<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 1994.
REGISTRATION NO. 33-53807
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
THE BLACK & DECKER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-0248090
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
701 EAST JOPPA ROAD
TOWSON, MARYLAND 21286
(410) 716-3900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CHARLES E. FENTON
VICE PRESIDENT AND GENERAL COUNSEL
THE BLACK & DECKER CORPORATION
701 EAST JOPPA ROAD
TOWSON, MARYLAND 21286
(410) 716-3900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
GLENN C. CAMPBELL DAVID J. SORKIN
MILES & STOCKBRIDGE, SIMPSON THACHER & BARTLETT
A PROFESSIONAL CORPORATION 425 LEXINGTON AVENUE
10 LIGHT STREET NEW YORK, NEW YORK 10017
BALTIMORE, MARYLAND 21202 (212) 455-2000
(410) 727-6464
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
----------------
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.
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<PAGE>
SUBJECT TO COMPLETION, DATED JULY 6, 1994
PROSPECTUS SUPPLEMENT
(To Prospectus Dated , 1994)
$500,000,000
[LOGO OF BLACK & DECKER APPEARS HERE]
MEDIUM TERM NOTES, SERIES A
WITH MATURITIES OF NINE MONTHS OR MORE FROM DATES OF ISSUE
----------
The Black & Decker Corporation (the "Corporation") may offer from time to
time its Medium Term Notes, Series A either within or outside the United States
or both simultaneously. The Medium Term Notes, Series A (the "Notes") offered
by this Prospectus Supplement are offered in an aggregate initial offering
price not to exceed $500,000,000 (or the equivalent thereof in one or more
foreign denominated currencies or units based on or relating to currencies
including European Currency Units), subject to reduction, under certain
circumstances as the result of the sale of other securities of the Corporation
under the Prospectus to which this Prospectus Supplement relates. The Notes
will be offered at varying maturities of nine months or more from their dates
of issue and may be subject to redemption at the option of the Corporation or
repayment at the option of the Holder, in each case, in whole or in part, prior
to the maturity date thereof (as further defined herein, the "Stated Maturity")
as set forth in the Pricing Supplement applicable to this Prospectus Supplement
(a "Pricing Supplement"). Each Note will be denominated in United States
dollars or in other currencies or units based on or relating to currencies (the
"Specified Currency") as set forth in the applicable Pricing Supplement. See
"Important Currency Information" and "Currency Risks."
(continued on next page)
----------
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 SUPPLEMENT, THE PROSPECTUS OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
Agents'
Price to Commission Proceeds to
Public (1) or Discount(2) Corporation (2)(3)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note............................... 100% .125%--.750% 99.875%--99.250%
- --------------------------------------------------------------------------------------------------------
$625,000-- $499,375,000--
Total.................................. $500,000,000 $3,750,000 $496,250,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Unless otherwise specified in the Pricing Supplement relating thereto, each
Note will be issued at 100% of the principal amount.
(2) The Corporation will pay Lehman Brothers Inc. (including its affiliate
Lehman Government Securities Inc.), Citicorp Securities, Inc., Goldman,
Sachs & Co., Morgan Stanley & Co. Incorporated, NationsBanc Capital
Markets, Inc. and Salomon Brothers Inc, as agents (together with any other
agent appointed by the Corporation from time to time, an "Agent," and
collectively, the "Agents") a commission, in the form of a discount,
ranging from .125 % to .750% of the principal amount of any Note, depending
upon its Stated Maturity, sold through such Agent. Commissions for Notes
with Stated Maturities in excess of 30 years, if any, will be negotiated at
the time of sale. Any Agent, acting as principal, also may purchase Notes
at a discount for resale at prices related to market prices at the time of
resale. No commission will be payable on any Note sold directly by the
Corporation. The Corporation has agreed to indemnify each Agent against
certain liabilities, including certain liabilities under the Securities Act
of 1933, as amended.
(3) Before deducting expenses payable by the Corporation estimated at $860,000.
----------
The Notes are being offered on a continuing basis by the Corporation through
the Agents, each of which has agreed to use its reasonable best efforts to
solicit offers to purchase the Notes. The Corporation has reserved the right to
sell Notes to any Agent, acting as principal, for resale to investors or to
another broker-dealer (acting as a principal for purposes of resale) at varying
prices related to prevailing market prices at the time of resale, as determined
by such Agent. The Corporation has reserved the right to sell the Notes to or
through additional agents and directly to investors on its own behalf. Unless
otherwise specified in an applicable Pricing Supplement, the Notes will not be
listed on any securities exchange, and there can be no assurance that the Notes
will be sold or that there will be a secondary market for the Notes. The
Corporation reserves the right to withdraw, cancel or modify the offer made
hereby without notice. The Corporation or the Agent that solicits any offer to
purchase the Notes may reject any offer in whole or in part. See "Plan of
Distribution."
----------
LEHMAN BROTHERS
CITICORP SECURITIES, INC.
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
NATIONSBANC CAPITAL MARKETS, INC.
SALOMON BROTHERS INC
----------
, 1994
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
(Continued from previous page)
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated in United States dollars will be issued only in denominations of
$1,000 or an integral multiple of $1,000. If the Notes are to be denominated in
a foreign currency or a composite currency, the authorized denominations and
currency exchange rate information will be set forth in the applicable Pricing
Supplement. The Notes may be issued as Indexed Notes, the principal amount of
which payable at Stated Maturity is determined by the fluctuation between a
Denominated Currency (as defined below) and an Indexed Currency (as defined
below) as set forth under "Description of Notes--Indexed Notes" and as set
forth in the applicable Pricing Supplement.
The interest rate, if any, or the formula for the determination of any such
interest rate applicable to each Note and, the formula, if any, for determining
the principal amount payable upon maturity of each Note and other variable
terms of the Notes as described herein will be established by the Corporation
at the date of issuance of each Note and will be set forth in the applicable
Pricing Supplement. Interest rates, interest rate and principal formulae, if
any, and other variable terms, if any, are subject to change by the
Corporation, but except as otherwise set forth herein no such change will
affect the interest rate or interest rate formula for any Note theretofore
issued or which the Corporation has agreed to sell. Unless otherwise indicated
in the applicable Pricing Supplement, each Note will bear interest at a fixed
rate (a "Fixed Rate Note"), which may be zero in the case of certain Notes
issued at a price representing a discount from the principal amount payable at
Stated Maturity, or at a floating rate as set forth therein and specified in
the Pricing Supplement applicable to the Note (a "Floating Rate Note"). A Fixed
Rate Note may pay a level amount in respect of both interest and principal
amortized over the life of the Note (an "Amortizing Note"). The applicable
Pricing Supplement will specify whether the rate of interest on a Floating Rate
Note is determined by reference to one or more of the CD Rate, the CMT Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Effective Rate, the J.J. Kenny Rate, LIBOR, the Prime Rate or the
Treasury Rate (each, an "Interest Rate Basis"), or any other interest rate
formula, as adjusted by any Spread or Spread Multiplier and will specify such
other terms applicable to such Note. See "Description of Notes."
Interest on each Fixed Rate Note, other than an Amortizing Note, will accrue
from its date of issue or the last date to which interest has been paid or duly
provided for and, unless otherwise specified in the applicable Pricing
Supplement, will be payable semiannually on each February 1 and August 1 and at
Maturity (as defined below) and upon redemption or repayment, if applicable.
Interest on each Floating Rate Note will accrue from its date of issue at rates
determined as set forth therein and will be payable on the dates set forth
therein and in the applicable Pricing Supplement. Unless otherwise specified in
an applicable Pricing Supplement, the rate of interest on each Floating Rate
Note will be reset daily, weekly, monthly, quarterly, semi-annually or
annually, as set forth therein and specified in the applicable Pricing
Supplement. Unless otherwise specified in an applicable Pricing Supplement,
each Note will be issued in fully registered form and will be represented by
either a global certificate (a "Global Security") registered in the name of a
nominee of The Depository Trust Corporation (or such other depositary as is
identified in the applicable Pricing Supplement), as Depositary (the
"Depositary") (each such Note represented by a Global Security being referred
to herein as a "Book-Entry Note") or a certificate issued in definitive form (a
"Certificated Note"), as set forth in the applicable Pricing Supplement.
Interests in Book-Entry Notes will be shown on and transfers thereof will be
effected only through, records maintained by the Depositary (with respect to
beneficial interests of participants) and its participants. See "Description of
Notes--Book-Entry System."
The Specified Currency, any applicable interest rate or interest rate or
principal formula, the Issue Price, the Stated Maturity, any Interest Payment
Dates (each as defined below), any redemption and repayment provisions, whether
such Note will be a Global Note or a Book-Entry or Certificated Note and any
other terms applicable to each Note will be established at the time of issuance
of the Note and set forth in the applicable Pricing Supplement. See
"Description of Notes."
S-2
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENTS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered hereby
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Notes and the Indenture set forth in
the accompanying Prospectus (in which the Notes are referred to as "Debt
Securities") under the heading "Description of Debt Securities" to which
description reference is hereby made. Capitalized terms set forth below that
are not otherwise defined herein have the meanings specified in the Indenture
or the Notes.
GENERAL
The Notes constitute a single series of Securities for purposes of the
Indenture and are limited to an aggregate initial offering price of
$500,000,000 (or the equivalent thereof in one or more foreign denominated
currencies or units based on or relating to currencies, including European
Currency Units), subject to reduction under certain circumstances as a result
of the sale of the other Debt Securities of the Corporation under the
accompanying Prospectus. Currency amounts in this Prospectus Supplement, the
accompanying Prospectus and any Pricing Supplement are stated in United States
dollars ("$," "dollars," "U.S. dollars" or "U.S.$"), unless otherwise indicated
in the applicable Pricing Supplement. The Corporation may from time to time
sell additional series of Debt Securities including additional series of medium
term notes.
The Notes will be offered on a continuing basis and each Note will mature
nine months or more from its date of issue, as selected by the initial
purchaser and agreed to by the Corporation, and may be subject to redemption at
the option of the Corporation or repayment at the option of the Holder prior to
Stated Maturity as set forth below under "Redemption and Repayment." Each Note
will be denominated in U.S. dollars or in such other Specified Currency as is
specified in the applicable Pricing Supplement. Each Note will be either (i) a
Fixed Rate Note which may bear interest at a rate of zero in the case of a Note
issued at an Issue Price (as defined below) representing a discount from the
principal amount payable at Stated Maturity (a "Zero-Coupon Note") or (ii) a
Floating Rate Note which will bear interest at a rate determined by reference
to the interest rate or combination of interest rate bases (the "Base Rate")
specified in the applicable Pricing Supplement which may be adjusted by a
Spread and/or Spread Multiplier (each as defined below).
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note in fully registered form without coupons. Except as set forth
below under "Book-Entry System," Book-Entry Notes will not be issuable in
certificated form.
Unless otherwise specified in an applicable Pricing Supplement, Notes
denominated in U.S. dollars will be issuable in denominations of $1,000 and
integral multiples of $1,000. The authorized denominations of any Note
denominated in other than U.S. dollars will be the amount of the Specified
Currency for such Note equivalent, at the noon U.S. dollar buying rate
specified in The City of New York as specified by the Federal Reserve Bank of
New York (the "Market Exchange Rate") on the first Business Day in The City of
New York and the country issuing such currency (or, in the case of European
Currency Units ("ECU"), Brussels) next preceding the date on which the
Corporation accepts the offer to purchase the Note, to U.S. $1,000 (rounded
down to an integral multiple of 10,000 units of such Specified Currency) and
any greater amount that is an integral multiple of 10,000 units of such
Specified Currency. If any of the Notes are to be
S-3
<PAGE>
denominated in a Specified Currency other than U.S. dollars, or if the
principal (and premium, if any), and any interest on any of the Notes not
denominated in U.S. dollars is to be payable at the option of the Holder or the
Corporation, in U.S. dollars, the applicable Pricing Supplement will provide
additional information, including applicable exchange rate information,
pertaining to the terms of the Notes and other matters of interest to the
Holders thereof.
"Business Day," with respect to any particular location, means each Monday,
Tuesday, Wednesday, Thursday and Friday, which is neither a legal holiday nor a
day on which banking institutions in such location are authorized or obligated
by law to close. "Market Day" means with respect to any Note other than a LIBOR
Note, any Business Day in The City of New York and, with respect to any LIBOR
Note, any Business Day in The City of New York on which dealings in deposits in
U.S. dollars are transacted in the London interbank markets. "Index Maturity"
means, with respect to a Floating Rate Note, the period to maturity of the
instrument or obligation on which the interest rate formula is based, as
specified in the applicable Pricing Supplement.
"Original Issue Discount Note" means (i) a Note, including any Zero-Coupon
Note, that has a stated redemption price at maturity that exceeds its Issue
Price by at least 0.25% of its principal amount multiplied by the number of
full years from the Original Issue Date to the Stated Maturity (each as defined
below) for such Note and (ii) any other Note designated by the Corporation as
issued with original issue discount for United States federal income tax
purposes.
The Pricing Supplement relating to each Note will describe the following
terms: (i) the Specified Currency with respect to the Note (and, if such
Specified Currency is other than U.S. dollars, certain other terms relating to
the Note, including the authorized denominations); (ii) the price (expressed as
a percentage of the aggregate principal amount thereof) at which Notes will be
issued (the "Issue Price"); (iii) the date on which the Note will be issued
(the "Original Issue Date"); (iv) the date on which the Note will mature (the
"Stated Maturity") and whether the Stated Maturity may be extended by the
Corporation, and if so, the Extension Periods and the Final Maturity Date (each
as defined below); (v) whether the Note is a Fixed Rate Note or a Floating Rate
Note; (vi) if the Note is a Fixed Rate Note, whether it is an Amortizing Note;
(vii) if the Note is a Fixed Rate Note, the rate per annum at which it will
bear interest, if any, the Interest Payment Date or Dates (as defined below)
and, if so specified in the applicable Pricing Supplement, that such rate may
be changed by the Corporation prior to the Stated Maturity and, if so, the
basis or formula for such change, if any; (viii) if the Note is a Floating Rate
Note, the Base Rate, the Initial Interest Rate, the Interest Reset Period, the
Interest Payment Period, the Index Maturity, the Maximum Interest Rate, if any,
the Minimum Interest Rate, if any, the Spread, if any, the Spread Multiplier,
if any (all as defined below), and any other terms relating to the particular
method of calculating the interest rate for the Note and, if so specified in
the applicable Pricing Supplement, that any such Spread or Spread Multiplier
may be changed by the Corporation prior to the Stated Maturity and, if so, the
basis or formula for such change, if any; (ix) whether the Note is an Original
Issue Discount Note, and if so, the yield to maturity; (x) whether the Note may
be redeemed at the option of the Corporation, or repaid at the option of the
Holder, prior to the Stated Maturity, and, if so, the provisions relating to
such redemption or repayment; (xi) whether such Note will be issued initially
as a Book-Entry or a Certificated Note; and (xii) any other term of the Note
not inconsistent with the provisions of the Indenture.
The Notes will constitute unsecured and unsubordinated indebtedness of the
Corporation and will rank pari passu with the Corporation's other unsecured and
unsubordinated indebtedness.
Certificated Notes may be presented for registration of transfer or exchange
at the Trustee's New York office.
S-4
<PAGE>
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement and Note,
payments of principal of (and premium, if any) and interest, if any, on all
Notes will be made in the applicable Specified Currency; provided, however,
that payments of principal of (and premium, if any) and interest, if any, on
Notes denominated in other than U.S. dollars will nevertheless be made in U.S.
dollars (i) at the option of the Holders thereof under the procedures described
below and (ii) at the option of the Corporation in the case of the imposition
of exchange controls or other circumstances beyond the control of the
Corporation as described below.
Unless otherwise specified in the applicable Pricing Supplement and Note,
payments with respect to Certificated Notes to be made in U.S. dollars of
interest, if any, and, in the case of Amortizing Notes, principal (and premium,
if any) on Notes (other than interest and, in the case of Amortizing Notes,
principal payable at Stated Maturity or upon earlier redemption or repayment)
will be made by mailing a check to the Holder at the address of such Holder
appearing on the security register for the Notes on the applicable Regular
Record Date, or, at the option of the Corporation, by wire transfer to such
account as may have been appropriately designated in writing no later than the
relevant Regular Record Date by such person and maintained with a bank located
in the United States. Notwithstanding the foregoing, a Holder of $10,000,000 or
more in aggregate principal amount of Certificated Notes of like tenor and
terms shall be entitled to receive such payments in U.S. dollars by wire
transfer of immediately available funds, but only if appropriate payment
instructions have been received in writing by the Paying Agent not less than 15
Business Days prior to the applicable Interest Payment Date. Payment of the
principal of (and premium, if any) and any interest due with respect to any
Certificated Note at Maturity to be made in U.S. dollars will be made in
immediately available funds upon surrender of the Note at the Corporate Trust
Office of the Trustee, acting as Paying Agent, provided that the Certificated
Note is presented to the Paying Agent in time for the Paying Agent to make
payment in such funds in accordance with its normal procedures.
Unless otherwise specified in the applicable Pricing Supplement and Note,
payments of interest and principal (and premium, if any) with respect to any
Note to be made in a Specified Currency other than U.S. dollars will be made by
wire transfer to such account, with a bank located in the country issuing the
Specified Currency (or, with respect to Notes denominated in ECUs, Brussels) or
other jurisdiction acceptable to the Corporation and the Trustee as shall have
been designated at least 15 days prior to the Interest Payment Date or Stated
Maturity, as the case may be, by the Holder of the Note on the relevant Regular
Record Date or at Maturity, provided that, in the case of payment of principal
of (and premium, if any) and any interest due at Maturity, the Note is
presented to the Paying Agent in time for the Paying Agent to make payment in
such funds in accordance with its normal procedures. Such designation shall be
made by filing the appropriate information with the Trustee at its Corporate
Trust Office and, unless revoked, any such designation made with respect to any
Note by a Holder will remain in effect with respect to any further payments
with respect to such Note payable to such Holder. If a payment with respect to
any such Note cannot be made by wire transfer because the required designation
has not been received by the Trustee on or before the requisite date or for any
other reason, a notice will be mailed to the Holder at its registered address
requesting a designation pursuant to which such wire transfer can be made, and,
upon the trustee's receipt of such designation, such payment will be made
within 15 days of such receipt. The Corporation will pay any administrative
costs imposed by banks in connection with making payments by wire transfer, but
any tax, assessment or governmental charge imposed upon payments will be borne
by the Holders of the Notes in respect of which such payments are made.
Beneficial owners of Book-Entry Notes are expected to be paid in accordance
with the Depositary's and its participants' procedures in effect from time to
time as described below under "Book-Entry System."
If so specified in the applicable Pricing Supplement and Note, except as
provided in the next paragraph, payments of interest, if any, and principal
(and premium, if any) with respect to any Note denominated in other than U.S.
dollars will be made in U.S. dollars if the Holder of the Note on the relevant
Regular Record Date or at Maturity, as the case may be, has transmitted a
written election with signature guarantee for such
S-5
<PAGE>
payment in U.S. dollars to the Trustee at its Corporate Trust Office in The
City of New York, on or prior to such Regular Record Date or the date 15 days
prior to Maturity, as the case may be. Such request may be in writing (mailed
or hand delivered) or by cable, telex or other form of facsimile transmission.
Any such request made with respect to any Note by a Holder will remain in
effect with respect to any further payments of interest, if any, and principal
(and premium, if any) with respect to the Note payable to such Holder, unless
such request is revoked on or prior to the relevant Regular Record Date or the
date 15 days prior to Maturity, as the case may be.
The U.S. dollar amount to be received by a Holder of a Note denominated in
other than U.S. dollars who elects to receive payments in U.S. dollars will be
based on the highest bid quotation in The City of New York received by the
Currency Determination Agent (as defined below) as of noon, New York City time,
on the second Business Day next preceding the applicable payment date from
three recognized foreign exchange dealers (one of which may be the Currency
Determination Agent) for the purchase by the quoting dealer of the Specified
Currency for U.S. dollars for settlement on such payment date in the aggregate
amount of the Specified Currency payable to all Holders of Notes electing to
receive U.S. dollar payments and at which the applicable dealer commits to
execute a contract. If three such bid quotations are not available on the third
Business Day preceding the date of payments of such principal (and premium, if
any) or interest with respect to any Note, such payment will be made in the
Specified Currency. All currency exchange costs associated with any payment in
U.S. dollars on any such Note will be borne by the Holder thereof by deductions
from such payment. Unless otherwise provided in the applicable Pricing
Supplement, Marine Midland Bank will be the Currency Determination Agent (the
"Currency Determination Agent") with respect to the Notes.
If the principal of (and premium, if any) or interest, if any, on any Note is
payable in any currency other than U.S. dollars and the Specified Currency is
not available due to the imposition of exchange controls or other circumstances
beyond the control of the Corporation, the Corporation will be entitled to
satisfy its obligations to Holders of the Notes by making such payment in U.S.
dollars on the basis of the Market Exchange Rate on the last date such
Specified Currency was available (the "Conversion Date"). Any payment made
under such circumstances in U.S. dollars where the required payment is in other
than U.S. dollars will not constitute an Event of Default under the Indenture.
If payment in respect of a Note is required to be made in any currency unit
(e.g., ECU) and such currency unit is unavailable due to the imposition of
exchange controls or other circumstances beyond the Corporation's control, then
all payments in respect of the Note shall be made in U.S. dollars until such
currency unit is again available. The amount of each payment in U.S. dollars
shall be computed on the basis of the equivalent of the currency unit in U.S.
dollars, which shall be determined by the Currency Determination Agent on the
following basis: (1) the component currencies of the currency unit for this
purpose (the "Component Currencies") shall be the currency amounts that were
components of the currency unit as of the Conversion Date for such currency
unit; (2) the equivalent of the currency unit in U.S. dollars shall be
calculated by aggregating the U.S. dollar equivalents of the Component
Currencies; and (3) the U.S. dollar equivalent of each of the Component
Currencies shall be determined by the Currency Determination Agent on the basis
of the Market Exchange Rate for each such Component Currency that is available
as of the third Business Day prior to the date on which the relevant payment is
due and for each such Component Currency that is unavailable, if any, as of the
Conversion Date for such Component Currency.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
S-6
<PAGE>
All determinations referred to above made by the Corporation or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on Holders of Notes.
Any payment due on any day which is not a Market Day (and, in the case of any
Note denominated in other than U.S. dollars, a Business Day in the country
issuing the Specified Currency (or, in the case of ECUs, Brussels)) need not be
made on such day, but may be made on the next such succeeding Market Day (or,
in the case of a LIBOR Note, if the next such succeeding Market Day falls in
the next calendar month, the next such preceding Market Day), with the same
force and effect as if made on the due date, and no interest shall be payable
on the date of payment for the period from and after the due date.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described in the Prospectus under "Description of Debt
Securities--Default and Remedies," the amount of principal due and payable with
respect to the Note shall be the Amortized Face Amount of the Note as of the
date of such declaration. The "Amortized Face Amount" of an Original Issue
Discount Note shall be an amount equal to the sum of (i) the aggregate
principal amount of the Note multiplied by the Issue Price set forth in the
applicable Pricing Supplement plus (ii) the portion of the difference between
the Issue Price and the principal amount of the Note that has accrued at the
Yield to Maturity set forth in the Pricing Supplement (computed in accordance
with generally accepted United States bond yield computation principles) to
such date of declaration, but in no event shall the Amortized Face Amount of an
Original Issue Discount Note exceed its principal amount.
