued as described
below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and a U.S. bank or trust company having a combined capital
and surplus of at least $50,000,000, to be named by the Company in a Prospectus
Supplement (the "Depositary"). Subject to the terms of the proposed Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, subscription and
liquidation rights). The following summary of certain provisions of the proposed
Deposit Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the definitive,
executed Deposit Agreement, including the definitions therein of certain terms,
each of which shall be incorporated herein and in the Prospectus Supplement by
reference. Copies of the forms of definitive, executed Deposit Agreement and
Depositary Receipt will be filed as exhibits to the Registration Statement of
which this Prospectus is a part, and the following summary of the proposed terms
and conditions of the Deposit Agreement and Deposit Receipt is qualified in its
entirety by reference to such exhibits.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Receipts relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date, which will be the same date as the record date fixed by the Company for
the Preferred Stock.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Receipts
in an equitable manner, unless the Depositary determines that it is not feasible
to make such distribution, in which case the Depositary may sell such property
and distribute the net proceeds from such sale to such holders. The amount
distributed in any of the foregoing cases may be reduced by any amounts required
to be withheld by the Company or the Depositary on account of taxes.
Withdrawal of Preferred Stock
Upon surrender of Depositary Receipts at a designated office of the
Depositary, the owner of the Depositary Shares evidenced thereby will be
entitled to delivery at such office of certificates evidencing Preferred Stock
(but only in whole shares of Preferred Stock) represented by such Depositary
Shares. If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of whole shares of Preferred Stock to
be withdrawn, the Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
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Redemption of Depositary Shares
If a series of Preferred Stock represented by Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of Preferred Stock held by the Depositary. The redemption price
per Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of the Preferred Stock.
Whenever the Company redeems shares of Preferred Stock held by the Depositary,
the Depositary will redeem as of the same redemption date the number of
Depositary Shares representing shares of Preferred Stock so redeemed. If fewer
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot, pro rata or by any other equitable method as
may be determined by the Depositary.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such Preferred Stock. Each record holder of such Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of the Preferred Stock
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of the Preferred Stock represented by
such Depositary Shares in accordance with such instructions, and the Company
will agree to take all reasonable action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holder of Depositary Shares representing
such Preferred Stock.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding. No such amendment may impair
the right, subject to the terms of the Deposit Agreement, of any owner of any
Depositary Shares to surrender the Depositary Receipts evidencing such
Depositary Shares with instructions to the Depositary to deliver to the holder
the Preferred Stock and all money and other property, if any, represented
thereby, except in order to comply with mandatory provisions of applicable law.
The Deposit Agreement may be terminated only if (i) all outstanding Depositary
Shares have been redeemed or (ii) there has been a final distribution in respect
of the Preferred Stock, including in connection with any liquidation,
dissolution or winding up of the Company, and such distribution has been
distributed to the holders of Depositary Receipts.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to the Company
notice of its election to do so, and the Company may at any time remove the
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointments. Such
successor Depositary must be appointed within 60 days after delivery of the
notice of resignation or
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removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
Charges of Depositary
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Company will pay charges of the Depositary in connection with the initial
deposit of the Preferred Stock and issuance of Depositary Receipts, all
withdrawals of shares of Preferred Stock by owners of the Depositary Shares and
any redemption of the Preferred Stock. Holders of Depositary Receipts will pay
other transfer and other taxes and governmental charges and such other charges
as they are expressly provided in the Deposit Agreement to be for their
accounts.
Miscellaneous
The Depositary will forward to holders of Depositary Receipts all
reports and communications from the Company which are delivered to the
Depositary and which the Company is required or otherwise determines to furnish
to the holders of the Preferred Stock.
The obligations of the Company and the Depositary under the Deposit
Agreement will be limited to performance in good faith of the duties thereunder.
Neither the Company nor the Depositary will be obligated to prosecute or defend
any legal proceeding in respect of any Depositary Shares or Preferred Stock
unless satisfactory indemnity is furnished. The Company and the Depositary may
rely upon written advice of counsel or accountants, or upon information provided
by persons presenting Preferred Stock for deposit, holders of Depositary
Receipts or other persons believed to be competent and on documents believed to
be genuine.
PROVISIONS OF RESTATED ARTICLES OF INCORPORATION AND BYLAWS
Certain provisions of the Restated Articles of Incorporation and Bylaws
of the Company may delay or make more difficult unsolicited acquisitions or
changes of control of the Company. It is believed that such provisions will
enable the Company to develop its business in a manner that will foster its
long-term growth by affording the Board of Directors greater control in a
takeover context and thus greater flexibility to negotiate with a potential
acquiror. Such provisions may also have the effect of making it more difficult
for third parties to cause the replacement of the current management of the
Company without the concurrence of the Board of Directors. These provisions
include, among others, (i) the availability of capital stock for issuance from
time to time at the discretion of the Board of Directors (see "Authorized and
Outstanding Capital Stock"), (ii) classified Board of Directors, (iii) the
ability of the Board of Directors to increase the size of the board and to
appoint directors to fill newly created directorships, (iv) supermajority voting
requirements and (v) business combinations with interested shareholders. The
descriptions set forth herein of such provisions do not purport to be complete
and are qualified in their entirety by reference to the Restated Articles of
Incorporation and the Bylaws, which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part and incorporated
herein by reference.
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Classified Board of Directors
The Company's Bylaws provide that the Board of Directors be divided
into three classes as nearly equal in number as possible, whose three-year terms
of office expire at different times in annual succession. A classified board
makes it more difficult for shareholders to change a majority of the directors.
Number of Directors; Filling of Vacancies; Removal of Directors
The Bylaws of the Company limit the total number of directors to 13 and
provide that newly-created directorships resulting from any increase in the
authorized number of directors or any vacancy shall be filled by a vote of a
majority of directors then in office. Accordingly, the Board of Directors of the
Company may be able to prevent any shareholder from obtaining majority
representation on the Board of Directors by increasing the size of the board and
filling the newly created directorships with its own nominees. The entire Board
of Directors, any class thereof or any individual director may be removed by a
vote of shareholders only for cause, and new directors may be elected at the
same meeting. The Board of Directors may remove any director who (i) has been
judicially declared of unsound mind, (ii) has been convicted of an offense
punishable by imprisonment for more than one year or (iii) does not accept the
office within 60 days of notice of his or her selection.
Supermajority Voting Requirements
The Company's Bylaws require that any proposal to change the number,
classification or term of office of directors must receive the affirmative vote
of at least 75% of all shares outstanding as of the record date for the meeting
at which such proposal is to be voted on. In addition, any proposal relating to
the foregoing 75% share approval requirement must receive the affirmative vote
of at least 75% of all shares outstanding.
The Company's Restated Articles of Incorporation require, in regard to
the vote of the shareholders for (i) approval of any plan of merger or
consolidation, (ii) the sale of all or substantially all the Company's assets or
(iii) the adoption of any amendment to the section of the Articles of
Incorporation setting forth this requirement, not only the approval of the
holders of a majority of the outstanding Common Stock and Preferred Stock
(voting together), but also the approval of at least two-thirds of the shares
(regardless of class) represented in person or by proxy at the particular
meeting.
Business Combinations with Interested Shareholders
The Company's Restated Articles of Incorporation generally prohibit
business combinations with interested shareholders unless certain terms and
conditions are satisfied, which terms and conditions are substantially similar
to those set forth in the "business combination" provisions of the Pennsylvania
Business Corporation Law described below. See "Description of Capital Stock --
Pennsylvania Business Corporation Law."
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PENNSYLVANIA BUSINESS CORPORATION LAW
Certain provisions of the Pennsylvania Business Corporation
Law of 1988 (the "PBCL") may have the effect of deterring, delaying or
preventing an attempt by a third party to acquire control of the Company.
The "control transactions" provisions in Sections 2541 through 2548 of
the PBCL require that any person or group that acquires at least 20% of the
voting power of a corporation (a "Controlling Person or Group") give notice of
such acquisition to the other shareholders of the corporation. The corporation's
shareholders are entitled to demand payment of the fair value of their shares
from the Controlling Person or Group. The definition of "Controlling Person or
Group" excludes from calculation of the 20% requirement, inter alia, (i) shares
held continuously since January 1983, (ii) shares acquired by gift, inheritance
or bequest from a person who had acquired the shares prior to January 1983,
(iii) shares acquired pursuant to a stock split, dividend, reclassification or
similar recapitalization, (iv) shares acquired by an underwriter pursuant to a
firm commitment underwriting registered under the Securities Act of 1933, as
amended, and (v) shares held by agents, brokers, nominees, trustees and other
similar record holders for beneficial owners either who do not possess 20% of
the voting power of the corporation or who otherwise satisfy one of the
foregoing exceptions.
The "business combination" provisions in Sections 2551 through 2556 of
the PBCL prohibit the Company from engaging in any business combination (which
is defined broadly to include mergers, consolidations, share exchanges,
divisions and sales or other dispositions of assets having a value in excess of
10% or more of the assets, market value or earning power or net income of the
corporation) with an "interested shareholder" or an affiliate thereof unless (A)
the business combination or the acquisition of shares in which a person becomes
an interested shareholder is approved by the Board of Directors before the
shareholder becomes an "interested shareholder," (B) the interested shareholder
owns 80% of the corporation's outstanding voting shares and the business
combination satisfies certain "fair price" criteria and is approved by the
holders of a majority of the remaining shares, (C) the business combination is
approved by all of the holders of the Company's Common Stock, (D) the holders of
a majority of the voting shares (excluding those held by the interested
shareholder) approve the business combination at a meeting held no earlier than
five years after the interested shareholder's share acquisition date or (E) the
business combination is approved at a shareholders' meeting called for such
purpose no earlier than five years after the interested shareholder's share
acquisition date and satisfies certain "fair price" criteria. An "interested
shareholder" is any beneficial owner of 20% or more of the voting shares of a
corporation, or an affiliate of the corporation who was at any time within the
five-year period prior to the date in question a beneficial owner of 20% or more
of the voting shares of the corporation, but does not include shareholders who
were interested shareholders prior to the date of the adoption of these
provisions by the Company.
The "control share" provisions in Sections 2561 through 2568 of the
PBCL deprive any of a corporation's "Control shares" of their voting rights
unless the holders of a majority of the voting power of the corporation vote to
restore such rights in two separate votes as follows: (i) all voting shares of
the corporation and (ii) all shares of the corporation other than those held by
the Company's executive officers or directors who are also officers, certain
employee stock plans and the person acquiring the Control shares. Control shares
are those voting shares the acquisition of voting power over which would confer
on the person acquiring them, when added to all voting power of the person over
other voting shares of the corporation, the ability to cast in an election of
directors, for the first time, a percentage of the voting power of the
corporation that falls within any of the following ranges: (i) at least 20% but
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less than 33 1/3%; (ii) at least 33 1/3% but less than 50%; or (iii) at least
50%. In calculating such percentage, the following shares are excluded: (i)
voting shares beneficially owned continuously since January 1988; (ii) voting
shares beneficially owned that were acquired by gift, inheritance or bequest
from a person who had beneficially owned the shares prior to January 1988; and
(iii) shares acquired pursuant to a stock split, dividend or other similar
distribution.
The "disgorgement" provisions in Sections 2571 through 2576 of the PBCL
permit a corporation to recover from "controlling persons" any profit realized
by such controlling persons from the disposition of any equity security of the
corporation if the equity securities (i) were sold within 18 months after such
persons became "controlling persons" and (ii) had been acquired by the
controlling persons within 24 months prior, or 18 months subsequent to, the date
on which the controlling persons became "controlling persons." A controlling
person is anyone who has, offers to acquire, or publicly discloses the intention
to acquire, 20% of the voting power of the corporation, or anyone who publicly
discloses the intention to acquire control of a corporation through any means.
The provisions provide a safe harbor for shareholders who would be deemed
"controlling persons" by reason of voting or giving a proxy or consent, under
certain circumstances evidencing the lack of any intention on the part of such
shareholders to change or influence control of the corporation.
In addition to the above, the PBCL expressly permits directors of a
corporation to consider the interests of constituencies other than shareholders,
such as employees, suppliers, customers and the community, in discharging their
duties, provides that they need not, in considering the best interests of the
corporation, consider any particular constituency's interests (including the
interests of shareholders) as the dominant or controlling interest, and provides
that directors do not violate their fiduciary duty by relying on shareholders'
rights plans or other anti-takeover provisions of the PBCL.
RIGHTS AGREEMENT
On September 8, 1988, the Board of Directors of the Company declared a
dividend distribution of one Right for each outstanding share of the Common
Stock (the "Common Shares") to shareholders of record at the close of business
on September 19, 1988. Each Right entitles the registered holder to purchase
from the Company one unit consisting of one Common Share or a combination of
securities and assets of equivalent value (a "Unit"), at a Purchase Price of
$150.00 per Unit, subject to adjustment. The Purchase Price may be paid in cash
or, if the Company permits, by the delivery of Common Shares having a value at
the time of exercise equal to the Purchase Price. The description and terms of
the Rights are set forth in a Rights Agreement, dated as of January 1, 1992 (the
"Rights Agreement") between the Company and American Stock Transfer & Trust
Company, as Rights Agent.
Initially, ownership of the Rights will be evidenced by the Common
Share certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Shares and a Distribution Date will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
20% or more of the outstanding Common Shares (the "Stock Acquisition Date"), or
(ii) such date as may be determined by the Board of Directors of the Company,
which shall not be later than 65 days following the commencement of a tender
offer or exchange offer that, if consummated, would result in a person or group
beneficially owning 20% or more of the outstanding Common Shares. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Share
certificates and will be transferred with and only with such Common Share
certificates, (ii) new Common Share certificates issued after September 19, 1988
will contain a notation incorporating
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the Rights Agreement by reference, and (iii) the surrender for transfer of any
certificates for Common Shares outstanding will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificates.
The Rights are exercisable, in whole or in part, at any time after the
Distribution Date and will expire at the close of business on September 19,
1998, unless earlier redeemed by the Company as described below (the "Expiration
Date").
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, and except in connection with (i) the exercise of
employee stock options or stock appreciation rights, or the exercise, conversion
or exchange of securities outstanding on September 19, 1988 or thereafter issued
by the Company or (ii) any other benefit plan for employees or directors, Common
Shares issued after September 19, 1988 and prior to the earlier of the
Distribution Date or the Expiration Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and its Common Shares remain outstanding, (ii) a
Person becomes the beneficial owner of 20% or more of the then outstanding
Common Shares other than pursuant to (x) a tender offer or exchange offer, the
price and other terms of which are fair to all shareholders, as determined by
the Board of Directors taking into account all relevant factors, or (y) a merger
in which the Company's Common Shares do not remain outstanding or a sale by the
Company of assets or earning power aggregating more than 50% of the assets or
earning power of the Company, (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement or (iv) during
any time that there is an Acquiring Person, there occurs a reclassification of
securities, a recapitalization of the Company or a merger of the Company with
any of its subsidiaries, the effect of which is to increase by more than 1% the
Common Shares beneficially owned by any Acquiring Person, each holder of a Right
will thereafter have the right to receive, upon exercise, Common Shares (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the exercise price of the Right. In lieu of requiring
payment of the Purchase Price upon exercise of the Rights following any such
event, the Company may permit the holders simply to surrender the Rights, in
which event they will be entitled to receive Common Shares (and other property,
as the case may be), with a value of 50% of what could be purchased by payment
of the full Purchase Price. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in clauses (i) - (iv) of this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person who was
involved in the transaction giving rise to any such event will be null and void.
If the Company does not have a sufficient number of authorized Common Shares,
the Company is required to substitute value in the form of cash, property, or
debt or equity securities, or a reduction of the Purchase Price, or any
combination of the foregoing, in an aggregate amount equal to the value of the
Common Shares that would otherwise be issuable (value for these purposes being
determined after the occurrence of any of the events set forth in clauses (i) -
(iv). Rights, however, are not exercisable following the occurrence of any of
the events set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination in which
the Company is not the surviving corporation (other than a merger that is
described in, or that follows a tender offer or exchange offer described in, the
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preceding paragraph), (ii) any entity merges with or into the Company in a
transaction in which the Company is the surviving corporation and the Common
Shares of the Company are converted into or exchanged for securities of the
other entity or (iii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights that previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, Common Shares of the acquiring company, the other party to the merger
or the party receiving the greatest portion of the assets or earning power, as
the case may be, having a value equal to two times the exercise price of the
Right. Provision is made to permit surrender of the Rights in exchange for
one-half of the value otherwise purchasable. The events set forth in this
paragraph and in the preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, (ii) if holders of the Common Shares are granted certain rights or
warrants to subscribe for Common Shares or for securities convertible into
Common Shares at a price less than the current market price of the Common
Shares, or (iii) upon the distribution to holders of the Common Shares of
evidences of indebtedness, cash or assets (excluding regular quarterly
dividends) or of certain subscription rights or warrants (other than those
referred to in this paragraph). The number of Common Shares for which the Rights
are exercisable are subject to adjustment in the event that any Person becomes
an Acquiring Person.
Notwithstanding the Purchase Price adjustments described above, and
with certain other exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Common Shares will be issued upon exercise of the Rights
and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Common Shares on the last trading date prior to the date of
exercise.
At any time until the earlier of (i) 10 days following the Stock
Acquisition Date or (ii) the expiration of the Rights Agreement on September 19,
1998, the Company may redeem all, but not less than all, of the Rights at a
price of $.01 per Right. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority of
the Continuing Directors. The Board of Directors may extend the ten-day
redemption period so long as the Rights are still redeemable. Immediately upon
the action of the Board of Directors ordering redemption of the Rights, with,
where required, the concurrence of the Continuing Directors, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$.01 redemption price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but in either case shall not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any representative of the
foregoing entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for
common shares of the acquiring company as set forth above.
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Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, to make changes that do not adversely
affect the interest of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
The Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Company because (i) the Board of
Directors (under certain circumstances, with the concurrence of the Continuing
Directors) may, at its option, at any time prior to the close of business on the
earlier of (a) the tenth day following the Stock Acquisition Date or (b)
September 19, 1998, redeem all but not less than all of the then outstanding
Rights at $.01 per Right, and (ii) in any event, the Rights Agreement does not
apply to an offer which the Board of Directors determines provides fair value to
all shareholders. The Board of Directors may, as discussed above, extend the
ten-day redemption period so long as the Rights are still redeemable.
The foregoing description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement. The
Company plans to adopt a new Rights Agreement, which will become effective upon
the expiration of the existing Rights Agreement in September 1998. Except for an
increase of the Purchase Price payable upon exercise of the Rights to $250.00
per Unit, the new Rights Agreement will be similar in all material respects to
the Company's existing Rights Agreement.
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), Preferred Stock, Common Stock or other of its
securities. Warrants may be issued independently or together with any such
securities of the Company and may be attached to or separate from such
securities of the Company. The Warrants are to be issued under warrant
agreements (each a "Warrant Agreement") to be entered into between the Company
and a bank or trust company, as warrant agent (the "Warrant Agent"), all as
shall be set forth in the Prospectus Supplement relating to Warrants being
offered pursuant thereto. The description of the terms of the Warrants that is
set forth below, and the description of the terms of the Warrants that will be
set forth in the applicable Prospectus Supplement, do not purport to be complete
and are qualified in their entirety by reference to the Warrant Agreement and
warrant certificate relating to such Warrants.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the warrant certificates representing such Debt Warrants, including the
following: (i) the specific designation of such Debt Warrants; (ii) the Debt
Securities of the Company for which such Debt Warrants are exercisable; (iii)
the aggregate number of such Debt Warrants; (iv) the principal amount of Debt
Securities purchasable upon exercise of each Debt
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Warrant, and the price or prices at which such Debt Warrants will be issued; (v)
the procedures and conditions relating to the exercise of such Debt Warrants;
(vi) the designation and terms of any related Debt Securities of the Company
with which such Debt Warrants are issued, and the number of such Debt Warrants
issued with each such Debt Security; (vii) the date, if any, on and after which
such Debt Warrants and the related securities of the Company will be separately
transferable; (viii) the date on which the right to exercise such Debt Warrants
shall commence, and the date on which such right shall expire; (ix) the maximum
or minimum number of such Debt Warrants which may be exercised at any time; (x)
if applicable, a discussion of material United States Federal income tax
considerations; (xi) the offering price of the Debt Warrants; (xii) the nature
of any antidilution provisions applicable to the Debt Warrants; (xiii) any other
terms of such Debt Warrants and terms, procedures and limitations relating to
the exercise of such Debt Warrants; and (xiv) the terms of the securities of the
Company purchasable upon exercise of such Debt Warrants. Prior to the exercise
of their Debt Warrants, holders of Debt Warrants exercisable for Debt Securities
will not have any of the rights of holders of the Debt Securities purchasable
upon such exercise and will not be entitled to payments of principal of (or
premium, if any) or interest, if any, on the Debt Securities purchasable upon
such exercise.
OTHER WARRANTS
The Company may issue other Warrants. The applicable Prospectus
Supplement will describe the following terms of any such other Warrants in
respect of which this Prospectus is being delivered: (i) the title of such
Warrants; (ii) the securities (which may include Preferred Stock or Common
Stock) for which such Warrants are exercisable; (iii) the price or prices at
which such Warrants will be issued; (iv) if applicable, the designation and
terms of the Preferred Stock or Common Stock with which such Warrants are
issued, and the number of such Warrants issued with each such share of Preferred
Stock or Common Stock; (v) if applicable, the date on and after which such
Warrants and the related Preferred Stock or Common Stock will be separately
transferable; (vi) if applicable, a discussion of material United States Federal
income tax considerations; (vii) the offering price of the Warrants; (viii) the
nature of any antidilution provisions applicable to the Warrants; and (ix) any
other terms of such Warrants, including terms, procedures and limitations
relating to the exchange and exercise of such Warrants. The applicable
Prospectus Supplement will also set forth (a) the amount of securities called
for by such Warrants, and, if applicable, the amount of Warrants outstanding,
and (b) information relating to provisions, if any, for a change in the exercise
price or the expiration date of such Warrants and the kind, frequency and timing
of any notice to be given. Prior to the exercise of their Warrants for shares of
Preferred Stock or Common Stock, holders of such Warrants will not have any
rights of holders of the Preferred Stock or Common Stock purchasable upon such
exercise and will not be entitled to dividend payments, if any, or voting rights
of the Preferred Stock or Common Stock purchasable upon such exercise.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase for cash or
other consideration such principal amount or such number of securities of the
Company at such exercise price as shall in each case be set forth in, or be
determinable as set forth in, the Prospectus Supplement relating to the Warrants
offered thereby. Warrants may be exercised as set forth in the Prospectus
Supplement relating to the Warrants offered thereby at any time up to the close
of business on the expiration date set forth in such Prospectus Supplement.
After the close of business on the expiration date (or such later expiration
date as may be extended by the Company), unexercised Warrants will become void.
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Upon receipt of payment and the warrant certificate properly completed
and duly executed at the corporate trust office of the Warrant Agent or any
other office indicated in the applicable Prospectus Supplement, the Company
will, as soon as practicable, forward the securities purchasable upon such
exercise. If less than all of the Warrants represented by such warrant
certificate are exercised, a new warrant certificate will be issued for the
remaining Warrants.
MODIFICATIONS
The Debt Warrant Agreement and the terms of the Debt Warrants and the
Debt Warrant Certificates may be amended by the Company and the Debt Warrant
Agent, without the consent of the holders, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision therein or in any other manner which the Company may deem
necessary or desirable and which will not adversely affect the interests of the
holders of Debt Warrants in any material respect.
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PLAN OF DISTRIBUTION
The Company may sell any of the Securities being offered hereby in any
one or more of the following ways from time to time: (i) to or through
underwriters; (ii) through agents; (iii) through dealers; (iv) directly to
purchasers; or (v) through a combination of such methods.
The distribution of the Securities may be effected 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.
Sales of Common Stock offered hereby may be effected from time to time
in one or more transactions on the New York Stock Exchange or in negotiated
transactions or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at other negotiated prices.
Offers to purchase Securities may be solicited by agents designated by
the Company from time to time. Any such agent involved in the offer or sale of
the Securities in respect of which this Prospectus is delivered will be named,
and any commissions payable by the Company to such agent will be set forth, in
the applicable Prospectus Supplement. Unless otherwise indicated in such
Prospectus Supplement, any such agent will be acting on a reasonable best
efforts basis for the period of its appointment. Any such agent may be deemed to
be an underwriter, as that term is defined in the Securities Act, of the
Securities so offered and sold.
If Securities are sold by means of an underwritten offering, the
Company will execute an underwriting agreement with an underwriter or
underwriters at the time an agreement for such sale is reached, and the names of
the specific managing underwriter or underwriters, as well as any other
underwriters, the respective amounts underwritten and the terms of the
transaction, including commissions, discounts and any other compensation of the
underwriters and dealers, if any, will be set forth in the applicable Prospectus
Supplement which will be used by the underwriters to make resales of the
Securities in respect of which this Prospectus is being delivered to the public.
If underwriters are utilized in the sale of any Securities in respect of which
this Prospectus is being delivered, such Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at fixed public offering
prices or at varying prices determined by the underwriters at the time of sale.
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by one or more underwriters. If
any underwriter or underwriters are utilized in the sale of the Securities,
unless otherwise indicated in the applicable Prospectus Supplement, the
underwriting agreement will provide that the obligations of the underwriters are
subject to certain conditions precedent and that the underwriters with respect
to a sale of Securities will be obligated to purchase all such Offered
Securities if any are purchased.
If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Company will sell such Securities to the
dealer as principal. The dealer may then resell such Securities to the public at
varying prices to be determined by such dealer at the time of resale, or, if so
agreed, between such dealer and the Company, at a fixed offering price. Any such
dealer may be deemed to be an underwriter, as such term is defined in the
Securities Act, of the Securities so offered and sold. The name of the dealer
and the terms of the transaction will be set forth in the Prospectus Supplement
relating thereto.
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Offers to purchase Securities may be solicited directly by the Company
and the sale thereof may be made by the Company directly to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales will be described in the Prospectus Supplement relating thereto.
Securities may also be offered and sold, if so indicated in the
applicable Prospectus Supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for the Company. Any remarketing firm will
be identified and the terms of its agreement, if any, with the Company and its
compensation will be described in the applicable Prospectus Supplement.
Remarketing firms may be deemed to be underwriters, as that term is defined in
the Securities Act, in connection with the Securities remarketed thereby.
If so indicated in the applicable Prospectus Supplement, the Company
may authorize agents and underwriters to solicit offers by certain institutions
to purchase Securities from the Company at the public offering price set forth
in the applicable Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on the date or dates stated in the applicable
Prospectus Supplement. Such delayed delivery contracts will be subject to any
conditions set forth in the applicable Prospectus Supplement, which will set
forth the commission payable for solicitation of such contracts. The
underwriters and other persons soliciting such contracts will have no
responsibility for the validity or performance of any such contracts.
Agents, underwriters, dealers and remarketing firms may be entitled
under relevant agreements with the Company to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments that such agents, underwriters, dealers
and remarketing firms may be required to make in respect thereof. The terms and
conditions of such indemnification will be described in the applicable
Prospectus Supplement. Agents, underwriters, dealers and remarketing firms, and
their affiliates, may be customers of, engage in transactions with, or perform
services for, the Company and its subsidiaries in the ordinary course of
business.