INTEREST AND INTEREST RATES
Each Note will bear interest, if any, from its date of original issue (the
"Original Issuance Date") or from the most recent Interest Payment Date to
which interest on such Note has been paid or duly provided for at a fixed rate
or rates per annum, or at a rate or rates per annum determined pursuant to a
Base Rate stated therein and in the applicable Pricing Supplement that may be
adjusted by a Spread or Spread Multiplier, until the principal thereof is paid
or made available for payment. Interest, if any, will be payable on each
Interest Payment Date and at Maturity. "Maturity" means the date on which the
principal of a Note or an installment of principal becomes due and payable in
full in accordance with its terms and the terms of the Indenture, whether at
Stated Maturity or by declaration of acceleration, call for redemption,
repayment or otherwise. Interest (other than defaulted interest which may be
paid on a Special Record Date or otherwise according to the Indenture) will be
payable to the Holder at the close of business on the Regular Record Date next
preceding such Interest Payment Date; provided, however, that interest payable
at Maturity (or upon redemption, if applicable) will be payable to the person
to whom principal shall be payable. The first payment of interest on any Note
originally issued between a Regular Record Date for such Note and the
succeeding Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date for such Note to the
registered owner on such next Regular Record Date. The Internal Revenue Service
might take the position that any such Note issued between a Regular Record Date
and the related Interest Payment Date should be treated as having been issued
with original issue discount for Federal income tax purposes which could affect
the reporting of income by certain holders. See "Certain United States Tax
Consequences."
Interest rates, Base Rates, Spreads and Spread Multipliers are subject to
change by the Corporation from time to time but no such change will affect any
Note theretofore issued or which the Corporation has agreed to sell. The
Interest Payment Dates and the Regular Record Dates for each Fixed Rate Note
shall be as described below under "Fixed Rate Notes." The Interest Payment
Dates for each Floating Rate Note shall be as indicated in the applicable
Pricing Supplement, and the Regular Record Dates for a Floating Rate Note will
be the fifteenth day (whether or not a Business Day) next preceding each
Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issuance Date at
the annual rate or rates stated thereon and in the applicable Pricing
Supplement. Payments of interest on any Fixed Rate Note with respect to any
Interest Payment Date will include interest accrued to but excluding that
Interest Payment Date. Fixed
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Rate Notes may bear one or more annual rates of interest during the periods or
under the circumstances specified therein and in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing Supplement,
interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months. With respect to Fixed Rate Notes other than Amortizing
Notes, unless otherwise specified in an applicable Pricing Supplement, the
Interest Payment Dates for the Fixed Rate Notes will be February 1 and August 1
of each year, and the Regular Record Dates will be January 15 and July 15 of
each year. Payments of principal and interest on Amortizing Notes, which are
Securities for which payments of principal and interest are made in equal
installments over the life of the Security, will be made either quarterly on
each February 1, May 1, August 1 and November 1 or semiannually on each
February 1 and August 1 as set forth in the applicable Pricing Supplement, and
at maturity or upon earlier redemption or repayment. With respect to Amortizing
Notes, payments will be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof. A table setting
forth repayment information in respect of each Amortizing Note will be provided
to the original purchaser and will be available, upon request to subsequent
Holders.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Original Issuance Date to
the first Interest Reset Date (as defined below) for such Note at the Initial
Interest Rate set forth on the face thereof and in the applicable Pricing
Supplement. Thereafter, the interest rate on each Floating Rate Note for each
Reset Period (as defined below) will be equal to the interest rate calculated
by reference to the Base Rate specified on the face thereof and in the
applicable Pricing Supplement, plus or minus a percentage per annum (the
"Spread"), if any, or times a fixed factor (the "Spread Multiplier"), if any.
The Spread or Spread Multiplier for a Floating Rate Note may be subject to
adjustment during a Reset Period under circumstances specified therein and in
the applicable Pricing Supplement.
The Corporation will appoint, and enter into an agreement with, an agent (a
"Calculation Agent") to calculate interest rates on Floating Rate Notes. Unless
otherwise specified in the applicable Pricing Supplement, the Calculation Agent
for each Floating Rate Note will be Marine Midland Bank.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Reset
Period" for the Note, and the first day of each Reset Period being an "Interest
Reset Date"), as specified on the face thereof and in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing Supplement,
the Interest Reset Dates will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week, in the case of
Treasury Rate Notes that reset weekly, Tuesday of each week; in the case of the
Floating Rate Notes that reset monthly, the third Wednesday of each month; in
the case of Floating Rate Notes that reset quarterly, the third Wednesday of
each March, June, September and December; in the case of Floating Rate Notes
that reset semiannually, the third Wednesday of each of two months of each year
specified on the face thereof and in the applicable Pricing Supplement; and, in
the case of Floating Rate Notes that reset annually, the third Wednesday of one
month of each year specified on the face thereof and in the applicable Pricing
Supplement; provided, however, that (i) the rate of interest in effect from the
Original Issuance Date to the first Interest Reset Date will be the Initial
Interest Rate specified on the face thereof and (ii) the interest rate in
effect for the 10 days immediately prior to the Stated Maturity, or the date of
redemption, if applicable, of a Floating Rate Note will be that in effect on
the tenth day preceding the Stated Maturity or the date of redemption. If an
Interest Reset Date for a Floating Rate Note would otherwise be a Market Day,
the Interest Reset Date for the Floating Rate Note shall be postponed to the
next day that is a Market Day, except that, in the case of a LIBOR Note, if
such Market Day is the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Market Day.
The interest rate for each Reset Period will be the rate determined by the
Calculation Agent on the Calculation Date pertaining to such Reset Period by
reference to the Interest Determination Date pertaining to such Reset Period.
The Calculation Date and the Interest Determination Date pertaining to a Reset
Period for each type of Floating Rate Note are as follows: unless otherwise
specified in the applicable Pricing
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Supplement, the Interest Determination Date pertaining to a Reset Period for
(a) a Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date"), (b) a Federal Funds Effective Rate Note (the "Federal Funds Interest
Determination Date"), (c) a CD Rate Note (the "CD Interest Determination
Date"), (d) a LIBOR Note (the "LIBOR Interest Determination Date") or (e) a
Prime Rate Note (the "Prime Interest Determination Date") will be the second
Market Day prior to the Interest Reset Date that commences each Reset Period.
The Interest Determination Date pertaining to a Reset Period for a Treasury
Rate Note (the "Treasury Interest Determination Date") will be the day of the
week in which the Interest Reset Date that commences such Reset Period falls on
which Treasury bills would normally be auctioned. Treasury bills are usually
sold at auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is usually held on the following Tuesday, except that
such auction may be held on the preceding Friday. If, as a result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Treasury Interest Determination Date pertaining to the Reset Period commencing
in the next succeeding week. If an auction date shall fall on any Interest
Reset Date for a Treasury Rate Note, then such Interest Reset Date shall
instead be the first Business Day immediately following such auction date. The
"Calculation Date" pertaining to a Reset Period with respect to (i) a
Commercial Paper Rate Note or Treasury Rate Note shall be the tenth calendar
day after the Interest Determination Date pertaining to such Reset Period or,
if such day is not a Market Day, the next succeeding Market Day, and (ii) a
LIBOR Note shall be the Interest Determination Date pertaining to such Reset
Period.
Except as provided below, interest on Floating Rate Notes will be payable, in
the case of Floating Rate Notes that reset daily, weekly or monthly, on the
third Wednesday of each month or on the third Wednesday of March, June,
September and December of each year, as specified on the face thereof and in
the applicable Pricing Supplement; in the case of Floating Rate Notes that
reset quarterly, on the third Wednesday of March, June, September and December
of each year; in the case of Floating Rate Notes that reset semiannually, on
the third Wednesday of each of two months of each year specified on the face
thereof and in the applicable Pricing Supplement; and, in the case of the
Floating Rate Notes that reset annually, on the third Wednesday of one month of
each year specified on the face thereof and in the applicable Pricing
Supplement (each such day being an "Interest Payment Date").
Each payment of interest on a Floating Rate Note will include interest
accrued to but excluding the applicable Interest Payment Date or the date of
Maturity, as the case may be; provided, however, that if such Note resets daily
or weekly, interest payable on any Interest Payment Date, other than interest
payable on any date on which principal for such Note is payable, will include
interest accrued from but excluding the second preceding Regular Record Date to
and including the next preceding Regular Record Date. Accrued interest from the
date of issue or from the last date to which interest has been paid is
calculated by multiplying the face amount of a Note by an accrued interest
factor. This accrued interest factor is computed by adding the interest factors
calculated for each day from the Original Issuance Date, or from the last date
to which interest has been paid, to the date for which accrued interest is
being calculated. The interest factor (expressed as a decimal rounded upward,
if necessary, to the nearest one hundred-thousandth of a percentage point
(e.g., 9.876541%, or .09876541, being rounded to 9.87655%, or .0987655,
respectively)) for each such day is computed by dividing the interest rate
(expressed as a decimal rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point) applicable to such date by 360, in
the case of Commercial Paper Rate Notes, Federal Funds Effective Rate Notes, CD
Rate Notes, Prime Rate Notes and LIBOR Notes, or by the actual number of days
in the year, in the case of Treasury Rate Notes.
The Calculation Agent will, upon the request of the Holder of any Floating
Rate Note, provide the interest rate then in effect and, if different, the
interest rate that will become effective as a result of a determination made on
the most recent Interest Determination Date with respect to the Note.
Any Floating Rate Note may also have either or both of the following: (i) a
maximum numerical interest rate limitation, or ceiling, on the rate of interest
that may accrue during any Reset Period and (ii) a minimum numerical interest
rate limitation, or floor, on the rate of interest that may accrue during any
Reset Period. The interest rate on the Notes will in no event be higher than
the maximum rate permitted by New York law as the same may be modified by
United States law of general application. Under present New York law, the
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maximum rate of interest is 25% per annum on a simple interest basis. This
limit may not apply to Notes in which $2,500,000 or more has been invested,
including Notes purchased by an Agent or Agents in such aggregate principal
amount or more for resale to investors.
Commercial Paper Rate Notes
A Commercial Paper Rate Note will bear interest at the interest rate
(calculated with reference to the Commercial Paper Rate and the Spread or
Spread Multiplier, if any) specified in the Commercial Paper Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) of the rate on
that date for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement as such rate is published by the Board of
Governors of the Federal Reserve system in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of the Board of
Governors ("H.15(519)") under the heading "Commercial Paper." In the event that
such rate is not published by 9:00 A.M., New York City time, on the Calculation
Date pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate shall be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity designated in the applicable Pricing Supplement as published by
the Federal Reserve Bank of New York in its daily statistical release
"Composite 3:30 p.m. Quotations for U.S. Government Securities" ("Composite
Quotations") under the heading "Commercial Paper." If by 3:00 P.M., New York
City time, on such Calculation Date such rate is not yet published in Composite
Quotations, then the Commercial Paper Rate for such Commercial Paper Interest
Determination Date shall be calculated by the Calculating Agent and shall be
the Money Market Yield of the arithmetic mean (each as rounded to the nearest
one hundred-thousandth of a percentage point) of the offered rates of three
leading dealers of commercial paper in The City of New York selected by the
Calculating Agent as of 11:00 A.M. New York City time, on such Commercial Paper
Interest Determination Date, for commercial paper having the Index Maturity
designated in the applicable Pricing Supplement placed for an industrial issuer
whose bond rating is "AA," or its equivalent, from a nationally recognized
securities rating agency; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Commercial Paper Rate with respect to such Commercial Paper
Interest Determination Date will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded to
the nearest one hundred-thousandth of a percentage point) calculated in
accordance with the following formula:
Money Market Yield = D X 360
------------- X 100
360 - D X M
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days of the interest period for which interest is being calculated.
Federal Funds Effective Rate Notes
A Federal Funds Effective Rate Note will bear interest at the interest rate
(calculated with reference to the Federal Funds Effective Rate and the Spread
or Spread Multiplier, if any) specified in the Federal Funds Effective Rate
Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Effective Rate" means, with respect to any Federal Funds Interest
Determination Date, the rate on that day for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)" or, if not so published
by 9:00 A.M.,
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New York City time, on the Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds Effective Rate will be the rate
on such Federal Funds Interest Determination Date as published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Federal Funds
Interest Determination Date will be calculated by the Calculation Agent and
will be the arithmetic mean (rounded to the nearest one hundred-thousandth of a
percentage point) of the rates as of 11:00 A.M., New York City time, on such
Federal Funds Interest Determination Date for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds transactions
in The City of New York selected by the Calculation Agent; provided, however,
that if the brokers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Federal Funds Effective Rate with
respect to such Federal Funds Interest Determination Date will be the Federal
Funds Effective Rate in effect on such Federal Funds Interest Determination
Date.
CD Rate Notes
A CD Rate Note will bear interest at the rate (calculated with reference to
the CD Rate and the Spread or Spread Multiplier, if any), specified in the CD
Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest Determination Date, the rate on such
date for negotiable certificates of deposit having the Index Maturity
designated in the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)" or, if not so published by 9:00 A.M., New
York City time, on the Calculation Date pertaining to such CD Interest
Determination Date, the CD Rate will be the rate on such CD Interest
Determination Date for negotiable certificates of deposit of the Index Maturity
designated in the applicable Pricing Supplement as published in Composite
Quotations under the heading "Certificates of Deposit." If such rate is not
published by 3:00 P.M., New York City time, on such Calculation Date, then the
CD Rate on such CD Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean (each as rounded to the
nearest one hundred-thousandth of a percentage point) of the secondary market
offered rates as of the opening of business, New York City time, on such CD
Interest Determination Date, of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks of the highest credit standing (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index
Maturity designated in the applicable Pricing Supplement in a denomination of
$5,000,000; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoted as mentioned in this sentence, the CD Rate
with respect to such CD Interest Determination Date will be the CD Rate in
effect on such CD Interest Determination Date.
LIBOR Notes
Each LIBOR Note will bear interest for each Reset Period at the interest rate
(calculated with reference to LIBOR on the LIBOR Interest Determination Date
for such Reset Period and the Spread or Spread Multiplier, if any) specified in
such Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR" will
be determined by the Calculation Agent as follows:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will be, as
specified in the applicable Pricing Supplement, either: (a) the arithmetic mean
of the offered rates for deposits in the Designated Deposit Currency (as
defined below) having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second Market Day immediately following such
LIBOR Interest Determination Date, that appear on the Reuters Screen LIBO Page
as of 11:00 A.M., London time, on such LIBOR Interest Determination Date, if at
least two such offered rates appear on the Reuters Screen LIBO Page ("LIBOR
Reuters"), or (b) the rate for deposits in the Designated Deposit Currency
having the Index Maturity designated in the applicable Pricing Supplement,
commencing on the second Market Day immediately
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following such LIBOR Interest Determination Date, that appears on Telerate Page
3750 as of 11:00 A.M., London time, on such LIBOR Interest Determination Date
("LIBOR Telerate"). "Reuters Screen LIBO Page" means the display designated as
page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace page LIBO on that service for the purpose of displaying London
interbank offered rates of major banks). "Telerate Page 3750" means the display
designated as page "3750" on the Telerate Service (or such other page as may
replace the 3750 page on that service or such other service or services as may
be nominated by the British Bankers' Association for the purpose of displaying
London interbank offered rates for the Designated Deposit Currency). If neither
LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing
Supplement, LIBOR will be determined as if LIBOR Telerate had been specified.
If at least two such offered rates appear on the Reuters Screen LIBO Page, the
rate in respect of such LIBOR Interest Determination Date will be the
arithmetic mean of such offered rates as determined by the Calculation Agent.
If fewer than two offered rates appear on the Reuters Screen LIBO Page, or if
no rate appears on Telerate Page 3750, as applicable, LIBOR in respect of such
LIBOR Interest Determination Date will be determined as if the parties had
specified the rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer than
two offered rates appear on the Reuters Screen LIBO Page, as specified in
(i)(a) above, or on which no rate appears on Telerate Page 3750, as specified
in (i)(b) above, as applicable, LIBOR will be determined on the basis of the
rates at which deposits in the Designated Deposit Currency having the Index
Maturity designated in the applicable Pricing Supplement are offered at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination
Date by four major banks in the London interbank market selected by the
Calculation Agent (the "Reference Banks") to prime banks in the London
interbank market, commencing on the second Market Day immediately following
such LIBOR Interest Determination Date and in a principal amount equal to an
amount of not less than $1,000,000 that is representative for a single
transaction in such market at such time. The Calculation Agent will request the
principal London office of each of the Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, LIBOR in respect of
such LIBOR Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect to such
LIBOR Interest Determination Date will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M., New York City time, on such LIBOR Interest
Determination Date by three major banks in The City of New York selected by the
Calculation Agent for loans in the Designated Deposit Currency to leading
European banks having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Business Day immediately following
such LIBOR Interest Determination Date and in a principal amount equal to an
amount of not less than $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the banks
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR with respect to such LIBOR Interest Determination Date
will be the interest rate otherwise in effect on such LIBOR Interest
Determination Date. "Designated Deposit Currency" means, with respect to any
LIBOR Note, the currency (including a currency unit), if any, designated in the
applicable LIBOR Note as the Designated Deposit Currency. If no such currency
is designated in the applicable LIBOR Note, the Designated Deposit Currency
shall be U.S. dollars.
Prime Rate Notes
Each Prime Rate Note will bear interest at the interest rate (calculated with
reference to the Prime Rate and the Spread or Spread Multiplier, if any)
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime Rate"
means, with respect to any Interest Determination Date, the rate set forth in
H.15(519) for such date opposite the caption "Bank Prime Loan." If such rate is
not yet published by 9:00 a.m., New York City time, on the Calculation Date,
the Prime Rate for such Interest Determination Date will be the arithmetic mean
of the rates of interest publicly announced by each bank named on the Reuters
Screen NYMF Page as such bank's prime rate or base lending rate as in effect
for such Interest Determination Date as quoted on the Reuters Screen NYMF Page
on such Interest Determination Date, or, if fewer than four such rates appear
on the Reuters Screen
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NYMF Page for such Interest Determination Date, the rate shall be the
arithmetic mean of the prime rates quoted on the basis of the actual number of
days in the year divided by 360 as the close of business on such Interest
Determination Date by at least two of the three major money center banks in The
City of New York selected by the Calculation Agent from which quotations are
required. If fewer than two quotations are provided, the Prime Rate shall be
calculated by the Calculation Agent and shall be determined as the arithmetic
mean on the basis of the prime rates in The City of New York on such date by
the appropriate number of substitute banks or trust companies organized and
doing business under the laws of the United States, or any State thereof,
having total equity capital of at least U.S. $500 million and being subject to
supervision or examination by a Federal or State authority, selected by the
Calculation Agent to quote such rate or rates; provided, however, that if the
Prime Rate is not published in H.15(519) and the banks or trust companies
selected as aforesaid are not quoting as mentioned in this sentence, the Prime
Rate for such Interest Reset Period will be the same as the Prime Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable on the Prime Rate Notes for which
the Prime Rate is being determined shall be the Initial Interest Rate).
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace the NYMF
Page on that service for the purpose of displaying prime rates or base lending
rates of major United States banks).
Treasury Rate Notes
Each Treasury Rate Note will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if
any) specified in such Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "U.S. Government
Treasury bills--auction average (investment)" or, if not so published by 3:00
P.M., New York City time, on the Calculation Date pertaining to the Reset
Period to which such Treasury Interest Determination Date pertains, the auction
average rate (expressed as a bond equivalent, rounded upward, if necessary, to
the nearest one hundred-thousandth of a percentage point, on the basis of a
year of 365 days or 366 days, as applicable, and applied on a daily basis) as
otherwise announced by the United States Department of the Treasury. In the
event that the results of the auction of Treasury bills having the Index
Maturity designated in the applicable Pricing Supplement are not published or
reported as provided above by 3:00 P.M., New York City time, on such
Calculation Date or if no such auction is held in a particular week, then the
Treasury Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent, rounded upward, if necessary, to
the nearest one hundred-thousandth of a percentage point, on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of 3:30 P.M., New York
City time, on such Treasury Interest Determination Date, for three leading
primary U.S. government securities dealers selected, after consultation with
the Corporation, by the Calculation Agent for the issue of Treasury bills with
a remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate with respect to such Treasury Interest
Determination Date will be the interest rate otherwise in effect on such
Treasury Interest Determination Date.
CMT Rate Notes
CMT Rate Notes will bear interest at the rates (calculated with reference to
the CMT Rate and the Spread or Spread Multiplier, if any) specified in such CMT
Rate Notes and any applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any Interest Determination Date relating to a CMT Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CMT Rate (a "CMT Rate Interest Determination Date"), the rate
displayed on the designated CMT Telerate Page under the caption "Treasury
Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays
approximately 3:45 p.m.," under the column for the Designated CMT Maturity
Index for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT
Rate Interest Determination Date and (ii) if the Designated CMT Telerate Page
is 7052, the week, or the month, as applicable, ended immediately preceding the
week in which the Related CMT Rate Interest Determination Date occurs. If such
rate is no longer displayed on the relevant page, or if not displayed by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate
for such CMT Rate Interest Determination Date will be such Treasury Constant
Maturity Rate for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or if not published by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination Date will be such Treasury
Constant Maturity Rate for the Designated CMT Maturity Index (or other United
States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate
Interest Determination Date with respect to such Interest Reset Date as may
then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519). If such
information is not provided by 3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for the CMT Rate Interest Determination
Date will be calculated by the Calculation Agent and will be a yield to
maturity, based on the arithmetic mean of the secondary market closing offer
side prices as of approximately 3:30 P.M., New York City time, on the CMT
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Referenced Dealer") in The City of New York selected by the Calculation Agent
(from five such Referenced Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct, non-callable fixed rate
obligations of the United States ("Treasury Note") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to
maturity of not less than such Designated CMT Maturity Index minus one year. If
the Calculation Agent cannot obtain three such Treasury Note quotations, the
CMT Rate for such CMT Rate Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity based on the arithmetic
mean of the secondary market offer side prices as of approximately 3:30 P.M.,
New York City time, on the CMT Rate Interest Determination Date of three
Referenced Dealers in The City of New York (from five such Referenced Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for Treasury Notes with original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least $100,000,000. If three or four (and
not five) of such Referenced Dealers are quoting as described above, then the
CMT Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor lowest of such quotes will be eliminated; provided,
however, that if fewer than three Referenced Dealers selected by the
Calculation Agent are quoting as described herein, the CMT Rate will be the CMT
Rate in effect on such CMT Rate Interest Determination Date. If two Treasury
Notes with an original maturity as described in the third preceding sentence,
have remaining terms to maturity equally close to the Designated CMT Maturity
Index, the quotes for the CMT Rate Note with the shorter remaining term to
maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturity as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
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"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years) specified
in the applicable Pricing Supplement with respect to which the CMT Rate will be
calculated. If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall be two years.
Eleventh District Cost of Funds Rate
Eleventh District Cost of Funds Rate Notes will bear interest at the rates
(calculated with reference to the Eleventh District Cost of Funds Rate and the
Spread or Spread Multiplier, if any) specified in such Eleventh District Cost
of Funds Rate Notes and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date relating to an Eleventh District Cost of Funds Rate Note or any Floating
Rate Note for which the interest rate is determined with reference to the
Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate
Interest Determination Date"), the rate equal to the monthly weighted average
cost of funds for the calendar months preceding such Eleventh District Cost of
Funds Rate Interest Determination Date as set forth under the caption "Eleventh
District" on Telerate page 7058 as of 11:00 A.M., San Francisco time, on such
Eleventh District Cost of Funds Rate Interest Determination Date. If such rate
does not appear on the Telerate page 7058 on any related Eleventh District Cost
of Funds Rate Interest Determination Date, the Eleventh District Cost of Funds
Rate for such Eleventh District Cost of Funds Rate Interest Determination Date
shall be the monthly weighted average cost of funds paid by member institutions
of the Eleventh Federal Home Loan Bank District that was most recently
announced (the "Index") by the FHLB of San Francisco as such cost of funds for
the calendar month preceding the date of such announcement. If the FHLB of San
Francisco fails to announce such rate for the calendar month next preceding
such Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds
Rate Interest Determination Date will be the Eleventh District Cost of Funds
Rate in effect on such Eleventh District Cost of Funds Rate Interest
Determination Date. "Telerate Page 7058" means the display on the Dow Jones
Telerate Service on such page (or such other page as may replace such page on
that service for the purpose of displaying the Eleventh District Cost of Funds
Rate) for the purpose of displaying the monthly average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District.
J.J. Kenny Rate Notes
J.J. Kenny Rate Notes will bear interest at the rate (calculated with
reference to the J.J. Kenny Rate and the Spread or Spread Multiplier, if any)
specified in such J.J. Kenny Rate Notes and any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "J.J. Kenny
Rate" means, with respect to any Interest Determination Date relating to a J.J.
Kenny Rate Note or any Floating Rate Note for which the Interest Rate is
determined with reference to the J.J. Kenny Rate (a "J.J. Kenny Rate Interest
Determination Date"), the rate in the high grade weekly index (the "Weekly
Index") on such date made available by Kenny Information Systems ("Kenny") to
the Calculation Agent. The Weekly Index is, and shall be, based upon 30-day
yield evaluations at par of bonds, the interest of which is exempt from federal
income taxation under the Internal Revenue Code of 1986, as amended (the
"Code"), of not less than five high grade component issuers selected by Kenny
which shall include, without limitation, issuers of general obligation bonds.
The specific issuers included among the component issuers may be changed from
time to time by Kenny in its discretion. The bonds on which the Weekly Index is
based shall not include any bonds on which the interest is subject to a minimum
tax or similar tax under the Code, unless all tax-exempt bonds are subject to
such tax. In the event that Kenny ceases to make available such Weekly Index, a
successor indexing agent will be selected by the Calculation Agent, such index
to reflect the prevailing rate for bonds rated in the highest short-term rating
category by Moody's Investor Service, Inc. and Standard & Poor's
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Corporation in respect of issuers most closely resembling the high grade
component issuers selected by Kenny for its Weekly Index, the interest on which
is (A) variable on a weekly basis, (B) exempt from federal income taxation
under the Code, and (C) not subject to a minimum tax or similar tax under the
Code, unless all tax-exempt bonds are subject to such tax. If such successor
indexing agent is not available, the rate for any J.J. Kenny Rate Interest
Determination Date shall be 67% of the rate determined as if the Treasury Rate
option had been originally selected.
INDEXED NOTES
The Corporation may from time to time offer Notes, the principal amount of
which payable at Stated Maturity is determined by the rate of exchange between
the currency or currency unit in which such Notes (the "Indexed Notes") are
denominated (the "Denominated Currency") and the other currency or currency
unit designated as the Indexed Currency in the applicable Pricing Supplement
(the "Indexed Currency"). Unless otherwise indicated in the applicable Pricing
Supplement, Holders of Indexed Notes will be entitled to receive a principal
amount of such Indexed Notes exceeding the amount designated as the face amount
of such Indexed Notes in the applicable Pricing Supplement (the "Face Amount")
if, at Stated Maturity, the rate at which the Denominated Currency can be
exchanged for the Indexed Currency is greater than the rate of such exchange
designated as the Base Exchange Rate in the applicable Pricing Supplement (the
"Base Exchange Rate"), and will be entitled to receive a principal amount of
such Indexed Notes less than the Face Amount of such Indexed Notes, if, at
Stated Maturity, the rate at which the Denominated Currency can be exchanged
for the Indexed Currency is less than such Base Exchange Rate. Information as
to the relative historical value (which information is not necessarily
indicative of relative future value) of the applicable Denominated Currency
against the applicable Indexed Currency, any exchange controls applicable to
such Denominated Currency or Indexed Currency, and the tax consequences to
Holders of Indexed Notes will be set forth in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, interest
will be payable by the Corporation in the Denominated Currency based on the
Face Amount of the Indexed Note and at the rate and time and in the manner set
forth herein and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, principal of
an Indexed Note will be payable by the Corporation in the Denominated Currency
at Stated Maturity in an amount equal to the Face Amount of the Indexed Note,
plus or minus an amount determined by the determination agent specified in the
applicable Pricing Supplement (the "Determination Agent") by reference to the
differences between the Base Exchange Rate and the rate at which the
Denominated Currency can be exchanged for the Indexed Currency as determined on
the second Exchange Rate Date prior to the Stated Maturity of such Indexed Note
(the "Determination Date") by the Determination Agent in the manner specified
in the applicable Pricing Supplement, on the Determination Date, for an amount
of Indexed Currency equal to the Face Amount of such Indexed Note multiplied by
the Base Exchange Rate, with the Denominated Currency for settlement at Stated
Maturity (such rate of exchange, as so determined, is hereinafter referred to
as the "Spot Rate"). The principal amount of the Indexed Notes determined by
the Determination Agent to be payable at Stated Maturity will be payable to the
Holders thereof in the manner set forth herein and in the applicable Pricing
Supplement. In the absence of manifest error, the determination by the
Determination Agent of the Spot Rate and the principal amount of Indexed Notes
payable at Stated Maturity shall be final and binding on the Corporation and
the Holders of such Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, on the basis
of the aforesaid determination by the Determination Agent, (i) if the Base
Exchange Rate equals the Spot Rate for any Indexed Note, then the principal
amount of such Indexed Note payable at Stated Maturity would be equal to the
Face Amount of such Indexed Note; (ii) if the Spot Rate exceeds the Base
Exchange Rate (i.e., the Denominated Currency has appreciated against the
Indexed Currency during the term of the Indexed Note), then the principal
amount payable would be greater than the Face Amount of such Indexed Note;
(iii) if the Spot Rate is less than the Base Exchange Rate (i.e., the
Denominated Currency has depreciated against the
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Indexed Currency during the term of the Indexed Note) but is greater than one-
half of the Base Exchange Rate, then the principal amount so payable would be
less than the Face Amount of such Indexed Note; and (iv) if the Spot Rate is
less than or equal to one-half of the Base Exchange Rate, then the Spot Rate
will be deemed to be one-half of the Base Exchange Rate and no principal amount
of the Indexed Note would be payable at Stated Maturity.
Unless otherwise specified in the applicable Pricing Supplement, the formulas
to be used by the Determination Agent to determine the principal amount of an
Indexed Note payable at Stated Maturity will be as follows:
If the Spot Rate equals or exceeds the Base Exchange Rate, the principal
amount of an Indexed Note payable at Maturity shall equal:
Face Amount + (Face Amount X Spot Rate - Base Exchange Rate)
------------------------------
Spot Rate
If the Base Exchange Rate exceeds the Spot Rate, the principal amount of an
Indexed Note payable at Maturity (which shall, in no event, be less than zero)
shall equal:
Face Amount - (Face Amount X Base Exchange Rate - Spot Rate)
------------------------------
Spot Rate
If the formulas set forth above are applicable to an Indexed Note, the
maximum principal amount payable at Maturity in respect of such Indexed Note
would be an amount equal to twice the Face Amount and the minimum principal
amount so payable would be zero.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS
AS TO THE RISKS OF AN INVESTMENT IN INDEXED NOTES. SUCH INDEXED NOTES ARE NOT
AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their redemption price at Maturity,
resulting in such Notes being treated as if they were issued with original
issue discount for Federal Income Tax purposes (the "Original Issue Discount
Notes"). Such Original Issue Discount Notes may currently pay no interest or
interest at a rate which at the time of issuance is below market rate. See
"Certain United States Tax Consequences." Certain additional considerations
relating to any Original Issue Discount Notes may be described in the Pricing
Supplement relating thereto.
DUAL CURRENCY NOTES
The Corporation may from time to time offer Notes (the "Dual Currency Notes")
as to which the Corporation has a one-time option, exercisable on any one of
the dates specified in the applicable Pricing Supplement (each an "Option
Election Date") in whole, but not in part, with respect to all Dual Currency
Notes issued on the same day and having the same terms (a "Tranche"), of
thereafter making all payments of principal (premium, if any) and interest, if
any, (which payments would otherwise be made in the Specified Currency of such
Notes) in the optional currency specified in the applicable Pricing Supplement
(the "Option Payment Currency"). Information as to the relative value of the
Specified Currency compared to the Option Payment Currency will be set forth in
the applicable Pricing Supplement.
The Pricing Supplement for each issuance of Dual Currency Notes will specify,
among other things, the Specified Currency and Option Payment Currency of such
issuance and the Designated Exchange Rate for
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such issuance, which will be a fixed exchange rate used for converting amounts
denominated in the Specified Currency into amounts denominated in the Optional
Payment Currency (the "Designated Exchange Rate"). The Pricing Supplement will
also specify the Option Election Dates and Interest Payment Dates for the
related issuance of Dual Currency Notes. Each Option Election Date will be a
certain number of days before an Interest Payment Date or the Stated Maturity,
as set forth in the applicable Pricing Supplement, and will be the date on
which the Corporation may select whether to make all scheduled payments due
thereafter in the Optional Payment Currency rather than in the Specified
Currency.
If the Corporation makes such an election, the amount payable in the Optional
Payment Currency shall be determined using the Designated Exchange Rate
specified in the applicable Pricing Supplement. If such election is made,
notice of such election shall be mailed in accordance with the terms of the
applicable Tranche of Dual Currency Notes within two Business Days of the
Option Election Date and shall state (i) the first date, whether an Interest
Payment Date or the Stated Maturity, on which scheduled payments in the
Optional Payment Currency will be made and (ii) the Designated Exchange Rate.
Any such notice by the Corporation, once given, may not be withdrawn. The
equivalent value in the Specified Currency of payments made after such election
may be less, at the then current exchange rate, than if the Corporation had
made such payment in the Specified Currency.
For federal income tax purposes, Holders of Dual Currency Notes may be
subject to rules which differ from the general rules applicable to Holders of
other types of Notes offered hereby. See "Certain United States Tax
Consequences." The applicable Pricing Supplement will describe any special tax
consequences to Holders of Dual Currency Notes.
AMORTIZING NOTES
The Corporation may from time to time offer Amortizing Notes. Unless
otherwise specified in the applicable Pricing Supplement, interest on each
Amortizing Note will be computed on the basis of a 360-day year of twelve 30-
day months. Payments with respect to Amortizing Notes will be applied first to
interest due and payable thereon and then to the reduction of the unpaid
principal amount thereof. Further information concerning additional terms and
conditions of any issue of Amortizing Notes will be provided in the applicable
Pricing Supplement. A table setting forth repayment information in respect of
each Amortizing Note will be included in the applicable Pricing Supplement and
set forth on such Note.
RENEWABLE NOTES
The Corporation may from time to time offer Notes that will mature on an
Interest Payment Date specified in the applicable Pricing Supplement occurring
in or prior to the twelfth month following the Original Issue Date of such
Notes (the "Initial Maturity Date") unless the term of all or any portion of
any such Note (a "Renewable Note") is renewed in accordance with the procedures
described below.
On the Interest Payment Date occurring in the sixth month (unless a different
interval (a "Special Election Interval") is specified in the applicable Pricing
Supplement) prior to the Initial Maturity Date of a Renewable Note (the
"Initial Renewal Date") and on the Interest Payment Date occurring in each
sixth month (or in the last month of each Special Election Interval) after such
Initial Renewal Date (each, together with the Initial Renewal Date, a "Renewal
Date"), the term of such Renewable Note may be extended to the Interest Payment
Date occurring in the twelfth month (or, if a Special Election Interval is
specified in the applicable Pricing Supplement, the last month in a period
equal to twice the Special Election Interval) after such Renewal Date, if the
Holder of such Renewable Note elects to extend the term of such Renewable Note
or any portion thereof as described below. If a Holder does not elect to extend
the term of any portion of the principal amount of a Renewable Note during the
specified period prior to any Renewal Date, such portion will become due and
payable on the Interest Payment Date occurring in the sixth month (or the last
month in the Special Election Interval) after such Renewal Date (the "New
Maturity Date").
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The Holder of a Renewable Note may elect to renew the term of such Renewable
Note or, if specified in the applicable Pricing Supplement, any portion
thereof, by delivering a notice to such effect to the Trustee (or any duly
appointed paying agent) at the Corporate Trust Office not less than 15 nor more
than 30 days prior to the Renewable Date (unless another period is specified in
the applicable Pricing Supplement as the "Special Election"). Such election
will be irrevocable and will be binding upon each subsequent Holder of such
Renewable Note. An election to renew the term of a Renewable Note may be
exercised with respect to less than the entire principal amount of such
Renewable Note only if so specified in the applicable Pricing Supplement and
only in such a principal amount, or integral multiple in excess thereof, as is
specified in the applicable Pricing Supplement. Notwithstanding the foregoing,
the term of any Renewable Note may not be extended beyond its Date of Maturity
specified for such Renewable Notes in the applicable Pricing Supplement.
If the Holder does not elect to renew the term, such Renewable Note must be
presented to the Trustee (or any duly appointed paying agent) simultaneously
with notice of such election (or, in the event notice of such election,
together with a guarantee of delivery within five Business Days, is transmitted
on behalf of a Holder from a member of a national securities exchange, the
National Association of Securities Dealers, Inc. (the "NASD"), or a commercial
bank or trust company in the United States, within five Business Days of the
date of such notice). With respect to a Renewable Note, that is a Certificated
Note, as soon as practicable following receipt of such Renewable Note, the
Trustee (or any duly appointed paying agent) shall issue and exchange therefor
in the name of such Holder (i) a Note, in a principal amount equal to the
principal amount of such exchanged Renewable Note for which the election not to
renew the term thereof was exercised, with terms identical to those specified
on such Renewable Note (except for the Original Issue Date and the Initial
Interest Rate and except that such Note shall have a fixed, non-renewable
Stated Maturity on the New Maturity Date) and (ii) if such election is made
with respect to less than the full principal amount of such Holder's Renewable
Note, a replacement Renewable Note, in a principal amount equal to the
principal amount of such exchanged Renewable Note for which an election to
renew was made, with terms identical to such exchanged Renewable Notes.
NOTES LINKED TO COMMODITY PRICES, EQUITY INDICES AND OTHER FACTORS
The Corporation may from time to time offer Notes, the principal amount of
which at Stated Maturity, or the amount of interest payable on an Interest
Payment Date, is determined by reference to one or more commodity prices,
equity indices or other factors and on such other terms as may be set forth in
the applicable Pricing Supplement.
INTEREST RATE RESET
If the Corporation has the option with respect to any Note to reset the
interest rate, in the case of a Fixed Rate Note, or to reset the Spread or
Spread Multiplier, in the case of a Floating Rate Note, the Pricing Supplement
relating to such Note will indicate such option, and, if so, (i) the date or
dates on which such interest rate or such Spread or Spread Multiplier, as the
case may be, may be reset (each an "Optional Reset Date") and (ii) the basis or
formula, if any, for such resetting.
The Corporation may exercise such option with respect to a Note by notifying
the Paying Agent of such exercise at least 45 but not more than 60 days prior
to an Optional Reset Date for such Note. Not later than 40 days prior to such
Optional Reset Date, the Paying Agent will mail to the Holder of such Note a
notice (the "Reset Notice"), first class, postage prepaid, setting forth (i)
the election of the Corporation to reset the interest rate, in the case of a
Fixed Rate Note, or the Spread or Spread Multiplier, in the case of a Floating
Rate Note, (ii) such new interest rate or such new Spread or Spread Multiplier,
as the case may be, and (iii) the provisions, if any, for redemption during the
period from such Optional Reset Date to the next Optional Reset Date or, if
there is no such next Optional Reset Date, to the Stated Maturity of such Note
(each such period a "Subsequent Interest Period"), including the date or dates
on which or the period or periods during which and the price or prices at which
such redemption may occur during such Subsequent Interest Period.
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Notwithstanding the foregoing, not later than 20 days prior to an Optional
Reset Date for a Note, the Corporation may, at its option, revoke the interest
rate, in the case of a Fixed Rate Note, or the Spread or Spread Multiplier, in
the case of a Floating Rate Note, in either case provided for in the Reset
Notice and establish a higher interest rate, in the case of a Fixed Rate Note,
or a higher Spread or Spread Multiplier, in the case of a Floating Rate Note,
for the Subsequent Interest Period commencing on such Optional Reset Date by
mailing or causing the Paying Agent to mail notice of such higher interest rate
or higher Spread or Spread Multiplier, as the case may be, first class, postage
prepaid to the Holder of such Note. Such notice shall be irrevocable. All Notes
with respect to which the interest rate or Spread or Spread Multiplier is reset
on an Optional Reset Date will bear such higher interest rate, in the case of a
Fixed Rate Note, or higher Spread or Spread Multiplier, in the case of a
Floating Rate Note.
If the Corporation elects to reset the interest rate or the Spread or Spread
Multiplier of a Note, the Holder of such Note will have the option to elect
repayment of such Note by the Corporation on any Optional Reset Date at a price
equal to the principal amount thereof plus any accrued interest to such
Optional Reset Date. In order for a Note to be so repaid on an Optional Reset
Date, the Holder thereof must follow the procedures set forth below under
"Redemption and Repayment" for optional repayment, except that the period for
delivery of such Note or notification to the Paying Agent shall be at least 25
but not more than 35 days prior to such Optional Reset Date and except that a
Holder who has tendered a Note for repayment pursuant to a Reset Notice, may,
by written notice to the Paying Agent, revoke any such tender for repayment
until the close of business on the tenth day prior to such Optional Reset Date.
EXTENSION OF MATURITY
If the Corporation has the option to extend the Stated Maturity of any Note
for one or more whole year periods (each an "Extension Period") up to but not
beyond the date (the "Final Maturity Date") set forth in the Pricing Supplement
relating to such Note, such Pricing Supplement will indicate such option and
the basis or formula, if any, for setting the interest rate or the Spread or
Spread Multiplier, as the case may be, applicable to any such Extension Period.
The Corporation may exercise such option with respect to a Note by notifying
the Paying Agent of such exercise at least 45 but not more than 60 days prior
to the Stated Maturity of such Note in effect prior to the exercise of such
option (the "Original Stated Maturity"). No later than 40 days prior to the
Original Stated Maturity, the Paying Agent will mail to the Holder of such Note
a notice (the "Extension Notice") relating to such Extension Period, first
class, postage prepaid, setting forth (i) the election of the Corporation to
extend the Stated Maturity of such Note, (ii) the new Stated Maturity, (iii) in
the case of a Fixed Rate Note, the interest rate applicable to the Extension
Period or, in the case of a Floating Rate Note, the Spread or Spread Multiplier
applicable to the Extension Period, and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by the
Paying Agent of an Extension Notice to the Holder of a Note, the Stated
Maturity of such Note shall be extended automatically as set forth in the
Extension Notice, and, except as modified by the Extension Notice and as
described in the next paragraph, such Note will have the same terms as prior to
the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the Original
Stated Maturity for a Note, the Corporation may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread or Spread
Multiplier, in the case of a Floating Rate Note, provided for in the Extension
Notice and establish a higher interest rate, in the case of a Fixed Rate Note,
or a higher Spread or Spread Multiplier, in the case of a Floating Rate Note,
for the Extension Period by mailing or causing the Paying Agent to mail notice
of such higher interest rate or higher Spread or Spread Multiplier, as the case
may be, first class, postage prepaid, to the Holder of such Note. Such notice
shall be irrevocable. All Notes with respect to which the Stated Maturity is
extended will bear such higher interest rate, in the case of a Fixed Rate Note,
or higher Spread or Spread Multiplier, in the case of a Floating Rate Note, for
the Extension Period.
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If the Corporation elects to extend the Stated Maturity of a Note, the Holder
of such Note will have the option to elect repayment of such Note by the
Corporation at the Original Stated Maturity at a price equal to the principal
amount thereof plus any accrued interest to such date. In order for a Note to
be so repaid on the Original Stated Maturity, the Holder thereof must follow
the procedures as set forth below under "Redemption and Repayment" for optional
repayment, except that the period for delivery of such Note or notification to
the Paying Agent shall be at least 25 but not more than 35 days prior to the
Original Stated Maturity and except that a Holder who has tendered a Note for
repayment pursuant to an Extension Notice may, by written notice to the Paying
Agent, revoke any such tender for repaying until the close of business on the
tenth day prior to the Original Stated Maturity.
REDEMPTION AND REPAYMENT
Unless one or more Redemption Dates are specified in the applicable Pricing
Supplement, the Notes will not be redeemable prior to their Stated Maturity. If
one or more Redemption Dates are so specified with respect to any Note, the
applicable Pricing Supplement will also specify one or more redemption prices
(expressed as a percentage of the principal amount of such Note) ("Redemption
Prices") and the redemption period or periods ("Redemption Periods") during
which such Redemption Prices shall apply. Unless otherwise specified in the
applicable Pricing Supplement, any such Note shall be redeemable at the option
of the Corporation at the specified Redemption Price applicable to the
Redemption Period during which such Note is to be redeemed, together with
interest accrued to the Redemption Note. Unless otherwise specified in the
applicable Pricing Supplement, the Notes will not be subject to any sinking
fund. The Corporation may redeem any of the Notes that are redeemable and
remain outstanding either in whole or from time to time in part, upon not less
than 30 nor more than 60 days' notice. In the event of a redemption in part of
any Note, a new Note for the amount of the unredeemed portion shall be issued
in the name of the Holder upon cancellation of the redeemed Note.
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid prior to Stated Maturity or that such Note will be
repayable at the option of the Holder on a date or dates specified prior to
Stated Maturity at a price or prices set forth in the applicable Pricing
Supplement, together with accrued interest to date of repayment.