Each series of Securities will be a new issue and, other than the
Common Stock which is listed on the New York Stock Exchange, will have no
established trading market. The Company may elect to list any series of
Securities on an exchange and, in the case of the Common Stock, on any
additional exchange, but, unless otherwise specified in the applicable
Prospectus Supplement, the Company shall not be obligated to do so. Any
underwriters to whom Securities are sold by the Company for public offering and
sale may make a market in such Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. Therefore, no assurance can be given as to the liquidity of the trading
market for any of the Securities. Any underwriter may engage in stabilizing
transactions, syndicate covering transactions and penalty bids in accordance
with Rule 104 under the Exchange Act. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve purchases of the
Securities in the open market after the distribution has been completed in order
to cover syndicate short positions. Penalty bids permit the Underwriters to
reclaim a selling concession from a syndicate member when the Securities
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
Securities to be higher than it would otherwise be in the absence of such
transactions. These transactions, if commenced, may be discontinued at any time.
-28-
<PAGE>
LEGAL MATTERS
Unless otherwise specified in a Prospectus Supplement relating to
particular Securities, the validity of the Securities offered hereby will be
passed upon for the Company by Drinker Biddle & Reath LLP, Philadelphia,
Pennsylvania. Certain legal matters will be passed upon for any underwriters,
dealers or agents, if any, by counsel named in the applicable Prospectus
Supplement.
EXPERTS
The consolidated financial statements and schedule of BetzDearborn Inc.
appearing in BetzDearborn Inc.'s Annual Report (Form 10-K) for the year ended
December 31, 1997 and incorporated herein by reference have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements and schedule are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
-29-
<PAGE>
================================================================================
No person is authorized in connection with any offering made hereby to
give any information or to make any representation not contained herein and, if
given or made, such information or representation must not be relied upon as
having been authorized by the Company or the Underwriters. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
security other than the Securities offered hereby, nor does it constitute an
offer to sell or a solicitation of an offer to buy any of the Securities offered
hereby to any person in any jurisdiction in which it is unlawful to make such an
offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any date subsequent to the date
hereof.
---------------------------
TABLE OF CONTENTS
Page
Available Information.........................................................
Incorporation of Certain Documents by Reference...............................
The Company...................................................................
Use of Proceeds...............................................................
Ratios of Earnings to Fixed
Charges and Earnings to
Combined Fixed Charges and
Preferred Stock Dividends...................................................
Description of Debt Securities................................................
Description of Capital Stock
and Depositary Shares........................................................
Description of Warrants.......................................................
Plan of Distribution..........................................................
Legal Matters.................................................................
Experts.......................................................................
---------------------------
$400,000,000
Debt Securities
Common Stock
Preferred Stock
Depository Shares
Warrants
BETZDEARBORN INC.
---------------------------
PROSPECTUS
MARCH 10, 1998
================================================================================
-30-
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION00,000,000
The following table sets forth the expenses (otherbthancunderwriting discounts
and commissions) expected to be incurred in connection with the
issuanceoandtdistribution of the securities being registered. Except for the
Securities and Exchange Commission filingrfee,tall amounts shown are estimates:
Registration Fee...................................................... $118,000
Rating Agency Fees.................................................... *
Accounting Fees and Expenses.......................................... *
Legal Fees and Expenses............................................... *
Blue Sky Fees and Expenses (including legal fees)..................... *
Printing and Engraving Expenses....................................... *
Fees and Expenses of Trustees......................................... *
NYSE Listing Fee...................................................... *
Transfer Agent and Registrar.......................................... *
Miscellaneous......................................................... *
--------
Total............................................................ $ *
========
- ----------------------
* To be filed by amendment.
II-1
<PAGE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
INDEMNIFICATION
Third Party Actions. The Company's Bylaws provide that the Company
shall indemnify any director or officer of the Company 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 by or in the right of the Company) by reason of the fact
that he or she is or was an authorized representative of the Company, which
means a director, officer, employee or agent of the Company, or a person who is
or was serving at the request of the Company 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 or her in
connection with such action, suit or proceeding if he or she 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 Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his or her conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, 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 that he reasonably believed to be in, or not opposed to,
the best interest of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Derivative Actions. The Company's Bylaws also provide that the Company
shall indemnify any director or officer of the Company 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 Company to procure a judgment in its favor by
reason of the fact that he or she is or was an authorized representative of the
Company, against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with the defense or settlement of such
action or suit if he or she acted in good faith and in a manner that he or she
reasonably believed to be in, or not opposed to, the best interests of the
Company and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his or her duty to the
Company unless and only to the extent that a court 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 such
expenses as the court shall deem proper.
Employees and Agents. Authorized representatives of the Company who
neither were nor are directors or officers of the Company, who have been
successful on the merits or otherwise in defense of any action, suit or
proceeding covered by the other indemnification provisions of the Bylaws or in
defense of any claim, issue or matter therein, are entitled to indemnification
by the Company against expenses (including attorneys' fees) actually and
reasonably incurred by them in connection therewith. The Company also has
discretion to indemnify such authorized representatives in any other
circumstances to any extent if the Company would be required by the other
indemnification provisions of the Bylaws to indemnify such authorized
representatives in such circumstances to such extent if they were or had been
directors or officers of the Company.
Expense of Litigation. Expenses incurred by any director, officer,
employee or agent in defending a civil or criminal action, suit or proceeding
covered by the indemnification provisions of the Bylaws may be paid by the
Company in advance of final disposition of such action, suit or proceeding
II-2
<PAGE>
upon receipt of an undertaking by or on behalf of such person to repay such
amount if it shall ultimately be determined such person is not entitled to be
indemnified by the Company.
Bylaw Provisions Not Exclusive. The provisions of the Bylaws relating
to indemnification and the liability of directors are not exclusive of any other
rights to which a person seeking indemnification or advancement of expenses may
be entitled under any other provision of the Bylaws, or any agreement, vote of
shareholders, vote of directors or otherwise both as to acts or failure to act
of such person in his or her official capacity and as to acts or failure to act
in another capacity while holding office. The Company has the fullest authority
to indemnify any such director, officer, employee or agent permitted under the
laws of the Commonwealth of Pennsylvania; provided, however, that no
indemnification is available in any case where the act or failure to act giving
rise to the claim for indemnification is finally determined by a court to have
constituted willful misconduct or recklessness.
LIMITATION OF LIABILITY
Pursuant to the Company's Bylaws, no director, including a director who
is also an officer, of the Company shall be personally liable for monetary
damages for any action taken, or any failure to take any action in his or her
capacity as a director, including his or her duties as a member of any committee
of the Board of Directors upon which he or she may serve unless: (i) the
director has breached or failed to perform his or her duties as a director in
good faith, in a manner he or she reasonably believed to be in the best interest
of the Company and with such care, including reasonable inquiry, skill and
diligence, as a person of ordinary prudence would use under similar
circumstances; and (ii) such breach or failure to perform his or her duties
constitutes self-dealing, willful misconduct or recklessness. Absent a breach by
a director of his or her duty as a fiduciary to the Company, lack of good faith,
or self-dealing, the acts of or failure to act by a director in his or her
capacity as a director shall be presumed to be in the best interest of the
Company.
In addition, the PBCL permits the Company to provide similar
indemnification to employees and agents who are not directors or officers. The
determination of whether an individual meets the applicable standard of conduct
may be made by the disinterested directors, independent legal counsel or the
shareholders. The PBCL also permits indemnification in connection with a
proceeding brought by or in the name of the Company to procure a judgment in its
favor.
The Company maintains directors' and officers' liability insurance that
covers the officers and directors of the Company.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to directors, officers,
and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Number Exhibit
- ------ -------
<S> <C>
1.1 Form of Debt Security Underwriting Agreement**
1.2 Form of Equity Underwriting Agreement**
1.3 Form of Distribution Agreement**
3.1 Restated Articles of Incorporation of the Company (incorporated herein by reference to
Exhibit 3 to the Company's
Report on Form 10-K for the fiscal year ended December 31, 1988)
(SEC File No. 0-2085)
3.3 Bylaws of the Company (incorporated herein by reference to Exhibit 3 to the Company's
Report on Form 10-K for the fiscal year ended December 31, 1988)
(SEC File No. 0-2085)
4.1 Statement Affecting Class or Series of Shares of the Company, dated June 19,
1989
4.2 Specimen of Common Stock Certificate (incorporated herein by reference
to Item 2 of the Company's Registration Statement on Form 8-A filed
with the Securities and Exchange Commission on November 23, 1992) (SEC
File No. 1-11558)
4.3 Form of Preferred Stock Certificate**
4.4 Form of Indenture between the Company and The Bank of New York, as Trustee
4.5 Form of Debt Securities**
4.6 Form of Warrants**
4.7 Form of Warrant Agreement**
4.8 Form of Deposit Agreement**
4.9 Form of Depositary Receipt**
4.10 Rights Agreement, dated as of January 1, 1992, between the Company and American
Stock Transfer and Trust Company (incorporated herein by
reference to Exhibit 1 to the Company's Current Report on Form
8-K filed with the Securities and Exchange Commission on
September 15, 1988) (SEC File No. 0-2085)
4.11 Rights Agreement, dated as of February 11, 1998, between the Company and American
Stock Transfer and Trust Company (incorporated herein by reference to Exhibit 4.1 to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997)
5 Opinion of Drinker Biddle & Reath LLP as to legality of the Securities*
12 Statement re: Computation of Ratios of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends
23.1 Consent of Ernst & Young LLP
23.3 Consent of Drinker Biddle & Reath LLP (contained in their opinion to be filed by
amendment as Exhibit 5)
24 Powers of attorney (on signature page hereof)
25 Form T-1 Statement of Eligibility of The Bank of New York, as Trustee under the
Indenture
</TABLE>
- ----------------------
* To be filed by amendment.
II-4
<PAGE>
** The form or forms of Debt Security Underwriting Agreement, Equity
Underwriting Agreement, Distribution Agreement, Preferred Stock
Certificate, Debt Securities, Warrant, Warrant Agreement, Deposit Agreement
and Depositary Receipts with respect to each particular offering of Debt
Securities, Common Stock, Preferred Stock, Warrants or Depositary Receipts,
as applicable, will be filed as an exhibit to a Report on Form 8-K and
incorporated herein by reference.
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent 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 with or furnished to
the Commission 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) Filings incorporating Subsequent Exchange Act Documents by Reference. The
undersigned registrant hereby further 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 15(d) of the
II-5
<PAGE>
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Request for Acceleration of Effective Date. 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.
(i) Rule 430A. The undersigned registrant hereby undertakes that:
(1) 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 shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
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-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Trevose, Commonwealth of Pennsylvania, on the 9th day
of March, 1998.
BETZDEARBORN INC.
By: /s/ William R. Cook
-----------------------------
William R. Cook
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints George L. James III and Linda R. Hansen,
and each of them, his or her true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead in any and all capacities, to sign any or all amendments
and supplements to this Registration Statement on Form S-3 (including but not
limited to post-effective amendments and prospectus supplements) and any
subsequent Registration Statements to be filed pursuant to Rule 462(b) of the
Securities Act of 1933, as amended (the "Securities Act") (or any successor
thereto), for the purpose of registering under the Securities Act and to file
the same, with all exhibits thereto, and other documents in connection therewith
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agent, or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 9th day of March, 1998.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ William R. Cook Chairman, President and Chief Executive
- -------------------------------- Officer (Principal Executive Officer)
William R. Cook
II-7
<PAGE>
/s/ George L. James III Senior Vice President and Chief Financial Officer
- -------------------------------- (Principal Financial and Accounting Officer)
George L. James III
/s/ John W. Boyer, Jr. Director
- --------------------------------
John W. Boyer, Jr.
/s/ Patrick F. Brennan Director
- --------------------------------
Patrick F. Brennan
/s/ Carolyn S. Burger Director
- --------------------------------
Carolyn S. Burger
/s/ John G. Drosdick Director
- --------------------------------
John G. Drosdick
/s/ Alan R. Hirsig Director
- --------------------------------
Alan R. Hirsig
/s/ John F. McCaughan Director
- --------------------------------
John F. McCaughan
/s/ John Quarles Director
- --------------------------------
John Quarles
/s/ John A. H. Shober Director
- --------------------------------
John A. H. Shober
/s/ Geoffrey Stengel, Jr. Director
- --------------------------------
Geoffrey Stengel, Jr.
/s/ Robert L. Yohe Director
- --------------------------------
Robert L. Yohe
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Exhibit
- ------ -------
<S> <C>
1.1 Form of Debt Security Underwriting Agreement**
1.2 Form of Equity Underwriting Agreement**
1.3 Form of Distribution Agreement**
3.1 Restated Articles of Incorporation of the Company (incorporated
herein by reference to Exhibit 3 to the Company's
Report on Form 10-K for the fiscal year ended December 31,
1988) (SEC File No. 0-2085)
3.3 Bylaws of the Company (incorporated herein by reference to
Exhibit 3 to the Company's Report on Form 10-K for the fiscal
year ended December 31, 1988) (SEC File No. 0-2085)
4.1 Statement Affecting Class or Series of Shares of the Company,
dated June 19, 1989
4.2 Specimen of Common Stock Certificate (incorporated herein by
reference to Item 2 of the Company's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission on
November 23, 1992) (SEC File No. 1-11558)
4.3 Form of Preferred Stock Certificate**
4.4 Form of Indenture between the Company and The Bank of New
York, as Trustee
4.5 Form of Debt Securities**
4.6 Form of Warrants**
4.7 Form of Warrant Agreement**
4.8 Form of Deposit Agreement**
4.9 Form of Depositary Receipt**
4.10 Rights Agreement, dated as of January 1, 1992, between the
Company and American Stock Transfer and Trust Company
(incorporated herein by reference to Exhibit 1 to the Company's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 15, 1988)
(SEC File No. 0-2085)
4.11 Rights Agreement, dated as of February 11, 1998, between the
Company and American Stock Transfer and Trust Company
(incorporated herein by reference to Exhibit 4.1 to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997)
5 Opinion of Drinker Biddle & Reath LLP as to legality of the
Securities*
12 Statement re: Computation of Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed Charges and Preferred
Stock Dividends
23.1 Consent of Ernst & Young LLP
23.3 Consent of Drinker Biddle & Reath
LLP (contained in their opinion to
be filed by amendment as Exhibit 5)
24 Powers of attorney (on signature page hereof)
II-9
<PAGE>
25 Form T-1 Statement of Eligibility of The Bank of New York, as
Trustee under the Indenture
</TABLE>
- ----------------------
* To be filed by amendment.
** The form or forms of Debt Security Underwriting Agreement, Equity
Underwriting Agreement, Distribution Agreement, Preferred Stock
Certificate, Debt Securities, Warrant, Warrant Agreement, Deposit Agreement
and Depositary Receipts with respect to each particular offering of Debt
Securities, Common Stock, Preferred Stock, Warrants or Depositary Receipts,
as applicable, will be filed as an exhibit to a Report on Form 8-K and
incorporated herein by reference.
II-10
STATEMENT AFFECTING CLASS OR SERIES
OF SHARES OF
BETZ LABORATORIES, INC.
In compliance with the requirements of Section 602 of the Pennsylvania
Business Corporation Law approved the 5th day of May, 1933, P.L. 364, as
amended, the undersigned corporation hereby certifies under its corporate seal
that:
1. The name of the Corporation is Betz Laboratories, Inc.
2. The resolution establishing and designating the new series Preferred
Shares and fixing and determining the relative rights and preferences of such
series, set forth in full is as follows:
There is hereby established a series of Preferred Shares authorized by
Article 5th of the Articles of Incorporation of the Corporation (such class of
Preferred Shares being hereinafter called "Preferred Stock"). The voting rights,
designation, preferences, qualifications, privileges, limitations, options,
conversion rights and other special rights, if any, of such series not set forth
in the Articles of Incorporation of the Corporation are as follows:
Section 1. Designation and Amount; Special Purpose Restricted Transfer
Issue.
(A) The shares of such series shall be designated as "Series A ESOP
Convertible Preferred Stock" ("Series A Preferred
<PAGE>
Stock") and the number of shares constituting such series shall be 500,030.
(B) Shares of Series A Preferred Stock shall be issued originally to
Mellon Bank, N.A., as trustee (the "Trustee") of the Employee Stock Ownership
Plan of the Corporation (the "Plan"). The Series A Preferred Stock shall be
transferable without consequence to any successor trustee under the Plan or to
any other person if the Corporation would be allowed a deduction for federal
income tax purposes, pursuant to Section 404(k) of the Internal Revenue Code of
1986 or any successor provision, in the full amount of the dividends paid on the
Series A Preferred Stock to such other person. Such transferee is hereinafter
referred to as a permitted transferee under the Plan. All references to the
holder of shares of Series A Preferred Stock shall mean the Trustee or any
permitted transferee under the Plan. In the event of any transfer of record
ownership of shares of Series A Preferred Stock to any person other than a
permitted transferee under the Plan, the shares of Series A Preferred Stock so
transferred, upon such transfer and without any further action by the
Corporation or the holder thereof, shall be automatically converted into Common
Shares of the Corporation (hereinafter referred to as shares of Common Stock) on
the terms otherwise provided for the conversion of shares of Series A Preferred
Stock into shares of Common Stock pursuant to Section 5 hereof and no such
transferee shall have any of the voting rights, preferences, qualifications,
privileges, limitations, options, conversion
-2-
<PAGE>
rights and other special rights, if any, ascribed to shares of Series A
Preferred Stock hereunder but, rather, only the powers and rights pertaining to
the Common Stock into which such shares of Series A Preferred Stock shall be so
converted. In the event of such a conversion, the transferee of the shares of
Series A Preferred Stock shall be treated for all purposes as the record holder
of the shares of Common Stock into which such shares of Series A Preferred Stock
have been automatically converted as of the date of such transfer and shall be
deemed, for purposes of Section 5 hereof, to have surrendered the certificates
for the Series A Preferred Stock so converted. Certificates representing shares
of Series A Preferred Stock shall bear a legend to reflect the foregoing
provisions. Notwithstanding the foregoing provisions of this paragraph (B) of
Section 1, shares of Series A Preferred Stock (i) may be converted into shares
of Common Stock as provided by Section 5 hereof and the shares of Common Stock
issued upon such conversion may be transferred by the holder thereof as
permitted by law (and the certificates therefor shall be so legended) and (ii)
shall be redeemable by the Corporation upon the terms and conditions provided by
Sections 6, 7 and 8 hereof.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series A Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available
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therefor, cash dividends ("Preferred Dividends") in an amount per share equal to
$16.00 per share per annum, and no more, payable quarterly in arrears,
one-quarter on the 14th day of September, one-quarter on the 14th day of
December, one-quarter on the 14th day of March and one-quarter on the 14th day
of June of each year (each a "Dividend Payment Date") commencing on September
14, 1989, to holders of record at the start of business on such Dividend Payment
Date. In the event that any Dividend Payment Date shall fall on any day other
than a "Business Day" (as hereinafter defined), the dividend payment otherwise
due on such Dividend Payment Date shall be paid on the Business Day immediately
preceding such Dividend Payment Date to holders of record at the start of
business on such Business Day. Preferred Dividends shall be cumulative on
outstanding shares of Series A Preferred Stock from the date of issuance of such
shares of Series A Preferred Stock. Preferred Dividends shall accrue on a daily
basis whether or not the Corporation shall have the legal ability to declare
dividends, but Preferred Dividends accrued after issuance on the shares of
Series A Preferred Stock for any period less than a full quarterly period
between Dividend Payment Dates shall be computed on the basis of a 360-day year
of 30-day months. Accrued but unpaid Preferred Dividends shall cumulate as of
the Dividend Payment Date on which they first become payable, but no interest
shall accrue on accumulated but unpaid Preferred Dividends.
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(B) So long as any shares of Series A Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set apart for payment on
any other class or series of stock ranking on a parity with the Series A
Preferred Stock as to dividends unless there shall also be or have been declared
and paid on the Series A Preferred Stock dividends for all dividend payment
periods of the Series A Preferred Stock ending on or before the dividend payment
date of such parity stock, ratably in proportion to the respective amounts of
dividends accumulated and unpaid through such dividend period on the Series A
Preferred Stock and accumulated and unpaid on such parity stock through the
dividend payment period on such parity stock next preceding such dividend
payment date. In the event that full cumulative dividends on the Series A
Preferred Stock have not been declared and paid or set apart for payment when
due, the Corporation shall not declare or pay or set apart for payment any
dividends or make any other distributions on, or make any payment on account of
the purchase, redemption or other retirement of, any other class of stock or
series thereof of the Corporation ranking, as to dividends or as to
distributions in the event of a liquidation or dissolution of the Corporation,
junior to the Series A Preferred Stock until full cumulative dividends on the
Series A Preferred Stock shall have been paid or declared and set apart for
payment; provided, however, that the foregoing shall not apply to (i) any
dividend payable solely in any shares of any stock ranking, as to dividends and
as to distributions in the event of a liquidation
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or dissolution of the Corporation, junior to the Series A Preferred Stock or
(ii) the acquisition of shares of any stock ranking, as to dividends or as to
distributions in the event of a liquidation or dissolution of the Corporation,
junior to the Series A Preferred Stock in exchange solely for shares of any
other stock ranking, as to dividends and as to distributions in the event of a
liquidation or dissolution of the Corporation, junior to the Series A Preferred
Stock.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the voting rights provided for in Article 5th - Part I, Section
5 of the Corporation's Articles of Incorporation.
Section 4. Liquidation or Dissolution.
(A) Upon any voluntary or involuntary liquidation or dissolution of the
Corporation, the holders of Series A Preferred Stock shall be entitled to
receive out of assets of the Corporation which remain after satisfaction in full
of all valid claims of creditors of the Corporation and which are available for
payment to stockholders, and subject to the rights of the holders of any stock
of the Corporation ranking senior to or on a parity with the Series A Preferred
Stock in respect of distributions upon liquidation or dissolution of the
Corporation, before any amount shall be paid or distributed among the holders of
Common Stock or any other shares ranking junior to the Series A Preferred Stock
in respect of distributions upon liquidation or dissolution of the Corporation,
liquidating distributions in the
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amount of $200 per share, plus an amount equal to all accumulated and unpaid
dividends thereon to the date fixed for distribution, and no more. If upon any
liquidation or dissolution of the Corporation, the amounts payable with respect
to the Series A Preferred Stock and any other stock ranking as to any such
distribution on a parity with the Series A Preferred Stock are not paid in full,
the holders of the Series A Preferred Stock and such other stock shall share
ratably in any distribution of assets in proportion to the full respective
preferential amounts to which they are entitled.
(B) Neither the consolidation of the Corporation with or the merger of
the Corporation with or into any other corporation or corporations, nor the
consolidation of any other corporation with or the merger of any other
corporation with or into the Corporation, nor the sale, lease, exchange or other
transfer of all or any portion of the assets of the Corporation, shall be deemed
to be a liquidation or dissolution of the Corporation for purposes of this
Section 4, but the holders of Series A Preferred Stock shall nevertheless be
entitled in the event of any such merger or consolidation to the rights, if any,
provided by Section 8 hereof.
(C) Written notice of any voluntary or involuntary liquidation or
dissolution of the Corporation, stating the payment date or dates when, and the
place or places where, the amounts distributable to holders of Series A
Preferred Stock in such circumstances shall be payable, shall be given by first-
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class mail, postage prepaid, mailed not less than twenty (20) days prior to any
payment date stated therein, to the holders of Series A Preferred Stock, at the
address shown on the books of the Corporation or any transfer agent for the
Series A Preferred Stock.
Section 5. Conversion into Common Stock.
(A) A holder of a share or shares of Series A Preferred Stock shall be
entitled, at any time prior to the close of business on the date fixed for
redemption of such shares pursuant to Sections 6, 7 and 8 hereof, to cause any
or all of such shares to be converted into shares of Common Stock, initially at
a conversion rate equal to 2.76 shares of Common Stock for each share of Series
A Preferred Stock so converted, which conversion rate is subject to adjustment
as the Conversion Price is adjusted as hereinafter provided. For purposes hereof
the term "Conversion Price" shall initially mean the amount obtained by dividing
$200 by 2.76 and thereafter shall be adjusted as hereinafter provided.
(B) Any holder of a share or shares of Series A Preferred Stock
desiring to convert such share or shares into shares of Common Stock shall
surrender the certificate or certificates representing the shares of Series A
Preferred Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), at
the principal executive office of the Corporation or the offices of the transfer
agent for the Series A
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Preferred Stock or such office or offices in the continental United States of an
agent for conversion as may from time to time be designated by notice to the
holders of the Series A Preferred Stock by the Corporation or the transfer agent
for the Series A Preferred Stock, accompanied by written notice of conversion.
Such notice of conversion shall specify (i) the number of shares of Series A
Preferred Stock to be converted and the name or names in which such holder
wishes the certificate or certificates for Common Stock and for any shares of
Series A Preferred Stock not to be so converted to be issued and (ii) the
address to which such holder wishes delivery to be made of such new certificates
to be issued upon such conversion.
(C) Upon surrender of a certificate representing a share or shares of
Series A Preferred Stock for conversion, the Corporation shall issue and send by
hand delivery (with receipt to be acknowledged) or by first class mail, postage
prepaid, to the holder thereof or to such holder's designee, at the address
designated by such holder, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled upon conversion.
In the event that there shall have been surrendered a certificate or
certificates representing shares of Series A Preferred Stock only part of which
are to be converted, the Corporation shall issue and deliver to such holder or
such holder's designee a new certificate or certificates representing the number
of shares of Series A Preferred Stock which shall not have been converted.
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(D) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Series A Preferred Stock into shares of Common Stock
made at the option of the holder thereof shall be effective as of the earlier of
(i) the delivery to such holder or such holder's designee of the certificates
representing the shares of Common Stock issued upon conversion thereof or (ii)
the commencement of business on the second business day after the surrender of
the certificate or certificates for the shares of Series A Preferred Stock to be
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto) as provided herein.
On and after the effective date of conversion, the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock, but no
allowance or adjustment shall be made in respect of dividends payable to holders
of Common Stock if the record date for such dividends is prior to such effective
date. The Corporation shall not be obligated to pay to such persons any
dividends which shall have been declared and shall be payable to holders of
shares of Series A Preferred Stock on a Dividend Payment Date if such Dividend
Payment Date for such dividend is subsequent to the effective date of conversion
of such shares.
(E) The Corporation shall not be obligated to deliver to holders of
Series A Preferred Stock any fractional share of shares of Common Stock issuable
upon any conversion of such
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shares of Series A Preferred Stock, but in lieu thereof may make a cash payment
in respect thereof in any manner permitted by law.
(F) Whenever the Company shall issue shares of Common Stock upon
conversion of shares of Series A Preferred Stock as contemplated by this Section
5, the Company shall issue together with each such share of Common Stock one
right to purchase Common Stock of the Company (or other securities in lieu
thereof) pursuant to the Rights Agreement dated as of September 8, 1988 between
the Company and Mellon Bank (East) N.A., as Rights Agent, as such agreement may
be from time to time amended (the "Rights Agreement"), or any rights issued to
holders of Common Stock of the Company in addition thereto or in replacement
therefor, whether or not such rights shall be exercisable at such time, but only
if such rights are issued and outstanding and held by other holders of Common
Stock of the Company at such time and have not expired.
(G) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock, solely for issuance upon the
conversion of shares of Series A Preferred Stock as herein provided, free from
any preemptive rights, such number of shares of Common Stock as shall from time
to time be issuable upon the conversion of all the shares of Series A Preferred
Stock then outstanding. Nothing contained herein shall preclude the Corporation
from issuing shares of Common Stock held in its treasury upon the conversion of
shares of Series A Preferred Stock into Common Stock pursuant to the
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terms hereof. The Corporation shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all requirements as to registration or
qualification of the Common Stock, in order to enable the Corporation lawfully
to issue and deliver to each holder of record of Series A Preferred Stock such
number of shares of its Common Stock as shall from time to time be sufficient to
effect the conversion of all shares of Series A Preferred Stock then outstanding
and convertible into shares of Common Stock.
Section 6. Redemption at the Option of the Corporation.
(A) The Series A Preferred Stock shall be redeemable to the extent
provided in this Section 6 and in Sections 7 and 8 below and not otherwise.
(B) The Series A Preferred Stock shall be redeemable, in whole or in
part, at the option of the Corporation at any time on or after June 19, 1992,
for the amount payable in respect of such shares upon liquidation of the
Corporation pursuant to Section 4 hereof. Payment of the redemption price shall
be made by the Corporation in cash or shares of Common Stock, or a combination
thereof, as permitted by paragraph (E) of this Section 6. From and after the
date fixed for redemption, dividends on shares of Series A Preferred Stock
called for redemption shall cease to accrue, such shares shall no longer be
deemed to be outstanding and all rights in respect of such shares shall cease,
except the right to receive the redemption price.
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If less than all of the outstanding shares of Series A Preferred Stock are to be
redeemed, the Corporation shall either redeem a portion of the shares of each
holder determined pro rata based on the number of shares held by each holder or
shall select the shares to be redeemed by lot, as may be determined by the
Corporation.
(C) The Corporation may, at its option, elect to redeem any or all of
the shares of Series A Preferred Stock notwithstanding that such redemption
takes place prior to June 19, 1992 for the amount payable in respect of such
shares upon liquidation of the Corporation pursuant to Section 4 hereof, which
amount shall be payable by the Corporation in cash or shares of Common Stock, or
a combination thereof, as permitted by paragraph (E) of this Section 6, upon the
occurrence of any of the following events: (i) In the event of a change in the
federal tax law of the United States of America which has the effect of
precluding the Corporation from claiming all or any portion of the tax
deductions for dividends paid on the Series A Preferred Stock when such
dividends are used as provided under Section 404(k)(2) of the Internal Revenue
Code of 1986, as amended and in effect on the date shares of Series A Preferred
Stock are initially issued; (ii) In the event the last reported sales prices,
regular way, of a share of Common Stock, as reported on the principal national
securities exchange on which such stock is listed or admitted to trading that is
also the principal market for the Common Stock or, if the principal market
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for the Common Stock is not a national securities exchange, on the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or, if the Common Stock is not quoted on such
National Market System, the average of the closing bid and asked prices in the
over-the-counter market as reported by NASDAQ, for at least twenty (20) trading
days within a period of thirty (30) consecutive trading days ending within five
(5) days of the notice of redemption, equals or exceeds one hundred fifty
percent (150%) of the Conversion Price in effect during such period (giving
effect in making such calculation to any adjustments required by Section 9
hereof); or (iii) In the event that the Plan is terminated in accordance with
its terms.
(D) Unless otherwise required by law, the Corporation shall cause
notice of any redemption under this Section 6 to be sent to the holders of
Series A Preferred Stock at the address shown on the books of the Corporation or
any transfer agent for the Series A Preferred Stock by first class mail, postage
prepaid, mailed not less than thirty (30) days nor more than sixty (60) days
prior to the redemption date. Each such notice shall state: (i) the redemption
date; (ii) the total number of shares of the Series A Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the
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redemption price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemption date; and (vi) the conversion rights of the shares to
be redeemed, the period within which conversion rights may be exercised, which
period shall not end prior to the redemption date, and the Conversion Price and
number of shares of Common Stock issuable upon conversion of a share of Series A
Preferred Stock at the time. Upon surrender of the certificate for any shares so
called for redemption and not previously converted (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice shall
so state), such shares shall be redeemed by the Corporation at the date fixed
for redemption and at the redemption price set forth in this Section 6.
(E) The Corporation, at its option, may make payment of the redemption
price payable upon any redemption of shares of Series A Preferred Stock in cash
or in shares of Common Stock, or in a combination of such shares and cash, any
such shares of Common Stock to be valued for such purposes at their Fair Market
Value (as defined in paragraph (H) of Section 9 hereof). Whenever the Company
shall issue shares of Common Stock in payment of all or a portion of the
redemption price pursuant to this paragraph, the Company shall issue together
with each such share of Common Stock one right to purchase Common Stock of the
Company (or other securities in lieu thereof) pursuant to the Rights Agreement,
or any rights issued to holders of Common Stock of the Company in addition
thereto or in replacement therefor,
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whether or not such rights shall be exercisable at such time, but only if such
rights are issued and outstanding and held by other holders of Common Stock of
the Company at such time and have not expired.
Section 7. Redemption at the Option of the Holder.
Shares of Series A Preferred Stock shall be redeemed by the Corporation
at the option of the holder at any time and from time to time when and to the
extent necessary: (i) for such holder to provide for distributions required to
be made to participants under, or to satisfy an investment election provided to
participants in accordance with, the Plan, or any successor plan; (ii) for such
holder to make any payments of principal, interest or premium due and payable
(whether scheduled or upon acceleration) under the Note Purchase Agreement among
the Trustee, Prudential Insurance Company of America or one of its affiliates or
any successor lender (collectively, the "Lender") and the Corporation or any
other indebtedness incurred by the holder for the benefit of the Plan; or (iii)
for such holder to meet the diversification requirements set forth in Section
404(a)(28) of the Internal Revenue Code as amended. Such shares shall be
redeemed by the Corporation for cash or, except for a redemption pursuant to
clause (iii) above, if the Corporation so elects, in shares of Common Stock or a
combination of such shares and cash, any such shares of Common Stock to be
valued (as defined in paragraph (H) of Section 9 hereof), at a redemption price
equal to the Fair Market Value (as defined in paragraph (H)
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of Section 9 hereof) of the shares of Series A Preferred Stock to be redeemed,
upon written notice by the holder to the Corporation, given not less than five
(5) business days prior to the date fixed by the holder in such notice for such
redemption, setting forth (i) the redemption date; (ii) the number of shares of
Series A Preferred Stock to be redeemed; (iii) the reason for the redemption;
and (iv) the holder's certification that the reason for the redemption and the
extent of the redemption are proper under this Section 7. If the Company makes
payment of all or a portion of the redemption price in shares of Common Stock,
the holder shall be entitled to receive, together with each share of Common
Stock, one right to purchase Common Stock (or other securities in lieu thereof)
as provided in Section 6(E) hereof.
Section 8. Consolidation, Merger, etc.
(A) In the event that the Corporation shall consummate any
consolidation or merger or similar business combination pursuant to which the
outstanding shares of the Corporation's Common Stock are by operation of law
exchanged solely for or changed, reclassified or converted solely into stock of
the Corporation or any successor or resulting corporation or other enterprise
that constitutes "employer securities" with respect to a holder of Series A
Preferred Stock within the meaning of Section 409(e) of the Internal Revenue
Code of 1986, as amended, and "qualifying employer securities" within the
meaning of Section 407(e)(5) of the Employee Retirement Income Security Act of
1974, as amended, or any successor provisions of law
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("employer securities" and "qualified employer securities" being hereinafter
collectively referred to as "qualified employer securities"), and, if
applicable, for a cash payment in lieu of fractional shares, if any, the shares
of Series A Preferred Stock of such holder shall, in connection with such
consolidation, merger or similar business combination, be assumed by and shall
become preferred stock of the Corporation or such successor or resulting
corporation or other enterprise, having in respect of such corporation or other
enterprise, insofar as possible, the same voting rights, designations,
preferences, qualifications, privileges, limitations, options, conversion rights
and other special rights, if any (including the redemption rights provided by
Sections 6, 7 and 8 hereof), that the Series A Preferred Stock had immediately
prior to such transaction, except that after such transaction each share of the
Series A Preferred Stock shall be convertible, otherwise on the terms and
conditions provided by Section 5 hereof, into the number and kind of qualified
employer securities so receivable by a holder of the number of shares of Common
Stock into which such shares of Series A Preferred Stock could have been
converted immediately prior to such transaction; provided, however, that if by
virtue of the structure of such transaction, a holder of Common Stock is
required to make an election with respect to the nature and kind of
consideration to be received in such transaction, which election cannot
practicably be made by the holders of the Series A Preferred Stock, then the
shares of Series A Preferred Stock shall, by
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virtue of such transaction and on the same terms as apply to the holders of
Common Stock, be converted into or exchanged for the aggregate amount of stock,
securities, cash or other property (payable in kind) receivable by a holder of
the number of shares of Common Stock into which such shares of Series A
Preferred Stock could have been converted immediately prior to such transaction
if such holder of Common Stock failed to exercise any rights or election to
receive any kind or amount of stock, securities, cash or other property (other
than such qualifying employer securities and a cash payment, if applicable, in
lieu of fractional shares) receivable upon such transaction (provided that, if
the kind or amount of qualifying employer securities receivable upon such
transaction is not the same for each non-electing share, then the kind and
amount so receivable upon such transaction for each non-electing share shall be
the kind and amount so receivable per share by the plurality of the non-electing
shares). The rights of the Series A Preferred Stock as preferred stock of any
such successor or resulting corporation shall successively be subject to
adjustments pursuant to Section 9 hereof after any such transaction as nearly
equivalent as practicable to the adjustment provided for by such section prior
to such transaction. The Corporation shall not consummate any such merger,
consolidation or similar transaction unless all then outstanding shares of
Series A Preferred Stock shall be assumed and authorized by the successor or
resulting corporation as aforesaid.
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(B) In the event that the Corporation shall consummate any
consolidation or merger or similar business combination pursuant to which the
outstanding shares of Common Stock are by operation of law exchanged for or
changed, reclassified or converted into other stock or securities or cash or any
other property, or any combination thereof, other than any such consideration
which is constituted solely of qualifying employer securities (as referred to in
paragraph (A) of this Section 8) and cash payments, if applicable, in lieu of
fractional shares, outstanding shares of Series A Preferred Stock shall, without
any action on the part of the Corporation or any holder thereof (but subject to
paragraph (C) of this Section 8), be automatically converted by virtue of such
merger, consolidation or similar transaction immediately prior to such
consummation into the number of shares of Common Stock into which such shares of
Series A Preferred Stock could have been converted at such time so that each
share of Series A Preferred Stock shall, by virtue of such transaction and on
the same terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other property
(payable in like kind) receivable by a holder of the number of shares of Common
Stock into which such shares of Series A Preferred Stock could have been
converted immediately prior to such transaction; provided, however, that if by
virtue of the structure of such transaction, a holder of Common Stock is
required to make an election with respect to the nature and kind of
consideration to
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be received in such transaction, which election cannot practicably be made by
the holders of the Series A Preferred Stock, then the shares of Series A
Preferred Stock shall, by virtue of such transaction and on the same terms as
apply to the holders of Common Stock, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property (payable in kind)
receivable by a holder of the number of shares of Common Stock into which such
shares of Series A Preferred Stock could have been converted immediately prior
to such transaction if such holder of Common Stock failed to exercise any rights
of election as to the kind or amount of stock, securities, cash or other
property receivable upon such transaction (provided that, if the kind or amount
of stock, securities, cash or other property receivable upon such transaction is
not the same for each non-electing share, then the kind and amount of stock,
securities, cash or other property receivable upon such transaction for each
non-electing share shall be the kind and amount so receivable per share by a
0plurality of the non-electing shares).
(C) In the event the Corporation shall enter into any agreement
providing for any consolidation or merger or similar business combination
described in paragraph (B) of this Section 8, then the Corporation shall as soon
as practicable thereafter (and in any event at least ten (10) business days
before consummation of such transaction) give notice of such agreement and the
material terms thereof to each holder of Series
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A Preferred Stock and each such holder shall have the right to elect, by written
notice to the Corporation, to receive, upon consummation of such transaction (if
and when such transaction is consummated), from the Corporation or the successor
of the Corporation, in redemption and retirement of such Series A Preferred
Stock, a cash payment equal to the amount payable in respect of shares of Series
A Preferred Stock upon liquidation of the Corporation pursuant to Section 4
hereof. No such notice of redemption shall be effective unless given to the
Corporation prior to the close of business on the fifth business day prior to
consummation of such transaction, unless the Corporation or the successor of the
Corporation shall waive such prior notice, but any notice of redemption so given
prior to such time may be withdrawn by notice of withdrawal given to the
Corporation prior to the close of business on the fifth business day prior to
consummation of such transaction.
Section 9. Anti-Dilution Adjustments.
(A) In the event the Corporation shall at any time or from time to time
while any of the shares of the Series A Preferred Stock are outstanding (i) pay
a dividend or make any other distribution in respect of the Common Stock in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock
into a greater number of shares or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, in each case whether by
reclassification of shares, recapitalization of the Corporation (including a
recapitalization
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effected by a merger or consolidation to which Section 8 hereof does not apply)
or otherwise, the Conversion Price in effect immediately prior to such action
shall be adjusted by multiplying such Conversion Price by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately before such event, and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event. An adjustment
made pursuant to this paragraph 9(A) shall be given effect, upon payment of such
a dividend or other distribution, as of the record date for the determination of
stockholders entitled to receive such dividend or distribution (on a retroactive
basis) and in the case of a subdivision or combination shall become effective
immediately as of the effective date thereof.
(B) In the event that the Corporation shall at any time or from time to
time while any of the shares of Series A Preferred Stock are outstanding issue
to holders of shares of Common Stock as a dividend or other distribution,
including by way of a reclassification of shares or a recapitalization of the
Corporation, any right or warrant to purchase shares of Common Stock (but not
including as such right or warrant any security convertible into or exchangeable
for shares of Common Stock) at a purchase price per share less than the Fair
Market Value (as hereinafter defined) of a share of Common Stock on the date of
issuance of such right or warrant, then, subject to the provisions of paragraphs
(F) and (G) of this Section 9, the Conversion Price shall be adjusted by
multiplying such Conversion
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Price by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or warrants
plus the number of shares of Common Stock which could be purchased at the Fair
Market Value of a share of Common Stock at the time of such issuance for the
maximum aggregate consideration payable upon exercise in full of all such rights
or warrants, and the denominator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or warrants
plus the maximum number of shares of Common Stock that could be acquired upon
exercise in full of all such rights and warrants whether or not such rights and
warrants are fully exercisable at the time of initial issuance.
(C) In the event the Corporation shall at any time or from time to time
while any of the shares of Series A Preferred Stock are outstanding issue, sell
or exchange shares of Common Stock (other than pursuant to any right or warrant
to purchase or acquire shares of Common Stock (including as such right or
warrant any security convertible into or exchangeable for shares of Common
Stock) and other than pursuant to any employee or director incentive or benefit
plan or arrangement or any stock option or stock incentive plan, including any
employment, severance or consulting agreement, of the Corporation or any
subsidiary of the Corporation heretofore or hereafter adopted or entered into)
for a consideration having a Fair Market Value, on the date of such issuance,
sale or exchange, less than the Fair
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Market Value of such shares on the date of issuance, sale or exchange, then,
subject to the provisions of paragraphs (F) and (G) of this Section 9, the
Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction the numerator of which shall be the sum of (i) the Fair Market Value of
all the shares of Common Stock outstanding on the day immediately preceding the
first public announcement of such issuance, sale or exchange plus (ii) the Fair
Market Value of the consideration received by the Corporation in respect of such
issuance, sale or exchange of shares of Common Stock, and the denominator of
which shall be the product of (I) the Fair Market Value of a share of Common
Stock on the day immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (II) the sum of the number of shares of
Common Stock outstanding on such day plus the number of shares of Common Stock
so issued, sold or exchanged by the Corporation.
(D) In the event the Corporation shall, at any time or from time to
time while any shares of Series A Preferred Stock are outstanding, issue, sell
or exchange any right or warrant to purchase or acquire shares of Common Stock
(including as such right or warrant any security convertible into or
exchangeable for shares of Common Stock), other than any such issuance to
holders of shares of Common Stock as a dividend or other distribution (including
by way of a reclassification of shares or a recapitalization of the Corporation)
and other than pursuant to any employee or director incentive or benefit plan or
arrangement
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<PAGE>
or any stock option or stock incentive plan (including any employment, severance
or consulting agreement) of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted or entered into, for a consideration having a
Fair Market Value, on the date of such issuance, sale or exchange, less than the
Non-Dilutive Amount (as hereinafter defined), then, subject to the provisions of
paragraphs (F) and (G) of this Section 9, the Conversion Price shall be adjusted
by multiplying such Conversion Price by a fraction the numerator of which shall
be the sum of (i) the Fair Market Value of all the shares of Common Stock
outstanding on the day immediately preceding the first public announcement of
such issuance, sale or exchange plus (ii) the Fair Market Value of the
consideration received by the Corporation in respect of such issuance, sale or
exchange of such right or warrant plus (iii) the Fair Market Value at the time
of such issuance of the consideration which the Corporation would receive upon
exercise in full of all such rights or warrants, and the denominator of which
shall be the product of (I) the Fair Market Value of a share of Common Stock on
the date immediately preceding the first public announcement of such issuance,
sale or exchange multiplied by (II) the sum of the number of shares of Common
Stock outstanding on such day plus the maximum number of shares of Common Stock
which could be acquired upon exercise in full of all such rights and warrants
whether or not such rights and warrants are fully exercisable at the time of
initial issuance.
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<PAGE>
(E) In the event the Corporation shall, at any time or from time to
time while any of the shares of Series A Preferred Stock are outstanding, make
an Extraordinary Distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including a recapitalization or
reclassification effected by a merger or consolidation to which Section 8 hereof
does not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of
Common Stock, the Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall, subject to paragraphs
(F) and (G) of this Section 9, be adjusted by multiplying such Conversion Price
by the fraction the numerator of which is (i) the product of (x) the number of
shares of Common Stock outstanding immediately before such Extraordinary
Distribution or Pro Rata Repurchase multiplied by (y) the Fair Market Value of a
share of Common Stock on the day before the ex-dividend date with respect to
such Extraordinary Distribution which is paid in cash and on the distribution
date with respect to an Extraordinary Distribution which is paid other than in
cash, or on the applicable expiration date (including all extensions thereof) of
any tender offer which is a Pro Rata Repurchase, or on the date of purchase with
respect to any Pro Rata Repurchase which is not a tender offer, as the case may
be, minus (ii) the Fair Market Value of the Extraordinary Distribution or the
aggregate purchase price of the Pro Rata
-27-
<PAGE>
Repurchase, as the case may be, and the denominator of which shall be the
product of (a) the number of shares of Common Stock outstanding immediately
before such Extraordinary Dividend or Pro Rata Repurchase minus, in the case of
a Pro Rata Repurchase, the number of shares of Common Stock repurchased by the
Corporation multiplied by (b) the Fair Market Value of a share of Common Stock
on the day before the ex-dividend date with respect to an Extraordinary
Distribution which is paid in cash and on the distribution date with respect to
an Extraordinary Distribution which is paid other than in cash, or on the
application expiration date (including all extensions thereof) of any tender
offer which is a Pro Rata Repurchase or on the date of purchase with respect to
any Pro Rata Repurchase which is not a tender offer, as the case may be. The
Corporation shall send each holder of Series A Preferred Stock (i) notice of its
intent to make any dividend or distribution and (ii) notice of any offer by the
Corporation to make a Pro Rata Repurchase, in each case at the same time as, or
as soon as practicable after, such offer is first communicated (including by
announcement of a record date in accordance with the rules of any stock exchange
on which the Common Stock is listed or admitted to trading) to holders of Common
Stock. Such notice shall indicate the intended record date and the amount and
nature of such dividend or distribution, or the number of shares subject to such
offer for a Pro Rata Repurchase and the purchase price payable by the
Corporation pursuant to such offer, as well as the Conversion Price and the
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number of shares of Common Stock into which a share of Series A Preferred Stock
may be converted at such time.
(F) Notwithstanding any other provisions of this Section 9, the
Corporation shall not be required to make any adjustment to the Conversion Price
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Conversion Price. Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and together with, the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least one percent
(1%) in the Conversion Price.
(G) If the Corporation shall make any dividend or other distribution on
the Common Stock or issue any Common Stock, other capital stock or other
security of the Corporation or any rights or warrants to purchase or acquire any
such security, which transaction does not result in an adjustment to the
Conversion Price pursuant to the foregoing provisions of this Section 9, the
Board of Directors of the Corporation shall consider whether such action is of
such a nature that an adjustment to the Conversion Price should equitably be
made in respect of such transaction. If in such case the Board of Directors of
the Corporation determines that an adjustment to the Conversion Price should be
made, such adjustment shall be made effective as of such date as is determined
by the Board of Directors of the Corporation. The determination of the Board of
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<PAGE>
Directors of the Corporation as to whether an adjustment to the Conversion Price
should be made pursuant to the foregoing provisions of this paragraph 9(G), and,
if so, as to what adjustment should be made and when, shall be final and binding
on the Corporation and all stockholders of the Corporation. The Corporation
shall be entitled to make such additional adjustments in the Conversion Price,
in addition to those provided for in the foregoing provisions of this Section 9,
as shall be necessary in order that any dividend or distribution in shares of
capital stock of the Corporation, subdivision, reclassification or combination
of shares of stock of the Corporation or any recapitalization of the Corporation
shall not be taxable to the holders of the Common Stock.
(H) For purposes of the provisions governing the Series A Preferred
Stock, the following definitions shall apply:
"Adjustment Period" shall mean the period of five (5) consecutive
trading days preceding, and including, the date as of which the Current Market
Price or Fair Market Value of a security is to be determined.
"Board of Directors" of the Corporation shall include a duly authorized
and appointed committee thereof.
"Business Day" shall mean each day that is not a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York, New
York are not required to be open.
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"Current Market Price" of publicly traded shares of Common Stock or any other
class of capital stock or other security of the Corporation or any other issuer
for any day shall mean the last reported sale price, regular way, or, in the
event that no sale takes place on such day, the average of the reported closing
bid and asked prices, regular way, in either case as reported on the principal
national securities exchange on which such security is listed or admitted to
trading that is also the principal market for the Common Stock or, if the
principal market for such security is not a national securities exchange, on the
NASDAQ National Market System or, if such security is not quoted on such
National Market System, the average of the closing bid and asked prices on each
such day in the over-the-counter market as reported by NASDAQ or, if bid and
asked prices for such security on any such day shall not have been reported
through NASDAQ, the average of the bid and asked prices for such day as
furnished by any New York Stock Exchange member firm regularly making a market
in such security selected for such purpose by the Board of Directors of the
Corporation, in each case, on each trading day during the Adjustment Period.
"Extraordinary Distribution" shall mean any dividend or other
distribution to holders of Common Stock (effected while any of the shares of
Series A Preferred Stock are outstanding) (i) of cash, where the aggregate
amount of such cash dividends or other cash distributions together with the
amount of all cash dividends and other cash distributions made during the
preceding period of
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12 months, when combined with the aggregate amount of all Pro Rata Repurchases
(for this purpose, including only that portion of the aggregate purchase price
of such Pro Rata Repurchase which is in excess of the Fair Market Value of the
Common Stock repurchased as determined on the applicable expiration date
(including all extensions thereof) of any tender offer or exchange offer which
is a Pro Rata Repurchase, or the date of purchase with respect to any other Pro
Rata Repurchase which is not a tender offer or exchange offer made during such
period), exceeds twelve and one-half percent (12 1/2%) of the aggregate Fair
Market Value of all shares of Common Stock outstanding on the day before the
ex-dividend date with respect to such Extraordinary Distribution which is paid
in cash and on the distribution date with respect to an Extraordinary
Distribution which is paid other than in cash, and/or (ii) of any shares of
capital stock of the Corporation (other than shares of Common Stock), other
securities of the Corporation (other than securities of the type referred to in
paragraphs (B) or (C) of this Section 9), evidences of indebtedness of the
Corporation or any other person or any other property (including shares of any
subsidiary of the Corporation) or any combination thereof. The Fair Market Value
of an Extraordinary Distribution for purposes of paragraph (D) of this Section 9
shall be equal to the sum of the Fair Market Value of such Extraordinary
Distribution plus the amount of any cash dividends which are not Extraordinary
Distributions made during such 12-month period and not previously
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included in the calculation of an adjustment pursuant to paragraph (D) of this
Section 9.
"Fair Market Value" shall mean, as to shares of Common Stock or any
other class of capital stock or securities of the Corporation or any other
issuer which are publicly traded, the average of the Current Market Prices of
such shares or securities for each day of the Adjustment Period.
The "Fair Market Value" of any security or of any other property which
is not publicly traded shall mean the fair value thereof as determined by an
independent investment banking or appraisal firm experienced in the valuation of
such securities or property selected in good faith by the Board of Directors of
the Corporation or, if no such investment banking or appraisal firm is in the
good faith judgment of the Board of Directors available to make such
determination, as determined in good faith by the Board of Directors of the
Corporation.
"Non-Dilutive Amount" in respect of an issuance, sale or exchange by
the Corporation of any right or warrant to purchase or acquire shares of Common
Stock (including any security convertible into or exchangeable for shares of
Common Stock) shall mean the remainder of (i) the product of the Fair Market
Value of a share of Common Stock on the day preceding the first public
announcement of such issuance, sale or exchange multiplied by the maximum number
of shares of Common Stock which could be acquired on such date upon the exercise
in full of such rights and warrants (including upon the conversion or exchange
of
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<PAGE>
all such convertible or exchangeable securities), whether or not exercisable (or
convertible or exchangeable) at such date, minus (ii) the aggregate amount
payable pursuant to such right or warrant to purchase or acquire such maximum
number of shares of Common Stock; provided, however, that in no event shall the
Non-Dilutive Amount be less than zero. For purposes of the foregoing sentence,
in the case of a security convertible into or exchangeable for shares of Common
Stock, the amount payable pursuant to a right or warrant to purchase or acquire
shares of Common Stock shall be the Fair Market Value of such security on the
date of the issuance, sale or exchange of such security by the Corporation.