In order for a Note that is redeemable at the option of the Holder to be
repaid, the Paying Agent must receive at least 30 days but not more than 45
days prior to the repayment date (a) appropriate wire instructions and (b)
either (i) the Note with the form entitled "Option to Elect Repayment" attached
to the Note duly completed or (ii) a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the NASD, or a
commercial bank or trust company in the United States setting forth the name of
the Holder of the Note, the principal amount of the Note, the portion of the
principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of the Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that the Note to be
repaid with the form entitled "Option to Elect Repayment" attached to the Note
duly completed will be received by the Paying Agent not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter and such Note and form duly completed must be received by the Paying
Agent by such fifth Business Day. Exercise of the repayment option by the
Holder of a Note shall be irrevocable, except as otherwise described above
under "Interest Rate Reset" and "Extension of Maturity." The repayment option
may be exercised by the Holder of a Note for less than the entire principal
amount of the Note provided that the principal amount of the Note remaining
outstanding after repayment is an authorized denomination. No transfer or
exchange of any Note (or, in the event that any Note is to be repaid in part,
the portion of the Note to be repaid) will be permitted after exercise of a
repayment option. All questions as to the availability, eligibility (including
time of receipt) and acceptance of any Note for repayment will be determined by
the Corporation, whose determination will be final, binding and non-appealable.
If a Note is represented by a Global Security, the Depositary's nominee will
be the Holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the
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Depositary's nominee will timely exercise a right to repayment with respect to
a particular Note, the beneficial owner of such Note must instruct the broker
or other direct or indirect participant through which it holds an interest in
such Note to notify the Depositary of its desire to exercise a right to
repayment. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner
should consult the broker or other direct or indirect participant through which
it holds an interest in a Note in order to ascertain the cut-off time by which
such an instruction must be given in order for timely notice to be delivered to
the Depositary.
Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is
an Original Issue Discount Note, the amount payable on such Note in the event
of redemption or repayment prior to its Stated Maturity shall be the Amortized
Face Amount of such Note, as specified in the applicable Pricing Supplement, as
of the Redemption Date or the date of repayment, as the case may be.
REPURCHASE
The Corporation may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Corporation may be held or
resold or, at the discretion of the Corporation, may be surrendered to the
Trustee or Paying Agent for cancellation.
BOOK-ENTRY SYSTEM
Upon issuance, all Book-Entry Notes having the same Specified Currency,
Original Issue Date, Date of Maturity, reset, extension, redemption and
repayment provisions, if any, Interest Payment Dates, Regular Record Dates,
and, in the case of Fixed Rate Notes, interest rate, or, in the case of
Floating Rate Notes, Base Rate, Initial Interest Rate, Index, Maturity,
Interest Reset Period, Interest Reset Dates, Interest Payment Period, Spread,
if any, Spread Multiplier, if any, Maximum Interest Rate, if any, and Minimum
Interest Rate, if any, will be represented by a single fully registered
certificate in definitive form (a "Global Security"). Each Global Security
representing Book-Entry Notes will be deposited with, or on behalf of, the
Depositary and registered in the name of the Depositary or its nominee. Book-
Entry Notes will not be exchangeable for Certificated Notes at the option of
the Holder and, except as set forth below, will not otherwise be issuable in
definitive form.
One Global Security will be issued for each issue of the Notes, each in the
aggregate principal amount of such issue, and will be deposited with the
Depositary. If, however, the aggregate principal amount of any issue exceeds
$150 million, one Global Security will be issued with respect to each $150
million of principal amount and an additional Global Security will be issued
with respect to any remaining principal amount of such issue.
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary holds securities that its
participants ("Participants") deposit with the Depositary. The Depositary also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct participants
("Direct Participants") include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. The
Depositary is owned by a number of its Direct Participants, by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the NASD. Access to
the Depositary's system is also available to others such as securities brokers
and dealers (including the Agents), banks and trust companies that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly. The rules applicable to the Depositary and its
Participants are on file with the Securities and Exchange Commission.
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Purchases of Book-Entry Notes under the Depositary's system must be made by
or through Direct Participants, which will receive a credit for the Book-Entry
Notes on the Depositary's records. The ownership interest of each actual
purchaser of each Book-Entry Note ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depositary of their purchase,
but Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Book-
Entry Notes are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interest in Book-Entry Notes, except
in the event that use of the book-entry system for the Book-Entry Notes is
discontinued.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Global Securities with the
Depositary and their registration in the name of Cede & Co. effect no change in
beneficial ownership. The Depositary has no knowledge of the actual Beneficial
Owners of the Book-Entry Notes; the Depositary's records reflect only the
identity of the Direct Participants to those accounts such Book-Entry Notes are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all Book-Entry
Notes within an issue are being redeemed, and unless otherwise notified by
either Corporation or the Trustee, the Depositary's current practice is to
determine by lot the amount of interest of each Direct Participant in such
issue to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
Book-Entry Notes. Under its usual procedures, the Depositary will mail an
Omnibus Proxy to the Corporation as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Book-Entry Notes are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Payments of principal, premium, if any, and interest, if any, on the Book-
Entry Notes will be made to the Depositary. The Depositary's practice is to
credit direct Participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the Depositary's records
unless the Depositary has reason to believe that it will not receive payment on
such date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as in the case with securities
held for the accounts of customers in bearer form or registered in "street
name" and will be the responsibility of such Participant and not of the
Depositary, any Agents, or the Corporation, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to the Depositary is the responsibility of the
Corporation or the Agents, disbursement of such payments to Direct Participants
shall be the responsibility of the Depositary, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Book-Entry Notes
repaid by the Corporation, through its Participant, to the Trustee, and shall
effect delivery of such Book-Entry Notes by causing the Direct Participant to
transfer the Participant's interest in the Book-Entry Notes, on the
Depositary's records, to the Paying Agent. The requirement for physical
delivery of Book-Entry Notes in connection with a demand
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for purchase or a mandatory purchase will be deemed satisfied when the
ownership rights in the Book-Entry Notes are transferred by Direct Participants
on the Depositary's records.
The Depositary may discontinue providing its services as securities
depository with respect to the Book-Entry Notes at any time by giving
reasonable notice to the Corporation or the Trustee. Under such circumstances,
in the event that a successor securities depositary is not obtained,
Certificated Notes are required to be printed and delivered in exchange for the
Book-Entry Notes represented by the Global Securities held by the Depositary.
The Corporation may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor securities depositary). In
that event, Certificated Notes will be printed and delivered in exchange for
the Book-Entry Notes represented by the Global Securities held by the
Depositary.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the
Corporation believes to be reliable, but the Corporation takes no
responsibility for the accuracy thereof.
Neither the Corporation, the Trustee, any Paying Agent nor the registrar for
the Notes will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interest in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each Note in the Specified Currency for
such Note. Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies and vice versa, and banks
generally do not offer non-U.S. dollar checking or savings account facilities
in the United States. However, if requested by a prospective purchaser of Notes
denominated in a Specified Currency other than U.S. dollars, the Agent
soliciting the offer to purchase will arrange for the conversion of U.S.
dollars into such Specified Currency to enable the purchaser to pay for such
Notes. Such requests must be made on or before the fifth Business Day preceding
the date of delivery of the Notes, or by such other date as determined by the
Agent which presents the offer to the Corporation. Each such conversion will be
made by the relevant Agent on such terms and subject to such conditions,
limitations and charges as such Agent may from time to time establish in
accordance with its regular foreign exchange practice. All costs of exchange
will be borne by the relevant purchaser of the Notes.
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in, or the payment of which is
determined with reference to, a Specified Currency other than U.S. dollars
entails significant risks that are not associated with similar investments in a
security denominated in U.S. dollars. Similarly, an investment in an Indexed
Note entails significant risks that are not associated with an investment in
non-Indexed notes. Such risks include, without limitation, the possibility of
significant changes in rates of exchange between U.S. dollars and the Specified
Currency (or, in the case of each Indexed Note, the rate of exchange between
the Denominated Currency and the Indexed Currency for such Indexed Note),
including changes resulting from official redenomination with respect to such
Specified Currency (or, in the case of each Indexed Note, with respect to the
Denominated Currency on the Indexed Currency therefor) and the possibility of
the imposition or modification of foreign exchange controls with respect to the
Specified Currency. Such risks generally depend on factors over which the
Corporation has no control, such as economic and political events and the
supply
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of and demand for the relevant currencies. In recent years, rates of exchange
between Specified Currencies have been highly volatile, and such volatility may
be expected in the future. Fluctuations in any particular exchanges that have
occurred in the past are not necessarily indicative, however, of fluctuations
in the rate that may occur during the term of any Note. Depreciation of a
foreign currency or units of a foreign composite currency in which a Note is
denominated against the U.S. dollar would result in a decrease in the effective
yield of such Note below its coupon rate, and in certain circumstances could
result in a loss to the investor on a U.S. dollar basis. Similarly,
depreciation of the Denominated Currency with respect to an Indexed Note
against the applicable Indexed Currency would result in the principal amount
payable with respect to such Indexed Note at the Stated Maturity being less
than the Face Amount of such Indexed Note which, in turn, would decrease the
effective yield of such Indexed Note below its applicable interest rate and
could also result in a loss to the investor.
The Notes provide that, in the event of an official redenomination of a
foreign currency (including, without limitation, an official redenomination of
a foreign currency that is a composite currency) the obligations of the
Corporation with respect to payments on Notes denominated in such currency
shall, in all cases be deemed immediately following such redenomination to
provide for the payment of that amount of redenominated currency representing
the amount for such obligations immediately before such redenomination. The
Notes do not provide for any adjustment to any amount payable under the Notes
as a result of (a) any change in the value of a foreign currency relative to
any other currency due solely to fluctuations in exchange rates or (b) any
redenomination of any component currency of any composite currency (unless such
composite currency is itself officially redenominated).
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a foreign currency for making payments with respect to a Note denominated in
such currency. There can be no assurances that exchange controls will not
restrict or prohibit payments of principal or interest in any currency or
currency unit. Even if there are not actual exchange controls, it is possible
that, with respect to any particular Note, the foreign currency for such Note
will not be available to the Corporation to make payments of interest and
principal then due because of circumstances beyond the control of the
Corporation. In that event, the Corporation will make such payments in the
manner set forth below under "Payment Currency."
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT, AND THE
APPLICABLE PRICING SUPPLEMENT WILL NOT, DESCRIBE ALL OF THE RISKS OF AN
INVESTMENT IN NOTES DENOMINATED IN, OR THE PAYMENT OF WHICH IS RELATED TO THE
VALUE OF, A CURRENCY (INCLUDING ANY COMPOSITE CURRENCY) OTHER THAN U.S.
DOLLARS, AND THE CORPORATION DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE
PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS
SUPPLEMENT OR THE DATE OF THE APPLICABLE PRICING SUPPLEMENT OR AS SUCH RISKS
MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED IN AN INVESTMENT IN SUCH
NOTES, WHICH ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Notes who are United States Holders, as that term is
defined herein, and the Corporation disclaims any responsibility to advise
prospective purchasers who are residents of countries other than the United
States with respect to any matter that may affect the purchase or holding of,
or receipt of payments of principal, premium, if any, or interest, if any, in
respect of, Notes. Such persons should consult their own counsel with regard to
such matters.
The Pricing Supplement relating to Notes denominated in a Specified Currency
other than U.S. dollars or relating to Indexed Notes will contain information
concerning historical exchange rates for such Specified
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Currency or Denominated Currency against the U.S. dollar or other relevant
currency (including, in the case of Indexed Notes, the applicable Indexed
Currency), a description of such currency or currencies, and any exchange
controls affecting such currency or currencies. The information therein
concerning exchange rates is furnished as a matter of information only and
should not be regarded as indicative of the range or trend in fluctuations in
currency exchange rates that may occur in the future.
PAYMENT CURRENCY
Except as set forth in the applicable Pricing Supplement, if payment on a
Note is required to be made in a Specified Currency other than U.S. dollars and
such currency is unavailable due to the imposition of exchange controls or
other circumstances beyond the Corporation's control, or is no longer used by
the government of the country issuing such currency for the settlement of
transactions by public institutions of or within the international banking
community, then all payments with respect to such Note shall be made in U.S.
dollars until such currency is again available or so used. The amount so
payable on any date in such foreign currency shall be converted to U.S. dollars
on the basis of the Market Exchange Rate on the last date such Specified
Currency was available. See "Description of Notes--Payment of Principal and
Interest."
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a component
shall be divided or multiplied in the same proportion. 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 the consolidated component currencies
expressed in such single currency. If any component currency is divided into
two or more currencies, the amount of the original component currency as a
component shall be replaced by the amounts of such two or more currencies
having an aggregate value on the date of division equal to the amount of the
former component currency immediately before such division.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. Courts in the United States customarily have not
rendered judgments for money damages denominated in any currency other than
U.S. dollars. If a Note is denominated in a Specified Currency other than U.S.
dollars, any judgment under New York law will be rendered in the foreign
currency of the underlying obligation and converted into U.S. dollars at a rate
of exchange prevailing on the date of entry of judgment or decree.
CERTAIN UNITED STATES TAX CONSEQUENCES
Set forth below is a summary of certain U.S. federal income tax
considerations of importance to Holders of the Notes. The summary concerns
Holders who hold the Notes as capital assets and not special classes of
Holders, such as dealers in securities or currencies, financial institutions,
insurance companies, regulated investment companies, persons who hold the Notes
as part of a conversion transaction or as part of a straddle with other
investments, persons who hold the Notes as a hedge against currency risks or
who hedge any currency risks of holding the Notes, tax-exempt investors or U.S.
Holders (as defined below) whose functional currency is other than the U.S.
dollar. The discussion below is based on existing provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations promulgated
thereunder, judicial decisions and administrative rulings, all of which are
subject to change or alternative construction with possible retroactive effect.
On February 2, 1994, final Treasury regulations under the original issue
discount ("OID") provisions of the Code (the "OID Regulations") were published
in the Federal Register. The OID Regulations, which replaced certain proposed
OID regulations that were issued on December 21, 1992, generally apply to debt
instruments issued on or after April 4, 1994. The following discussion is based
on the OID Regulations.
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UNITED STATES TAX CONSIDERATIONS FOR U.S. HOLDERS
GENERAL
As used herein, "U.S. Holder" means a Holder of a Note who is a citizen or
resident of the United States, a corporation or partnership (including an
entity treated as a corporation or partnership for U.S. tax purposes) or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, an estate or trust the income of which is
subject to U.S. federal income taxation regardless of its source, and any other
Holder whose ownership of a Note is effectively connected with the conduct of a
trade or business in the United States.
PAYMENTS OF INTEREST
Interest on the Notes generally will be taxable to a U.S. Holder as ordinary
interest income at the time it is accrued or received, depending in part on the
U.S. Holder's method of accounting for tax purposes.
ORIGINAL ISSUE DISCOUNT
General. Notes with a term greater than one year may be issued with OID for
U.S. federal income tax purposes. OID is the excess of the "stated redemption
price at maturity" of a Note over its "issue price." If this excess is less
than .25% of the Note's stated redemption price at maturity multiplied by the
number of complete years to its maturity or, in the case of an Amortizing Note,
its weighted average maturity (a "de minimis amount"), the amount of OID is
considered to be zero. The "stated redemption price at maturity" of a Note is
all amounts payable on the Note however designated other than payments of
"qualified stated interest." The "issue price" of an issue of Notes is defined
as the first price at which a substantial amount of such Notes has been sold,
other than to bond houses, brokers or similar persons or organizations acting
as underwriters, placement agents or wholesalers. "Qualified stated interest"
generally is stated interest that is unconditionally payable in cash or in
property (other than debt instruments of the issuer) at least annually at a
single fixed rate (a single fixed rate is a rate that appropriately takes into
account the length of time between payments). If a Note has certain interest
payment characteristics (e.g., teaser rates or interest holidays), then such
Note may also be treated as having OID for U.S. federal income tax purposes
even if such Note were issued at an issue price which does not otherwise result
in OID.
Accrual of OID. U.S. Holders are required to include OID in income before the
receipt of cash attributable to such income, regardless of such U.S. Holders'
method of accounting for tax purposes. The amount of OID includible in income
by the initial U.S. Holder of a Note is the sum of the daily portions of OID
with respect to such Note for each day during the taxable year or portion of
the taxable year in which such U.S. Holder held such Note. The amount of OID
which accrues in an accrual period is an amount equal to the excess (if any) of
(a) the product of the Note's "adjusted issue price" at the beginning of such
accrual period and its yield to maturity (determined on the basis of
compounding at the end of each accrual period and appropriately adjusted to
take into account the length of the particular accrual period) over (b) the sum
of the qualified stated interest payments, if any, allowable to the accrual
period. The daily portion of OID is determined by allocating to each day in any
accrual period a ratable portion of the amount of OID which accrues during the
accrual period. The "adjusted issue price" of a Note at the beginning of any
accrual period is the sum of the issue price of such Note plus the OID
allocable to all prior accrual periods reduced by payments on the Note other
than qualified stated interest. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the debt instrument,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the first day or the last day
of an accrual period. Under these rules, U.S. Holders generally will have to
include in income increasingly greater amounts of OID in successive accrual
periods.
Floating Rate Notes. The Floating Rate Notes are treated as either "variable
rate debt instruments" or Contingent Notes (as defined below). The OID
Regulations provide special rules for determining the amount
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and accrual of qualified stated interest and OID on a Floating Rate Note. Under
the OID Regulations, a Floating Rate Note will qualify as a variable rate debt
instrument if (a) its issue price does not exceed the total noncontingent
principal payments due under such Floating Rate Note by more than a specified
de minimis amount and (b) it provides for stated interest, paid or compounded
at least annually, at (where applicable) current values of (i) one or more
"qualified floating rates," (ii) a single fixed rate and one or more qualified
floating rates, (iii) a single "objective rate," or (iv) a single fixed rate
and a single objective rate that is a "qualified inverse floating rate," as
such terms are defined under the OID Regulations. The definitions of such terms
and their application, if any, to a particular Floating Rate Note will be
described in the related Pricing Supplement.
If a Floating Rate Note that qualifies as a variable rate debt instrument
provides for stated interest at either a single qualified floating rate or a
single objective rate that is unconditionally payable in cash or property
(other than debt instruments of the issuer) at least annually, then such stated
interest will constitute qualified stated interest, and will be taxable to the
U.S. Holder as ordinary interest income at the time it is accrued or received,
depending on such U.S. Holder's method of accounting for tax purposes. Such a
Floating Rate Note thus generally will not be treated as having OID unless its
stated principal amount exceeds its issue price and such excess is greater than
or equal to a specified de minimis amount. OID, if any, on such a Floating Rate
Note is allocated to an accrual period under the method described above.
Any Floating Rate Note that qualifies as a variable rate debt instrument
generally will be converted into a fixed rate instrument, and the amount and
accrual of qualified stated interest and OID on such Floating Rate Note are
then determined by applying the general OID rules. The method for converting
such a Floating Rate Note to a fixed rate instrument will depend on its
characteristics. Such a Floating Rate Note providing for a qualified floating
rate or a qualified inverse floating rate is converted by substituting a fixed
rate (the "equivalent" fixed rate) equal to the value of the qualified floating
rate or qualified inverse floating rate as of such Floating Rate Note's issue
date. Such a Floating Rate Note providing for an objective rate (other than a
qualified inverse floating rate) is converted by substituting an equivalent
fixed rate that reflects the yield that is reasonably expected on such Floating
Rate Note. In the case of a Floating Rate Note that qualifies as a variable
rate debt instrument and provides for stated interest at one or more qualified
floating rates or a qualified inverse floating rate and additionally provides
for stated interest at a single fixed rate, the fixed rate is converted into a
qualified floating rate (or a qualified inverse floating rate if such Floating
Rate Note provides for a qualified inverse floating rate). The qualified
floating rate or qualified inverse floating rate that replaces the fixed rate
must be such that the fair market value of the Floating Rate Note as of the
Floating Rate Note's issue date is approximately the same as the fair market
value of an otherwise identical debt instrument that provides for either the
qualified floating rate or qualified inverse floating rate rather than the
fixed rate. Such a Floating Rate Note is then converted into an equivalent
fixed rate debt instrument as described above. In the event that the amount of
qualified stated interest or OID assumed to have accrued or been paid with
respect to the equivalent fixed rate debt instrument of a Floating Rate Note
that qualifies as a variable rate debt instrument differs from the amount of
qualified stated interest or OID actually accrued or paid on such Floating Rate
Note during an accrual period, the OID Regulations provide for appropriate
adjustments to be made to the amount of qualified stated interest or OID
assumed to have accrued or been paid.
CONTINGENT NOTES
Notes may be issued under circumstances in which the amount and/or timing of
interest and principal on the Notes is subject to a contingency ("Contingent
Notes"). For example, the Corporation may issue Notes under which the total
noncontingent payments are less than the issue price or Indexed Notes under
which interest and/or principal is determined by reference to multiple formulae
based on the values of specified stocks, commodities, foreign currencies or
other such personal property. If a Floating Rate Note does not qualify as a
variable rate debt instrument under the OID Regulations, then the Floating Rate
Note would be treated as a Contingent Note. It is not entirely clear under
current law how a Floating Rate Note would be
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taxed in such case. The proper U.S. federal income tax treatment of a
Contingent Note will be described in the related Pricing Supplement.
SHORT-TERM NOTES
Notes that have a fixed maturity of one year or less ("Short-Term Notes")
will be treated as having been issued with acquisition discount. U.S. Holders
who report income for U.S. federal income tax purposes under the accrual
method, and certain other holders including banks and dealers in securities,
are required to accrue acquisition discount on Short-Term Notes on a straight-
line basis unless an election is made to accrue the acquisition discount under
a constant yield method (based on daily compounding). In general, an individual
or other cash method U.S. Holder is not required to accrue such acquisition
discount unless the U.S. Holder elects to do so. If such an election is not
made, any gain recognized by the U.S. Holder on the sale, exchange or maturity
of the Short-Term Note will be ordinary income to the extent of the acquisition
discount accrued on a straight-line basis, or upon election under the constant
yield method (based on daily compounding), through the date of sale or
maturity, and a portion of the deductions otherwise allowable to the U.S.
Holder for interest on borrowings allocable to the Short-Term Note will be
deferred until a corresponding amount of income is realized.
MARKET DISCOUNT AND PREMIUM
If a U.S. Holder acquires a Note at a price below its issue price (or, in the
case of a subsequent purchaser, its stated redemption price at maturity), or
acquires a Note issued with OID at a price below its adjusted issue price as of
the purchase date, the amount of the difference will be treated as "market
discount." If the market discount exceeds a de minimis amount, any gain on the
sale, exchange or retirement of the Note is treated as ordinary interest income
at the time of the disposition to the extent of the accrued market discount,
unless the U.S. Holder elects (the "current inclusion election") to accrue
market discount in income on a current basis. In addition, a U.S. Holder who
does not make the current inclusion election is required to defer deductions
for a portion of such Holder's interest expense on any indebtedness incurred to
purchase or carry such Note. Market discount is normally accrued on a straight-
line basis, but a Holder may elect to use a constant yield method of accrual.