"Pro Rata Repurchase" shall mean any purchase of shares of
Common Stock by the Corporation or any subsidiary thereof, whether for cash,
shares of capital stock of the Corporation, other securities of the Corporation,
evidences of indebtedness of the Corporation or any other person or any other
property (including shares of a subsidiary of the Corporation), or any
combination thereof, effected while any of the shares of Series A Preferred
Stock are outstanding, pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any successor provision of law, or pursuant to any other offer
available to substantially all holders of Common Stock; provided, however, that
no purchase of shares by the Corporation or any subsidiary thereof made in open
market transactions shall be
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deemed a Pro Rata Repurchase. For purposes of this paragraph 9(G), shares shall
be deemed to have been purchased by the Corporation or any subsidiary thereof
"in open market transactions" if they have been purchased substantially in
accordance with the requirements of Rule 10b-18 as in effect under the Exchange
Act on the date shares of Series A Preferred Stock are initially issued by the
Corporation or on such other terms and conditions as the Board of Directors of
the Corporation shall have determined are reasonably designed to prevent such
purchases from having a material effect on the trading market for the Common
Stock.
(I) Whenever an adjustment to the Conversion Price of the Series A
Preferred Stock is required pursuant to the terms hereof, the Corporation shall
forthwith place on file with the transfer agent for the Common Stock and the
Series A Preferred Stock, and with the Secretary of the Corporation, a statement
signed by two officers of the Corporation stating the adjusted Conversion Price
determined as provided herein and the resulting conversion rate of the Series A
Preferred Stock. Such statement shall set forth in reasonable detail such facts
as shall be necessary to show the reason and the manner of computing such
adjustment, including any determination of Fair Market Value involved in such
computation. Promptly after each adjustment to the Conversion Price of the
Series A Preferred Stock, the Corporation shall mail a notice thereof and of the
then
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prevailing conversion rate to each holder of shares of the Series A Preferred
Stock.
Section 10. Miscellaneous.
(A) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) business days after the mailing thereof if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice under
the terms hereof) with postage prepaid, addressed: (i) if to the Corporation, to
its principal executive office (Attention: Secretary) or to the transfer agent
for the Series A Preferred Stock, or other agent of the Corporation designated
as permitted by this Resolution or (ii) if to any holder of the Series A
Preferred Stock or Common Stock, as the case may be, to such holder at the
address of such holder as listed in the stock record books of the Corporation
(which may include the records of any transfer agent for the Series A Preferred
Stock or Common Stock, as the case may be) or (iii) to such other address as the
Corporation or any such holder, as the case may be, shall have designated by
notice similarly given.
(B) The term "Common Stock" as used in this Resolution means the
Corporation's Common Stock, par value $0.10 per share, as the same exists at the
date of original issuance of the Series A Preferred Stock or any other class of
stock resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to
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no par value, or from no par value to par value. In the event that, at any time
as a result of an adjustment made pursuant to Section 9 hereof the holder of any
share of the Series A Preferred Stock upon thereafter surrendering such share
for conversion, shall become entitled to receive any shares or other securities
of the Corporation other than shares of Common Stock, the Conversion Price in
respect of such other shares or securities so receivable upon conversion of
shares of Series A Preferred Stock shall thereafter be adjusted, and shall be
subject to further adjustment from time to time, in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in Section 9 hereof, and the provisions of Sections 1 through 8 and 10
hereof with respect to the Common Stock shall apply on like or similar terms to
any such other shares or securities.
(C) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Series A Preferred Stock or shares of Common Stock or
other securities issued on account of Series A Preferred Stock pursuant hereto
or certificates representing such shares or securities. The Corporation shall
not, however, be required to pay any such tax which may be payable in respect of
any transfer involved in the issuance or delivery of shares of Series A
Preferred Stock or Common Stock or other securities in a name other than that in
which the shares of Series A Preferred Stock with respect to
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which such shares or other securities are issued or delivered were registered,
or in respect of any payment to any person with respect to any such shares or
securities other than a payment to the registered holder thereof, and shall not
be required to make any such issuance, delivery or payment unless and until the
person otherwise entitled to such issuance, delivery or payment has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of the Corporation, that such tax has been paid or is not payable.
(D) In the event that a holder of shares of Series A Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Series A Preferred Stock should be made or
the address to which the certificate or certificates representing such shares,
or such payment, should be sent, the Corporation shall be entitled to register
such shares, and make such payment, in the name of the holder of such Series A
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Corporation.
(E) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Series A Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first-class
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mail, postage prepaid, to each holder of record of Series A Preferred Stock.
3. The aggregate number of shares of such series established and
designated by (a) such resolution, (b) all prior statements, if any, filed under
the Pennsylvania Business Corporation Law with respect thereto, and (c) any
other provision of the Articles of Incorporation is 500,030.
4. The foregoing resolution was adopted, and the filing of this
Statement Affecting Class or Series of Shares was authorized, by the Board of
Directors of the Corporation at a duly called meeting held on the 19th day of
June, 1989.
IN WITNESS WHEREOF, this Corporation has caused this Statement
Affecting Class or Series of Shares to be executed by a duly authorized officer
and its corporate seal, duly attested by another such officer, to be hereunto
affixed this 19th day of June, 1989.
BETZ LABORATORIES, INC.
(Corporate Seal)
By: /s/ William C. Brafford
-----------------------------
William C. Brafford
Vice President
ATTEST:
/s/ Peter D. Heinz
- ---------------------------
Peter D. Heinz
Assistant Secretary
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BETZDEARBORN INC.
AND
THE BANK OF NEW YORK, TRUSTEE
-------------------------
INDENTURE
DATED AS OF , 1998
-------------------------
================================================================================
<PAGE>
TIE-SHEET
OF PROVISIONS OF TRUST INDENTURE ACT OF 1939 WITH INDENTURE DATED AS OF
_________, 1998, BETWEEN BETZDEARBORN INC. AND THE BANK OF NEW YORK, AS TRUSTEE;
SECTION OF
SECTION OF ACT INDENTURE
-------------- ----------
310(a)(1) and (2)....................................... 8.08
310(a)(3) and (4)....................................... Not applicable
310(b) ................................................. 8.08 and 8.09(b)
310(c) ................................................. Not applicable
311(a) and (b).......................................... 8.12
311(c) ................................................. Not applicable
312(a) ................................................. 6.01 and 6.02(a)
312(b) and (c).......................................... 6.02(b) and (c)
313(a) ................................................. 6.04(a)
313(b)(1)............................................... Not applicable
313(b)(2)............................................... 6.04(b)
313(c) ................................................. 6.04(c)
313(d) ................................................. 6.04(d)
314(a) ................................................. 6.03
314(b) ................................................. Not applicable
314(c)(1) and (2)....................................... 16.07
314(c)(3)............................................... Not applicable
314(d) ................................................. Not applicable
314(e) ................................................. 16.07
315(a), (c) and (d)..................................... 8.01
315(b) ................................................. 7.08
315(e) ................................................. 7.09
316(a)(1)............................................... 7.01 and 7.07
316(a)(2)............................................... Omitted
316(a) last sentence.................................... 9.04
316(b) ................................................. 7.04
317(a) ................................................. 7.02
317(b) ................................................. 5.07
318(a) ................................................. 16.09
- ---------------
This tie-sheet is not part of the Indenture as executed.
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TABLE OF CONTENTS
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PARTIES................................................................................................................. 1
RECITAL................................................................................................................. 1
ARTICLE ONE.
DEFINITIONS........................................................................... 1
SECTION 1.01. Definitions..................................................................................... 1
Authorized Newspaper.................................................................................. 1
Board of Directors.................................................................................... 2
Business Day.......................................................................................... 2
Company ............................................................................................. 2
Components............................................................................................ 2
Consolidated Net Tangible Assets...................................................................... 2
Conversion Date....................................................................................... 3
Coupon Security....................................................................................... 3
Dollar................................................................................................ 3
ECU................................................................................................... 3
European Communities.................................................................................. 3
Event of Default...................................................................................... 3
Exchange Rate......................................................................................... 3
Exchange Rate Agent................................................................................... 4
Exchange Rate Officer's Certificate................................................................... 4
Foreign Currency...................................................................................... 4
Fully Registered Security............................................................................. 4
Holder................................................................................................ 5
Indenture............................................................................................. 5
Interest ............................................................................................. 5
Interest Payment Date................................................................................. 5
Market Exchange Rate.................................................................................. 5
Maturity ............................................................................................. 6
Officers' Certificate................................................................................. 6
Opinion of Counsel.................................................................................... 6
Original Issue Date................................................................................... 6
Original Issue Discount Security...................................................................... 6
Person................................................................................................ 7
Place of Payment...................................................................................... 7
Principal Office of the Trustee....................................................................... 7
Registered Coupon Security............................................................................ 7
Registered Holder..................................................................................... 7
Registered Security................................................................................... 7
Required Currency..................................................................................... 7
Responsible Officer................................................................................... 8
Restricted Property................................................................................... 8
Restricted Subsidiary................................................................................. 8
Security or Securities outstanding.................................................................... 8
Stated Maturity....................................................................................... 9
Subsidiary............................................................................................ 9
Trustee............................................................................................... 10
Trust Indenture Act of 1939........................................................................... 10
Unregistered Security................................................................................. 10
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ARTICLE TWO.
THE SECURITIES AND SECURITY FORMS..................................................... 10
SECTION 2.01. Amount Unlimited: Issuable in Series........................................................... 10
SECTION 2.02. Form of Securities and of Trustee's
Certificate of Authentication................................................................. 12
SECTION 2.03. Denomination, Authentication and Dating of
Securities.................................................................................... 13
SECTION 2.04. Execution of Securities......................................................................... 14
SECTION 2.05. Registration, Registration of Transfer and
Exchange...................................................................................... 15
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen
Securities.................................................................................... 16
SECTION 2.07. Temporary Securities............................................................................ 18
SECTION 2.08. Cancellation of Securities Paid, etc............................................................ 18
SECTION 2.09. Moneys of Different Currencies to be
Segregated.................................................................................... 18
SECTION 2.10. Payment to Be in Proper Currency................................................................ 18
SECTION 2.11. Payment in Currencies........................................................................... 19
SECTION 2.12. CUSIP Numbers................................................................................... 22
ARTICLE THREE.
REDEMPTION OF SECURITIES.............................................................. 22
SECTION 3.01. Applicability of Article........................................................................ 22
SECTION 3.02. Notice of Redemption; Selection of
Securities.................................................................................... 22
SECTION 3.03. Payment of Securities Called for Redemption..................................................... 23
ARTICLE FOUR.
SINKING FUNDS......................................................................... 24
SECTION 4.01. Applicability of Article........................................................................ 24
SECTION 4.02. Satisfaction of Mandatory Sinking Fund
Payments with Securities...................................................................... 24
SECTION 4.03. Redemption of Securities for Sinking Fund....................................................... 24
ARTICLE FIVE.
PARTICULAR COVENANTS OF THE COMPANY................................................... 26
SECTION 5.01. Payment of Principal, Premium and Interest...................................................... 26
SECTION 5.02. Offices for Notices and Payments, etc........................................................... 26
SECTION 5.03. Limitation on Liens............................................................................. 27
SECTION 5.04. Limitation on Sale and Lease-Back............................................................... 28
SECTION 5.05. Definition of "Value.".......................................................................... 29
SECTION 5.06. Appointments to Fill Vacancies in Trustee's
Office........................................................................................ 29
SECTION 5.07. Provision as to Paying Agent.................................................................... 29
SECTION 5.08. Annual Certificate to Trustee................................................................... 30
SECTION 5.09. Calculation of Original Issue Discount.......................................................... 31
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ARTICLE SIX.
HOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.............................. 31
SECTION 6.01. Holders Lists................................................................................... 31
SECTION 6.02. Preservation and Disclosure of Lists............................................................ 31
SECTION 6.03. Reports by the Company.......................................................................... 33
SECTION 6.04. Reports by the Trustee.......................................................................... 33
ARTICLE SEVEN.
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT............................... 34
SECTION 7.01. Events of Default............................................................................... 34
SECTION 7.02. Payment of Securities on Default; Suit
Therefor...................................................................................... 37
SECTION 7.03. Application of Moneys Collected by Trustee...................................................... 39
SECTION 7.04. Proceedings by Holders.......................................................................... 40
SECTION 7.05. Proceedings by Trustee.......................................................................... 41
SECTION 7.06. Remedies Cumulative and Continuing.............................................................. 41
SECTION 7.07. Direction of Proceedings and Waiver of
Defaults by Majority of Holders............................................................... 41
SECTION 7.08. Notice of Defaults.............................................................................. 42
SECTION 7.09. Undertaking to Pay Costs........................................................................ 42
SECTION 7.10. Judgment Currency............................................................................... 43
ARTICLE EIGHT.
CONCERNING THE TRUSTEE................................................................ 44
SECTION 8.01. Duties and Responsibilities of Trustee.......................................................... 44
SECTION 8.02. Reliance on Documents, Opinions, etc............................................................ 45
SECTION 8.03. No Responsibility for Recitals, etc............................................................. 46
SECTION 8.04. Trustee, Paying Agent or Registrar May Own
Securities.................................................................................... 46
SECTION 8.05. Moneys to be Held in Trust...................................................................... 47
SECTION 8.06. Compensation and Expenses of Trustee............................................................ 47
SECTION 8.07. Officers' Certificate as Evidence............................................................... 47
SECTION 8.08. Eligibility; Disqualification................................................................... 48
SECTION 8.09. Resignation or Removal of Trustee............................................................... 48
SECTION 8.10. Acceptance by Successor Trustee................................................................. 49
SECTION 8.11. Succession by Merger, etc....................................................................... 51
SECTION 8.12. Limitation on Rights of Trustee as a
Creditor...................................................................................... 51
ARTICLE NINE.
CONCERNING THE HOLDERS................................................................ 51
SECTION 9.01. Action by Holders............................................................................... 51
SECTION 9.02. Proof of Execution by Holders................................................................... 52
SECTION 9.03. Who Deemed Absolute Owners...................................................................... 52
SECTION 9.04. Company-Owned Securities Disregarded............................................................ 53
SECTION 9.05. Revocation of Consents; Future Holders Bound.................................................... 54
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ARTICLE TEN.
HOLDERS' MEETINGS..................................................................... 54
SECTION 10.01. Purposes of Meetings........................................................................... 54
SECTION 10.02. Call of Meetings by Trustee.................................................................... 55
SECTION 10.03. Call of Meetings by Company or Holders......................................................... 55
SECTION 10.04. Qualification for Voting....................................................................... 55
SECTION 10.05. Regulations.................................................................................... 56
SECTION 10.06. Voting......................................................................................... 57
SECTION 10.07. No Delay of Rights by Meeting.................................................................. 57
ARTICLE ELEVEN.
SUPPLEMENTAL INDENTURES............................................................... 57
SECTION 11.01. Supplemental Indentures without Consent of
Holders...................................................................................... 57
SECTION 11.02. Supplemental Indentures with Consent of
Holders of a Series.......................................................................... 59
SECTION 11.03. Compliance with Trust Indenture Act; Effect
of Supplemental Indentures................................................................... 60
SECTION 11.04. Notation on Securities......................................................................... 60
SECTION 11.05. Evidence of Compliance of Supplemental
Indenture to be Furnished Trustee............................................................ 60
ARTICLE TWELVE.
CONSOLIDATION, MERGER AND SALE........................................................ 61
SECTION 12.01. Company May Consolidate, etc., on Certain
Terms........................................................................................ 61
SECTION 12.02. Securities to be Secured in Certain Events..................................................... 61
SECTION 12.03. Successor Corporation to be Substituted........................................................ 62
SECTION 12.04. Opinion of Counsel to be Given Trustee......................................................... 62
ARTICLE THIRTEEN.
SATISFACTION AND DISCHARGE OF INDENTURE............................................... 62
SECTION 13.01. Discharge of Indenture......................................................................... 62
SECTION 13.02. Deposited Moneys to be Held in Trust by
Trustee...................................................................................... 63
SECTION 13.03. Paying Agent to Repay Moneys Held.............................................................. 63
SECTION 13.04. Return of Unclaimed Moneys..................................................................... 63
ARTICLE FOURTEEN.
DEFEASANCE............................................................................ 64
SECTION 14.01. Applicability of Article....................................................................... 64
SECTION 14.02. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations....................................................................... 64
SECTION 14.03. Deposited Moneys and U.S. Government
Obligations To Be Held in Trust; Miscellaneous............................................... 66
</TABLE>
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<TABLE>
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SECTION 14.04. Repayment to Company........................................................................... 66
SECTION 14.05. Reinstatement.................................................................................. 67
ARTICLE FIFTEEN.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.............................................................. 67
SECTION 15.01. Indenture and Securities Solely Corporate
Obligations.................................................................................. 67
ARTICLE SIXTEEN.
MISCELLANEOUS PROVISIONS.............................................................. 67
SECTION 16.01. Provisions Binding on Company's Successors..................................................... 67
SECTION 16.02. Benefits of Indenture Restricted to Parties
and Holders.................................................................................. 67
SECTION 16.03. Official Acts by Successor Corporation......................................................... 68
SECTION 16.04. Addresses for Notices, etc..................................................................... 68
SECTION 16.05. Notices to Holders: Waiver.................................................................... 68
SECTION 16.06. Governing Law.................................................................................. 69
SECTION 16.07. Evidence of Compliance with Conditions
Precedent.................................................................................... 69
SECTION 16.08. Legal Holidays................................................................................. 69
SECTION 16.09. Trust Indenture Act to Control................................................................. 69
SECTION 16.10. No Security Interest Created................................................................... 70
SECTION 16.11. Table of Contents, Headings, etc............................................................... 70
SECTION 16.12. Execution in Counterparts...................................................................... 70
SECTION 16.13. Acceptance of Trust............................................................................ 70
EXHIBIT A Form of Election to Receive Payments in
Foreign Currency or to Rescind Such Election
</TABLE>
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INDENTURE, dated as of ___________, 1998, between BETZDEARBORN INC., a
corporation duly organized and existing under the laws of Pennsylvania (the
"Company"), and THE BANK OF NEW YORK, a New York banking corporation (the
"Trustee").
RECITAL 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 unsecured
debentures, notes or other evidences of indebtedness to be issued in one or more
series (the "Securities"), as provided herein.
AGREEMENT
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture which are defined in the Trust Indenture Act
of 1939 or which are by reference therein defined in the Securities Act of 1933,
as amended, (except as herein otherwise expressly provided or unless the context
otherwise requires) shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of the
execution of this Indenture.
Assistant Officer:
The term "Assistant Officer" shall mean a duly elected Treasurer,
Assistant Treasurer, Senior Vice President, Vice President, Assistant
Controller, or Secretary of the Company.
Authorized Newspaper:
The term "Authorized Newspaper" shall mean a newspaper of general
circulation in The City of New York (and, if any Place of Payment is not in The
City of New York, in each such Place of Payment) printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays. Whenever successive weekly publications in an
Authorized Newspaper are authorized hereunder, they may be made (unless
otherwise expressly provided herein) on the same or different days of the week
and in the same or different Authorized Newspapers.
<PAGE>
Board of Directors:
The term "Board of Directors" shall mean the Board of Directors of the
Company or any committee of such Board duly authorized to act for such Board.
Business Day:
The term "Business Day" means any day, other than a Saturday or Sunday,
that is (a) not a day on which banking institutions are authorized or required
by law or regulation to be closed in The City of New York or The City of
Philadelphia or, if a series of Securities is denominated in a Foreign Currency,
the financial center of the country issuing such currency (which, in the case of
ECUs, shall be Brussels, Belgium) and (b) if a Security has an interest rate
determined with reference to the London interbank offered rate for deposits in a
particular currency, any day on which dealings in deposits in such currency are
transacted in the London interbank market.
Company:
The term "Company" shall mean BETZDEARBORN INC., a Pennsylvania
corporation, and subject to the provisions of Article Twelve shall include its
successors and assigns.
Components:
The term "Components," with respect to Foreign Currency which is a
composite currency (including but not limited to the ECU), means the currency
amounts that are components of such composite currency on the Conversion Date
with respect to such composite currency. If the official unit of any Component
currency is altered by way of combination or subdivision, the number of units of
such currency as a Component shall be proportionately divided or multiplied. If
two or more Component currencies are consolidated into a single currency, the
amounts of those currencies as Components shall be replaced by an amount in such
single currency equal to the sum of the amounts of such consolidated Component
currencies expressed in such single currency, and such amount shall thereafter
be a Component. If after such Conversion Date any Component currency shall be
divided into two or more currencies, the amount of such currency as a Component
shall be replaced by amounts of such two or more currencies, each of which shall
be equal to the amount of such former Component currency divided by the number
of currencies into which such Component currency was divided, and such amounts
shall thereafter be Components.
Consolidated Net Tangible Assets:
The term "Consolidated Net Tangible Assets" shall mean the total amount
of assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any thereof which are
by their terms extendible
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or renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed), and (b) all
goodwill, trade names, trademarks, patents, purchased technology, unamortized
debt discount and other like intangible assets, all as set forth on the most
recent quarterly balance sheet of the Company and its consolidated Subsidiaries
and computed in accordance with generally accepted accounting principles.
Conversion Date:
The term "Conversion Date," with respect to a Foreign Currency which is
a composite currency (including but not limited to the ECU), has the meaning
specified in Section 2.11(d).
Coupon Security:
The term "Coupon Security" shall mean any Security authenticated and
delivered with one or more interest coupons appertaining thereto.
Dollar:
The term "Dollar" or "$" means the coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
ECU:
The term "ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
European Communities:
The term "European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community
and any successor thereto.
Event of Default:
The term "Event of Default" shall mean any event specified in Section
7.01, continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.
Exchange Rate:
The term "Exchange Rate" means (a) if pursuant to Section 2.11(a)
payment is to be made in Dollars with respect to a Security denominated in a
Foreign Currency, the highest firm bid quotation for Dollars received by the
Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the
second Business Day preceding the applicable payment date (or, if no such rates
are quoted on such date, the last date on which such rates were quoted), from
three recognized foreign exchange dealers in New York City selected by the
Exchange Rate Agent and approved by the Company (one of which may be the
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<PAGE>
Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on
such payment date, of the aggregate amount of the Foreign Currency payable on
such payment date in respect of all Securities denominated in such Foreign
Currency and (b) if an Exchange Rate is to be computed for purposes of any
provision other than Section 2.11(a), the rate determined pursuant to the
foregoing clause (a) on such date and at such time as may be specified in the
relevant provision.
In the case of clause (a) above, if no such bid quotations are
available, payments pursuant to Section 2.11(a) will be made in the applicable
Foreign Currency, unless such Foreign Currency is unavailable due to the
imposition of exchange controls (or, in the case of a composite currency, such
currency ceases to be used for the purposes for which it was established as
provided in Section 2.11(d)(ii)) or other circumstances beyond the Company's
control, in which case the Company will be entitled to make payments in Dollars
on the basis of the Market Exchange Rate for such Foreign Currency on the second
Business Day prior to such payment date as provided in Section 2.11(d)(i) or
(ii), as applicable.
Exchange Rate Agent:
The term "Exchange Rate Agent" means the New York clearing house bank
designated pursuant to Section 2.01, or any successor thereto.
Exchange Rate Officer's Certificate:
The term "Exchange Rate Officer's Certificate," with respect to any
date for the payment of principal of (and premium, if any) and interest on any
series of Securities, means a certificate, signed by an officer of the Exchange
Rate Agent and delivered to the Company and to the Trustee, setting forth the
applicable Exchange Rate as of the second Business Day preceding the applicable
payment date or such other date as provided herein, as the case may be, and the
amounts payable in Dollars or Foreign Currency, as applicable, in respect of the
principal of (and premium, if any) and interest on Securities denominated in
Foreign Currency.
Foreign Currency:
The term "Foreign Currency" means a currency issued by the government
of any country other than the United States of America or a composite currency
based on the aggregate value of currencies of any group of countries, including
but not limited to the ECU.
Fully Registered Security:
The term "Fully Registered Security" shall mean any Security registered
as to principal and interest, if any.
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<PAGE>
Holder:
The term "Holder," "Holder of Securities," or other similar terms, when
used with respect to any Security shall mean a bearer of an Unregistered
Security or a Registered Holder of a Registered Security and when used with
respect to any coupon, means the bearer thereof.
Indenture:
The term "Indenture" shall mean this instrument as originally executed
or, if amended or supplemented as herein provided, as so amended or
supplemented, and shall include the form and terms of particular series of
Securities established as contemplated hereunder, provided, however, that if at
any time more than one Person is acting as Trustee under this instrument,
"Indenture" shall mean with respect to any one or more series of Securities for
which 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 a particular series of Securities established as
contemplated by Section 2.01, exclusive, however, of any provisions or terms
which relate solely to one or more series of Securities 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.
Interest:
The term "interest", when used with respect to any series of
non-interest bearing Securities, shall mean interest payable after Maturity.
Interest Payment Date:
The term "Interest Payment Date", with respect to any Security, shall
mean the Stated Maturity of an installment of interest on such Security.
Market Exchange Rate:
The term "Market Exchange Rate" shall mean (a) if pursuant to Section
2.11(d)(i) payment is to be made in Dollars with respect to a Security
denominated in a Foreign Currency (other than a composite currency), the noon
buying rate in New York City for cable transfers of such Foreign Currency as
certified by the Federal Reserve Bank of New York on the second Business Day
preceding the applicable payment date and (b) if pursuant to Section 2.11(d)(ii)
payment is to be made in Dollars with respect to a Security denominated in a
composite currency, for each Component of such composite currency, the Market
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<PAGE>
Exchange Rate determined pursuant to the foregoing clause (a) on the second
Business Day preceding the applicable payment date.
In the event a Market Exchange Rate as described in clause (a) or (b)
above is not available, the Company will be entitled to make payments in U.S.
dollars pursuant to Section 2.11(d)(i) or (ii) on the basis of the most recently
available Market Exchange Rate for such Foreign Currency or each Component of
such composite currency, as the case may be.
Maturity:
The term "Maturity", when used with respect to any Security, shall mean
the date on which the principal of such Security becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, repayment at the option of the Holder or
otherwise.
Officer
The term "Officer" shall mean a duly elected President, or Chief
Financial Officer or Controller of the Company.
Officers' Certificate:
The term "Officers' Certificate" shall mean a certificate signed by two
Officers or by one Officer and one Assistant Officer of the Company and
delivered to the Trustee. If applicable, each certificate shall include the
statements provided for in Section 16.07 if and to the extent required by the
provisions of such Section.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be an employee of, or of counsel to the Company, or
may be other counsel. Each such opinion shall include the statements provided
for in Section 16.07 if and to the extent required by the provisions of such
Section.
Original Issue Date:
The term "original issue date" of any Security (or portion thereof)
shall mean the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
Original Issue Discount Security:
The term "Original Issue Discount Security" shall mean (a) a Security
which has been issued at an issue price lower than the principal amount thereof
and which provides that upon redemption or acceleration of the maturity thereof
an amount less than the principal
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<PAGE>
amount thereof shall become due and payable and (b) any other Security which for
United States federal income tax purposes would be considered an original issue
discount security.
Person:
The term "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Place of Payment:
The term "Place of Payment" for a series of Securities shall mean the
Place or Places of Payment designated for each series pursuant to Sections
2.01(5) and 5.02.
Principal Office of the Trustee:
The term "Principal Office of the Trustee," or other similar term,
shall mean the principal corporate trust office of the Trustee in the Borough of
Manhattan, The City of New York, at which at any particular time its corporate
trust business shall be administered and which on the date hereof is at 101
Barclay Street, Floor 21 West, New York, New York 10286.
Registered Coupon Security:
The term "Registered Coupon Security" shall mean any Coupon Security
registered as to principal only.
Registered Holder:
The term "Registered Holder," when used with respect to a Registered
Security, shall mean the person in whose name such Security is registered on the
books of the Company kept for that purpose in accordance with the terms hereof.
Registered Security:
The term "Registered Security" shall mean any Security registered on
the books of the Company.
Required Currency:
The term "Required Currency" means the currency in which the Securities
of any series are payable, as specified by the Company pursuant to Section
2.01(13) and taking into account any election made by one or more Holders
pursuant to Section 2.11(a). If, however, the Required Currency is a Foreign
Currency and is unavailable for the reasons stated in Section 2.11(d)(i) or
(ii), the Required Currency shall mean Dollars.
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<PAGE>
Responsible Officer:
The term "Responsible Officer" shall mean any officer to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with the particular subject.
Restricted Property:
The term "Restricted Property" shall mean:
(a) any production plant of the Company or any Subsidiary located
within the United States except any such facility that in the opinion of the
Board of Directors is not a principal plant of the Company and its Subsidiaries;
and
(b) any shares of capital stock or indebtedness of a Restricted
Subsidiary.
Restricted Subsidiary:
The term "Restricted Subsidiary" shall mean any Subsidiary which owns
any Restricted Property, except a Subsidiary substantially all the physical
properties of which are located outside the continental United States of
America.
Security or Securities outstanding:
The terms "Security" or "Securities" shall have the meaning stated in
the recital of this Indenture and shall mean any Security or Securities, as the
case may be, authenticated and delivered pursuant to this Indenture (including,
without limitation, the Securities of any series issued in temporary or
permanent global form pursuant to Section 2.01(15)); provided, however, that if
at any time there is more than one Person acting as Trustee under this
instrument, "Securities" with respect to the Indenture as to which such Person
is Trustee shall have the meaning stated in the recital and shall more
particularly mean Securities authenticated and delivered pursuant to this
instrument, exclusive of Securities of any series as to which such Person is not
Trustee.
The term "outstanding," when used with reference to Securities or
Securities of any series shall, subject to the provisions of Section 9.04, mean,
as of any particular time, all such Securities authenticated and delivered by
the Trustee pursuant to this Indenture, except:
(a) such Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) such Securities, or portions thereof, for the payment or redemption
of which moneys in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or shall have been
set aside and segregated in trust
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<PAGE>
by the Company (if the Company shall act as its own paying agent), provided that
if such Securities are to be redeemed prior to the maturity thereof, notice of
such redemption shall have been mailed as provided in Article Three, or
provision satisfactory to the Trustee shall have been made for mailing such
notice; and
(c) Securities paid pursuant to Section 2.06 and Securities in lieu of
or in substitution for which other Securities shall have been authenticated and
delivered pursuant to the terms of Section 2.06 except to the extent that a bona
fide holder in due course of any such Securities shall have presented proof
satisfactory to the Trustee that such holder is a bona fide holder in due course
of any such Securities.
In determining whether the Holders of the requisite principal amount of
outstanding Securities of a series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder: (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the Maturity thereof determined in accordance with Section
7.01; and (ii) each Security denominated in a Foreign Currency shall be deemed
to have a principal amount determined by the Exchange Rate Agent (as evidenced
by a certificate of such Exchange Rate Agent) by converting the principal amount
of such Security in the currency in which such Security is denominated into
Dollars at the Exchange Rate as of 9:00 A.M., New York City time, on the date
such request, demand, authorization, direction, notice, consent or waiver is
delivered to the Trustee and, where it is hereby expressly required, to the
Company (or, if there is no such rate on such date for the reasons specified in
Section 2.11(d), such rate on the date specified in such Section).
Stated Maturity:
The term "Stated Maturity" when used with respect to any Security or
any installment of interest thereon shall mean the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of interest is due and payable.
Subsidiary:
The term "Subsidiary" shall mean any corporation at least a majority of
the outstanding securities of which having ordinary voting power to elect a
majority of the board of directors of such corporation (whether or not any other
class of securities has or might have voting power by reason of the happening of
a contingency) is at the time owned or controlled directly or indirectly by the
Company or one or more Subsidiaries or by the Company and one or more
Subsidiaries.
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Trustee:
The term "Trustee" shall mean The Bank of New York, until another or a
successor trustee shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter shall mean and include each Person who is then
a Trustee hereunder; provided, however, that if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any series
shall mean only the Trustee with respect to the Securities of that series.
Trust Indenture Act of 1939:
The term "Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939 as it was in force at the date of execution of this Indenture,
except as provided in Section 11.03; provided, however, that if the Trust
Indenture Act of 1939 is amended after such date, the Trust Indenture Act of
1939 shall mean, to the extent required by such amendment, said Act as so
amended.
Unregistered Security:
The term "Unregistered Security" shall mean any Security or temporary
bearer Security not registered as to principal.
ARTICLE TWO.
THE SECURITIES AND SECURITY FORMS.
SECTION 2.01. Amount Unlimited: Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. Securities may be issued in one or more series.
The terms and conditions listed below, as applicable, of any series of
Securities shall be established (i) in an indenture supplemental hereto, (ii) in
a resolution of the Board of Directors or (iii) by an Officers' Certificate
pursuant to a resolution of the Board of Directors:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of all other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Sections 2.05, 2.06, 2.07, 3.03 or
11.04);
(3) the date or dates on which the principal and premium, if
any, of the Securities of the series are payable;
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(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the formula by which interest shall be
calculated, the date or dates from which such interest shall accrue,
the interest payment dates on which such interest shall be payable and
the record dates for the determination of Holders thereof to whom
interest is payable;
(5) the place or places where the principal of, and premium,
if any, and any interest on Securities of the series shall be payable
(herein called the "Place of Payment"); provided, however, that payment
of principal, premium, if any, and interest with respect to Registered
Securities may be made as provided in Section 5.02;
(6) the price or prices at which, the period or periods within
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the price
or prices at which and the period or periods within which and the terms
and conditions upon which Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) if other than the principal amount at Stated Maturity
thereof, the portion of the principal amount of Securities of the
series which shall be payable upon declaration of acceleration of the
maturity thereof pursuant to Section 7.01 or provable in bankruptcy
pursuant to Section 7.02 or used to determine the relative voting
rights of the Holders thereof pursuant to Section 10.05 or the method
by which such portion of the principal amount shall be determined;
(10) any Events of Default with respect to the Securities of a
particular series, if not set forth herein;
(11) if the rate or rate at which the Securities of the series
shall bear interest is to be fixed until Maturity, provisions, if any,
for the defeasance of Securities of the series;
(12) (A) the currency of denomination of the Securities of any
series, which may be in Dollars or any Foreign Currency, (B) if such
currency of denomination is a composite currency other than the ECU,
the agency or organization, if any, responsible for overseeing such
composite currency and (C) if such Securities are
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<PAGE>
denominated in a Foreign Currency other than a composite currency, the
financial center of the country issuing such Foreign Currency;
(13) the designation of the currency or currencies in which
payment of the principal of (and premium, if any) and interest on the
Securities of the series will be made, and, if such currency or
currencies is a Foreign Currency, whether payment of the principal (and
premium, if any) or the interest on such Securities shall be payable in
such Foreign Currency or in Dollars, and if in Dollars, whether the
Holders thereof may elect instead to have such payments made in such
Foreign Currency;
(14) if the Securities of such series are to be denominated in
a Foreign Currency, the designation of an agent for purposes of
determining the amounts payable with respect to such Securities in
Dollars and exchanging Foreign Currency into Dollars or Dollars into
Foreign Currency, as the case may be (the "Exchange Rate Agent"), which
shall be a New York clearing house bank;
(15) the extent to which any Securities will be issuable in
temporary or permanent global form, and the manner in which any
payments on a temporary or permanent global Security will be made;
(16) the form of Securities of such series; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any series issued under this Indenture shall in all
respects be equally and ratably entitled to the benefits hereof with respect to
such series without preference, priority or distinction on account of actual
time or times of authentication and delivery or maturity of the Securities of
such series. All Securities of the same series shall be substantially identical
except as to denomination and except as may otherwise be provided in (i) an
indenture supplemental hereto, (ii) a resolution of the Board of Directors or
(iii) a certificate of an officer of the Company authorized pursuant to a
resolution of the Board of Directors.
SECTION 2.02. Form of Securities and of Trustee's Certificate of
Authentication. The Securities of each series, the appurtenant coupons, if any,
and the certificates of authentication thereon shall be in substantially the
form as shall be established as provided in Section 2.01 with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rules made pursuant thereto or with
any rules of any securities exchange or as may be determined consistently
herewith by the officers executing such
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Securities and coupons, if any, as evidenced by their execution of the
Securities and coupons, if any.
The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange, all as determined by the officers executing
such Securities and coupons, if any, as evidenced by their execution of such
Securities and coupons, if any.
The form of Trustee's certificate of authentication shall be as
follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK, as Trustee
By____________________________________
Authorized Signatory
SECTION 2.03. Denomination, Authentication and Dating of Securities.
The Securities of each series may be issued as Registered Securities or
Unregistered Securities, as provided in the terms of such Securities and shall
be issuable in the denominations of $1,000 and any integral multiple of $1,000,
or such other denominations as authorized as provided in Section 2.01. Each
Security shall be dated as of the date of its authentication.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication. Except as otherwise provided in this
Article Two, the Trustee shall thereupon authenticate and deliver said
Securities to or upon the written order of the Company, signed by the President
and Chief Executive Officer, the Senior Vice President and Chief Financial
Officer, its Vice President and Treasurer or one of its Assistant Treasurers. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and, subject to Section 8.01, shall be fully protected in
relying upon:
(a) A copy of the resolution or resolutions of the Board of
Directors in or pursuant to which the terms and form of the Securities
were established, 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 as of
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the date of such certificate, and if the terms and form of such
Securities are established by an Officers' Certificate pursuant to
general authorization of the Board of Directors, such Officers'
Certificate;
(b) an executed supplemental indenture, if any;
(c) an Officers' Certificate delivered in accordance with
Section 16.07; and
(d) an Opinion of Counsel which shall state:
(1) that the form of such Securities has been established by a
supplemental indenture or by or pursuant to a resolution of the Board
of Directors in accordance with Sections 2.01 and 2.02 and in
conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been established in
accordance with Section 2.01 and in conformity with the other
provisions of this Indenture;
(3) that such Securities, 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 in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting the enforcement of creditors' rights and to general equity
principles; and
(4) that all laws and requirements in respect of the execution
and delivery by the Company of such Securities have been complied with.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith by its board of directors or trustees, executive committee, or a trust
committee of directors or trustees or vice presidents shall determine that such
action would expose the Trustee to personal liability to existing Holders.
SECTION 2.04. Execution of Securities. The Securities, and any coupons
appertaining thereto, shall be signed in the name and on behalf of the Company
manually or by facsimile by its President and Chief Executive Officer or its
Senior Vice President and Chief Financial Officer and by its Vice President and
Treasurer, its Secretary or one of its Assistant Secretaries, under its
corporate seal (which may be printed, engraved or otherwise reproduced thereon,
by facsimile or otherwise). Only such Securities as shall bear thereon a
certificate of authentication substantially in the form hereinbefore recited,
executed manually by the Trustee, shall be entitled to the benefits of this
Indenture or be valid or obligatory
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for any purpose. Such certificate by the Trustee upon any Security executed by
the Company shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the Holder is entitled
to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Securities shall cease to be such officer before the Securities so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Securities nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Securities had not ceased to be
such officer of the Company; and any Security or coupon may be signed on behalf
of the Company by such persons as, at the actual date of the execution of such
Securities or coupons, shall be the proper officers of the Company, although at
the date of the execution of this Indenture any such person was not such an
officer.
SECTION 2.05. Registration, Registration of Transfer and Exchange. The
Company shall keep or cause to be kept a register (herein sometimes referred to
as the "registry books of the Company") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Registered Securities and the registration of transfers of Registered
Securities. Any such register shall be in written form or in any other form
capable of being converted into written form within a reasonable time. At all
reasonable times the information contained in such register or registers shall
be available for inspection by the Trustee at the office or agency to be
maintained by the Company as provided in Section 5.02.
Upon surrender of any Registered Security of any series for
registration of transfer at the office or agency of the Company to be maintained
as provided in Section 5.02, the Company shall execute, and the Trustee, upon
the written authorization or request of any officer of the Company, shall
authenticate and deliver, in the name of the designated transferee or
transferees, at the expense of the Company, one or more new Registered
Securities of such series of any authorized denominations and of a like
aggregate principal amount and Stated Maturity.
At the option of the Holder thereof, Securities of a series, whether
Registered or Unregistered, which by their terms are registrable as to principal
only or as to principal and interest, may be exchanged for Registered Coupon
Securities or Fully Registered Securities of such series, as may be issued by
the terms thereof. Securities so issued in exchange for other Securities shall
be of any authorized denomination and of like principal amount and Stated
Maturity and shall be issued upon surrender of the Securities for which they are
to be exchanged and, in the case of Coupon Securities, together with all
unmatured coupons and all matured coupons in default appertaining thereto, at
the office of the Company provided for in Section 5.02 and upon payment, if the
Company shall require, of charges provided herein. Whenever any Securities are
so surrendered,
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the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making such exchange is entitled to receive.
Upon presentation for registration of any Unregistered Security of any
series which by its terms is registrable as to principal, at the office or
agency of the Company to be maintained as provided in Section 5.02, such
Security shall be registered as to principal in the name of the Holder thereof
and such registration shall be noted on such Security. Any Security so
registered shall be transferable on the registry books of the Company, upon
presentation of such Security at such office or agency for similar notation
thereon, but such Security may be discharged from registration by being in like
manner transferred to bearer, whereupon transferability by delivery shall be
restored. Unregistered Securities shall continue to be subject to successive
registrations and discharges from registration at the option of the Holders
thereof.
Unregistered Securities shall be transferable by delivery. Registration
of any Coupon Security shall not affect the transferability by delivery of the
coupons appertaining thereto which shall continue to be payable to bearer and
transferable by delivery.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company duly executed, by the Holder thereof or his attorney
duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Securities of any series for a period of 15 days next
preceding the mailing of any notice of redemption of Securities of such series
to be redeemed, or (ii) to register the transfer or exchange of any Securities
so selected for redemption in whole or in part except, in the case of any
Security to be redeemed in part, the portion thereof not to be so redeemed.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Securities. In case
any temporary or definitive Security or any coupon appurtenant to a Coupon
Security shall become mutilated or be destroyed, lost or
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stolen, the Company in its discretion may execute, and upon written
authorization or request of any officer of the Company, the Trustee shall
authenticate and deliver, a new Security (in the case of a Coupon Security, with
coupons corresponding to the coupons appertaining to the mutilated, destroyed,
lost or stolen Security or the Security with respect to which a coupon shall
have become mutilated, destroyed, stolen or lost) of the same series and of like
tenor and principal amount at Stated Maturity bearing a number not
contemporaneously outstanding. In every case the applicant for a substituted
Security shall furnish to each of the Company and the Trustee such security or
indemnity as may be required by either of them, as the case may be, to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Security and of the
ownership thereof. In every case of mutilation, the applicant shall surrender to
the Trustee, the mutilated Security or the Security to which the mutilated
coupon appertains, in the case of a Coupon Security, with all coupons (including
any mutilated coupons) appertaining thereto.
Upon the issuance of any substituted Security, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses connected
therewith. In case any Security or coupon which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Security or coupon, pay or authorize the payment
of the same (without surrender thereof except in the case of a mutilated
Security or coupon) if the applicant for such payment shall furnish to each of
the Company and the Trustee such security or indemnity as may be required by
either of them, as the case may be, to save each of them harmless and, in case
of destruction, loss or theft, evidence satisfactory to the Company and the
Trustee of the destruction, loss or theft of such Security or coupon and of the
ownership thereof.
Every substituted Security, and in the case of Coupon Securities, its
appurtenant coupons, issued pursuant to the provisions of this Section 2.06 by
virtue of the fact that any Security or coupon of that series is destroyed, lost
or stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security or coupon of that series
shall be found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities and
coupons of that series duly issued hereunder. All Securities and coupons shall
be held and owned upon the express condition that, to the extent permitted by
law, the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities and coupons and shall
preclude any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
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SECTION 2.07. Temporary Securities. Pending the preparation of
definitive Securities of any series the Company may execute and the Trustee,
upon satisfaction of the provisions of Section 2.03, shall authenticate and
deliver printed or lithographed temporary Securities. Temporary Securities shall
be issuable in any authorized denomination, and substantially in the form of the
definitive Securities of that series, but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company. Every such temporary Security of any series shall be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Securities of that
series. Without unreasonable delay, the Company will execute and deliver to the
Trustee definitive Securities of that series and thereupon any or all temporary
Securities of that series may be surrendered in exchange therefor, at the office
or agency of the Company in the Place of Payment for such series, and the
Company shall execute and the Trustee shall authenticate and deliver in exchange
for such temporary Securities an equal aggregate principal amount at Stated
Maturity of definitive Securities. Such exchange shall be made by the Company at
its own expense and without any charge therefor except that the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto. Until so exchanged, the
temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of that series
authenticated and delivered hereunder.
SECTION 2.08. Cancellation of Securities Paid, etc. Securities of any
series surrendered for the purpose of payment, redemption, exchange or
registration of transfer and all coupons surrendered for payment, shall, if
surrendered to the Company or any paying agent, be surrendered to the Trustee
for cancellation, or, if surrendered to the Trustee, shall be cancelled by it,
and no Securities or coupons shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture or of such series of
Securities. The Trustee shall deliver all cancelled Securities to the Company.
If the Company shall acquire any of the Securities or coupons, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities or coupons unless and until the same
are surrendered to the Trustee for cancellation.
SECTION 2.09. Moneys of Different Currencies to be Segregated. The
Trustee shall segregate all moneys, funds and accounts held by the Trustee
hereunder in one currency from any money, funds or accounts in any other
currencies, notwithstanding any provision herein which would otherwise permit
the Trustee to commingle such amounts.
SECTION 2.10. Payment to Be in Proper Currency. The obligation of the
Company to make any payment of principal of (and premium, if any) and interest
on any Security shall not be discharged or satisfied by any tender by the
Company, or recovery by the Trustee, in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
Trustee timely holding the
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full amount of the Required Currency then due and payable. If any such tender or
recovery is in a currency other than the Required Currency, the Trustee may take
such actions as it considers appropriate to exchange such currency for the
Required Currency. The costs and risks of any such exchange, including without
limitation the risks of delay and exchange rate fluctuation, shall be borne by
the Company, and the Company shall remain fully liable for any shortfall or
delinquency in the full amount of Required Currency then due and payable, and in
no circumstances shall the Trustee be liable therefor. The Company hereby waives
any defense of payment based upon any such tender or recovery which is not in
the Required Currency, or which, when exchanged for the Required Currency by the
Trustee, is less than the full amount of Required Currency then due and payable.
Any costs incurred by or on behalf of the Company (other than costs
incurred by the Trustee that are passed on to the Company as provided above) in
connection with the conversion of Dollars to any Foreign Currency pursuant to an
election made by a Holder in accordance with Section 2.11(a) shall be borne by
the Holder making such an election through deduction from payments required to
be made to such Holder pursuant to the terms of this Indenture.
SECTION 2.11. Payment in Currencies. (a) Payment of the principal of
(and premium, if any) and interest on the Securities of any series, whether or
not denominated in a Foreign Currency pursuant to Section 2.01(12), shall be
made in Dollars, unless the Company specifies another currency or currencies
pursuant to Section 2.01(13). If a series of Securities is denominated in a
Foreign Currency, the amount receivable in Dollars by the Holders of such series
shall be determined as provided in Section 2.11(c). Not later than one Business
Day prior to each Interest Payment Date, the Trustee shall inform the Company of
the total amount of the interest payments to be made by the Company on such
Interest Payment Date and the currencies or currency units in which such
interest payments are to be made. The Trustee shall provide monthly to the
Company a list of the principal and interest to be paid on Securities of each
series maturing in the next succeeding month.
(b) If authorized pursuant to Section 2.01(13), any Holder of a
Security of a series of Securities denominated in Foreign Currency may elect to
receive payments in the Foreign Currency in which such Security is denominated
pursuant to Section 2.01(12). A Holder may make such election by delivering to
the Trustee: (i) a written notice thereof, substantially in the form attached
hereto as Exhibit A or in such other form as may be acceptable to the Trustee,
not later than the close of business on the record date immediately preceding
the applicable Interest Payment Date or the fifteenth day immediately preceding
the Maturity of an installment of principal, as the case may be, and (ii) wire
transfer instructions as required by Section 5.02. Such election shall remain in
effect with respect to such Holder until such Holder delivers to the Trustee a
written notice rescinding such election, provided, however, that any such notice
must be delivered to the Trustee not later than the close of business on the
record date
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immediately preceding the next Interest Payment Date or the fifteenth day
immediately preceding the Maturity of an installment of principal, as the case
may be, in order to be effective for the payment to be made thereon; and
provided further that no such recession may be made with respect to payments to
be made on any Security with respect to which notice of redemption has been
given by the Company pursuant to Article Three. The Trustee shall deliver a copy
of each notice received by it under this Section 2.11(b) to the Exchange Rate
Agent and the Company as soon as practicable after receipt. Upon request, the
Trustee will mail a copy of the form of Exhibit A to any Holder requesting a
copy thereof to the address of such Holder set forth in such request.
(c) For each series of Securities denominated in a Foreign Currency,
the Exchange Rate Agent shall determine the amount receivable by the Holders
thereof in Dollars, which amount shall equal the sum obtained by converting the
applicable Foreign Currency into Dollars at the Exchange Rate. The applicable
Exchange Rate shall be set forth in an Exchange Rate Officer's Certificate. The
Exchange Rate Agent shall deliver to the Company and to the Trustee, not later
than one Business Day prior to the date each payment is required to be made, a
written notice specifying the amount of principal of (and premium, if any) and
interest on such series of Securities to be paid on such payment date in Dollars
and, if at least one Holder has made the election referred to in subsection (b)
above to receive payments in Foreign Currency on a series of Securities
denominated in a Foreign Currency, such Foreign Currency, together with a
counterpart of the Exchange Rate Officer's Certificate, referred to above.
(d)(i) If a Foreign Currency, other than a composite currency, in which
the payment of principal of (and premium, if any) and interest on a series of
Securities is required to be made is not available to the Company due to the
imposition of exchange controls or other circumstances beyond the control of the
Company, then with respect to each payment date occurring after the last date on
which such Foreign Currency was so used, all payments with respect to the
Securities of any such series shall be made in Dollars. If payment is to be made
in Dollars to the Holders of any such series of Securities pursuant to the
provisions of the preceding sentence, then the amount to be paid in Dollars on a
payment date by the Company to the Trustee and by the Trustee or any paying
agent to Holders shall be determined by the Exchange Rate Agent and shall be
equal to the sum obtained by converting the applicable Foreign Currency into
Dollars at the applicable Market Exchange Rate set forth in an Exchange Rate
Officer's Certificate.
(ii) If the ECU ceases to be used both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or is not available due to circumstances beyond
the control of the Company, or if any other composite currency in which the
payment of principal of (and premium, if any) and interest on a series of
Securities is required to be made ceases to be used for the purposes for which
it was
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established or is not available due to circumstances beyond the control of the
Company, then with respect to each payment date (the "Conversion Date")
occurring after the last date on which the ECU or such other composite currency
was so used, all payments with respect to the Securities of any such series
shall be made in Dollars. If payment with respect to Securities of a series is
to be made in Dollars pursuant to the provisions of the preceding sentence, then
the amount to be paid in Dollars on a payment date by the Company to the Trustee
and by the Trustee or any paying agent to Holders shall be determined by the
Exchange Rate Agent and shall be equal to the sum of the amounts obtained by
converting each Component of such composite currency into Dollars at its
respective Market Exchange Rate set forth in an Exchange Rate Officer's
Certificate, multiplied by the number of ECU or units of such other composite
currency, as appropriate, that would have been so paid had the ECU or such other
composite currency, as appropriate, not ceased to be so used.
(e) All decisions and determinations of the Exchange Rate Agent
regarding the Exchange Rate or conversion of Foreign Currency other than a
composite currency into Dollars pursuant to subsection (d)(i) above or the
conversion of ECU or any other composite currency into Dollars pursuant to
subsection (d)(ii) shall, in the absence of manifest error, be conclusive for
all purposes and irrevocably binding upon the Company, the Trustee, any paying
agent and all Holders of the Securities. If a Foreign Currency, other than a
composite currency, in which payment of the principal of (and premium, if any)
and interest on a series of Securities is required pursuant to subsection (a)
above, is not available to the Company for making payments thereof due to the
imposition of exchange controls or other circumstances beyond the control of the
Company, the Company, after learning thereof, will give notice thereof to the
Trustee immediately (and the Trustee promptly thereafter will give notice to the
Holders in the manner provided in Section 16.05) specifying the last date on
which such Foreign Currency was used for the payment of principal of (and
premium, if any) or interest on such series of Securities. In the event the ECU
ceases to be used both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Communities or is not available due to circumstances beyond the control of the
Company, or any other composite currency in which the principal of (and premium,
if any) and interest on a series of Securities is required ceases to be used for
the purposes for which it was established or is not available due to
circumstances beyond the control of the Company, the Company, after learning
thereof, will give notice thereof to the Trustee immediately (and the Trustee
promptly thereafter will give notice to the Holders in the manner provided in
Section 16.05). In the event of any subsequent change in any Component, the
Company, after learning thereof, will give notice to the Trustee similarly (and
the Trustee promptly thereafter will give notice to the Holders in the manner
provided in Section 16.05). The Trustee shall be fully justified and protected
in relying and acting upon the information so received by it from the Company
and the Exchange Rate Agent and shall not otherwise
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have any duty or obligation to determine the accuracy or validity of such
information independently.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE THREE.
REDEMPTION OF SECURITIES.
SECTION 3.01. Applicability of Article. The Company may reserve the
right to redeem and pay, prior to Stated Maturity, all or any part of the
Securities of any series, either by optional redemption, sinking fund or
otherwise, by provision therefor in the Security for such series established
pursuant to Sections 2.01 and 2.02. Redemption of Securities of any series shall
be made in accordance with the terms of such Securities and, to the extent that
this Article does not conflict with such terms, in accordance with this Article.
SECTION 3.02. Notice of Redemption; Selection of Securities. In case
the Company shall desire to exercise the right to redeem all or any part of the
Securities of a series in accordance with their terms, it shall fix a date for
redemption and shall mail a notice of such redemption at least 30 and not more
than 60 days prior to the date fixed for redemption to each Holder of a
Registered Security to be redeemed as a whole or in part at his address as the
same appear on the registry books of the Company and, if Unregistered Securities
are to be redeemed, shall publish a notice of redemption at least 30 and not
more than 60 days prior to the date fixed for redemption in an Authorized
Newspaper in the Place of Payment. If mailed in the manner herein provided, the
notice shall be conclusively presumed to have been duly given, whether or not
any such Holder receives such notice. Any defect in the notice to the Holder of
any Security of a series designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other
Security of such series.