A U.S. Holder who purchases a Note for an amount above its adjusted issue
price immediately after its purchase and less than or equal to its stated
redemption price at maturity will be considered to have purchased such Note at
an "acquisition premium." Under the acquisition premium rules, the amount of
OID which such U.S. Holder must include in its gross income with respect to
such Note for any taxable year (or portion thereof in which the U.S. Holder
holds such Note) will be reduced (but not below zero) by the portion of the
acquisition premium properly allocable to the period.
If a U.S. Holder purchases a Note for an amount above its stated redemption
price at maturity, such U.S. Holder will be considered to have purchased the
Note with "amortizable bond premium" equal in amount to such excess. A U.S.
Holder may elect to amortize such premium using a constant yield method over
the remaining term of the Note and may offset interest otherwise required to be
included in respect of the Note during any taxable year by the amortized amount
of such excess for the taxable year. However, if the Note may be optionally
redeemed after the U.S. Holder acquires it at a price in excess of its stated
redemption price at maturity, special rules would apply which could result in a
deferral of the amortization of some bond premium until later in the term of
the Note.
ELECTION TO TREAT ALL INTEREST AND PREMIUM AS OID
U.S. Holders who acquire Notes on or after April 4, 1994, may elect
irrevocably to include all interest (including stated interest, acquisition
discount, OID, de minimis OID, market discount, de minimis market discount, and
unstated interest, as adjusted by any amortizable bond premium or acquisition
premium on a debt instrument) in income by using the constant yield method
applicable to OID, subject to certain limitations and exceptions.
S-29
<PAGE>
DISPOSITION OF A NOTE
U.S. Holders of Notes recognize gain or loss on the sale, redemption,
exchange or other disposition of such Notes. This gain or loss is measured by
the difference between the amount of cash received (except to the extent
attributable to accrued interest) and the U.S. Holder's adjusted tax basis in
the Note. A U.S. Holder's adjusted tax basis for determining gain or loss on a
sale or disposition of a Note generally will be such U.S. Holder's cost
increased by any amounts included in income, other than qualified stated
interest, and reduced by any amortized premium and cash received other than
qualified stated interest. Gain or loss on the sale, exchange or redemption of
a Note generally will be long-term capital gain or loss if the Note has been
held as a capital asset for more than one year, except to the extent that gain
represents accrued market discount or acquisition discount not previously
included in the U.S. Holder's income.
FOREIGN CURRENCY NOTES
Notes may be denominated in, or interest or principal on the Notes may be
determined by reference to, a foreign currency or foreign currency unit (e.g.,
the ECU) ("Foreign Currency Notes"). In this case, for U.S. federal income tax
purposes, U.S. Holders of Foreign Currency Notes may need to determine the U.S.
dollar equivalent of amounts includible in income and separately calculate any
foreign exchange gain or loss arising from holding a Foreign Currency Note.
Treatment of Interest Income and OID. With respect to interest income and
OID, a U.S. Holder of a Foreign Currency Note who is an accrual basis taxpayer
generally will be required to translate the interest income or OID for an
accrual period into U.S. dollars at the average exchange rate for such accrual
period. Alternatively, a U.S. Holder may elect to translate accrued interest
income or OID into U.S. dollars at the spot rate in effect on the last day of
such accrual period. If elected, this alternative method must be applied
consistently to all debt instruments held by such U.S. Holder from year to
year.
A U.S. Holder of a Foreign Currency Note who is an accrual basis taxpayer
recognizes foreign exchange gain or loss on the receipt of a payment of accrued
interest income. Such exchange gain or loss generally will be measured by the
difference between (a) the U.S. dollar equivalent of the interest received
translated at the spot rate in effect on the date of payment, and (b) the U.S.
dollar equivalent of the accrued interest income translated at the average
exchange rates used to include such accrued interest in income. Cash basis
taxpayers generally will translate interest income and OID into U.S. dollars at
the spot exchange rate in effect on the date of payment. No foreign exchange
gain or loss will be realized with respect to the receipt of such interest
income or OID (other than the gain or loss which may be realized upon
disposition of any foreign currency received).
Treatment of Principal. With respect to payments of principal on a Foreign
Currency Note, a U.S. Holder (regardless of such U.S. Holder's method of
accounting) recognizes foreign exchange gain or loss measured by the difference
between (a) the U.S. dollar equivalent of the principal payment received
translated at the spot rate on the date of each payment, and (b) the U.S.
dollar equivalent of the principal amount paid translated at the spot rate in
effect on the date such U.S. Holder acquired the Note.
Market Discount. Market discount on a Foreign Currency Note is first
determined in the relevant foreign currency. Accrued market discount which,
under the rules discussed above, is taken into income upon the receipt of a
principal payment or upon the retirement or disposition of the Foreign Currency
Note, is translated into U.S. dollars on the disposition date and no part of
such accrued market discount is treated as exchange gain or loss. Where a U.S.
Holder makes an election to include accrued market discount on a current basis,
the market discount is translated into U.S. dollars on the basis of the average
exchange rate in effect during such accrual period, and the exchange gain or
loss is determined upon the receipt of any principal payment or upon the
disposition of the Foreign Currency Note in a manner similar to that described
above with respect to accrued interest.
S-30
<PAGE>
Acquisition Premium. Acquisition premium is computed in the relevant foreign
currency, and reduces OID accordingly. Exchange gain or loss is realized with
respect to such acquisition premium by treating the portion of premium
amortized with respect to any period as a return of principal. Accordingly,
exchange gain or loss will be computed by comparing the relevant exchange rate
at the date of purchase and the dates on which the acquisition premium reduces
OID.
Treatment of Foreign Exchange Gains and Losses. In general, foreign exchange
gain realized under the rules described above will be considered ordinary
income and includible in the taxable income of a U.S. Holder as interest
income. Foreign exchange loss realized under the rules described above
generally will be considered an ordinary loss deductible from taxable income
as interest expense to the extent provided for in the Code.
Dispositions of Foreign Currency. Foreign currency received by a U.S. Holder
with respect to a Foreign Currency Note will have a tax basis equal to its
U.S. dollar value at the time such foreign currency is received. Foreign
currency that is purchased generally will have a tax basis equal to its U.S.
dollar cost of acquisition. Any gain or loss recognized on a sale or
disposition of foreign currency will be ordinary income or loss.
Dual and Multi-Currency Notes. Notes may be issued in circumstances where
interest payments on the Notes are denominated in or determined by reference
to one currency and the principal portion of the Notes may be denominated in
or determined by reference to another currency ("Dual Currency Notes"). In
addition, Notes may be issued in circumstances where interest or principal are
denominated in or determined by reference to more than one currency ("Multi-
Currency Notes"). The federal income tax treatment of Dual and Multi-Currency
Notes will be described in an applicable Pricing Supplement.
UNITED STATES TAX CONSIDERATIONS FOR FOREIGN PURCHASERS
Set forth below is a summary of certain U.S. federal income tax consequences
for U.S. Alien Holders of the Notes. For purposes of this discussion, "U.S.
Alien" means any person who, for U.S. federal income tax purposes, is a
foreign corporation, a nonresident alien individual, a nonresident alien
fiduciary of a foreign estate or trust, or a foreign partnership one or more
of the members of which is, for U.S. federal income tax purposes, a foreign
corporation, a nonresident alien individual, or a nonresident alien fiduciary
of a foreign estate or trust.
Assuming certain certification requirements are satisfied (which generally
can be satisfied by providing Internal Revenue Service Form W-8, identifying
the beneficial owner of the instrument as a U.S. Alien and disclosing the U.S.
Alien's name and address), under current U.S. federal income and estate tax
laws:
(a) Payments of principal and interest (including OID) on a Note to a
Holder of a Note who is a U.S. Alien will not be subject to U.S. federal
income tax or withholding tax, provided that, in the case of interest and
OID, (i) the payments are not effectively connected with a U.S. trade or
business, (ii) the Holder does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of the
Corporation entitled to vote, (iii) the Holder is not a controlled foreign
corporation related to the Corporation through stock ownership, and (iv)
the Holder is not a bank receiving interest pursuant to a loan agreement
entered into in the ordinary course of its trade or business;
(b) A U.S. Alien Holder of a Note will not be subject to U.S. federal
income tax on gain realized on the sale, exchange or redemption of a Note
if such gain is not effectively connected with a U.S. trade or business
and, in the case of a U.S. Alien Holder who is an individual, such Holder
is not present in the United States for a total of 183 days or more during
the taxable year in which such gain is realized; and
(c) A Note held by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to U.S.
federal estate tax as a result of such individual's death, unless the
individual actually or constructively owns 10% or more of the total
combined voting power of all classes of stock of the Corporation entitled
to vote or the interest received on such Note is effectively connected with
the conduct by such Holder of a U.S. trade or business.
S-31
<PAGE>
BACKUP WITHHOLDING
Under current U.S. federal income tax law, a 31% "backup" withholding tax is
applied to certain interest and principal payments made to, and to the proceeds
of sales before maturity by, certain U.S. persons if such persons fail to
supply taxpayer identification numbers and certain other information in the
required manner. Interest paid with respect to a Note and received by a U.S.
Alien will not be subject to backup withholding if the person required to
withhold has received appropriate certification statements. The applicable
certification procedures require that the Holder certify as to its status as a
U.S. Alien and provide its name and address.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by the Corporation through
the Agents, each of which has agreed to use its reasonable best efforts to
solicit purchases of the Notes. The Corporation will pay each Agent a
commission of from .125% to .750% of the principal amount of each Note,
depending upon its Stated Maturity, sold through such Agent. Commissions for
Notes with Stated Maturities in excess of 30 years will be negotiated at the
time of sale. Each Agent will have the right, in its discretion reasonably
exercised, to reject in whole or in part any offer to purchase Notes received
by such Agent. The Corporation also may sell to any Agent, acting as principal,
at a discount to be agreed upon at the time of sale, for resale to one or more
investors or to another broker-dealer (acting as principal for purposes of
resale) at varying prices related to prevailing market prices at the time of
resale, as determined by such Agent. In addition, the Corporation reserves the
right to sell the Notes to or through additional agents and directly to
investors on its own behalf in those jurisdictions where it is authorized to do
so. Sales of Notes to or through additional agents shall be on the same terms
and conditions (including commission rates) other than immaterial changes as
would apply to sales to or through Agents. In such circumstances, the
Corporation will have the sole right to accept offers to purchase Notes and may
reject any proposed purchase of Notes in whole or in part. In the case of sales
made directly by the Corporation, no commission will be payable.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Corporation has agreed to
indemnify each Agent against certain liabilities, including certain liabilities
under the Act, or to contribute to payments each Agent may be required to make
in respect thereof. The Corporation has agreed to reimburse the Agents for
certain of the Agents' expenses, including, but not limited to, the fees and
expenses of counsel to the Agents.
The Corporation has been advised by each Agent that it may from time to time
purchase and sell Notes in the secondary market, but that it is not obligated
to do so. There can be no assurance that there will be a secondary market for
the Notes or liquidity in the secondary market if one develops. From time to
time, each Agent may make a market in the Notes.
Lehman Brothers Inc., Citicorp Securities, Inc., Goldman, Sachs & Co., Morgan
Stanley & Co. Incorporated, NationsBanc Capital Markets, Inc. and Salomon
Brothers Inc each have from time to time performed various investment banking
services for the Corporation for which customary compensation has been
received. In addition, affiliates of Citicorp Securities, Inc. and NationsBanc
Capital Markets, Inc. are lenders under the Corporation's principal credit
facility and provide various commercial banking services to the Corporation.
Lehman Brothers Inc. also acts as a dealer for the Corporation's commercial
paper program.
ERISA MATTERS
The Corporation, the Agents, and their respective affiliates may each be
considered a "party in interest" within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and a "disqualified person"
under corresponding provisions of the Code, with respect to many employee
benefit plans. "Prohibited Transactions" within the meaning of ERISA and the
Code may result if the Notes are acquired by an employee benefit plan with
respect to which the Corporation, the Agents or any of their respective
affiliates is a party in interest, unless the Notes are acquired pursuant to an
applicable exemption. Any employee benefit plan or other entity subject to such
provisions of ERISA or the Code proposing to acquire the Notes should consult
with its legal counsel.
S-32
<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 STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 6, 1994
PROSPECTUS
$500,000,000
LOGO
DEBT SECURITIES
----------
The Black & Decker Corporation (the "Corporation") from time to time may
offer debt securities in one or more series (the "Debt Securities"), which Debt
Securities may consist of debentures, notes or other unsecured evidences of
indebtedness, in an amount sufficient to result in an aggregate initial
offering price not to exceed $500,000,000 (or the equivalent in one or more
foreign denominated currencies or units based on or relating to currencies,
including European Currency Units). The Debt Securities may be offered as
separate series in amounts, at prices, and on terms to be determined by market
conditions at the time of sale. The Debt Securities may be sold in United
States dollars or one or more foreign denominated currencies or units based on
or relating to currencies, and the principal of (and premium, if any) and
interest, if any, on the Debt Securities may likewise be payable in United
States dollars or one or more foreign denominated currencies or units based on
or relating to currencies. The Debt Securities may be issued in registered or
bearer form. Debt Securities issued in bearer form, subject to certain
exceptions, will not be offered or sold to persons who are within the United
States or to United States persons. See "Limitations on Issuance of Bearer
Securities." All or a portion of the Debt Securities may be evidenced by a
Global Security or Global Securities.
The accompanying Prospectus Supplement and Pricing Supplement (if applicable)
set forth, with regard to the Debt Securities in respect of which this
Prospectus is being delivered, the title, aggregate principal amount, currency
denominations, maturity, rate (which may be fixed or variable) and time of
payment of any interest, any terms for redemption at the option of the
Corporation or the holder, any terms for sinking fund payments, any listing on
a securities exchange, the initial public offering price and any other terms in
connection with the offering and sale of the Debt Securities or a series of the
Debt Securities.
The Corporation may sell Debt Securities to or through underwriters or
dealers, and also may sell Debt Securities directly to other purchasers or
through agents. If underwriters are used in the sale, the Debt Securities may
be offered to the public either through underwriting syndicates represented by
one or more managing underwriters or directly by one or more of such firms. See
"Plan of Distribution." The accompanying Prospectus Supplement sets forth the
names of any underwriters, dealers or agents involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the
principal amounts, if any, to be purchased by underwriters or dealers, and the
compensation, if any, of those underwriters, dealers or agents. The net
proceeds to the Corporation from the sale of the Debt Securities in respect of
which this Prospectus is being delivered are set forth in the Prospectus
Supplement or in the Pricing Supplement (if applicable). See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers and agents.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES 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.
----------
, 1994
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR IN AN APPLICABLE PROSPECTUS SUPPLEMENT OR
PRICING SUPPLEMENT IN CONNECTION WITH ANY OFFER MADE BY THIS PROSPECTUS AND
SUCH PROSPECTUS SUPPLEMENT AND PRICING SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION OR ANY UNDERWRITER, DEALER, AGENT OR OTHER PERSON. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OR PRICING
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT AND PRICING SUPPLEMENT
DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION.
AVAILABLE INFORMATION
The Corporation 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 maintained by the Commission at Room 1024, 450 5th Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: New York Office, Seven World Trade Center, 13th Floor, New York,
New York 10048; and Chicago Office, Northwestern Atrium Center, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 5th Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, such reports,
proxy statements and other information can be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, and
the Pacific Stock Exchange Incorporated, 301 Pine Street, San Francisco,
California 94104.
The Corporation has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments, documents incorporated by reference and
exhibits, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Debt Securities offered
hereby. This Prospectus and the Prospectus Supplement, which constitute a part
of the Registration Statement, do not contain all the information set forth in
the Registration Statement, certain parts of which are contained in exhibits to
the Registration Statement or otherwise have been omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement and to the documents incorporated therein
by reference. Copies of the Registration Statement are on file at the offices
of the Commission and may be obtained upon payment of the fees prescribed by
the Commission, or examined without charge at the public reference facilities
of the Commission described above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Corporation's Annual Report on Form 10-K for the year ended December 31,
1993, Quarterly Report on Form 10-Q for the quarter ended April 3, 1994 and
Current Report on Form 8-K dated January 20, 1994, are incorporated by
reference herein and made a part hereof. All documents filed by the Corporation
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference and to be a part of this Prospectus 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 to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such a
statement. A statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
2
<PAGE>
The Corporation will provide, without charge, to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any and all of
the documents incorporated herein by reference other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Requests should be directed to The Black & Decker Corporation,
701 East Joppa Road, Towson, Maryland 21286, Attention: Corporate Affairs,
(800) 992-3042.
----------------
FOR FLORIDA RESIDENTS
Emhart (U.K.) Limited, a subsidiary of the Corporation located in the United
Kingdom, from time to time has provided spare parts to be incorporated into
machinery used in the production of glass containers manufactured by
Cubaequipos of Havana, Cuba. Transactions with Cubaequipos are subject to the
provisions of the Cuban Assets Control Regulations and have been consummated in
accordance with all applicable United States laws and regulations pursuant to
specific licenses issued from time to time thereunder by the Office of Foreign
Assets Control ("OFAC") of the United States Department of the Treasury. OFAC
issued a license to complete the delivery of spare parts pursuant to a contract
that predated the Cuban Democracy Act of 1992. The Cuban Democracy Act of 1992
prohibits OFAC from issuing additional licenses after October 23, 1992, except
in connection with contracts entered into prior to that date. At this time, it
is not clear whether OFAC will issue any additional licenses in light of the
prohibitions set forth in the Cuban Democracy Act of 1992.
The information set forth above is accurate as of the date hereof. Current
information concerning the Corporation's business dealings with the government
of Cuba or with any person or affiliate located in Cuba may be obtained from
the Division of Securities and Investor Protection of the Florida Department of
Banking and Finance, The Capital, Tallahassee, Florida 32399-0350, telephone
number (904) 488-9805.
3
<PAGE>
THE CORPORATION
The Black & Decker Corporation (the "Corporation"), incorporated in Maryland
in 1910, is a global marketer and manufacturer of products used in and around
the home and for various commercial applications. The Corporation markets its
products in over 100 countries and enjoys worldwide brand name recognition.
The Corporation operates in three business segments: Consumer and Home
Improvement Products, including consumer and professional power tools and
accessories, household products, security hardware, lawn and garden and
recreational outdoor products, plumbing products, and product service;
Commercial and Industrial Products, including fastening systems and glass
container-making equipment; and Information Systems and Services, including
government and commercial information systems development, consulting, and
other related contract services.
The Corporation's principal executive offices are located at 701 East Joppa
Road, Towson, Maryland 21286. The telephone number of the Corporation is (410)
716-3900.
USE OF PROCEEDS
Except as otherwise stated in the Prospectus Supplement in respect of which
this Prospectus is being delivered, the net proceeds from the sale of the Debt
Securities offered by the Corporation will be added to the general funds of the
Corporation and will be available for general corporate purposes, which may
include but are not limited to refinancing of indebtedness, working capital and
capital expenditures.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for the
quarters ended April 3, 1994 and April 4, 1993, each of the last five fiscal
years and for the three-month Transition Period ended December 31, 1989. The
Transition Period resulted from the Corporation's change in its fiscal year
from the last Sunday in September to December 31, effective for the 1990 fiscal
year.
<TABLE>
<CAPTION>
QUARTER YEAR ENDED
ENDED DECEMBER 31 YEAR ENDED
--------------- -------------------- ------------
APRIL 3 APRIL 4 TRANSITION SEPTEMBER 24
1994 1993 1993 1992 1991 1990 PERIOD 1989
------- ------- ---- ----- ---- ---- ---------- ------------
(DOLLARS IN MILLIONS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges.......... 1.41 1.46 1.75 -- 1.32 1.29 -- 1.25
Deficiency in the
coverage of fixed
charges by earnings
before fixed charges... -- -- -- $29.0 -- -- $2.0 --
</TABLE>
The ratio of earnings to fixed charges equals earnings before fixed charges
divided by fixed charges. For purposes of calculating the ratio of earnings to
fixed charges, earnings before fixed charges consist of earnings (loss) before
income taxes, extraordinary item, and cumulative effects of changes in
accounting principles, plus fixed charges. Fixed charges consist of interest
expense (including amortization of debt expense and discount or premium
relating to any indebtedness), capitalized interest and that portion of rental
expense representative of the interest factor.
4
<PAGE>
Exclusive of the accrual of $142.4 million before income taxes in connection
with a restructuring of certain of its operations, the ratio of earnings to
fixed charges for the year ended December 31, 1992, would have been 1.43.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
and Pricing Supplement (if applicable) may relate. The particular terms of the
Debt Securities offered by any Prospectus Supplement and Pricing Supplement (if
applicable) (the "Offered Debt Securities"), including the nature of any
variation from the following general provisions applicable to the Offered Debt
Securities, will be described in the Prospectus Supplement and Pricing
Supplement (if applicable) relating to the Offered Debt Securities.
The Offered Debt Securities are to be issued in one or more series under an
indenture (as it may be supplemented by a supplemental indenture described in
any Prospectus Supplement for any series of Debt Securities, the "Indenture")
between the Corporation and Marine Midland Bank, as Trustee (the "Trustee"), a
copy of which Indenture is filed as an exhibit to the Registration Statement.
The following summaries of certain provisions of the Indenture, while
accurately reflecting the material terms of the Indenture, do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, including definitions of certain terms.
Provisions of or defined terms in the Indenture that are used in this
Prospectus are incorporated by reference.
GENERAL
The Indenture does not limit the aggregate principal amount of debentures,
notes or other evidences of indebtedness that may be issued by the Corporation
and provides that Debt Securities may be issued thereunder in one or more
series in an aggregate principal amount which may be authorized from time to
time by the Corporation. The Debt Securities will be unsecured obligations of
the Corporation and, except as otherwise provided in the Prospectus Supplement
in respect of which this Prospectus is being delivered, will rank equally with
all other unsecured and unsubordinated debt of the Corporation. Any other
unsecured and unsubordinated indebtedness may contain covenants, events of
default and other provisions which are different from or which are not
contained in the Debt Securities. See the discussion below under the captions
"Certain Covenants--Limitations on Liens, " "Limitations on Sale-Leaseback
Transactions" and "Exempted Debt" for a discussion of certain limitations
regarding the incurrence of indebtedness that will rank senior to the Debt
Securities.