Each such notice of redemption shall identify the Securities to be
redeemed including CUSIP numbers and shall specify the date fixed for
redemption, the redemption price, the place where such Securities are to be
surrendered for payment of the redemption price, which shall be the office or
agency of the Company in each Place of Payment, that payment will be made upon
presentation and surrender of such
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Securities and all coupons appertaining thereto, if any, that accrued interest,
if any, to the redemption date will be paid as specified in said notice, and
that on and after said date, interest thereon or on the portions thereof to be
redeemed will cease to accrue. In case the redemption is on account of a sinking
fund, said notice shall so specify. If less than all the outstanding Securities
of a series are to be redeemed, the notice of redemption shall specify the
numbers of the Securities of that series to be redeemed. In case any Security of
a series is to be redeemed in part only, the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state that
on and after the date fixed for redemption, upon surrender of such Security, a
new Security or Securities of that series in the principal amount and Stated
Maturity equal to the unredeemed portion thereof will be issued.
The Company shall give the Trustee notice not less than 45 days prior
to the redemption date of any redemption hereunder, provided, however, that if
fewer than all the Securities of a series are to be redeemed, the Company shall
give the Trustee notice not less than 60 days prior to the redemption date as to
the aggregate principal amount at Stated Maturity of Securities to be redeemed,
and the Trustee shall select from the Securities outstanding in such manner as
in its sole discretion it shall deem appropriate and fair, the Securities of
that series or portions thereof to be redeemed. Securities of a series may be
redeemed in part only in multiples of $1,000, except as otherwise set forth in
the form of Security to be redeemed.
Any notice of redemption to be mailed by the Company pursuant to this
Section 3.02 may be mailed, at the Company's direction, by the Trustee in the
name and at the expense of the Company.
SECTION 3.03. Payment of Securities Called for Redemption. If notice of
redemption has been mailed or published, as the case may be as above provided,
the Securities or portions of Securities of a series with respect to which such
notice has been mailed or published shall become due and payable on the date and
at the place or places stated in such notice at the applicable redemption price,
together with accrued interest to the redemption date and on and after said date
(unless the Company shall default in the payment of such Securities at the
applicable redemption price, together with accrued interest, if any, to said
date) any interest on the Securities or portions of Securities of any series so
called for redemption shall cease to accrue, and such Securities and portions of
Securities of any series shall be deemed not to be outstanding hereunder and
shall not be entitled to any benefit under this Indenture except to receive
payment of the redemption price, together with accrued interest, if any, to the
date fixed for redemption. On or before the Business Day preceding the
redemption date specified in the notice of redemption, the Company shall deposit
with the Trustee or with one or more paying agents an amount of money, in
immediately available funds, sufficient to redeem on the redemption date all the
Securities so called for redemption at the applicable redemption price, together
with accrued interest, if any, to the date fixed for redemption. On presentation
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and surrender of such Securities at the Place of Payment, the said Securities or
the specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with accrued interest, if any, to the date
fixed for redemption.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of such
series, of authorized denominations in aggregate principal amount and Stated
Maturity equal to the unredeemed portion of the Security so presented.
ARTICLE FOUR.
SINKING FUNDS.
SECTION 4.01. Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.01 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment."
SECTION 4.02. Satisfaction of Mandatory Sinking Fund Payments with
Securities. In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Securities of a series in cash, the Company may at
its option (a) deliver to the Trustee Securities of that series theretofore
purchased or otherwise acquired by the Company, or (b) receive credit for the
principal amount of Securities of that series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, provided that such Securities have not been previously
so credited. Such Securities shall be received and credited for such purpose by
the Trustee at the redemption price specified in such Securities for redemption
through operation of the sinking fund and the amount of such mandatory sinking
fund payment shall be reduced accordingly.
SECTION 4.03. Redemption of Securities for Sinking Fund. Not less than
60 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 4.02,
which Securities will accompany such
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certificate, if not theretofore delivered, and whether the Company intends to
exercise its right to make a permitted optional sinking fund payment with
respect to such series. Such certificate shall also state that no Event of
Default with respect to such series has occurred and is continuing.
Any mandatory or optional sinking fund payment or payments made in cash
plus any unused balance of any preceding sinking fund payments made in cash
which shall equal or exceed $50,000 or an equivalent amount, if applicable, in a
Foreign Currency (or a lesser sum if the Company shall so request) with respect
to Securities of any particular series shall be applied by the Trustee on the
sinking fund payment date on which such payment is made (or, if such payment is
made prior to a sinking fund payment date, on the sinking fund payment date
following the date of such payment) to the redemption of such Securities at the
redemption price specified in such Securities for operation of the sinking fund
together with accrued interest to the date fixed for redemption. Any sinking
fund moneys not so applied or allocated by the Trustee to the redemption of
Securities shall be added to the next cash sinking fund payment received by the
Trustee for such series and, together with such payment, shall be applied in
accordance with the provisions of this Section 4.03. Any and all sinking fund
moneys with respect to the Securities of any particular series held by the
Trustee on the last sinking fund payment date with respect to such Securities,
and not held for the payment or redemption of particular Securities, shall be
applied by the Trustee, to the payment of the principal of the Securities of
that series at maturity.
The Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in the penultimate paragraph
of Section 3.02 and the Company shall cause notice of the redemption thereof to
be given in the manner provided in Section 3.02. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Section 3.03.
On each sinking fund payment date, the Company shall pay to the Trustee
in immediately available funds a sum equal to all accrued interest to the date
fixed for redemption on Securities to be redeemed on such sinking fund payment
date pursuant to this Section 4.03.
The Trustee shall not redeem any Securities of a series with sinking
fund moneys or mail or publish any notice of redemption of such Securities by
operation of the sinking fund for such series during the continuance of a
default in payment of interest on such Securities or of any Event of Default
(other than an Event of Default occurring as a consequence of this paragraph),
except that if the notice of redemption of any such Securities shall theretofore
have been mailed or published in accordance with the provisions hereof, the
Trustee shall redeem Securities if cash sufficient for that purpose shall be
deposited with the Trustee for that purpose in accordance with the terms of this
Article Four. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of Default shall occur and any
moneys thereafter paid into
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such sinking fund shall, during the continuance of such default or Event of
Default, be held as security for the payment of all Securities of such series;
provided, however, that in case such default or Event or Default shall have been
cured or waived as provided herein, such moneys shall thereafter be applied on
the next sinking fund payment date for such Securities on which such moneys may
be applied pursuant to the provisions of this Section 4.03.
ARTICLE FIVE.
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 5.01. Payment of Principal, Premium and Interest. The Company
shall duly and punctually pay or cause to be paid the principal of and premium,
if any, and interest, if any, on the Securities of each series in the Required
Currency in accordance with the terms thereof and this Indenture and shall
comply with all other forms, agreements and conditions contained in or made in
this Indenture for the benefit of such Securities.
SECTION 5.02. Offices for Notices and Payments, etc. So long as any
Securities of a series remain outstanding, the Company shall maintain in each
Place of Payment for such series of Securities an office or agency where the
Securities of that series may be presented for payment, for registration of
transfer and for exchange as provided in this Indenture and where notices and
demands to or upon the Company in respect of the Securities of that series or of
this Indenture may be served. The Company shall give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. In case the Company shall fail to maintain any such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made at the Principal Office
of the Trustee (or at any other address previously furnished in writing to the
Company by the Trustee) and notices may be served at the Principal Office of the
Trustee. Unless otherwise provided pursuant to Section 2.01, the Company hereby
initially designates as the Place of Payment for each series of Securities, the
Borough of Manhattan, The City of New York, and initially appoints the Trustee
its agent for payment, for registration of transfers, for exchange of the
Securities and where notices and demands may be served upon the Company.
Notwithstanding any other provisions to the contrary, the Company at its option
may make payment of principal, premium (if any) and interest with respect to
Registered Securities by check mailed to the address of the Person entitled
thereto, as such address appears on the registry books of the Company; provided,
however, that in the case of a Registered Security issued between a record date
and the initial Interest Payment Date relating to such record date, interest for
the period beginning on the Original Issue Date and ending on such initial
Interest Payment Date shall be paid on such initial Interest Payment Date to the
person to whom such Registered Security shall have been originally issued.
Notwithstanding the foregoing, a holder of U.S. $10,000,000 or more in
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aggregate principal amount of Registered Securities (or a holder of the
equivalent thereof in a Foreign Currency) shall be entitled to receive such
payments in Dollars by wire transfer of immediately available funds, but only if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than fifteen days prior to the applicable Interest Payment
Date. Simultaneously with the election by any holder to receive payments in a
Foreign Currency as provided in Section 2.11, such holder shall provide
appropriate wire transfer instructions to the Trustee, and all such payments
will be made by wire transfer of immediately available funds to an account
maintained by the payee with a bank located outside the United States.
SECTION 5.03. Limitation on Liens. Nothing in this Indenture or in the
Securities shall in any way restrict or prevent the Company or any Subsidiary
from incurring any indebtedness; provided, however, that neither the Company nor
any Restricted Subsidiary shall issue, assume or guarantee any notes, bonds,
debentures or other similar evidences of indebtedness for money borrowed (notes,
bonds, debentures or other similar evidences of indebtedness for money borrowed
being hereinafter in this Article Five called "Debt") secured by mortgage, lien,
pledge or other encumbrance (mortgages, liens, pledges or other encumbrances
being hereinafter in this Article Five called "Mortgages") upon any Restricted
Property, without effectively providing that the Securities of each series then
outstanding and thereafter created (together with, if the Company so determines,
any other indebtedness or obligation then existing and any other indebtedness or
obligation thereafter created ranking equally with the Securities then existing
or thereafter created which is not subordinated to the Securities of each
series) shall be secured equally and ratably with (or prior to) such Debt so
long as such Debt shall be so secured, except that the foregoing provisions
shall not apply to:
(a) Mortgages affecting property of a corporation existing at the time
it becomes a Subsidiary or at the time it is merged into or consolidated with
the Company or a Subsidiary;
(b) Mortgages on property existing at the time of acquisition thereof
or incurred to secure payment of all or part of the purchase price thereof or to
secure Debt incurred prior to, at the time of or within 180 days after
acquisition thereof for the purpose of financing all or part of the purchase
price thereof;
(c) Mortgages on any property to secure all or part of the cost of
construction or improvements thereon or Debt incurred to provide funds for any
such purpose in a principal amount not exceeding the cost of such construction
or improvements;
(d) Mortgages which secure only an indebtedness owing by a Subsidiary
to the Company or a Subsidiary;
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(e) Mortgages in favor of the United States or any state thereof, or
any department, agency, instrumentality, or political subdivision of any such
jurisdiction, to secure partial, progress, advance or other payments pursuant to
any contract or statute or to secure any indebtedness incurred for the purpose
of financing all or any part of the purchase price or cost of constructing or
improving the property subject thereto, including, without limitation, Mortgages
to secure Debt of the pollution control or industrial revenue bond type; or
(f) Mortgages required by any contract or statute in order to permit
the Company or a Subsidiary to perform any contract or subcontract made by it
with or at the request of the United States of America, any state or any
department, agency or instrumentality or political subdivision of either;
(g) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Mortgage referred to in
the foregoing clauses (a) to (f) inclusive or of any Debt secured thereby,
provided that the principal amount of Debt secured thereby shall not exceed the
principal amount of Debt so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement Mortgage shall be
limited to all or part of substantially the same property which secured the
Mortgage extended, renewed or replaced (plus improvements on such property).
Notwithstanding the foregoing provisions of this Section 5.03, the
Company and any one or more Restricted Subsidiaries may issue, assume or
guarantee Debt secured by Mortgages which would otherwise be subject to the
foregoing restrictions in an aggregate principal amount which, together with the
aggregate outstanding principal amount of all other Debt of the Company and its
Restricted Subsidiaries which would otherwise be subject to the foregoing
restrictions (not including Debt permitted to be secured under clauses (a) to
(g) inclusive above) and the aggregate Value, as defined in Section 5.05, of the
Sale and Lease-Back Transactions, as defined in Section 5.04, in existence at
such time (not including Sale and Lease-Back Transactions as to which the
Company has complied with Section 5.04(b)), does not at any one time exceed 10%
of the Consolidated Net Tangible Assets of the Company and its consolidated
Subsidiaries.
SECTION 5.04. Limitation on Sale and Lease-Back. Neither the Company
nor any Restricted Subsidiary shall enter into any arrangement with any Person
(other than the Company or a Subsidiary), or to which any such Person is a
party, providing for the leasing to the Company or a Restricted Subsidiary for a
period of more than three years of any Restricted Property which has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person or to any other Person (other than the Company or a Subsidiary), to which
funds have been or are to be advanced by such Person on the security of the
leased property (in this Article Five called "Sale and Lease-Back Transactions")
unless either:
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(a) the Company or such Restricted Subsidiary would be entitled,
pursuant to the provisions of Section 5.03, to incur Debt in a principal amount
equal to or exceeding the Value of such Sale and Lease-Back Transaction, secured
by a Mortgage on the property to be leased, without equally and ratably securing
the Securities; or
(b) the Company (and in any such case the Company covenants and agrees
that it will do so) during or immediately after the expiration of four months
after the effective date of such Sale and Lease-Back Transaction (whether made
by the Company or a Restricted Subsidiary) applies to the voluntary retirement
of indebtedness of the Company (including Securities, provided that Securities
may only be redeemed at the redemption prices and in accordance with the other
provisions of the form thereof), maturing by the terms thereof more than one
year after the original creation thereof and ranking at least pari passu with
the Securities (hereinafter in this Section called "Funded Debt") an amount
equal to the Value of such Sale and Lease-Back Transaction, less the principal
amount of Securities delivered, within four months after the effective date of
such arrangement, to the Trustee for retirement and cancellation and the
principal amount of other Funded Debt voluntarily retired by the Company within
such four-month period, excluding retirements of Securities and other Funded
Debt as a result of conversions or pursuant to mandatory sinking fund or
prepayment provisions or by payment at maturity.
SECTION 5.05. Definition of "Value." For purposes of Sections 5.03 and
5.04, the term "Value" shall mean, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater of (1)
the net proceeds of the sale or transfer of the property leased pursuant to such
Sale and Lease-Back Transaction or (2) the fair value, in the opinion of the
Board of Directors, of such property at the time of entering into such Sale and
Lease-Back Transaction, in either case divided first by the number of full years
of the term of the lease and then multiplied by the number of full years of such
term remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
SECTION 5.06. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee
for any one or more series of Securities, shall appoint a Trustee, in the manner
provided in Section 8.10 so that there shall at all times be a Trustee with
respect to each series of Securities hereunder.
SECTION 5.07. Provision as to Paying Agent. (a) If the Company appoints
a paying agent other than the Trustee with respect to the Securities of any
series, it shall cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 5.07:
(1) that it will hold all sums held by it as such agent for the payment
of the principal of and premium, if any, or interest, if any,
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on the Securities of such series (whether such sums have been paid to it by the
Company or by any other obligor on the Securities of such series) in trust for
the benefit of the Holders of the Securities of such series; and
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on the Securities of such series) to make any payment
of the principal of and premium, if any, or interest, if any, on the Securities
of such series when the same shall be due and payable.
(b) If the Company acts as its own paying agent with respect to the
Securities of any series it shall, on or prior to each due date of the principal
of and premium, if any, or interest, if any, on any of the Securities of such
series, set aside, segregate and hold in trust for the benefit of the Holders of
such Securities or the coupons appertaining thereto, as the case may be, a sum
sufficient to pay such principal and premium, if any, or interest, if any, so
becoming due and will notify the Trustee of any failure to take such action and
of any failure by the Company (or by any other obligor under such Securities) to
make any payment of the principal of and premium, if any, or interest, if any,
on such Securities when the same shall become due and payable.
(c) Whenever the Company has one or more paying agents with respect to
the Securities of any series, it shall deposit with a paying agent (who shall
make any necessary funds available to any other paying agents), on the Business
Day next preceding each due date in funds available on the due date of the
principal of, premium, if any, and interest, if any, on such Securities, a sum
in immediately available funds sufficient to pay such principal, premium, if
any, and interest, if any, so becoming due, such sum to be held in trust for the
benefit of the Holders of such Securities or the coupons appertaining thereto,
as the case may be, entitled to any such principal, premium and interest, and
(unless such paying agent is the Trustee) the Company shall promptly notify the
Trustee of its action or failure so to act.
(d) Anything in this Section 5.07 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it, or any paying agent hereunder, as
required by this Section 5.07, such sums to be held by the Trustee upon the
trusts herein contained.
(e) Anything in this Section 5.07 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.07 is subject to
Sections 13.03 and 13.04.
SECTION 5.08. Annual Certificate to Trustee. The Company shall
deliver to the Trustee on or before September 1 in each year during
which any Securities are outstanding hereunder (beginning with respect
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to Securities of each series with the September 1 next following the issue date
of any series of Securities) an Officers' Certificate, one of the signers of
which shall be the principal executive, principal financial or principal
accounting officer of the Company, stating whether or not the signers thereof
have knowledge of any default of the Company under the Indenture and, if so,
specifying each such default of which the signers have knowledge and the nature
thereof.
SECTION 5.09 Calculation of Original Issue Discount. The Company shall
file or cause to be filed with the Trustee promptly at the end of each calendar
year (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities as
of the end of such year and (ii) such other specific information relating to
such original issue discount as may then be relevant under the Internal Revenue
Code of 1986, as amended from time to time.
ARTICLE SIX.
HOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.
SECTION 6.01. Holders Lists. The Company shall furnish or cause to be
furnished to the Trustee, with respect to the Registered Securities of each
series (i) semi-annually, not later than each Interest Payment Date for such
series and on dates to be determined pursuant to Section 2.01 for non-interest
bearing Securities in each year, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders, as of the
respective record dates therefor, and on dates to be determined pursuant to
Section 2.01 for non-interest bearing Securities, and (ii) at such other times
as the Trustee may request in writing, within 30 days after receipt by the
Company of any such request, a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders as of a date not more than 15
days prior to the time such information is furnished; provided, however, that so
long as the Trustee shall be the registrar of a series of Securities all of
which are Registered Securities, such list shall not be required to be furnished
in respect of that series.
SECTION 6.02. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Holders of Registered
Securities of any series contained in the most recent list furnished to it as
provided in Section 6.01 or received by the Trustee in its capacity as
Securities registrar. The Trustee may destroy any list furnished to it as
provided in Section 6.01 upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities of the same series
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least
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six months preceding the date of such application, and such application states
that the applicants desire to communicate with other Holders of Securities of
such series or with Holders of Securities of all series with respect to their
rights under this Indenture or under such Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit for such purpose, then the Trustee shall, within five Business Days
after the receipt of such application, at its election, either
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section 6.02, or
(2) inform such applicants as to the approximate number of Holders of
Securities of such series or of all series, as the case may be, whose names and
addresses appear in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section 6.02 and as to
the approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Security of such series or of all series, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection (a) of this
Section 6.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interests of the Holders of
Securities of such series or of all series, as the case may be, or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If said Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, said Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender: otherwise, the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Each Holder of any Security or coupon or both, by receiving and
holding the same, agrees with the Company and the Trustee that
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neither the Company nor the Trustee nor any paying agent shall be held
accountable by reason of the disclosure of the name and address of such Holder
in accordance with the provisions of subsection (b) of this Section 6.02,
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 said subsection (b).
SECTION 6.03. Reports by the Company. (a) The Company shall file with
the Trustee, within 15 days after the Company is required to file the same with
the Securities and Exchange 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 said Commission may from time to time by rules and regulations
prescribe) relating to the equity or debt securities of the Company which the
Company may be required to file with said 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 such
sections, then to file with the Trustee and said Commission, in accordance with
rules and regulations prescribed from time to time by said 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 security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(b) The Company shall file with the Trustee and the Securities and
Exchange Commission, in accordance with the rules and regulations prescribed
from time to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.
(c) The Company shall transmit by mail to each Holder of Securities, in
the manner and to the extent provided in Section 6.04, within 30 days after the
filing thereof with the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to subsections (a) and
(b) of this Section 6.03 as may be required by rules and regulations prescribed
from time to time by the Securities and Exchange Commission.
(d) Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 6.04. Reports by the Trustee. (a) The Trustee shall transmit to
the Holders such reports concerning the Trustee and its
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actions under this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto. If required by
Section 313(a) of the Trust Indenture Act, the Trustee shall, within sixty dates
after each October 15 following the date of this Indenture, deliver to Holders a
brief report, dated as of such October 15, which complies with the provisions of
such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange, if any, upon which
the Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when the Securities are listed on any stock
exchange and of any delisting thereof.
ARTICLE SEVEN.
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT.
SECTION 7.01. Events of Default. "Event of Default," whenever used
herein with respect to Securities of any series means each one of the following
events unless it is either inapplicable to a particular series or it is
specifically deleted or modified in the supplemental indenture under which such
series of Securities is issued, if any, or in the form of Security for such
series:
(a) default in the payment of any installment of interest upon any
Security of that series or any coupon appertaining thereto when the same becomes
due and payable; and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if any, on
any Securities of that series as and when the same shall become due and payable
either at Maturity, upon redemption, by declaration or otherwise; or
(c) default in the payment of any sinking fund installment or analogous
obligation as and when the same shall become due and payable by the terms of
that series, and continuance of such default for a period of 30 days; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Securities of such series or in this Indenture (other than a covenant or
agreement in respect of the Securities of such series a default in the
performance of which or the breach of which is elsewhere in this Section 7.01
specifically provided for or which has expressly been included in this Indenture
solely for the benefit of one or more series of Securities other than such
series), and continuance of such default or breach for a period of 90 days after
the date on which written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice
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of Default" hereunder, shall have been given to the Company by the Trustee, or
to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount at Stated Maturity of the Securities of that series at the time
outstanding; or
(e) the acceleration of the maturity of indebtedness of the Company or
its wholly-owned subsidiaries for borrowed money, other than the Securities,
provided that the amount due and payable by reason of such acceleration equals
$25,000,000 or more;
(f) if there shall be entered a decree or order by a court having
jurisdiction for relief in respect of the Company under any applicable Federal
or State bankruptcy law or other similar law, or appointing a receiver, trustee
or liquidator, or other similar official of the Company or of any substantial
part of its property, or ordering the winding-up or liquidation of its affairs
and the continuance of any such decree or order unstayed and in effect for a
period of 90 consecutive days; or
(g) if the Company shall file a petition or an answer or consent
seeking relief under any applicable Federal or State bankruptcy law or other
similar law, or shall consent to the institution of proceedings thereunder or to
the filing of any such petition or to the appointment or taking possession by a
receiver, trustee, custodian or other similar official of the Company or of any
substantial part of its property, or the Company shall make an assignment for
the benefit of creditors generally or shall admit in writing to its inability to
pay its debts generally as they become due; or
(h) any other event provided in the form of Security for such series,
or in the supplemental indenture, Officers' Certificate or resolution of the
Board of Directors under which such series of Securities is issued, if any.
An Event of Default shall not occur with respect to any Securities of any series
solely by reason of an Event of Default occurring with respect to Securities of
a different series unless specific provision is made to that effect in the terms
of the Securities of the series or in the supplemental indenture under which the
series of the Securities is issued, if any, or in the form of Security for such
series.
If an Event of Default described in clauses (a), (b), (c) or (g) with respect to
Securities of any series at the time outstanding occurs and is continuing, then
and in each and every such case, unless the principal of all the Securities of
such series shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount at Stated Maturity of
the Securities of such series then outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by Holders), may declare the
principal amount (in the case of Securities that are Original Issue Discount
Securities, such principal amount as may be determined in accordance with the
terms of that series) of all the Securities of such series to be due and payable
immediately, and upon
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any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Securities of such series
contained to the contrary notwithstanding. If an Event of Default described in
clauses (d), (e) or (f) occurs and is continuing, then and in each and every
such case, unless the principal of all the Securities shall have already become
due and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount at Stated Maturity of all the Securities then
outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Holders), may declare the principal amount (or, if any Securities
are Original Issue Discount Securities, such portion of the principal amount as
may be determined in accordance with the terms of that series) of all the
Securities to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, anything in this
Indenture or in the Securities contained to the contrary notwithstanding. The
foregoing provisions are, however, subject to the condition that if, at any time
after the principal amount (in the case of Securities that are Original Issue
Discount Securities, such portion of the principal amount as may be determined
in accordance with the terms of that series) of the Securities of any series or
of all the Securities, as the case may be, shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of such series or of all of the
Securities, as the case may be, and the principal of and premium, if any, on all
Securities of such series or of all the Securities, as the case may be, which
shall have become due otherwise than by acceleration (with interest on overdue
installments of interest, to the extent that payment of such interest is
enforceable under applicable law, and on such principal and premium, if any, at
the rate of interest or yield to Maturity (in the case of Original Issue
Discount Securities) borne by the Securities of such series or at the rates of
interest or yields to Maturity of all the Securities, as the case may be, to the
date of such payment or deposit) and 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 any and all defaults under this
Indenture, other than the nonpayment of principal of or premium, if any, or
accrued interest, if any, on Securities of such series or of all of the
Securities, as the case may be, which shall have become due by acceleration,
shall have been remedied - then and in every such case the Holders of a majority
in aggregate principal amount at Stated Maturity of the Securities of such
series or of all of the Securities, as the case may be, then outstanding, by
written notice to the Company and to the Trustee, may waive all defaults with
respect to that series or of all of the Securities, as the case may be, and
rescind and annul such declaration and its consequences; but no waiver or
rescission and annulment shall extend to or shall affect any subsequent default,
or shall impair any right consequent thereon.
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If any Securities are denominated in a coin or currency other than that
of the United States, then for purposes of determining whether the Holders of
the requisite principal amount of Securities have taken any action as herein
described, the principal amount of such Securities shall be deemed to be that
amount of United States dollars that could be obtained for such principal amount
on the basis of the spot rate of exchange into United States dollars for the
currency in which such Securities are denominated as of the date the taking of
such action by the Holders of such requisite principal amount is evidenced to
the Trustee as provided in the Indenture.
If any Securities are original issue discount securities, then for the
purposes of determining whether the Holders of the requisite principal amount of
Securities have taken any action herein described, the principal mount of such
Securities shall be deemed to be the portion of such principal amount that would
be due and payable at the time of the taking of such action upon a declaration
of acceleration of maturity thereof.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company and the Trustee shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceeding had been
taken.
SECTION 7.02. Payment of Securities on Default; Suit Therefor. In case
(1) default shall be made in the payment of any installment of interest upon any
Security of any series as and when the same shall become due and payable, and
such default shall have continued for a period of 30 days, or (2) default shall
be made in the payment of the principal of or premium, if any, on any Security
of any series as and when the same shall have become due and payable, whether at
Maturity of Securities of that series or otherwise, or (3) default is made in
the making or satisfaction of any sinking fund payment or analogous obligation
when the same becomes due by the terms of the Securities of any series and such
default shall continue for a period of 30 days then, upon demand of the Trustee,
the Company shall pay to the Trustee, for the benefit of the Holder of any such
Security, the whole amount that then shall have become due and payable on any
such Security for principal and premium, if any, or interest, if any, or both,
as the case may be, with interest on the overdue principal and premium, if any,
and (to the extent that payment of such interest is enforceable under applicable
law) on the overdue installments of interest at the rate of interest or yield to
Maturity (in the case of Original Issue Discount Securities) borne by any such
Security and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation to
the Trustee, its agents, attorneys and counsel, and any expenses or liabilities
incurred by the Trustee hereunder other than through its negligence or bad
faith.
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In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor upon such
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property, wherever situated, of the Company or
any other obligor upon such Securities.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Securities of any
series under any Federal or State bankruptcy law or other similar law, or in
case a receiver or trustee shall have been appointed for the property of the
Company or such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the Securities of any
series, or to the creditors or property of the Company or such other obligor,
the Trustee (irrespective of whether the principal of any Securities 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
pursuant to the provisions of this Section 7.02) shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and premium, if any, and
interest, if any, owing and unpaid in respect of the Securities of any series
(in the case of Securities that are Original Issue Discount Securities, such
principal amount as would be then due and payable upon declaration of
acceleration in accordance with the terms of that series) and, in case of any
judicial proceedings, to file such proofs of claim and 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 allowed
in such judicial proceedings relative to the Company or any other obligor on the
Securities of any series, its or their creditors, or its or their property, and
to collect and receive any moneys or other property payable or deliverable on
any such claims, and to distribute the same after the deduction of its charges
and expenses; and any receiver, assignee, liquidator, sequestrator or trustee in
bankruptcy or reorganization is hereby authorized by each of the Holders to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to the Holders, to pay to the Trustee
any amount due it for compensation, expenses, disbursements and advances of the
Trustee, its agents or counsel, and any other amounts due to the Trustee under
Section 8.06 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
approve, consent, accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof, or to authorize
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the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee with respect to the Securities of any series shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall be
for the ratable benefit of the Holders of the Securities in respect of which
such action is taken.
SECTION 7.03. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee with respect to any series of Securities under this
Article Seven shall be applied in the order following, at the date or dates
fixed by the Trustee for the distribution of such moneys on account of
principal, premium, if any, or interest, if any, upon presentation of the
several Securities of such series or the coupons appertaining thereto, as the
case may be, and stamping thereon the payment, if only partially paid, and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 8.06 hereof;
SECOND: In case the principal of the outstanding Securities of
that series shall not have become due and be unpaid, to the payment of
interest on the Securities of that series, in the order of the maturity
of the installments of such interest with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate of interest (or yield to maturity
in the case of Original Issue Discount Securities) borne by the
Securities of that series, such payments to be made ratably to the
Persons entitled thereto;
THIRD: In case the principal of the outstanding Securities of
a series in respect of which such moneys have been collected shall have
become due and payable, by declaration or otherwise, to the payment of
the whole amount then owing and unpaid upon the Securities of that
series for principal and premium, if any, and interest, if any, with
interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon any
overdue installments of interest at the rate of interest (or yield to
Maturity in the case of Original Issue Discount Securities) borne by
the Securities of that series, and in case such moneys shall be
insufficient to pay in full the whole amounts so due and unpaid upon
the Securities of that series, then to the payment of such principal
and premium, if any, and interest, if any, without preference or
priority of principal and premium, if any, over interest, or of
interest over principal and premium, if any, or
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of any installment of interest over any other installment of interest,
or of any Security of that series over any other Security of that
series, ratably to the aggregate of such principal and premium, if any,
and any accrued and unpaid interest. The Holders of each series of
Securities of which the Required Currency is a Foreign Currency shall
be entitled to receive a ratable portion of the amount determined by
the Exchange Rate Agent by converting the principal amount outstanding
of such series of Securities in the Foreign Currency in which payments
with respect to such series of Securities are required into Dollars at
the Exchange Rate as of the date of declaration of acceleration of the
Maturity of the Securities (or, if there is no such rate on such date
for the reasons specified in Section 2.11(d), such rate on the date
specified in such Section).
FOURTH: Any surplus then remaining shall be paid to the
Company or to such other Person as shall be entitled to receive it.
SECTION 7.04. Proceedings by Holders. No Holder of any Security of any
series or of any coupon appertaining thereto shall have any right by virtue of
or by availing of any provision of this Indenture to institute any suit, action
or proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% in aggregate
principal amount at Stated Maturity of the Securities of that series (or, in
case of an Event of Default described in clause (d), (e) or (f) of Section 7.01,
25% in aggregate principal amount of all Securities then outstanding (in the
case of Original Issue Discount Securities, such principal amount to be
determined as provided in Section 2.01(9))) shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as the
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee during such 60 day
period by the Holders of a majority in principal amount at Stated Maturity of
the outstanding Securities of such series, it being understood and intended, and
being expressly covenanted by the Holder of every Security of that series with
every other Holder of every Security of that series or coupons appertaining
thereto and the Trustee, that no one or more Holders of Securities of any series
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holder of Securities of that series or any other series or coupons
appertaining thereto, or to obtain or seek to obtain priority over or preference
to any other such Holder,
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or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities.
Notwithstanding any other provisions in this Indenture, however, the
right of any Holder of any Security or coupon to receive payment of the
principal of, and premium, if any, and interest, if any, on such Security, on or
after the respective Stated Maturities expressed in such Security or, in the
case of redemption or repayment on or after the redemption date or repayment
date, as the case may be, and to institute suit for the enforcement of any such
payment on or after such respective date shall not be impaired or affected
without the consent of such Holder.
SECTION 7.05. Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee, in its discretion, may proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 7.06. Remedies Cumulative and Continuing. All powers and
remedies given by this Article Seven to the Trustee or to the Holders of
Securities or coupons shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or such Holders, by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee or of any
Holder to exercise any right or power accruing upon any default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 7.04, every power and remedy given by this
Article Seven or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as shall be deemed expedient, by the Trustee or by
the Holders.
SECTION 7.07. Direction of Proceedings and Waiver of Defaults by
Majority of Holders. The Holders of a majority in aggregate principal amount of
the Securities of all series affected (voting as one class) (in the case of
Original Issue Discount Securities, such principal amount to be determined as
provided in Section 2.01(9)) at the time outstanding shall have the right to
direct the time, method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, provided, however, that such direction shall not conflict with any rule
of law or this Indenture, and provided further, that (subject to the provisions
of Section 8.01) the Trustee may take any action deemed proper by the Trustee
which is not inconsistent with such direction
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and the Trustee shall have the right to decline to follow any such direction if
the Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good faith
by its board of directors or trustees, executive committee, or a trust committee
of directors or trustees or Responsible Officers shall determine that the action
or proceedings so directed would involve the Trustee in personal liability.
Prior to any declaration accelerating the maturity of the Securities of a
particular series (or all of the Securities as the case may be), the Holders of
a majority in aggregate principal amount at Stated Maturity of the Securities of
that series at the time outstanding may on behalf of the Holders of all the
Securities of that series waive any past default or Event of Default described
in clause (a), (b), (c) or (g) of Section 7.01 (or, in the case of an event
specified in clause (d), (e) or (f) of Section 7.01, the Holders of an aggregate
principal amount of all the Securities then outstanding (in the case of Original
Issue Discount Securities, such principal amount to be determined as provided in
Section 2.01(9))) may waive such default or Event of Default as its consequences
except (1) a default in the payment of interest, if any, or premium, if any, on,
or the principal of, any of the Securities or in the payment of any sinking fund
installment or analogous obligation with respect to Securities or (2) in respect
of a covenant or provision hereof which under Article Eleven cannot be modified
or amended without the consent of the Holder of each Security outstanding of the
series affected. Upon any such waiver the Company, the Trustee and the Holders
of Securities of that series (or all of the Securities, as the case may be)
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been waived as permitted by this Section 7.07, said
default or Event of Default shall for all purposes of the Securities and this
Indenture be deemed to have been cured and to be not continuing.
SECTION 7.08. Notice of Defaults. The Trustee shall, within 90 days
after the occurrence of any default hereunder with respect to Securities of any
series, mail to all Holders of Securities of that series in the manner and to
the extent provided in Section 6.04(c) notice of such default known to the
Trustee, unless such default shall have been cured prior to the giving of such
notice; provided, however, that, in the case of any default of the character
specified in Section 7.01(d) with respect to Securities of such series, no such
notice to Holders of Securities of such series shall be given until at least 90
days after the occurrence thereof. For the purpose of this Section, the term
"default," with respect to Securities of any series, means any event which is,
or after notice or lapse of time, or both, would become, an Event of Default
with respect to Securities of such series.
SECTION 7.09. Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security or coupon by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any
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right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 7.09 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Holder or group of Holders,
holding in the aggregate more than 10% in principal amount at Stated Maturity of
the Securities outstanding of that series (or, in case of any suit relating to
or arising under clause (d), (e) or (f) of Section 7.01, 10% in principal amount
of all Securities outstanding (in the case of Original Issue Discount
Securities, such principal amount to be determined as provided in the definition
of "Securities")) or to any suit instituted by any Holder for the enforcement of
the payment of the principal of or premium, if any, or interest, if any, on any
Security on or after the respective Stated Maturities expressed in such
Securities (or in the case of redemption or repayment on or after the redemption
date or repayment date).
SECTION 7.10. Judgment Currency. If for the purpose of obtaining a
judgment in any court with respect to any obligation of the Company hereunder or
under any Security, it shall become necessary to convert into any other currency
or currency unit (the "Judgment Currency") any amount in the currency or
currency unit due hereunder or under such Security (the "Contract Currency"),
then such conversion shall be made at the Conversion Rate as in effect on the
date the Company shall make payment to any person in satisfaction of such
judgment. If pursuant to any such judgment, conversion shall be made on a date
other than the date payment is made and there shall occur a change between such
Conversion Rate and the Conversion Rate as in effect on the date of payment, the
Company agrees to pay such additional amounts (if any) as may be necessary to
ensure that the amount paid is the amount in the Judgment Currency which, when
converted at the Conversion Rate as in effect on the date of payment, is
equivalent to the amount then due hereunder or under such Security in the
Contract Currency. Any amount due from the Company under this Section 7.10 shall
be due as a separate debt and is not to be affected by or merged into any
judgment being obtained for any other sums due hereunder or in respect of any
Security. In no event, however, shall the Company be required to pay more in the
Contract Currency at the Conversion Rate as in effect when payment is made than
the amount stated to be due hereunder or under such Security so that in any
event the Company's obligations hereunder or under such Security will be
effectively maintained as obligations in the Contract Currency.
For purposes of this Section 7.10, "Conversion Rate" shall mean the
rate determined by the Exchange Rate Agent equal to the arithmetic average of
the highest firm bid quotations in the Contract Currency received by the
Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the
second Business Day preceding the applicable
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payment date (or, if no such rate is quoted on such date, the last date on which
such rate was quoted), from three recognized foreign exchange dealers in New
York City selected by the Exchange Rate Agent and approved by the Company (one
of which may be the Exchange Rate Agent) for the purchase by the quoting dealer,
for settlement on such payment date, of the aggregate amount of the Judgment
Currency payable on such payment date.
ARTICLE EIGHT.
CONCERNING THE TRUSTEE.
SECTION 8.01. Duties and Responsibilities of Trustee. With respect to
the Holders of any series of Securities issued hereunder, the Trustee, prior to
the occurrence of an Event of Default with respect to the Securities of that
series and after the curing of all Events of Default which may have occurred
with respect to the Securities of that series, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations with respect to such series shall be read into
this Indenture against the Trustee. In case an Event of Default with respect to
the Securities of any series has occurred (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture with respect to that series 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 his or her own affairs.
Prior to the occurrence of an Event of Default with respect to the
Securities of a series, and after the curing or waiving of all Events of Default
with respect to that series which may have occurred and in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions 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.
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) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent facts,
and
(b) 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
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the direction of the Holders pursuant to Section 7.07 of any series relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if it has reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
8.01.
SECTION 8.02. Reliance on Documents, Opinions, etc. Except as otherwise
provided in Section 8.01:
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a written statement signed in the name
of the Company by the President and Chief Executive Officer, one of its Vice
Presidents or its Treasurer (unless other evidence in respect thereof is herein
specifically prescribed); and any resolution of the Board of Directors shall be
sufficiently evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) Whenever in the administration of the Indenture, the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically provided) may, in the absence of bad faith on its part,
rely on an Officers' Certificate;
(d) the Trustee may consult with its counsel of its selection or
require an Opinion of Counsel and any such advice or Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the
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Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(f) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture;
(g) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, debenture, coupon or other paper or document, unless
requested in writing to do so by the Holders of not less than a majority in
principal amount at Stated Maturity of the Securities then outstanding of any
series affected or of all the Securities, as the case may be; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to so proceeding;
(h) 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; and
(i) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Principal Trust Office of the Trustee,
and such notice references the Securities and this Indenture.
SECTION 8.03. No Responsibility for Recitals, etc. The recitals
contained herein and in the Securities (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of any of
the Securities or coupons; provided, however, that the Trustee shall not be
relieved of its duty to authenticate Securities as authorized by this Indenture.
The Trustee shall not be accountable for the use or application by the Company
of any Securities or the proceeds of any Securities authenticated and delivered
by the Trustee in conformity with the provisions of this Indenture.
SECTION 8.04. Trustee, Paying Agent or Registrar May Own Securities.
The Trustee or any paying agent or Security registrar or
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any other agent of the Company or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities or the coupons
appertaining thereto with the same rights it would have if it were not Trustee,
paying agent or Security registrar.
SECTION 8.05. Moneys to be Held in Trust. Subject to the provisions of
Section 13.04, all moneys received by the Trustee or any paying agent shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee and any paying agent shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree in writing with the Company to pay thereon.
SECTION 8.06. Compensation and Expenses of Trustee. The Company shall
pay to the Trustee from time to time, and the Trustee shall be entitled to, such
compensation as shall be agreed in writing between the Company and the Trustee
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Company shall pay or
reimburse the Trustee upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may be attributable to its negligence or willful misconduct. The
Company shall indemnify the Trustee for, and hold it harmless against, any and
all loss, liability, damage, claim or expense, including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or willful
misconduct on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability arising in connection with
its duties under this Indenture. The obligations of the Company under this
Section 8.06 to compensate the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to that
of the Securities upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the Holders of particular
Securities. When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 7.01(e) or Section 7.01(f), the
expenses (including the reasonable charges and expenses 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.
SECTION 8.07. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or
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omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
willful misconduct on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or willful misconduct on the part
of the Trustee, shall be full warrant to the Trustee for any action taken or
omitted by it under the provisions of this Indenture upon the faith thereof.
SECTION 8.08. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of the Trust Indenture Act of 1939 Sections
310(a)(1) and 310(a)(2) or successor provisions. The Trustee (or any affiliate
thereof which has unconditionally guaranteed the obligations of the Trustee
hereunder) shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with the Trust Indenture Act of 1939 Section 310(b) or successor
provisions. In determining whether the Trustee has conflicting interests as
defined in the Trust Indenture Act of 1939 Section 310(b)(1) or successor
provisions, the provisions contained in the proviso to the Trust Indenture Act
of 1939 Section 310(b)(1) or successor provisions shall be deemed incorporated
herein.
SECTION 8.09. Resignation or Removal of Trustee. (a) The Trustee may
resign with respect to any series of Securities at any time by giving written
notice of such resignation to the Company. The Company shall mail or cause to be
mailed to the Holders of the applicable series of Securities notice of the
resignation of the Trustee. Upon receiving such notice of resignation with
respect to the applicable series of Securities, the Company shall promptly
appoint a successor trustee with respect to that series by written instrument,
in duplicate, executed by or pursuant to a resolution of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If a successor trustee shall not have been so
appointed with respect to any series of Securities, and shall have accepted
appointment within 30 days after the giving of such notice of resignation to the
Holders of such series, the resigning Trustee may, at the expense of the
Company, petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Holder who has been a bona fide holder of a Security
or Securities of the applicable series for at least six months may, subject to
the provisions of Section 7.09, on behalf of such Holder and all others
similarly situated, petition any such court for the appointment of a successor
trustee with respect to that series. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur -
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(1) the Trustee shall fail to comply with the provisions of subsection
(a) of Section 8.08 after written request therefor by the Company or by any
Holder who has been a bona fide holder of a Security or Securities of the
applicable series for at least six months, or
(2) the Trustee shall become incapable of acting, with respect to any
series of Securities 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, the Company may remove the Trustee with respect to any one or more of such
series of Securities and appoint a successor trustee of that series by written
instrument, in duplicate, executed by or pursuant to order of the Board of
Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or subject to the provisions of
Section 7.09, any Holder has been a bona fide Holder of a Security or Securities
of that 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
removal of the Trustee and the appointment of a successor trustee with respect
to that series. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a successor trustee
with respect to that series.
(c) The Holders of a majority in aggregate principal amount at Stated
Maturity of the Securities of any series at the time outstanding may at any time
remove the Trustee with respect to such series and nominate with respect to such
series a successor trustee which shall be deemed appointed as successor trustee
with respect to such series unless within 10 days after such nomination the
Company objects thereto, in which case the Trustee so removed or any Holder of
Securities of the series may, at the expense of the Company, petition any court
of competent jurisdiction for appointment of a successor trustee with respect to
such series upon the terms and conditions and otherwise as provided in
subsection (a) of this Section 8.09.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee with respect to an applicable series of Securities pursuant to
any of the provisions of this Section 8.09 shall become effective upon
acceptance of appointment by the successor trustee for that series as provided
in Section 8.10.
(e) The Company shall give notice as provided in Section 15.05 of each
resignation or removal of the Trustee with respect to any series of Securities.
Each notice shall include the name of such successor trustee and the address of
its Principal Office and shall be given within 60 days of such event.
SECTION 8.10. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.09 shall execute,
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acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee with respect to all or any applicable
series shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts, duties and obligations with respect to such series of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Company or of the successor trustee,
the trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of Section 8.06, execute and deliver an instrument
transferring to such successor trustee all the rights and powers and trusts with
respect to any series of Securities of the trustee so ceasing to act. Upon
request of any successor trustee, the Company shall execute any and all
instruments in writing in order more fully and certainly to vest in and confirm
to such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 8.06.
In case of the appointment hereunder of a successor trustee with
respect to the Securities of any one or more (but not all) series, the Company,
the predecessor trustee and each successor trustee with respect to the
Securities of any applicable series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment
and which shall contain (1) such provisions as shall be necessary or desirable
to transfer and confirm to, and vest in each successor trustee all of the
rights, powers and duties of the predecessor trustee with respect to the
Securities of that or those series to which the appointment of such successor
trustee relates, (2) if the retiring trustee is not retiring with respect to all
Securities, it shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor trustee with respect to the Securities of any series as to which the
predecessor trustee is not retiring shall continue to be vested in the
predecessor trustee and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such trustees
co-trustees of the same trust 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.
No successor trustee shall accept appointment as provided in this
Section 8.10 unless at the time of such acceptance such successor trustee shall
be eligible and qualified under the provisions of Section 8.08.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.10, the Company shall mail notice of the succession
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of such trustee hereunder to all the Registered Holders of such series as the
names and addresses of such Holders shall appear on the registry books of the
Company and shall publish notice of such event once in an Authorized Newspaper
in the Place of Payment. If the Company fails to mail such notice in the
prescribed manner within 10 days after the acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 8.11. Succession by Merger, etc. 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 the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder provided such corporation shall be eligible and qualified
under the provisions of Section 8.08 without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities of any series shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Securities of any series so authenticated; and in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities of any series either in the name of any
predecessor hereunder or in the name of the successor trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the
Securities of any series or in this Indenture provided that the certificate of
the Trustee shall have; provided, however, that the right to adopt the
certificate of authentication of any predecessor trustee or authenticate
Securities of any series in the name of any predecessor trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 8.12. Limitation on Rights of Trustee as a Creditor. If and
when the Trustee shall be or become a creditor of the Company, the Trustee shall
be subject to the provisions of the Trust Indenture Act of 1939 regarding the
collection of claims against the Company.
ARTICLE NINE.
CONCERNING THE HOLDERS.
SECTION 9.01. Action by Holders. (a) Whenever in this Indenture it is
provided that the Holders of a specified percentage in aggregate principal
amount at Stated Maturity of the Securities of any or all series may take any
action (including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action) the fact that at the time
of taking any such action
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the Holders of such specified percentage have joined therein may be evidenced
(A) by any instrument or any number of instruments of similar tenor executed by
Holders in person or by agent or proxy appointed in writing, or (B) by the
record of the Holders of Securities voting in favor thereof at any meeting of
Holders duly called and held in accordance with the provisions of Article Ten,
or (C) by a combination of such instrument or instruments and any such record of
such a meeting of such Holders.
(b) If the Company shall solicit from the Holders of any or all series
any request, demand, authorization, direction, notice, consent, waiver or other
act, the Company may, at its option, by or pursuant to resolution of the Board
of Directors fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other act, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other act may be given before or after the record
date, but only the Holders of record at the close of business on the record date
shall be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
act, and for that purpose the Securities deemed to be outstanding shall be
computed as of the record date; provided, however, that no such authorization,
agreement or consent by the Holders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
SECTION 9.02. Proof of Execution by Holders. Subject to the provisions
of Sections 8.01, 8.02 and 10.05, proof of the execution of any instrument by a
Holder, his agent or proxy shall be sufficient if made in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The ownership of Securities of
any series shall be proved by the registry books of the Company or by a
certificate of the registrar of the Securities of any series.
The record of any meeting of Holders of Securities may be proved in the
manner provided in Section 10.06.
SECTION 9.03. Who Deemed Absolute Owners. The Company, the Trustee, any
paying agent, any transfer agent and any Security registrar may treat the Holder
of any Unregistered Security and the Holder of any coupon, except with respect
to a Fully Registered Security, whether or not the Security to which it
appertained be registered, as the absolute owner of such Security or coupon for
the purpose of receiving payment thereof or on account thereof and for all other
purposes (whether or not such Security or coupon shall be overdue) and neither
the Company, the Trustee, any paying agent, any transfer agent nor any Security
registrar shall be affected by any notice to the contrary. The Company, the
Trustee, any paying agent,
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any transfer agent and any Security registrar may treat the person in whose name
a Registered Security shall be registered upon the registry books of the Company
as the absolute owner of such Security (whether or not such Security shall be
overdue) for the purpose of receiving payment of principal of, premium, if any,
on and, if such Registered Security is a Fully Registered Security, interest, if
any, on, such Registered Security and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any transfer agent nor any
Security registrar shall be affected by any notice to the contrary. All such
payments so made to any Holder for the time being or upon his order shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon such Security.
The amount of Unregistered Securities held by any Person executing any
instrument or writing as a Holder, and the numbers of such Unregistered
Securities, and the date of his holding the same, may be proved by the
production of such Securities or by a certificate executed by any trust company,
bank, banker or member of a national securities exchange (wherever situated), as
depositary, if such certificate is in form satisfactory to the Trustee, showing
that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Unregistered Securities therein described;
or such facts may be proved by the certificate or affidavit of the Person
executing such instrument or writing as a Holder, if such certificate or
affidavit is in form satisfactory to the Trustee. The Trustee and the Company
may assume that such ownership of any Unregistered Security continues until (i)
another certificate bearing a later date issued in respect of the same
Unregistered Security is produced, or (ii) such Unregistered Security is
produced by some other Person, or (iii) such Unregistered Security is registered
as to principal or is surrendered in exchange for a Fully Registered Security,
or (iv) such Unregistered Security has been cancelled in accordance with Section
2.08.
SECTION 9.04. Company-Owned Securities Disregarded. In determining
whether the Holders of the requisite aggregate principal amount at Stated
Maturity of Securities have concurred in any direction, consent or waiver under
this Indenture, Securities which are owned by the Company or any other obligor
on such Securities or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction or consent only Securities which a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section 9.04 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Securities and that the pledgee
is not a person directly or indirectly controlling or controlled by or under
direct or indirect common control with the
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Company or any such other obligor. In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 9.05. Revocation of Consents; Future Holders Bound. (a) At any
time prior to but not after, the evidencing to the Trustee, as provided in
Section 9.01, of the taking of any action by the Holders of the percentage in
aggregate principal amount at Stated Maturity of the Securities of any or all
series, as the case may be, specified in this Indenture in connection with such
action, any Holder of a Security the number, letter or other distinguishing
symbol of which is shown by the evidence to be included in the Securities the
Holders of which have consented to such action may, by filing written notice
with the Trustee at the Principal Office of the Trustee and upon proof of
holding as provided in Section 9.02, revoke such action so far as concerns such
Holder and all future Holders and owners of such Security and any Securities
which may be issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon such Security or such
other Security issued in exchange or substitution therefor.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of any action taken, suffered or omitted by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made upon such
Security.
ARTICLE TEN.
HOLDERS' MEETINGS.
SECTION 10.01. Purposes of Meetings. A meeting of the Holders of
Securities of any or all series may be called at any time and from time to time
pursuant to the provisions of this Article Ten for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default hereunder
and its consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article Seven;
(b) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article Eight;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(d) to take any other action authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount at
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Stated Maturity of the Securities of any or all series, as the case may be,
under any other provisions of this Indenture or under applicable law.
SECTION 10.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Holders of Securities of any or all series to take any action
specified in Section 10.01, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of the Holders of Securities of any or all series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be mailed to Holders of
Registered Securities of each series affected, at their addresses as they appear
on the registry books of the Company, and notice to Holders of Unregistered
Securities of each series affected shall be published in an Authorized Newspaper
in the Place of Payment. Such notice shall be mailed or published, as the case
may be, not less than 20 nor more than 90 days prior to the date fixed for the
meeting. However, if all Securities of any series with respect to which the
meeting is to be held are Registered Securities no notice need be given except
notice by mail as hereinabove provided.
Failure to receive such notice or any defect therein shall in no case
affect the validity of any action taken at such meeting. Any meeting of Holders
of Securities of any or all series, as the case may be, shall be valid without
notice if the Holders of all such Securities outstanding, the Company and the
Trustee are present in person or by proxy or shall have waived notice thereof
before or after the meeting.
SECTION 10.03. Call of Meetings by Company or Holders. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
Holders of at least 10% in aggregate principal amount at Stated Maturity of the
Securities then outstanding of any or all series, as the case may be, that may
be affected by the action proposed to be taken at the meeting, shall have
requested the Trustee to call a meeting of Holders of Securities of any or all
series, as the case may be, that may be so affected by written request setting
forth in a reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have mailed the notice of such meeting within 20 days
after receipt of such request, then the Company or such Holders, in the amount
specified, may determine the time and the place in said Borough of Manhattan for
such meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
SECTION 10.04. Qualification for Voting. To be entitled to vote at any
meeting of Holders of Securities, a Person shall (a) be a Holder of one or more
Securities with respect to which such meeting is being held or (b) be a Person
appointed by an instrument in writing as proxy by such a Holder. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any or all series, as the case may be, shall be the
Persons entitled to vote
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at such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 10.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities, in regard to proof of the
holding of Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 10.03, in which case
the Company or the Holders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Holders of a majority
in principal amount at Stated Maturity of the Securities represented at the
meeting.