Reference is made to the Prospectus Supplement for the following terms of the
Offered Debt Securities: (1) the title of the Offered Debt Securities; (2) the
price (expressed as a percentage of the aggregate principal amount thereof) at
which the Offered Debt Securities will be issued; (3) any limit on the
aggregate principal amount of the Offered Debt Securities or the series of
which the Offered Debt Securities are a part; (4) the date or dates (or manner
of determining the same) on which the Offered Debt Securities will mature; (5)
the rate or rates (which may be fixed or variable) per annum (or the manner of
determining the same) at which the Offered Debt Securities will bear interest,
if any, and the date or dates from which such interest will accrue; (6) the
date or dates on which such interest will be payable (or the manner of
determining the same) and the record dates for Interest Payment Dates for
Registered Securities; (7) the place or places where the principal of (and
premium, if any) and interest, if any, on the Offered Debt Securities will be
payable and each office or agency where the Offered Debt Securities may be
presented for transfer or exchange; (8) if the trustee in respect of the
Offered Debt Securities is other than the Trustee (or any successor thereto),
the identity of the trustee; (9) any mandatory or optional sinking fund or
purchase fund or analogous provision and the terms and conditions thereof; (10)
any provisions relating to the date after which, the circumstances under which,
and the price or prices at which the Offered Debt Securities may, pursuant to
any optional or mandatory redemption provisions, be redeemed at the option of
the Corporation or of the holder thereof and certain other terms and provisions
of such optional or mandatory redemption; (11) if the amount payable upon
acceleration of the Offered Debt Securities is other than the full principal
amount, the portion of the principal amount payable upon acceleration; (12) any
provisions relating to the conversion of Offered Debt
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Securities into Debt Securities of another series or any other securities; (13)
any provisions restricting defeasance of the Offered Debt Securities; (14) if
the right of payment with respect to the Offered Debt Securities is
subordinated to the right of payment with respect to any other indebtedness of
the Corporation, the terms and conditions of subordination; (15) if the Offered
Debt Securities will be issued, in whole or in part, in the form of one or more
temporary or permanent Global Securities, the identity of the depositary for
such Global Securities; (16) whether the Offered Debt Securities are to be
issued as Registered Securities, Bearer Securities or both and the terms upon
which any Bearer Securities of such series may be exchanged for Registered
Securities of such series; (17) if other than United States dollars, the
currency or currencies (including ECU) in which the Offered Debt Securities may
be purchased, and the currency or currencies (including ECU) in which the
principal of and premium, if any, and interest, if any, on such Offered Debt
Securities may be payable; (18) if the currency for which the Offered Debt
Securities may be purchased or in which the principal of (and premium, if any)
or interest, if any, on the Offered Debt Securities may be payable is at the
election of the Holder thereof, the manner of such election; (19) any index
used to determine the amount of payments of principal of (and premium, if any)
or interest, if any, on the Offered Debt Securities; (20) if the amounts of
payments of principal of (and premium, if any) or interest, if any, on the
Offered Debt Securities may be, at the election of the Corporation or a Holder
thereof, determined with reference to an index based on a currency or currency
unit other than that in which the Offered Debt Securities are stated to be
payable, the manner in which such amounts are to be determined; and (21) any
other terms of the Offered Debt Securities not inconsistent with the provisions
of the Indenture.
The Debt Securities may be issuable as Registered Securities, Bearer
Securities or both. Bearer Securities, subject to certain exceptions, will not
be offered or sold to persons who are within the United States or to United
States persons. See "Limitations on Issuance of Bearer Securities." Unless
otherwise indicated in the Prospectus Supplement relating thereto, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof, and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000. The Pricing
Supplement or Prospectus Supplement relating to a series of Debt Securities
denominated in a foreign currency or currency unit will specify the
denominations thereof. In the case of Global Securities, one or more Global
Securities will be issued in a denomination or aggregate denominations equal to
the aggregate principal amount of Outstanding Debt Securities of the series to
be represented by such Global Securities. No service charge will be made for
any transfer or exchange of Debt Securities, but the Corporation may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. For certain information about Debt Securities
issued in global form, see "Description of Debt Securities--Global Securities."
In connection with its sale during the "restricted period" as defined in
Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations
(generally, the first 40 days after the closing date and, with respect to
unsold allotments, until sold), no Bearer Security shall be offered or sold to
persons who are within the United States or to United States persons or mailed
or otherwise delivered to any location in the United States (as defined below
under "Limitations on Issuance of Bearer Securities") and any such Bearer
Security (other than a temporary Global Security in bearer form) may be
delivered only if (i) the person entitled to receive such Bearer Security
furnishes written certification, in the form required by the Indenture, to the
effect that such Bearer Security is not being acquired by or on behalf of a
United States person (as defined below under "Limitations on Issuance of Bearer
Securities"), or (ii) if a beneficial interest in such Bearer Security is being
acquired by or on behalf of a United States person, that United States person
is a person described in Section 1.163-5(c)(2)(i)(D)(6) of the United States
Treasury regulations or is a financial institution who has purchased such
Bearer Security for resale during the restricted period and who certifies that
it has not acquired such Bearer Security for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions. See "Description of Debt Securities--Global Securities" and
"Limitations on Issuance of Bearer Securities."
At the option of the Holder and subject to the terms of the Indenture, Bearer
Securities (with all unmatured coupons, except as provided below) of any series
will be exchangeable into an aggregate principal amount of Registered
Securities (if the Debt Securities of such series are issuable as Registered
Securities) or
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Bearer Securities of the same series (with the same interest rate and maturity
date) and Registered Securities of any series (other than a Global Security)
will be exchangeable into an equal aggregate principal amount of Registered
Securities of the same series (with the same interest rate and maturity date)
of different authorized denominations. If a Holder surrenders Bearer Securities
in exchange for Registered Securities between a Regular Record Date or in
certain circumstances a Special Record Date and the relevant Interest Payment
Date, the Holder will not be required to surrender the coupon related to such
interest payment date. Registered Securities may not be exchanged for Bearer
Securities.
Debt Securities may be presented for exchange and Registered Securities
(other than a Global Security) may be presented for transfer (with the form of
transfer endorsed thereon duly executed) at the office of the Trustee or at the
office of the Security Registrar, without service charge and upon payment of
any taxes and other governmental charges as described in the Indenture. Such
transfer or exchange will be effected by the Trustee or the Security Registrar,
as the case may be, being satisfied with the documents of title and identity of
the person making the request. Bearer Securities will be transferable by
delivery.
Debt Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. One or more series of Debt Securities may be
floating rate debt securities, exchangeable for fixed rate debt securities.
Special United States federal income tax considerations applicable to any such
discounted or floating rate Debt Securities or to certain Debt Securities
issued at par which are treated as having been issued at a discount for United
States federal income tax purposes will be described in the Prospectus
Supplement in respect of which this Prospectus is being delivered, if
applicable.
Debt Securities may be issued, from time to time, with the principal amount
(and premium, if any) payable on the applicable principal payment date, or the
amount of interest, if any, payable on the applicable interest payment date, to
be determined by reference to one or more currency exchange rates, commodity
prices, equity indices or other factors. In such cases, holders of such Debt
Securities may receive a principal amount (and premium, if any) on any
principal payment date, or a payment of interest, if any, on any interest
payment date, that is greater than or less than the amount of principal (and
premium, if any) or interest payable on such dates, depending upon the value on
such dates of the applicable currency, commodity, equity index or other factor.
Information as to the methods for determining the amount of principal (and
premium, if any) or interest, if any, payable on any date, the currencies,
commodities, equity indices or the factors to which the amount payable on such
date is linked and certain additional tax considerations applicable to the
Offered Debt Securities will be set forth in the Prospectus Supplement in
respect of which this Prospectus is being delivered, if applicable.
The Indenture does not limit the amount of additional unsecured indebtedness
that the Corporation or its Subsidiaries may incur. Unless otherwise specified
in the resolutions or any supplemental indenture establishing the terms of the
Offered Debt Securities, the terms of the Offered Debt Securities or the
covenants contained in the Indenture do not afford holders of the Offered Debt
Securities protection in the event of a highly leveraged or other similar
transaction involving the Corporation that may adversely affect
Securityholders. See "Description of Debt Securities--Certain Covenants." The
operations of the Corporation are conducted through its subsidiaries and,
therefore, the Corporation is substantially dependent on the earnings and cash
flow of its subsidiaries to meet its debt obligations, including its
obligations in respect of the Debt Securities. Because the assets of its
subsidiaries constitute effectively all of the assets of the Corporation, the
claims of the holders of the Debt Securities effectively will be subordinated
to the claims of creditors of the Corporation's subsidiaries.
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and interest, if any, on Bearer
Securities will be payable in the currency designated in the applicable Pricing
Supplement or related Prospectus Supplement, subject to any applicable laws and
regulations, at such paying agencies outside the United States as the
Corporation may appoint from time to time. Such payment may be made, at the
option of the Holder, by a check in the
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designated currency or by transfer to an account in the designated currency
maintained by the payee with a bank located outside the United States. No
payment of interest on a Bearer Security will be made unless on the earlier of
the date of the first such payment by the Corporation or the date of delivery
by the Corporation of a definitive Bearer Security, including a permanent
Global Security, a written certificate, in the form required by the Indenture
is provided to the Corporation stating that on such date the Bearer Security is
not owned by or on behalf of a United States person or if a beneficial interest
in such Bearer Security is owned by or on behalf of a United States person,
that such United States person is a person described in Section 1.163-
5(c)(i)(2)(D)(6) of the United States Treasury regulations or is a financial
institution who has purchased such Bearer Security for resale during the
restricted period and who certifies that it has not acquired such Bearer
Security for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions. No payment
with respect to any Bearer Security will be made at the Corporate Trust Office
of the Trustee or any other paying agency maintained by the Corporation in the
United States nor will any such payment be made by transfer to an account or by
mail to an address in the United States. Notwithstanding the foregoing,
payments of principal of (and premium, if any) and interest, if any, on Bearer
Securities denominated and payable in U.S. dollars will be made at the offices
of the Paying Agent in the United States with respect thereto in the City of
New York if payment of the full amount thereof in U.S. dollars at all paying
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions.
Payment of principal of (and premium, if any) on Registered Securities will
be made in the designated currency against surrender of such Registered
Securities at the Corporate Trust Office of the Paying Agent with respect
thereto in the City of New York. Unless otherwise indicated in the related
Prospectus Supplement payment of any installment of interest on a Registered
Security will be made to the person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
interest. Unless otherwise indicated in the related Prospectus Supplement,
payments of such interest will be made at the Corporate Trust Office of the
Trustee for such Security in the City of New York or at the Corporation's
option, by a check in the designated currency mailed to the Holder at such
Holder's registered address or by transfer to an account in the designated
currency maintained by the payee.
The Paying Agents outside the United States initially appointed by the
Corporation for a series of Debt Securities will be named in the related
Prospectus Supplement. The Corporation may terminate the appointment of any of
the Paying Agents from time to time, except that the Corporation will maintain
at least one Paying Agent in a city outside the United States so long as any
Bearer Securities are outstanding where Bearer Securities may be presented for
payment and may be surrendered for exchange, provided that so long as any
series of Debt Securities is listed on the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Corporation will maintain a Paying Agent in Luxembourg or
any other required city located outside the United States, as the case may be,
for such series of Debt Securities.
All moneys paid by the Corporation to a Paying Agent for the payment of
principal of (or premium, if any) or interest, if any, on any Debt Security
that remains unclaimed at the end of two years will be repaid to the
Corporation, unless otherwise prohibited by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, will be repaid to the
Corporation, and the Holder of such Debt Security or any coupon appertaining
thereto will thereafter look only to the Corporation for payment thereof.
GLOBAL SECURITIES
Debt Securities of any series may be issued, in whole or in part, in the form
of one or more Global Securities that will be deposited with a depositary (the
"Depositary") or with a nominee for a Depositary identified in the Prospectus
Supplement relating to such series. Global Securities may be issued in either
Registered or Bearer form and in temporary or permanent form. Unless and until
it is exchanged in whole or in part for Debt Securities in definitive
registered form, a Global Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any nominee to a successor Depositary or a nominee of any successor.
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The terms of the depositary arrangement with respect to any series of Debt
Securities to be represented by a Global Security will be described in the
Prospectus Supplement relating to such series. The Corporation anticipates that
the provisions set forth below will apply to such depositary arrangements.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Security to the accounts of
persons that have accounts with such Depositary ("participants"). The accounts
to be credited shall be designated by any underwriters or agents participating
in the distribution of such Debt Securities or by the Corporation if the Debt
Securities are offered and sold directly by the Corporation. Ownership of
beneficial interest in a Global Security will be limited to participants or
persons that hold interests through participants, but the Corporation has no
obligations to any persons that 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 Depositary for such Global Security (with respect to interests of
participants) or by participants or persons that hold through 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 the securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
As long as the Depositary or its nominee is the owner of such Global
Security, the Depositary or its nominee, as the case may be, will be considered
the sole owner or holder of the Debt Securities represented by the Global
Security for all purposes under the Indenture. Except as set forth below,
owners of beneficial interests in a Global Security will not be entitled to
have the Debt Securities represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
such Debt Securities in definitive form and will not be considered the owners
or holders thereof under the Indenture.
Subject to the restrictions discussed above under "Payment and Paying
Agents," payments of principal (and premium, if any) and interest, if any, on
Debt Securities represented by a Global Security registered in the name of or
held by a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner or the holder of such
Global Security. Neither the Corporation, the Trustee, 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 in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Corporation expects that the Depositary for any Debt Securities
represented by a Global Security, upon receipt of any payment of principal (and
premium, if any) or interest, if any, in respect of a permanent Global Security
will, except as provided below, immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of the
Depositary. The Corporation 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 the securities held for the accounts of customers in
bearer form or registered in "street names" and will be the responsibility of
such participants. Receipt by owners of beneficial interests in a temporary
Global Security of payments in respect of such temporary Global Security will
be subject, in the case of a Global Security representing Bearer Securities, to
the furnishing of the certificate described above under "Payment and Paying
Agents."
If the Depositary for any Debt Securities represented by a Global Security is
at any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Corporation within 90 days, the Corporation
will issue Debt Securities in definitive form in exchange for such Global
Security. In addition, the Corporation may at any time and in its sole
discretion determine not to have any of the Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue in
exchange therefor Debt Securities of such series in definitive form. Further,
if the Corporation so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing
Debt
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Securities of that series may, on terms acceptable to the Corporation and the
Depositary for such Global Security, receive Debt Securities of such series in
definitive form. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
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 (if the Debt Securities of such series are issuable as
Registered Securities). Debt Securities of such series so issued in definitive
form will be issued (a) as Registered Securities in denominations, unless
otherwise specified by the Corporation, of $1,000 and integral multiples
thereof if the Debt Securities of such series are issuable as Registered
Securities and are denominated in United States dollars, (b) as Bearer
Securities in denominations, unless otherwise specified by the Corporation, of
$5,000 if the Debt Securities of such series are issuable as Bearer Securities
and are denominated in United States dollars or (c) as either Registered or
Bearer Securities, if the Debt Securities of such series are issuable in either
form. See, however, "Limitations on Issuance of Bearer Securities" below for
description of certain restrictions on the issuance of a Bearer Security in
definitive form in exchange for an interest in a temporary Global Security.
AMENDMENT, SUPPLEMENT AND WAIVER
Modifications and amendments of the Indenture, the Debt Securities and any
related coupon may be made by the Corporation and the Trustee with the consent
of the Holders of a majority in principal amount of the Outstanding Debt
Securities of each series issued under the Indenture affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest, if any, on any Debt Security or
any related coupon, (b) reduce the principal amount of or rate of interest, if
any, on any Debt Security or any related coupon or any premium payable upon the
redemption thereof, (c) reduce the amount of principal of a Discounted Security
payable upon acceleration of the Maturity thereof, (d) change the Place of
Payment, (e) change the currency or currency unit of payment of principal of
(or premium, if any) or interest, if any, on any Debt Security or any related
coupon, (f) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security, or any related coupon on or
after the Stated Maturity thereof (or in the case of redemption on or after the
Redemption Date) or (g) reduce the percentage in principal amount of
Outstanding Securities of any series, the consent of the Holders of which is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as the series is concerned,
compliance by the Corporation with certain restrictive provisions of the
Indenture. The Holders of not less than a majority of principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all Debt
Securities of that series and any coupons appertaining thereto waive any past
default under the Indenture with respect to that series, except a default in
the payment of the principal of (or premium, if any) and interest, if any, on
any Debt Security of that series or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of that series affected. The Indenture and the
Debt Securities may be amended or supplemented, without the consent of any
Holder of Debt Securities, to cure any ambiguity or inconsistency or to make
any change that does not have a materially adverse effect on the rights of any
Holder of Debt Securities.
In the event that the consent of Holders is required for any amendment,
supplement or waiver, either the Trustee, the Company or the Holders of a
majority in principal amount of the Outstanding Securities may call a meeting
of the Holders for such purpose, or, the consent of the Holders may be sought
in writing from the required number of Holders. No remedies are provided to
minority Holders that do not consent to any amendment, supplement or waiver.
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CERTAIN COVENANTS
Unless otherwise specified in the Board Resolution or Resolutions or any
supplemental indenture establishing the terms of the Debt Securities of any
series, the terms of the Debt Securities of any series or the covenants
contained in the Indenture do not afford holders of Debt Securities protection
in the event of a highly leveraged or other similar transaction involving the
Corporation that may adversely affect Securityholders. If the Offered Debt
Securities contain, or a future supplemental indenture contains, covenants to
afford Securityholders protection in the event of a highly leveraged or similar
transaction, the Prospectus Supplement or Pricing Supplement relating to the
Offered Debt Securities will provide a brief description of such protective
covenants. The Indenture does not limit the amount of additional unsecured
indebtedness that the Corporation or its Subsidiaries may incur.
General. The Indenture requires the Corporation to covenant to the following
with respect to each series of Debt Securities: (i) to promptly pay the
principal of (and premium, if any) and interest, if any, on such series of Debt
Securities and any related coupons; (ii) to maintain an office or agency in
each place where Debt Securities and any related coupons may be presented,
surrendered for payment, transferred or exchanged and where notice upon the
Corporation may be served; (iii) if the Corporation acts as its own Paying
Agent for any series of Securities, to segregate and hold in trust for the
benefit of the persons entitled thereto a sum sufficient to pay the principal
of (and premium, if any) or interest, if any, as the same becomes due; (iv) to
deliver to the Trustee, within 120 days after the end of each fiscal year, a
written statement to the effect that the Corporation has complied with its
obligations under the Indenture; and (v) to deliver to the Trustee copies of
annual and other reports that the Corporation files with the Commission within
15 days after filing such reports with the Commission.
Limitations on Liens. Unless otherwise specified in the Prospectus
Supplement in respect of which this Prospectus is being delivered, and subject
to the following sentence as well as to the exceptions set forth below under
the caption "Exempted Debt," the Corporation will not, and will not permit any
Subsidiary (as hereinafter defined) to, directly or indirectly, as security for
any Debt (as hereinafter defined), mortgage, pledge or create or permit to
exist any lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or Principal Property (as hereinafter defined), whether such shares
of stock, indebtedness or other obligations of a Subsidiary or Principal
Property are owned at the date of the Indenture or thereafter acquired, unless
the Corporation secures or causes to be secured any outstanding Securities
equally and ratably with all Debt secured by such mortgage, pledge or lien, so
long as that Debt shall be so secured. This restriction will not apply to,
among other things, certain mortgages, pledges or other liens on any shares of
stock, indebtedness or other obligations of a Subsidiary or a Principal
Property (i) existing at the time of the acquisition thereof (or within 120
days thereafter) or incurred to secure or provide for the payment or financing
of any part of the purchase price thereof; (ii) as to any particular series of
Debt Securities, existing on the date that Debt Securities of such series are
first issued; (iii) in favor of the Corporation or any Subsidiary; (iv)
securing Debt incurred to finance construction of or improvements to a
Principal Property; (v) incurred in connection with the issuance by a state or
political subdivision thereof of certain tax exempt securities; and (vi)
certain other mortgages, pledges and liens.
"Consolidated Net Tangible Assets" means total assets less (1) total current
liabilities (excluding any Debt which, at the option of the borrower, is
renewable or extendable to a term exceeding 12 months and which is included in
current liabilities and further excluding any deferred income taxes which are
included in current liabilities) and (2) goodwill, patents, trademarks and
other like intangibles, all as stated on the Corporation's most recent quarter-
end consolidated balance sheet preceding the date of determination.
"Debt" means any debt for borrowed money, capitalized lease obligations and
purchase money obligations, or any guarantee of such debt, in any such case
which would appear on the consolidated balance sheet of the Corporation as a
liability.
"Principal Property" means land, land improvements, buildings and associated
factory and laboratory equipment owned or leased pursuant to a capital lease
and used by the Corporation or any Subsidiary
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primarily for manufacturing, assembling, processing, producing, packaging or
storing its products, raw materials, inventories or other materials and
supplies and located in the United States and having an acquisition cost plus
capitalized improvements in excess of 2% of Consolidated Net Tangible Assets as
of the date of determination but shall not include any such property financed
through the issuance of tax exempt governmental obligations, or any such
property that has been determined by Board Resolution of the Corporation not to
be of material importance to the respective businesses conducted by the
Corporation and its Subsidiaries taken as a whole, effective as of the date
such resolution is adopted.
"Subsidiary" means a corporation a majority of the voting stock of which is
owned by the Corporation, the Corporation and one or more Subsidiaries, or one
or more Subsidiaries.
Limitations on Sale-Leaseback Transactions. Unless otherwise specified in
the Prospectus Supplement in respect of which this Prospectus is being
delivered, and subject to the following sentence as well as to the exceptions
set forth below under the caption "Exempted Debt," the Corporation will not,
and will not permit any Subsidiary to, sell or transfer, directly or
indirectly, except to the Corporation or a Subsidiary, a Principal Property as
an entirety, or any substantial portion thereof, with the intention of taking
back a lease of all or part of such property, except a lease for a period of
three years or less at the end of which it is intended that the use of such
property by the lessee will be discontinued. Notwithstanding the foregoing, the
Corporation or any Subsidiary may sell a Principal Property and lease it back
for a longer period (i) if the Corporation or such Subsidiary would be
entitled, pursuant to the provisions set forth above under the caption
"Limitations on Liens," to create a mortgage on the property to be leased
securing Debt in an amount equal to the Attributable Debt (as hereinafter
defined) in respect of the sale-leaseback transaction without equally and
ratably securing the outstanding Debt Securities or (ii) if the Corporation
promptly informs the Trustee of such transaction, the net proceeds of such
transaction are at least equal to the fair value (as determined by a Board
Resolution) of such property, and the Corporation causes an amount equal to the
net proceeds of the sale to be applied to the retirement of Funded Debt
(including the Debt Securities) and having an outstanding principal amount
equal to the net proceeds.
"Funded Debt" means all Debt having a maturity of more than one year from the
date of its creation or having a maturity of less than one year but by its
terms being renewable or extendible, at the option of the obligor in respect
thereof, beyond one year from its creation.
Exempted Debt. Notwithstanding the restrictions set forth above under the
captions "Limitations on Liens" and "Limitations on Sale-Leaseback
Transactions," the Corporation or any Subsidiary may create or assume liens and
renew, extend or replace such liens and may enter into sale and leaseback
transactions, in each case in addition to those permitted under the captions
"Limitations on Liens" and "Limitations on Sale-Leaseback Transactions,"
provided that at the time of the creation, assumption, renewal, extension or
replacement of such liens or the entering into of such sale-leaseback
transactions, and after giving effect thereto, Exempted Debt does not exceed
10% of Consolidated Net Tangible Assets.
"Attributable Debt" for a lease means the carrying value of the capitalized
rental obligation determined under generally accepted accounting principles
whether or not such obligation is required to be shown on the balance sheet as
a long-term liability. The carrying value may be reduced by the capitalized
value of the rental obligations, calculated on the same basis, that any
sublessee has for all or part of the same property.
"Exempted Debt" means the sum, without duplication, of the following items
outstanding as of the date Exempted Debt is being determined: (i) Debt incurred
after the date of the Indenture and secured by liens created or assumed or
permitted to exist pursuant to the exception to the limitations set forth above
under the caption "Exempted Debt," and (ii) Attributable Debt of the
Corporation and its Subsidiaries in respect of all sale-leaseback transactions
with regard to any Principal Property entered into pursuant to the exception to
the sale-leaseback limitations set forth above under the caption "Exempted
Debt."
Consolidation, Merger, Sale of Assets. The Corporation may not consolidate
with or merge into, or transfer, directly or indirectly, all or substantially
all of its assets to, another corporation or other entity unless
12
<PAGE>
(1) the resulting, surviving or transferee corporation or other entity assumes
by supplemental indenture all of the obligations of the Corporation under the
Debt Securities and the Indenture, (2) immediately after giving effect to the
transaction no Event of Default, and no event that, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing, and (3) the Corporation shall have delivered an officers'
certificate and an opinion of counsel each stating that the consolidation,
merger or transfer and the supplemental indenture comply with the terms of the
Indenture.
When a successor corporation or other entity, trustee, paying agent or
registrar assumes all of the obligations of its predecessor under the Debt
Securities and the Indenture, the predecessor will be released from those
obligations.
DEFAULT AND REMEDIES
An Event of Default under the Indenture in respect of any series of Debt
Securities includes: default for 30 days in payment of interest on the Debt
Securities or a related coupon, if any, of that series; default in payment of
principal on the Debt Securities of that series; failure by the Corporation for
30 days after notice to it to comply with any of its other agreements in the
Indenture for the benefit of holders of Debt Securities of that series; failure
by the Corporation or any Subsidiary to pay when due principal of or interest
on any Debt (other than the Debt Securities) having a then-outstanding
principal amount in excess of $20,000,000 or the maturity of any such Debt
shall have been accelerated; certain events of bankruptcy or insolvency; and
any other Event of Default specifically provided for by the terms of such
series, as described in the related Prospectus Supplement. If an Event of
Default occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the outstanding Debt Securities of the affected series may
declare the Debt Securities of that series to be due and payable immediately:
provided, however, that such acceleration may be rescinded by the holders of a
majority in principal amount of the outstanding Debt Securities of the affected
series if (i) all existing Events of Default have been cured or waived, (ii)
the recision would not conflict with any judgment or decree and (iii) all
payments due to the Trustee have been made. Such a recision will apply to all
holders of that series; provided, however, that under no circumstances may a
holder use the Indenture to prejudice the rights of another holder or to obtain
a preference or priority over another holder.
Securityholders may not enforce the Indenture or the Debt Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Debt Securities unless it receives indemnity satisfactory to it. Subject
to certain limitations, holders of a majority in principal amount of the Debt
Securities of any series may direct the Trustee in its exercise of any trust or
power under the Indenture in respect of that series. The Indenture provides
that the Trustee will, within 90 days after the occurrence of any default with
respect to the Debt Securities of any particular series, give to the holders of
such Debt Securities notice of the default if known to it, unless the default
shall have been cured or waived. The Trustee may withhold from Securityholders
notice of any continuing default (except a default in payment of principal of
(or premium, if any) or interest, if any) if it determines that withholding
such notice does not adversely affect the interests of such Holders.
If, for the purpose of obtaining a judgment in any court with respect to any
obligation of the Corporation under the Indenture, any Debt Security, or any
related coupon, as the case may be, it becomes necessary to convert into any
other currency or currency unit any amount in the currency or currency unit due
under the Indenture, such Debt Security or coupon, as the case may be, the
conversion will be made by the Currency Determination Agent appointed pursuant
to the Indenture with respect to such Debt Security at the Market Exchange Rate
in effect on the date of entry of the judgment (the "Judgment Date"). If
pursuant to any such judgment, conversion is made on a date (the "Substitute
Date") other than the Judgment Date and a change has occurred between the
Market Exchange Rate in effect on the Judgment Date and the Market Exchange
Rate in effect on the Substitute Date, the Indenture requires the Corporation
to pay such additional amounts (if any) as may be necessary to ensure that the
amount paid is equal to the amount in such other currency or currency unit
which, when converted at the Market Exchange Rate in effect on the Judgment
Date, is the
13
<PAGE>
amount then due under the Indenture, such Debt Security or coupon, as the case
may be. The Corporation will not, however, be required to pay more in the
currency or currency unit due under the Indenture, such Debt Security or
coupon, as the case may be, at the Market Exchange Rate in effect on the
Judgment Date than the amount of currency or currency unit stated to be due
under the Indenture, such Debt Security or coupon, as the case may be, and the
Corporation will be entitled to withhold (or be reimbursed for, as the case may
be), any excess of the amount actually realized upon any such conversion at the
Substitute Date over the amount due and payable on the Judgment Date.
No remedy under the Indenture or any series of Debt Securities may be pursued
by a holder unless (i) the holder gives written notice of the existence of an
Event of Default, (ii) the holders of at least 25% in principal amount of the
series of Debt Securities request in writing that the Trustee pursue the
remedy, (iii) the holders offer indemnity satisfactory to the Trustee, (iv) the
Trustee does not comply with the request within 60 days of the satisfaction of
the conditions set forth in (i), (ii) and (iii) and (v) the holders of a
majority in principal amount do not give the Trustee direction inconsistent
with such request during the 60-day period. Notwithstanding the foregoing, no
holder may use the Indenture to prejudice the rights of another holder or to
obtain a preference or priority over another holder.
IMMUNITY OF STOCKHOLDERS, OFFICERS AND DIRECTORS
A director, officer, employee or stockholder, as such, of the Corporation
shall not have any liability for any obligations of the Corporation under the
Debt Securities or the Indenture or for any claim based on, in respect of, or
by reason of such obligations or their creation. By accepting a Debt Security,
each Securityholder waives and releases all such claims and liability. This
waiver and release are part of the consideration for the issue of the Debt
Securities.
DEFEASANCE
The Indenture provides, unless such provision is made inapplicable to the
Debt Securities of any series issued pursuant to the Indenture, that the
Corporation may, subject to certain conditions described below, discharge its
indebtedness and its obligations or certain of its obligations under the
Indenture in respect of Debt Securities of a series by depositing funds or
Government Obligations with the Trustee. The Indenture provides that (1) the
Corporation will be discharged from any obligation to comply with certain
restrictive covenants of the Indenture and certain other obligations under the
Indenture and any noncompliance with such obligations shall not be an Event of
Default in respect of the series of Debt Securities or (2) provided that 91
days have passed from the date of the deposit referred to below and certain
specified Events of Default have not occurred, the Corporation will be
discharged from any and all obligations in respect of the series of Debt
Securities (except for certain obligations, including obligations to register
the transfer and exchange of the Debt Securities of such series, to replace
mutilated, lost or stolen Debt Securities of such series, to maintain paying
agencies and to cause money to be held in trust), in either case upon the
deposit with the Trustee, in trust, of money and/or Government Obligations
that, through the payment of interest and principal in accordance with their
terms, will provide money in an amount sufficient to pay the principal of (and
premium, if any) and each installment of interest, if any, on the series of
Debt Securities on the date when such payments become due in accordance with
the terms of the Indenture and the series of Debt Securities. Such a trust may
(except to the extent the terms of the Debt Securities of such series provide
otherwise) only be established, if among other things, (a) the deposit of money
and/or Government Obligations will not result in a breach or violation of, or
constitute a default under, the Indenture or any other agreement or instrument
to which the Corporation is a party or by which it is bound, (b) the
Corporation shall have delivered to the Trustee an opinion of counsel to the
effect that the holders of Debt Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance or discharge and will be subject to federal income tax on
the same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance or discharge had not occurred and (c) if
the Debt Securities are then listed on any securities exchange, the Corporation
shall have delivered to the Trustee an opinion of counsel to the effect that
such deposit, defeasance or
14
<PAGE>
discharge will not cause the Debt Securities to be delisted. In the event of
any such defeasance under clause (1) above, the obligations of the Corporation
under the Indenture and the Debt Securities of the affected series, other than
with respect to the covenants relating to limitations on liens and sale-
leaseback transactions and the delivery of compliance certificates, shall
remain in full force and effect. In the event of defeasance and discharge under
clause (2) above, the holders of Debt Securities of the affected series are
entitled to look only to the trust fund created by such deposit for payment.
Pursuant to the escrow or trust agreements that the Corporation may execute
in connection with the defeasance of all or certain of its obligations under
the Indenture as provided above, the Corporation from time to time may elect to
substitute Government Obligations for any or all of the Government Obligations
deposited with the Trustee; provided that the money and/or Government
Obligations in trust following such substitution or substitutions will be
sufficient, through the payment of interest, if any, and principal in
accordance with their terms, to pay the principal of (and premium, if any) and
each installment of interest on the series of Debt Securities on the date when
such payments become due in accordance with the terms of the Indenture and the
series of Debt Securities. The escrow or trust agreements also may enable the
Corporation (1) to direct the Trustee to invest any money received by the
Trustee on the Government Obligations comprising the trust in additional
Government Obligations, and (2) to withdraw monies or Government Obligations
from the trust from time to time; provided that the money and/or Government
Obligations in trust following such withdrawal will be sufficient, through the
payment of interest, if any, and principal in accordance with their terms, to
pay the principal of (and premium, if any) and each installment of interest on
the series of Debt Securities on the date when such payments become due in
accordance with the terms of the Indenture and the series of Debt Securities.
NOTICES
Except as may otherwise be set forth in the Prospectus Supplement relating to
a series of Debt Securities, notices to Holders of Bearer Securities will be
given by publication in a daily newspaper in the English language of general
circulation in the City of New York and in London, and so long as such Bearer
Securities are listed on the Luxembourg Stock Exchange and the Luxembourg Stock
Exchange shall so require in a daily newspaper of general circulation in
Luxembourg or, if not practical, elsewhere in Western Europe. Such publication
is expected to be made in The Wall Street Journal, the Financial Times and the
Luxemburger Wort. Notices to Holders of Registered Securities will be given by
mail to the addresses of such Holders as they appear in the Security Register.
TITLE
Title to any temporary Global Security, any permanent Global Security, and
Bearer Securities and any coupons appertaining thereto will pass by delivery.
The Corporation, the Trustee and any agent of the Corporation or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon and
the registered owner of any Registered Security as the absolute owner thereof
(whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes.
GOVERNING LAW
The Debt Securities and the Indenture will be governed by the laws of the
State of New York.
TRUSTEE
An affiliate of Marine Midland Bank participates in the Corporation's
revolving credit facility and from time to time performs other services for the
Corporation in the normal course of business.
ADDITIONAL INFORMATION
The Indenture is an exhibit to the Registration Statement of which this
Prospectus is a part. Any person who receives this Prospectus may obtain a copy
of the Indenture without charge by writing to the Corporation at the address
listed under the caption "Incorporation of Certain Information by Reference."
15
<PAGE>
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered or sold during the restricted period provided for
in Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations (as
explained below) or delivered in connection with their sale during the
restricted period to a person who is within the United States or its
possessions or to United States persons (each as defined below) except to the
extent permitted under Section 1.163-5(c)(2)(i)(D) of the United States
Treasury regulations (the "D Rules"). The "restricted period" begins on the
earlier of the closing date or the first date on which Bearer Securities are
offered to persons other than an agent or underwriter and will end on the
expiration of the 40-day period beginning on the closing date. Notwithstanding
the preceding sentence, any offer to sell or sale of the Debt Securities by the
Company or an agent or underwriter shall be deemed to be during the restricted
period if the Company or the agent or underwriter holds the Debt Security as
part of an unsold allotment or subscription. Any underwriters, agents and
dealers participating in the offering of Debt Securities must agree that they
will not offer for sale or resale, or sell, Bearer Securities in the United
States or its possessions or to United States persons, except to the extent
permitted under the D Rules, nor deliver Bearer Securities within the United
States.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code." Under Sections 165(j) and 1287(a) of the Code and the
regulations thereunder, Holders of Bearer Securities that are United States
persons, with certain exceptions, will not be allowed to deduct any loss
sustained on the sale, exchange, redemption or other disposition of Bearer
Securities and will be taxed at ordinary income rates on any gain (which might
otherwise be characterized as capital gain) recognized on such sale, exchange
or disposition. In addition, interest on Bearer Securities will be payable only
outside the United States.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia), and its "possessions," including
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands, and "United States person" means an individual who is
a citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, or any estate or trust the income of which is
subject to United States Federal income taxation regardless of its source.
PLAN OF DISTRIBUTION
The Corporation may sell Debt Securities to or through underwriters or to
dealers, acting as principals for their own account and also may sell Debt
Securities directly to other purchasers or through agents. The Prospectus
Supplement in respect of which this Prospectus is being delivered sets forth
the terms of the offering of the Offered Debt Securities and includes, without
limitation, (i) the name or names of any underwriters, dealers or agents with
which the Corporation has entered into arrangements with respect to the sale of
the Offered Debt Securities, (ii) the initial public offering or purchase price
of the Offered Debt Securities, (iii) the principal amounts of the Offered Debt
Securities to be purchased by any such underwriters, dealers or agents, (iv)
any underwriting discounts, commissions and other items constituting
underwriters' compensation and any other discounts, concessions or commissions
allowed or reallowed or paid by any underwriters or other dealers, (v) any
commissions paid to any agents, (vi) the net proceeds to the Corporation and
(vii) the securities exchanges, if any, on which the Offered Debt Securities
will be listed.
If underwriters are used in the offering of Debt Securities, the Debt
Securities being sold 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 a fixed public offering price or at
varying prices determined at the time of such resale. Unless otherwise set
forth in an applicable Prospectus Supplement, the obligations of the
16
<PAGE>
underwriters to purchase such Debt Securities will be subject to certain
conditions precedent and each of the underwriters with respect to such Debt
Securities will be obligated to purchase all of the Debt Securities allocated
to it if any such Debt Securities are purchased. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
If dealers are utilized in the sale of the Debt Securities in respect of
which this Prospectus is being delivered, the Corporation will sell such Debt
Securities to such dealers as principals. The dealers may then resell such Debt
Securities to the public at varying prices to be determined by such dealers at
the time of resale.
Offers to purchase Debt Securities may be solicited by agents designated by
the Corporation from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the
offer or sale of the Debt Securities in respect of which this Prospectus is
being delivered will be named, and any commissions payable by the Corporation
to such agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement in respect of which this Prospectus is
being delivered, any such agent will be acting on a reasonable or best efforts
basis for the period of its appointment.
Offers to purchase Debt Securities may be solicited, and sales thereof may be
made directly by the Corporation to institutional investors or otherwise, who
may be deemed to be underwriters within the meaning of the Securities Act with
respect to any resales thereof.
Underwriters, dealers and agents participating in the distribution of Debt
Securities may be deemed to be "underwriters," as that term is defined under
the Securities Act, and any discounts and commissions received by them and any
profit realized by them on the resale thereof may be deemed to be underwriting
discounts and commissions, under the Securities Act.
Under agreements that may be entered into by the Corporation, underwriters,
dealers and agents who participate in the distribution of Debt Securities may
be entitled to indemnification by the Corporation against certain liabilities,
including certain liabilities under the Securities Act.
If indicated in the Prospectus Supplement, the Corporation may authorize
underwriters or other persons acting as the Corporation's agents to solicit
offers by certain institutions to purchase Offered Debt Securities from the
Corporation pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all cases
such institutions must be approved by the Corporation. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the Offered Debt Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and any such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
VALIDITY
The validity of the Debt Securities offered hereby will be passed on for the
Corporation by Miles & Stockbridge, a Professional Corporation, Baltimore,
Maryland. If this Prospectus is being delivered in an underwritten offering of
Debt Securities, certain matters will be passed on for any underwriters by
Simpson Thacher & Bartlett (a partnership which includes professional
corporations), New York, New York. Simpson Thacher & Bartlett may rely, as to
matters of Maryland law, upon the opinion of Miles & Stockbridge, a
Professional Corporation.
EXPERTS
The consolidated financial statements of the Corporation appearing in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1993,
have been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses (other than underwriting
discounts and commissions) expected to be incurred in connection with the
offering or offerings described in this Registration Statement. All amounts are
estimated except the Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $172,414
Trustee fees and expenses........................................ 15,000
Legal fees and expenses.......................................... 200,000
Accounting fees and expenses..................................... 200,000
Printing and engraving fees and expenses......................... 60,000
Rating agency fees............................................... 170,000
Blue Sky fees and expenses (including legal fees)................ 25,000
Miscellaneous.................................................... 17,586
--------
$860,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation's By-Laws provide that the Corporation may indemnify and
advance expenses to its currently acting and its former directors to the
fullest extent permitted by the Maryland General Corporation Law, and that the
Corporation may indemnify and advance expenses to its officers to the same
extent as its directors and to such further extent as is consistent with law.
The Maryland General Corporation Law provides that a corporation may indemnify
any director made a party to any proceeding by reason of service in that
capacity unless it is established that: (1) the act or omission of the director
was material to the matter giving rise to the proceeding and (a) was committed
in bad faith or (b) was the result of active and deliberate dishonesty, or (2)
the director actually received an improper personal benefit in money, property
or services, or (3) in the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful. The statute
permits Maryland corporations to indemnify its officers, employees or agents to
the same extent as its directors and to such further extent as is consistent
with law.
The Corporation's Charter provides that, to the fullest extent limitations on
the liability of directors and officers are permitted by the Maryland General
Corporation Law, no director or officer of the Corporation shall have any
liability to the Corporation or its stockholders for monetary damages. The
Maryland General Corporation Law provides that a corporation's charter may
include a provision which restricts or limits the liability of its directors or
officers to the corporation or its stockholders for money damages except: (1)
to the extent that it is proved that the person actually received an improper
benefit or profit in money, property or services, for the amount of the benefit
or profit in money, property or services actually received, or (2) to the
extent that a judgment or other final adjudication adverse to the person is
entered in a proceeding based on a finding in the proceeding that the person's
action, or failure to act, was the result of active and deliberate dishonesty
and was material to the cause of action adjudicated in the proceeding. In
situations to which the Charter provision applies, the remedies available to
the Corporation or a stockholder are limited to equitable remedies such as
injunction or rescission. This provision would not, in the opinion of the
Commission, eliminate or limit the liability of directors and officers under
the federal securities laws.
The form of underwriting agreement filed as an exhibit to this Registration
Statement provides for indemnification by the Corporation of the underwriters
or controlling persons of the underwriters under certain circumstances.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1(a) Form of Underwriting Agreement.*
1(b) Forms of Distribution Agreement.
4(a) Form of Indenture.
4(b) Form of Medium Term Note (Fixed Rate).
4(c) Form of Medium Term Note (Floating Rate).
5 Opinion of Miles & Stockbridge, a Professional Corporation.*
12 Statement regarding computation of ratio of earnings to fixed
charges.*
23(a) Consent of Ernst & Young.
23(b) Consent of Miles & Stockbridge, a Professional Corporation (included
in Exhibit 5).*
24 Powers of Attorney.*
25 Form T-1, Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939.*
</TABLE>
- --------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) 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;
(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)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
(h) 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
Securities Act of 1933 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(i) 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 of 1933 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 Act
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.
(j) 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 of 1939 in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) of the Trust Indenture Act of 1939.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF TOWSON, STATE OF MARYLAND, THE 6TH DAY OF JULY 1994.
The Black & Decker Corporation
/s/ Charles E. Fenton
By: _________________________________
Charles E. Fenton
Vice President and General Counsel
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
SIGNATURES TITLE DATE
* Chairman, President
_____________________________________ and Chief Executive July 6, 1994
NOLAN D. ARCHIBALD Officer (Principal
Executive Officer)
* Vice President--
_____________________________________ Finance (Principal July 6, 1994
THOMAS M. SCHOEWE Financial Officer)
* Corporate Controller
_____________________________________ (Principal July 6, 1994
STEPHEN F. REEVES Accounting Officer)
The registration statement also has been signed on the date indicated by the
following directors, who constitute a majority of the Board of Directors:
Nolan D. Archibald* J. Dean Muncaster*
Barbara L. Bowles* Lawrence R. Pugh*
Malcolm Candlish* Mark H. Willes*
Alonzo G. Decker, Jr.* M. Cabell Woodward, Jr.*
Anthony Luiso*
/s/ Charles E. Fenton
*By: ________________________________ July 6, 1994
Charles E. Fenton
(As Attorney-in-fact)
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
<C> <S> <C>
1(a) Form of Underwriting Agreement.*
1(b) Forms of Distribution Agreement.
4(a) Form of Indenture.
4(b) Form of Medium Term Note (Fixed Rate).
4(c) Form of Medium Term Note (Floating Rate).
5 Opinion of Miles & Stockbridge, a Professional
Corporation.*
12 Statement regarding computation of ratio of earnings to
fixed charges.*
23(a) Consent of Ernst & Young.
23(b) Consent of Miles & Stockbridge, a Professional Corporation
(included in Exhibit 5).*
24 Powers of Attorney.*
25 Form T-1, Statement of Eligibility and Qualification Under
the Trust Indenture Act of 1939 (filed under separate
cover).*
</TABLE>
- --------
* Previously filed.
II-5
<PAGE>
U. S. $500,000,000
THE BLACK & DECKER CORPORATION
MEDIUM TERM NOTES, SERIES A
DISTRIBUTION AGREEMENT
________________, 199_
Lehman Brothers Inc. Citicorp Securities, Inc.
3 World Financial Center 399 Park Avenue
New York, New York 10285 New York, New York 10043
Goldman, Sachs & Co. Morgan Stanley & Co. Incorporated
399 Park Avenue 1221 Avenue of the Americas
New York, New York 10043 New York, New York 10020
NationsBanc Capital Markets, Salomon Brothers Inc
Inc. Seven World Trade Center
100 North Tryon Street New York, New York 10048
Charlotte, North Carolina 28255
Dear Sirs:
The Black & Decker Corporation, a Maryland corporation (the "Company"),
confirms its agreement with each of you (individually, an "Agent" and
collectively, the "Agents") (which terms shall, for all purposes of this
Agreement, include Lehman Government Securities Inc., an affiliate of Lehman
Brothers Inc.) with respect to the issuance and sale by the Company of up to
an aggregate of $500,000,000 (or the U.S. dollar equivalent in certain
specified foreign currencies or currency units) in gross proceeds of its
Medium Term Notes, Series ___ (the "Notes"). The Notes are to be issued from
time to time pursuant to an indenture, dated as of ___________ 1994 (as it may
be supplemented or amended from time to time, the "Indenture"), between the
Company and Marine Midland Bank, as trustee (the "Trustee").