Subject to the provisions of Section 9.04, at any meeting each Holder
of Securities with respect to which such meeting is being held, or proxy
therefor, shall be entitled to one vote for each $1,000 (or, if such Securities
are denominated in a Foreign Currency, the minimum denomination of such
Securities as specified pursuant to Section 2.01(8)) in principal amount (in the
case of Original Issue Discount Securities, such principal amount to be
determined as provided in Section 2.01(9)) of such Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any such Security challenged as not outstanding and
ruled by the chairman of the meeting to be not outstanding. The chairman of the
meeting shall have no right to vote other than as a Holder of Securities or
proxy therefor. At any meeting of Holders of Securities, the presence of Persons
holding or representing the Securities with respect to which such meeting is
being held in such aggregate principal amount sufficient to take action on the
business for the transaction of which such meeting was called shall constitute a
quorum, but, if less than a quorum is present, the Persons holding or
representing a majority in such aggregate principal amount of such Securities
represented at the meeting may adjourn such meeting with the same effect, for
all intents and purposes, as though a quorum had been present. Any meeting of
Holders of Securities with respect to which such meeting is being held duly
called pursuant to the provisions of Section 10.02 or 10.03 may be adjourned
from time to time by vote of the Holders of a majority in such aggregate
principal amount of the Securities represented at the meeting and entitled to
vote, and the meeting may be held as so adjourned without further notice.
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SECTION 10.06. Voting. The vote upon any resolution submitted to any
meeting of Holders of Securities with respect to which such meeting is being
held shall be by written ballots on which shall be inscribed the signatures of
the Holders or of their representatives by proxy and the serial number or
numbers of the Securities held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 10.02. The record
shall show the serial numbers of the Securities voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.07. No Delay of Rights by Meeting. Nothing in this Article
Ten contained shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Holders of Securities or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Holders of Securities under any of the provisions of this Indenture or of
the Securities.
ARTICLE ELEVEN.
SUPPLEMENTAL INDENTURES.
SECTION 11.01. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of any series of Securities, the Company,
when authorized by or pursuant to a resolution of the Board of Directors, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation,
pursuant to Article Twelve hereof, of the covenants, agreements and obligations
of the Company herein and in the Securities contained;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the
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Holders of any series of Securities as the Board of Directors and the Trustee
shall consider to be for the protection of the Holders of such Securities, and
to make the occurrence, or the occurrence and continuance, of a default in any
of such additional covenants, restrictions or conditions a default or an Event
of Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default and shall not
adversely affect the interests of the Holders of Securities of any series;
(c) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of any series, any property or assets which the
Company may desire or may be required to convey, transfer, assign, mortgage or
pledge in accordance with the provisions of Section 5.03 or Section 12.02;
(d) to establish the form or terms of Securities of any series as
permitted by Section 2.01;
(e) to cure any ambiguity, to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture which shall not be inconsistent with the provisions
of this Indenture; provided, however, that such action shall not adversely
affect the interests of the Holders of Securities of any series; or
(f) to evidence and provide for the acceptance of appointment hereunder
by a successor trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
8.10;
(g) to provide for the documentation necessary for the issuance of
Securities outside the United States of America; or
(h) to conform the Indenture to the provisions of the Trust Indenture
Act of 1939, as then in effect.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects
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the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.01 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 11.02.
SECTION 11.02. Supplemental Indentures with Consent of Holders of a
Series. With the consent (evidenced as provided in Section 9.01) of the Holders
of not less than 50% in aggregate principal amount at Stated Maturity of the
Securities at the time outstanding of each series affected by such supplemental
indenture or indentures, the Company, when authorized by or pursuant to a
resolution of the Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of each such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each outstanding Security
affected thereby, (i) extend the fixed Maturity of any Security, (ii) reduce the
rate of interest of, or any premium payable upon the redemption of, any
Security, or extend the time of payment of principal or interest, if any,
thereon or reduce the principal thereof or the time during which premium is
payable thereon, (iii) change the Required Currency, (iv) reduce the amount of
the principal of an Original Issue Discount Security that would be due and
payable upon an acceleration of the maturity thereof pursuant to Section 7.01 or
the amount thereof provable in bankruptcy pursuant to Section 7.02 without the
consent of the Holder of each Security so affected, (v) change the place of
payment where, or the currency or currencies or currency unit or units in which,
any Security or any premium or interest thereon is payable, (vi) impair the
right to institute suit for the enforcement of any such payment on or after the
maturity thereof, (vii) affect adversely the terms, if any, of conversion of any
Security into stock or other securities of the Company or of any other
corporation, (viii) change any obligation of the Company, with respect to
outstanding Securities, to maintain an office or agency in the places and for
the purposes specified in the Indenture, (ix) reduce the percentage in principal
amount at Stated Maturity of the outstanding Securities, the consent of whose
Holders is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with certain provisions hereof
or of certain defaults hereunder and their consequences provided for in this
Indenture, or (x) modify any provision of this Section 11.02 or Section 7.07
hereof except to increase any such percentage or to provide certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby. A supplemental indenture which
changes or eliminates any covenant or other provision of this Indenture which
has expressly been included solely for the benefit of one or more particular
series of Securities, or which modifies the
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rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Holders of such series as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 11.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures. Any supplemental indenture executed pursuant to the
provisions of this Article Eleven shall comply with the Trust Indenture Act of
1939, as then in effect. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article Eleven, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective
rights, limitation of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Holders of the series of
Securities affected shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 11.04. Notation on Securities. Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Eleven may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Securities of any series so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then outstanding.
SECTION 11.05. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee. The Trustee, subject to the provisions of Sections 8.01 and
8.02, shall be entitled to receive and shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental
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indenture executed pursuant hereto is authorized and permitted by this Indenture
and complies with the requirements of this Article Eleven.
ARTICLE TWELVE.
CONSOLIDATION, MERGER AND SALE.
SECTION 12.01. Company May Consolidate, etc., on Certain Terms. (a)
Subject to the provisions of Section 12.02, nothing contained in this Indenture
or in any of the Securities shall prevent any consolidation or merger of the
Company with or into any other U.S. corporation or corporations (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of all or substantially all the property of the
Company, to any other corporation (whether or not affiliated with the Company)
authorized to acquire and operate the same; provided, however, that, except as
otherwise provided in Section 12.01(b) below, upon any such consolidation,
merger, sale or conveyance, other than a consolidation or merger in which the
Company is the continuing corporation, the due and punctual payment of the
principal of and premium, if any, and interest, if any, on all of the
Securities, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture and in such
series to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been merged, or by
the corporation which shall have acquired such property; and provided further
that the Company or such successor corporation, as the case may be, shall not
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition.
(b) Notwithstanding the provisions of Section 12.01(a), the Company may
sell or convey all or substantially all its property located in the United
States of America to one or more wholly owned Subsidiaries organized under the
laws of the United States of America or any political subdivision thereof, and
such Subsidiary or Subsidiaries will not be required to assume the performance
or observance of any of the Company's obligations under this Indenture or any
Securities.
SECTION 12.02. Securities to be Secured in Certain Events. If, upon any
consolidation or merger of the Company with or into any other corporation, or
upon any sale or conveyance of all or substantially all the property of the
Company to any other corporation, any of the property of the Company or of any
Restricted Subsidiary would thereupon become subject to any mortgage, lien or
pledge, the Company, prior to or simultaneously with such consolidation, merger,
sale or conveyance, will secure the Securities of each series outstanding
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hereunder, equally and ratably with any other obligations of the Company or any
Restricted Subsidiary then entitled thereto, by a direct lien on all such
property prior to all liens other than any theretofore existing thereon.
SECTION 12.03. Successor Corporation to be Substituted. In case of any
such consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest, if any, on all of the
Securities of each series and the due and punctual performance of all of the
covenants and conditions of this Indenture and in such series to be performed by
the Company, such successor corporation shall succeed to and be substituted for
the Company, with the same effect as if it had been named herein and, if the
Company is to be voluntarily dissolved, the Company shall thereupon be released
from all obligations hereunder and under the Securities of each series. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of BetzDearborn Inc. any or all of the Securities of
each series issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication, and
any Securities which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the other Securities of such series theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
SECTION 12.04. Opinion of Counsel to be Given Trustee. Before the
Trustee shall execute any supplemental indenture required pursuant to this
Article Twelve, the Trustee, subject to Sections 8.01 and 8.02, shall receive
and shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale or conveyance and any such assumption complies with the provisions of this
Article.
ARTICLE THIRTEEN.
SATISFACTION AND DISCHARGE OF INDENTURE.
SECTION 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Securities of any series theretofore
authenticated (other than any Securities of such series which shall have been
destroyed, lost or stolen or in lieu of or in substitution for which other
Securities shall have been
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authenticated and delivered) and not theretofore cancelled, or (b) all the
Securities of any series not theretofore cancelled or delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee, in trust, an
amount in the Required Currency (other than funds repaid by the Trustee to the
Company in accordance with Section 13.04) sufficient to pay at maturity or upon
redemption all of the Securities of such series (other than any Securities of
such series which shall have been mutilated, destroyed, lost or stolen and in
lieu of or in substitution for which other Securities shall have been
authenticated and delivered or which shall have been paid) not theretofore
cancelled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest, if any, due or to become due to such date of
maturity or redemption date, as the case may be, and if in either case the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of further effect with
respect to Securities of such series, and the Trustee, on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 16.07 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture with
respect to Securities of such series, the Company, however, hereby agreeing to
reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred and to compensate the Trustee for any services reasonably and
properly rendered by the Trustee in connection with this Indenture or the
Securities.
SECTION 13.02. Deposited Moneys to be Held in Trust by Trustee. All
moneys deposited with the Trustee pursuant to Section 13.01 shall be held in
trust and applied by it to the payment, either directly or through any paying
agent (including the Company if acting as its own paying agent), to the Holders
of the particular Securities for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest and premium, if any.
SECTION 13.03. Paying Agent to Repay Moneys Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Securities (other than the Trustee) shall, upon demand of the Company, be repaid
to it or paid to the Trustee, and thereupon such paying agent shall be released
from all further liability with respect to such moneys.
SECTION 13.04. Return of Unclaimed Moneys. Any moneys deposited with or
paid to the Trustee for payment of the principal of (and premium, if any) or
interest, if any, on Securities of any series and not applied but remaining
unclaimed by the Holders of Securities of that series for two years after the
date upon which the principal of, and premium, if any, or interest, if any, on
such Securities, as the case may be, shall have become due and payable, shall,
upon written
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demand, be repaid to the Company by the Trustee; and the Holder of any of such
Securities shall thereafter look only to the Company for any payment which such
Holder may be entitled to collect, provided, however, that, before being
required to make any such repayment, the Trustee may (at the cost of the
Company) mail to such Holders at their last known address or cause to be
published once a week for two successive weeks, in each case on any day of the
week, in an Authorized Newspaper in the Place of Payment, a notice (in such form
as may be deemed appropriate by the Trustee) that said moneys remain unclaimed
and that, after a date named therein, any unclaimed balance of said moneys then
remaining will be returned to the Company (except that with respect to
presentation of Securities for payment and transfer, such term shall mean the
office or agency of the Trustee in said city at which at any particular time its
corporate agency business shall be conducted).
ARTICLE FOURTEEN.
DEFEASANCE.
SECTION 14.01. Applicability of Article. If pursuant to Section 2.01
provision is made for the defeasance of Securities of a series, then the
provisions of this Article shall be applicable except as otherwise specified as
contemplated by Section 2.01 for Securities of such series.
SECTION 14.02. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations. At the Company's option, either (x) the Company shall be deemed to
have been Discharged (as defined below) from its obligations with respect to
Securities of any series on the 91st day after the applicable conditions set
forth below have been satisfied, or (y) the Company shall cease to be under any
obligation to comply with any term, provision or condition set forth in Sections
5.03, 5.04, 5.08, 12.01 and 12.02 with respect to Securities of any series at
any time after the applicable conditions set forth below have been satisfied:
(a) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series (i) money in the Required Currency in an amount, or
(ii) in the case of Securities denominated in Dollars, U.S. Government
Obligations (as defined below), which through the payment of interest, principal
and premium, if any, in respect thereof in accordance with their terms will
provide (without any reinvestment of such interest, principal or premium), not
later than one day before the due date of any payment, money in an amount, or
(iii) a combination of (i) and (ii), sufficient, in the opinion (with respect to
(ii) and (iii)) of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee at or prior to the time of such deposit, to pay and discharge each
installment of principal (including
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any mandatory sinking fund payments) of, premium, if any, and interest on, the
outstanding Securities of such series on the dates such installments of
interest, principal or premium are due or the outstanding Securities of such
series are redeemable, if applicable, pursuant to Section 14.02(b) below;
(b) in case any of the Securities of such series are to be redeemed on
any date prior to their Stated Maturity, the Company shall have given to the
Trustee an irrevocable notice pursuant to Section 3.02 of this Indenture
requiring redemption of such Securities on such date and the Company shall have
given to the Trustee in form satisfactory to the Trustee irrevocable
instructions to publish notice of redemption of such Securities prior to said
date as provided in Section 3.02 of this Indenture; and in the event such
Securities are not to be redeemed within the 60 days next succeeding the date of
such deposit with the Trustee, the Company shall have given the Trustee in form
satisfactory to it irrevocable instructions to publish, as soon as practicable,
once in each of two successive calendar weeks in an Authorized Newspaper, a
notice to the Holders of such Securities that the deposit required by Section
14.02(a) has been made with the Trustee and stating such Maturity or redemption
date or dates upon which moneys are to be available for the payment of the
principal of, premium, if any, and interest on such Securities.
(c) the Company shall have delivered to the Trustee an Officers'
Certificate certifying (i) as to whether the Securities of such series are then
listed on the New York Stock Exchange and (ii) that the deposit and related
defeasance would not cause the holders of such series of Securities to recognize
income, gain or loss for United States Federal income tax purposes and that the
Holders of such series will be subject to United States Federal income tax in
the same amounts, in the same manner and at the same times as would have been
the case if such option had not been exercised;
(d) if the Securities of such series are then listed on the New York
Stock Exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
Section would not cause such Securities to be delisted;
(e) no Event of Default or event (including such deposit) which, with
notice or lapse of time, or both, would become an Event of Default with respect
to the Securities of such series shall have occurred and be continuing on the
date of such deposit as evidenced to the Trustee in an Officers' Certificate
delivered to the Trustee concurrently with such deposit;
(f) the Company shall have paid or duly provided for payment of all
amounts then due to the Trustee pursuant to Section 8.06.
"Discharged" means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by, and obligations under, the Securities of
such series and to have satisfied all the
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obligations under this Indenture relating to the Securities of such series (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except (A) the rights of Holders of Securities of such
series to receive, from the trust fund described in clause (a) above, payment of
the principal of, and premium, if any, and the interest on such Securities when
such payments are due, (B) the Company's obligations with respect to the
Securities of such series under Sections 2.05, 2.06, 5.02 and 14.03 and (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including without limitation, the provisions of Section 8.06.
"U.S. Government Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case under clauses
(i) or (ii) are not callable or redeemable at the option of the issuer thereof.
SECTION 14.03. Deposited Moneys and U.S. Government Obligations To Be
Held in Trust; Miscellaneous. All moneys and U.S. Government Obligations
deposited with the Trustee pursuant to Section 14.02 in respect of Securities of
a series shall be held in trust and applied by it, in accordance with the
provisions of such Securities 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 Holders of such Securities,
of all sums due and to become due thereon for principal, premium, if any, and
interest, if any, but such money need not be segregated from other funds except
to the extent required by law. The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 14.02 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of Outstanding Securities.
SECTION 14.04. Repayment to Company. After the Maturity and payment of
the principal of, premium, if any, and interest on the Securities of any series
for which money or U.S. Government Obligations have been deposited pursuant to
Section 14.02, the Trustee and any paying agent shall promptly pay or return to
the Company upon request any money and U.S. Government Obligations held by them
that are not required for the payment of the principal of, premium, if any, and
interest on the Securities of such series. The provisions of Section 13.04 shall
apply to any money held by the Trustee or any paying agent under this Article
that remains unclaimed for two years after the Maturity of any series of
Securities for which money or U.S. Government Obligations have been deposited
pursuant to Section 14.02.
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SECTION 14.05. Reinstatement. If the Trustee is unable to apply any
money or U.S. Government Obligations in accordance with Section 14.02 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 14.02 until such time as the Trustee is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 14.02.
ARTICLE FIFTEEN.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.
SECTION 15.01. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or interest,
if any, on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture, or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE SIXTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 16.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements in this Indenture contained by
the Company shall bind its successors and assigns whether so expressed or not.
SECTION 16.02. Benefits of Indenture Restricted to Parties and Holders.
Nothing in this Indenture or in the Securities, expressed or implied, shall give
or be construed to give to any person, firm or corporation, other than the
parties hereto and their successors and assigns and the Holders, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; and, subject to the
provisions of Articles Nine and Fifteen, all of such covenants, conditions and
provisions shall be for the sole benefit of the parties hereto and the Holders.
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SECTION 16.03. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 16.04. Addresses for Notices, etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the Holders of Securities on the Company shall be
deemed to have been sufficiently given or served, for all purposes, if given or
served at the office of the Treasurer at the principal office of the Company at
4636 Somerton Road, P.O. Box 3002, Trevose, PA 19053-6783 (until another address
is filed by the Company with the Trustee). Any notice, direction, request of
demand by any Holder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at the
Principal Office of the Trustee, addressed to the attention of its corporate
trust department.
SECTION 16.05. Notices to Holders: Waiver. Where this Indenture or any
Security provides for notice to Holders of any event, (a) if any of the
Securities affected by such event are Registered Securities, such notice shall
be sufficiently given (unless otherwise herein or in such Securities expressly
provided) if in writing and mailed, first-class, postage prepaid, to each
Registered Holder of such Securities, at his address as it appears on the
registry books of the Company, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice, and (b) if any
of the Securities affected by such event are Unregistered Securities, such
notice shall be sufficiently given (unless otherwise herein or in such
Securities expressly provided) if published once in an Authorized Newspaper in
the Place of Payment 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 is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible to make
publication of any notice in one or more Authorized Newspapers as required by
any Security or this Indenture, then such method of publication or notification
as shall be made with the approval of the Trustee shall constitute a sufficient
publication of such notice.
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In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to the Holders of Securities when such notice is required to
be given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
SECTION 16.06. Governing Law. This Indenture, each Security and any
coupon appertaining thereto shall be deemed to be a contract made under the laws
of the State of New York, and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 16.07. Evidence of Compliance with Conditions Precedent. Upon
any application or demand by the Company to the Trustee to take any action under
any of the provisions of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, 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, ail such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition; (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinion contained in such certificate or opinion
are based; (c) a statement that, in the opinion of such person, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
SECTION 16.08. Legal Holidays. In any case where the date of maturity
of interest on or principal of the Securities or the date fixed for redemption
of any Security will not be a Business Day at the applicable Place of Payment,
then payment of such interest and premium, if any, on or principal of the
Securities need not be made at such Place of Payment on such date but may be
made on the next Business Day at such Place of Payment with the same force and
effect as if made on the date of maturity or the date fixed for redemption and
no interest shall accrue for the period from and after such date.
SECTION 16.09. Trust Indenture Act to Control. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Indenture by any of sections
310 to 317, inclusive, of the Trust Indenture Act of 1939, such required
provision shall control.
-69-
<PAGE>
SECTION 16.10. No Security Interest Created. Nothing in this Indenture
or in the Securities, expressed or implied, shall be construed to create or
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction
where property of the Company or its Subsidiaries is located.
SECTION 16.11. Table of Contents, Headings, etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 16.12. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 16.13. Acceptance of Trust. The Trustee hereby accepts
the trusts declared and provided in this Indenture, upon the terms and
conditions hereinabove set forth.
IN WITNESS WHEREOF, BETZDEARBORN INC. has caused this Indenture to be
signed by its President and Chief Executive Officer, its Senior Vice President
and Chief Financial Officer or its Treasurer, and THE BANK OF NEW YORK, as
Trustee, has caused this Indenture to be signed by one of its Vice Presidents or
Assistant Vice Presidents,
-70-
<PAGE>
as of the day and year first written above.
BETZDEARBORN INC.
By:________________________________
Title:_____________________________
THE BANK OF NEW YORK, as Trustee
By:________________________________
Title:_____________________________
-71-
<PAGE>
EXHIBIT A
FORM OF ELECTION TO RECEIVE PAYMENTS IN FOREIGN CURRENCY
OR TO RESCIND SUCH ELECTION
The undersigned, registered owner of certificate number (the
"Certificate"), representing [name of series of Securities] (the "Securities")
in an aggregate principal amount of , hereby
elects to receive all payments in respect of the Securities in [Foreign
Currency in which the Securities are denominated]. Subject to the terms
and conditions set forth in the indenture under which the Securities
were issued (the "Indenture"), this election shall take effect on the
next record date after this election form is received by the Trustee
and shall remain in effect until it is rescinded by the undersigned or
until the Certificate is transferred or paid in full at Maturity.
[Insert appropriate wire transfer instructions.]
rescinds the election previously submitted by the undersigned to
receive all payments in respect of the Securities in [Foreign Currency
in which the Securities are denominated] represented by the
Certificate. Subject to the terms and conditions set forth in the
Indenture, this rescission shall take effect on the next record date
after this election form is received by the Trustee, or, in the case of
Maturity of an installment of principal, the fifteenth day immediately
preceding such Maturity.
The undersigned acknowledges that, except as provided in the Indenture,
any costs incurred by or on behalf of the Company in connection with the
conversion of Dollars into Foreign Currency shall be borne by the undersigned
through deduction from payments required to be made to the undersigned pursuant
to the terms of the Indenture.
All capitalized terms used herein, unless otherwise defined herein, shall have
the meanings assigned to them in the Indenture.
-----------------------------------
(Name of Owner)
-----------------------------------
(Signature of Owner)
BETZDEARBORN INC.
Computation of the Ratio of Earnings to Fixed Charges and the Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
(Millions of Dollars)
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED
CHARGES
Earnings before income taxes and
cumulative effect of accounting
changes $142.9 $ 99.7 $111.6 $120.9 $104.1
Add:
Interest expense 45.5 25.7 1.1 0.2 0.1
Portion of rent expense
representative of interest 7.0 5.6 4.5 4.2 4.0
------ ------ ------ ------ ------
Earnings available for fixed charges $195.4 $131.0 $117.2 $125.3 $108.2
====== ====== ====== ====== ======
Interest expense $ 45.5 $ 25.7 $ 1.1 $ 0.2 $ 0.1
Add capitalized interest 0.4 0.4 0.5 1.1 1.2
Portion of rent expense
representative of interest 7.0 5.6 4.5 4.2 4.0
------ ------ ------ ------ ------
Fixed charges $ 52.9 $ 31.7 $ 6.1 $ 5.5 $ 5.3
====== ====== ====== ====== ======
Ratio of Earnings to Fixed Charges 3.7 4.1 19.2 22.8 20.4
====== ====== ====== ====== ======
</TABLE>
<PAGE>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings before income taxes
and cumulative effect of
accounting changes $142.9 $ 99.7 $111.6 $120.9 $104.1
Add:
Interest expense 45.5 25.7 1.1 0.2 0.1
Portion of rent expense
representative of interest 7.0 5.6 4.5 4.2 4.0
------ ------- ------ ------ ------
Earnings available for fixed
charges $195.4 $ 131.0 $117.2 $125.3 $108.2
====== ======= ====== ====== ======
Interest expense $ 45.5 $ 25.7 $ 1.1 $ 0.2 $ 0.1
Add capitalized interest 0.4 0.4 0.5 1.1 1.2
Portion of rent expense 7.0 5.6 4.5 4.2 4.0
representative of interest
Preferred stock dividends 7.7 7.7 7.8 7.9 8.0
------ ------- ------ ------ ------
Fixed charges $ 60.6 $ 39.4 $ 13.9 $ 13.4 $ 13.3
====== ======= ====== ====== ======
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends 3.2 3.3 8.4 9.4 8.1
====== ======= ====== ====== ======
</TABLE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-00000) and related Prospectus of
BetzDearborn Inc. and to the incorporation by reference therein of our report
dated February 2, 1998, with respect to the consolidated financial statements
and schedule of BetzDearborn Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
March 9, 1998
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
- ---------------------------- -------------------
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
----------------------------
BETZDEARBORN INC.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-1503731
- --------------------------------- ------------------
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
4636 Somerton Road
Trevose, Pennsylvania 19053-6783
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
----------------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(a) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 6th day of March, 1998.
THE BANK OF NEW YORK
By: /s/ VAN K. BROWN
--------------------------------
Name: VAN K. BROWN
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
--------------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................. $ 5,004,638
Interest-bearing balances ........................................... 1,271,514
Securities:
Held-to-maturity securities ......................................... 1,105,782
Available-for-sale securities ....................................... 3,164,271
Federal funds sold and Securities purchased under agreements
to resell............................................................ 5,723,829
Loans and lease financing receivables:
Loans and leases, net of unearned income ............................ 34,916,196
LESS: Allowance for loan and lease losses ................... ....... 581,177
LESS: Allocated transfer risk reserve................................ 429
Loans and leases, net of unearned income, allowance,
and reserve .................................................... 34,334,590
Assets held in trading accounts ....................................... 2,035,284
Premises and fixed assets (including capitalized leases) .............. 671,664
Other real estate owned ............................................... 13,306
Investments in unconsolidated subsidiaries and associated
companies ........................................................... 210,685
Customers' liability to this bank on acceptances outstanding .......... 1,463,446
Intangible assets ..................................................... 753,190
Other assets .......................................................... 1,784,796
-----------
Total assets .......................................................... $57,536,995
===========
LIABILITIES
Deposits:
In domestic offices ................................................. $27,270,824
Noninterest-bearing ................................................. 12,160,977
Interest-bearing .................................................... 15,109,847
In foreign offices, Edge and Agreement subsidiaries, and IBFs ....... 14,687,806
Noninterest-bearing ................................................. 657,479
Interest-bearing .................................................... 14,030,327
Federal funds purchased and Securities sold under agreements to
repurchase........................................................... 1,946,099
Demand notes issued to the U.S. Treasury .............................. 283,793
Trading liabilities ................................................... 1,553,539
Other borrowed money:
With remaining maturity of one year or less ......................... 2,245,014
With remaining maturity of more than
one year through three years....................................... 0
With remaining maturity of more than
three years ....................................................... 45,664
Bank's liability on acceptances executed and outstanding .............. 1,473,588
Subordinated notes and debentures ..................................... 1,018,940
Other liabilities ..................................................... 2,193,031
-----------
Total liabilities ..................................................... 52,718,298
-----------
EQUITY CAPITAL
Common stock .......................................................... 1,135,284
Surplus ............................................................... 731,319
Undivided profits and capital reserves ................................ 2,943,008
Net unrealized holding gains (losses) on available-for-sale
securities .......................................................... 25,428
Cumulative foreign currency translation adjustments ................... (16,342)
-----------
Total equity capital .................................................. 4,818,697
-----------
Total liabilities and equity capital .................................. $57,536,995
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
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