The Notes shall have the maturity ranges, applicable interest rates or
interest rate formulas, specified currency, issue price, redemption and
repayment provisions and other terms set forth in the Prospectus referred to
in Section 1(a) as it may be amended or supplemented from time to time,
including any supplement providing for the interest rate, maturity and other
terms of any Note (a "Pricing Supplement"). The Notes will be issued, and the
terms thereof established, from time to time, by the Company in accordance
with the Indenture and the Procedures referred to below. This Agreement shall
only apply to sales of the Notes and not to sales of any other securities or
evidences of indebtedness of the Company and only on the specific terms set
forth herein.
Subject to the terms and conditions stated herein and to the reservation
by the Company of the right to sell its Notes directly
<PAGE>
on its own behalf, the Company hereby (i) appoints each of the Agents as the
agent of the Company for the purpose of soliciting and receiving offers to
purchase Notes from the Company and (ii) agrees that whenever the Company
determines to sell Notes directly to an Agent as principal it will enter into a
separate agreement (each a "Purchase Agreement"). Each such Purchase Agreement,
whether oral (and confirmed in writing, which may be by facsimile transmission)
or in writing, shall be with respect to such information (as applicable) as
specified in Exhibit C hereto, relating to such sale in accordance with Section
2(e) hereof.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to each Agent as of the date hereof,
as of the Closing Date (defined herein) and as of the times referred to in
Sections 6(a) and 6(b) hereof (the Closing Date and each such time being
herein sometimes referred to as a "Representation Date") as follows:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (File No. 33-53807) relating to the Notes and
the offering thereof and has filed such amendments thereto as may have been
required to the date hereof. Such registration statement, as amended, has been
declared effective by the Commission. No stop order suspending the
effectiveness of such registration statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission.
As provided in Section 3, a prospectus supplement reflecting the terms
of any Notes to be sold through or to the Agents ("Designated Notes"), the terms
of the offering thereof and the other matters set forth therein will be prepared
and filed pursuant to Rule 424 under the Act. In addition, a preliminary
prospectus supplement reflecting the terms of the Designated Notes, the terms of
the offering thereof and the other matters set forth therein may also be
prepared and filed pursuant to Rule 424 under the Act. Such prospectus
supplement, as filed pursuant to Rule 424 under the Act, is herein referred to
as the "Prospectus Supplement," and any such preliminary prospectus supplement
in the form filed pursuant to Rule 424 under the Act is hereinafter referred to
as the "Preliminary Prospectus Supplement." Any prospectus accompanied by a
Preliminary Prospectus Supplement is hereinafter referred to, collectively with
such Preliminary Prospectus Supplement, as a "Preliminary Prospectus." The
registration statement referred to above in this Section 1(a), as amended at the
time of execution of the applicable Pricing Agreement, or, if there is no
Pricing Agreement relating to the particular offering of the Notes, at the time
the Company accepts the applicable offer to purchase Notes, including the
exhibits thereto and the documents incorporated by reference therein, is herein
called the "Registration Statement," and the basic prospectus included therein
relating to all offerings of securities
-2-
<PAGE>
under the Registration Statement, as then supplemented by the Prospectus
Supplement (as such Prospectus Supplement is itself supplemented by the Pricing
Supplement in the form first filed pursuant to Rule 424 under the Act), is
herein called the "Prospectus", in each case including the documents filed by
the Company with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), that are incorporated by reference
therein. All references in this Agreement to financial statements and
schedules and other information, facts and statements which are "contained,"
"included" or "stated" in the Registration Statement, the Prospectus or the
Preliminary Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and
other information which is or is deemed to be incorporated by reference in the
Registration Statement, the Prospectus or the Preliminary Prospectus, as the
case may be. Any reference in this Agreement to amending or supplementing the
Prospectus shall be deemed to include the filing of materials incorporated by
reference in the Prospectus after the Closing Date, and any reference in this
Agreement to any amendment or supplement to the Prospectus shall be deemed to
include any such materials incorporated by reference in the Prospectus after
the Closing Date.
(b) The Registration Statement and the Prospectus, as of the
applicable Representation Date and at all times during each period during which
a prospectus relating to the Notes is required to be delivered under the Act
(each, a "Marketing Period"), complied and will comply in all material respects
with the applicable requirements of the Act and rules and regulations (the "1933
Act Regulations") of the Commission thereunder. The Registration Statement does
not, and will not, as of the applicable Representation Date and at all times
during each Marketing Period, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectusdoes not, and will
not, as of the applicable Representation Date and at all times during each
Marketing Period, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by any of the Agents expressly for use in the
Registration Statement or Prospectus relating to such Notes or to that part of
the Registration Statement which shall constitute the Statement of Eligibility
and Qualification under the Trust Indenture Act (Form T-1) of the Trustee under
the Indenture.
(c) The documents incorporated by reference in the Registration
Statement and Prospectus do, and will, as of the applicable Representation Date
and at all times during each Marketing Period comply in all material respects
with the applicable requirements of the Exchange Act, and the applicable rules
and regulations of the Commission thereunder and, when read
-3-
<PAGE>
together with the other information in the Prospectus, do not, and will not, as
of the applicable Representation Date and at all times during each Marketing
Period, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.
(d) When the Registration Statement became effective, the Indenture
was, and at all times thereafter the Indenture has been and will be, duly
qualified under the Trust Indenture Act, and when such Registration Statement
became effective the Indenture conformed, and at all times thereafter the
Indenture has conformed and will conform, in all material respects to the
applicable requirements of the Trust Indenture Act and the rules and regulations
(the "Trust Indenture Act Regulations") of the Commission thereunder.
(e) The Company has all requisite corporate power and authority to
execute and deliver this Agreement and each Purchase Agreement. This Agreement
and the applicable Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(f) The Company has all of the requisite corporate power and
authority to execute, issue and deliver the Designated Notes and to incur and
perform its obligations provided for therein; from the time a Purchase Agreement
is executed and delivered by the Company in respect of Designated Notes or, if
there is no Purchase Agreement, from the time the Company accepts an offer to
purchase Designated Notes, such Designated Notes will have been duly authorized
by the Company and, when such Designated Notes are authenticated in the manner
provided for in the Indenture and delivered against payment therefor as provided
for in this Agreement and the applicable Purchase Agreement, if any, such
Designated Notes will have been duly executed, authenticated (assuming due
authentication by the Trustee), issued and delivered and will constitute legal,
valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting enforcement of creditors' rights generally, by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing; and
the Designated Notes conform in all material respects to the description thereof
contained in the Prospectus.
(g) The Company has all of the requisite corporate power and
authority to execute and deliver the Indenture and to perform its obligations
provided for therein; the Indenture has been duly authorized, executed and
delivered by the Company, will be substantially in the form heretofore delivered
to the Agents and assuming due execution and delivery by the Trustee, will
constitute a legal, valid and binding obligation of the Company, enforceable
-4-
<PAGE>
against the Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting enforcement of creditors' rights
generally, by general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing; and the Indenture conforms in all material respects
to the description thereof contained in the Prospectus.
(h) The Company and each of its subsidiaries (as defined in Rule 405
of the 1933 Act Regulations) ("Subsidiaries") have been duly incorporated and
are validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification (except where the failure to be so
qualified or be in good standing would not have, individually or in the
aggregate, a material adverse effect on the business or financial condition of
the Company and Subsidiaries taken as a whole), and have all power and authority
necessary to own or hold their respective properties and to conduct the business
in which they are engaged.
(i) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable;
and all of the issued shares of capital stock of each Subsidiary have been duly
and validly authorized and issued and are fully paid, non-assessable and (except
for directors' qualifying shares) owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims (except for such
liens, encumbrances, equities or claims arising as a matter of law that would
not have a material adverse effect on the business or financial condition of the
Company and Subsidiaries taken as a whole).
(j) The issuance, sale and delivery of the Designated Notes, the
execution, delivery and performance of this Agreement, the Indenture, the Notes
and each applicable Purchase Agreement (collectively, "Operative Documents"),
the compliance by the Company with the terms therein and the consummation by the
Company of the transactions contemplated hereby, thereby and by the Registration
Statement do not and will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any Subsidiaries is subject, (ii) result in
any violation of the provisions of the charter or by-laws of the Company or
(except for any violation the result of which would not be material to the
Company and Subsidiaries taken
-5-
<PAGE>
as a whole and would not adversely affect the consummation of the transactions
contemplated hereby and thereby) any Subsidiaries or (iii) result in the
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
Subsidiaries or any of their properties the result of which violation would be
material to the Company and Subsidiaries taken as a whole or would adversely
affect the consummation of the transactions contemplated hereby or thereby.
Except (i) for such consents, approvals, authorizations, registrations or
qualifications as may be required under applicable state or foreign securities
laws and (ii) such consents, approvals, authorizations, registrations and
qualifications as have been obtained or made and are in full force and effect at
the applicable Representation Date, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental agency or
body is required for the valid authorization, issuance, sale and delivery of the
Designated Notes or the authorization, execution, delivery and performance of
this Agreement and the applicable Purchase Agreement, if any, by the Company and
the consummation of the transactions contemplated hereby and thereby. No
consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the due
authorization, execution, delivery and performance of the Indenture and the
consummation of the transactions contemplated thereby.
(k) Other than rights in favor of Newell Co. which have been waived
or satisfied in respect of the Registration Statement, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act.
(l) Neither the Company nor any Subsidiary has sustained, since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
material, individually or in the aggregate, to the Company and Subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the Prospectus;
and, since such date, there has not been any change in the capital stock or debt
of the Company or any Subsidiaries otherwise than in the ordinary course of
business or any material adverse change, or any development reasonably likely to
involve a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and Subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Prospectus.
-6-
<PAGE>
(m) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included or
incorporated by reference in the Prospectus present, and will present, as of the
applicable Representation Date and at all times during each Marketing Period,
fairly the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated, and
have been, and will be, as of the the applicable Representation Date and at all
times during each Marketing Period, prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except as otherwise stated therein.
(n) Ernst & Young, who have certified certain financial statements of
the Company and whose report appears in the Prospectus or is incorporated by
reference therein, are (and were at the time such reports were issued)
independent public accountants as required by the Act and the 1933 Act
Regulations.
(o) The Company and each of the Subsidiaries own or possess adequate
rights to use all patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights and
licenses necessary and material to the conduct of their respective businesses as
now being conducted except when the failure to own or possess adequate rights to
use any such patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights or
licenses would not have, individually or in the aggregate, a material adverse
effect on the business or financial condition of the Company and Subsidiaries
taken as a whole and have no reason to believe that the conduct of their
respective businesses as now being conducted conflict with, and have not
received any notice of any claim of conflict with, the rights of others in
respect thereof except for any such conflict or claim of conflict which is not
reasonably likely to have, individually or in the aggregate, a material adverse
effect on the business or financial condition of the Company and Subsidiaries
taken as a whole.
(p) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any Subsidiaries is a
party or of which any property of the Company or any Subsidiaries is the subject
which are reasonably likely to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and Subsidiaries taken as a whole; and to
the best of the Company's knowledge, except as described in the Prospectus, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(q) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Act or by the 1933 Act Regulations which have not been
described in the Prospectus or
-7-
<PAGE>
filed as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the 1933 Act Regulations.
(r) Neither the Company nor any Subsidiaries (i) is in violation of
its charter or by-laws, (ii) is in default in any material respect, and no event
has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
condition contained in any material agreement, indenture or instrument, or (iii)
is in violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property may be subject or
has failed to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business, except, in the case of clauses (ii)
and (iii), for any such defaults, violations or failures which, individually or
in the aggregate, would not have a material adverse effect on the business or
financial condition of the Company and Subsidiaries taken as a whole.
SECTION 2. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL
(a) Appointment. Subject to the terms and conditions stated herein, the
Company hereby appoints each of the Agents as the non-exclusive agent of the
Company for the purpose of soliciting or receiving offers to purchase the
Notes from the Company by others. On the basis of the representations and
warranties contained herein, but subject to the terms and conditions herein
set forth, each Agent agrees, as the non-exclusive agent of the Company, to
use its reasonable best efforts to solicit offers to purchase the Notes upon
the terms and conditions set forth in the Prospectus. Each Agent also may
purchase Notes from the Company as principal for purposes of resale, as more
fully described in paragraph (e) of this Section. The Company may offer the
Notes for sale from time to time otherwise than through an Agent. However, so
long as this Agreement is in effect the Company shall not solicit offers to
purchase Notes through an agent without (i) amending this Agreement to appoint
such agent as an additional Agent hereunder on the same terms and conditions
as provided herein for the Agents (the consent of the then current Agents
shall not be necessary for such purpose) and (ii) delivering 2 days prior
written notice thereof to the Agents. Notwithstanding the foregoing, the
Company may provide copies of the Prospectus, any Prospectus Supplement and
any Pricing Supplement to an agent (other than an Agent) who has made or
conveyed an offer with respect to the purchase of Notes, and accept offers to
purchase Notes through an agent other than an Agent, provided in each case
that (i) the Company shall not have solicited such offers, (ii) the Company
and such agent shall have executed an agreement with respect to such purchases
having the same terms and conditions (including, without limitation,
commission and discount rates) other than immaterial changes as those which
would apply to such purchases under this Agreement if such agent were an Agent
(which may be accomplished by incorporating by reference in such agreement the
terms and conditions of this Agreement) and (iii) the Company shall provide
-8-
<PAGE>
the Agents with a copy of such agreement promptly following the execution
thereof.
(b) Suspension of Solicitation. The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to purchase the Notes
commencing at any time for any period of time or indefinitely. Upon receipt of
at least one business day's prior written notice from the Company, the Agents
will suspend solicitation of offers to purchase Notes from the Company until
such time as the Company has advised the Agents that such solicitation may be
resumed. For the purpose of the foregoing sentence, "business day" shall mean
any day which is not a Saturday or Sunday and which is not a day on which (i)
banking institutions are generally authorized or obligated by law to close in
The City of New York and (ii) The New York Stock Exchange, Inc. is closed for
trading.
Upon receipt of notice from the Company as contemplated by Section
3(c) hereof, each Agent shall suspend its solicitation of offers to purchase
Notes until such time as the Company shall have furnished it with an amendment
or supplement to the Registration Statement or the Prospectus, as the case may
be, contemplated by Section 3(c) and shall have advised such Agent that the
solicitation may be resumed.
(c) Agent's Commission. Promptly upon the closing of the sale of any
Notes sold by the Company as a result of a solicitation made by or offer to
purchase received by an Agent, the Company agrees to pay such Agent a
commission, in the form of a discount, in accordance with the schedule
relating to each series of Notes set forth in Exhibit A hereto.
(d) Solicitation of Offers. The Agents are authorized to solicit offers
to purchase the Notes only in denominations as are specified in the Prospectus
at a purchase price as shall be specified by the Company. Each Agent shall
communicate to the Company, orally or in writing, each reasonable offer to
purchase Notes received by it as an Agent. The Company shall have the sole
right to accept offers to purchase the Notes and may reject any such offer in
whole or in part. Each Agent shall have the right, in its discretion
reasonably exercised without advising the Company, to reject any offer to
purchase the Notes received by it, in whole or in part, and any such rejection
shall not be deemed a breach of its agreement contained herein.
No Note which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by the
Company, until the Note shall have been delivered against payment therefor.
(e) Purchases as Principal. Each sale of Notes to any Agent as
principal, for resale to one or more investors or to another broker dealer
(acting as principal for purposes of resale), shall be made in accordance with
the terms of this Agreement and a Purchase Agreement whether oral (and
confirmed in writing by such
-9-
<PAGE>
Agent to the Company, which may be by facsimile transmission) or in writing,
which will provide for the sale of such Notes to, and the purchase thereof by,
the Agent. A Purchase Agreement may also specify certain provisions relating to
the reoffering of such Notes by such Agent. The commitment of any Agent to
purchase Notes from the Company as principal shall be deemed to have been made
on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth.
Each Purchase Agreement shall specify the principal amount and terms of the
Notes to be purchased by an Agent, the time and date (each such time and date
being referred to herein as a "Time of Delivery") and place of delivery of and
payment for such Notes and such other information (as applicable) as is set
forth in Exhibit C hereto. The Company agrees that if any Agent purchases Notes
as principal for resale such Agent shall receive such compensation, in the form
of a discount or otherwise, as shall be indicated in the applicable Purchase
Agreement or, if no compensation is indicated therein, a commission in
accordance with Exhibit A hereto. Any Agent may utilize a selling or dealer
group in connection with the resale of such Notes. In addition, any Agents may
offer the Notes it has purchased as principal to other dealers. Any Agent may
sell Notes to any dealer at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed to any dealer will not be
in excess of 66 2/3% of the discount to be received by such Agent from the
Company. The Purchase Agreement shall also specify any requirements for
delivery of opinions of counsel, accountant's letters and officers' certificates
pursuant to Section 5 hereof.
(f) Administrative Procedures. Administrative procedures respecting the
sale of Notes (the "Procedures") are set forth in Exhibit B hereto and may be
amended in writing from time to time by the Agents and the Company. Each Agent
and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them herein and in the
Procedures. The Procedures shall apply to all transactions contemplated
hereunder including sales of Notes to any Agent as principal pursuant to a
Purchase Agreement, unless otherwise set forth in such Purchase Agreement.
(g) Delivery of Documents. The documents required to be delivered by
Section 5 hereof shall be delivered at the offices of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017, not later than 10:00
A.M., New York City time, on the date of this Agreement or at such later time
as may be mutually agreed upon by the Company and the Agents, which in no
event shall be later than the time at which the Agents commence solicitation
of offers to purchase Notes hereunder (the "Closing Date").
SECTION 3. COVENANTS OF THE COMPANY
The Company covenants and agrees:
(a) Delivery of Signed Registration Statement. To furnish promptly to
the Agents and to their counsel a signed copy of the
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<PAGE>
Registration Statement as originally filed and each amendment or supplement
thereto.
(b) Delivery of Other Documents. To deliver promptly to the Agents, and
in such number as they may request, each of the following documents: (i)
conformed copies of the Registration Statement (excluding exhibits other than
the computation of the ratio of earnings to fixed charges, the Indenture, this
Agreement and such other exhibits that the Agents may request), (ii) the basic
prospectus as supplemented by the Prospectus Supplement, (iii) each
Prospectus and (iv) any documents incorporated by reference in the
Prospectus.
(c) Revisions to Prospectus--Material Changes. If, during any Marketing
Period, any event occurs as a result of which the Prospectus would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, not misleading, or if it is
necessary at any time to amend any Prospectus to comply with the Act, to
notify the Agents promptly, in writing, to suspend solicitation of purchases
of the Notes; and if the Company shall decide to amend or supplement the
Registration Statement or any Prospectus, to promptly advise the Agents by
telephone (with confirmation in writing) and to promptly, in writing, prepare
and file with the Commission an amendment or supplement which will correct
such statement or omission or an amendment which will effect such compliance;
provided, however, that if during the period referred to above any Agent shall
own any Notes which it has purchased from the Company as principal with the
intention of reselling them, the Company shall promptly prepare and timely
file with the Commission any amendment or supplement to the Registration
Statement or any Prospectus that may, in the judgment of the Company or the
Agents, be required by the Act or that is requested by the Commission.
(d) Commission Filings. To timely file with the Commission during any
Marketing Period, all documents (and any amendments to previously filed
documents) required to be filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act.
(e) Copies of Filings with Commission. Prior to or contemporaneously
with filing with the Commission during any Marketing Period, (i) any amendment
or supplement to the Registration Statement, (ii) any amendment or supplement
to any Prospectus or (iii) any document incorporated by reference in any of
the foregoing or any amendment of or supplement to any such incorporated
document, to furnish a copy thereof to the Agents.
(f) Notice to Agent of Certain Events. To advise the Agents immediately
(i) when any post-effective amendment to the Registration Statement relating
to or covering the Notes becomes effective, (ii) of any request or proposed
request by the Commission for an amendment or supplement to the Registration
Statement, to any Prospectus, to any document incorporated by reference in any
of the foregoing or for any additional information and the Company will afford
the Agents a reasonable opportunity to comment on any such proposed amendment
or supplement, (iii) of the
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<PAGE>
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof or any order directed to any
Prospectus or any document incorporated therein by reference or the initiation
or threat of any stop order proceeding or of any challenge to the accuracy or
adequacy of any document incorporated by reference in any Prospectus, (iv) of
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threat of any proceeding for that purpose, (v) of any downgrading in the rating
of the Notes or any other debt securities of the Company, or any proposal to
downgrade the rating of the Notes or any other debt securities of the Company,
by any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading of such rating)
as soon as the Company learns of any such downgrading, proposal to downgrade or
public announcement and (vi) of the happening of any event which makes untrue
any statement of a material fact made in the Registration Statement or any
Prospectus or which requires the making of a change in the Registration
Statement or any Prospectus in order to make any material statement therein not
misleading.
(g) Stop Orders. If, during any Marketing Period, the Commission shall
issue a stop order suspending the effectiveness of the Registration Statement,
to make every reasonable effort to obtain the lifting of that order at the
earliest possible time.
(h) Earnings of Statements. As soon as practicable, but not later than
18 months, after the date of each acceptance by the Company of an offer to
purchase Notes hereunder, to make generally available to its security holders
an earnings statement covering a period of at least 12 months beginning after
the later of (i) the effective date of the Registration Statement, (ii) the
effective date of the most recent post-effective amendment to the Registration
Statement to become effective prior to the date of such acceptance, and (iii)
the date of the Company's most recent Annual Report on Form 10-K filed with
the Commission prior to the date of such acceptance which will satisfy the
provisions of Section 11(a) of the Act (including, at the option of the
Company, Rule 158 of the 1933 Act Regulations);
(i) Copies of Reports, Releases and Financial Statements. So long as
any of the Notes are outstanding, to furnish to the Agents, not later than the
time the Company makes the same generally available to others, copies of all
public reports or releases and all reports and financial statements furnished
by the Company to any securities exchange on which the Notes are listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder.
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(j) Blue Sky Qualifications. To endeavor, in cooperation with the
Agents, to qualify the Notes for offering and sale under the securities laws
of such jurisdictions located within the United States and foreign countries
as the Agents may designate, and to maintain such qualifications in effect for
as long as may be required for the distribution of the Notes; and to file such
statements and reports as may be required by the laws of each jurisdiction in
which the Notes have been qualified as above provided.
(k) Holdback. Between the date of a Purchase Agreement and the date of
delivery of the Notes with respect thereto, the Company will not offer or
sell, or enter into any agreement to sell, any debt securities of the
Corporation similar to the Notes that are the subject of the Purchase
Agreement, other than the private placement of securities and issuances of its
commercial paper.
(l) Pricing Supplement. To prepare, with respect to any Notes to be
sold through or to the Agents pursuant to this Agreement, a Pricing Supplement
with respect to such Notes in a form previously approved by the Agents and to
file such Pricing Supplement pursuant to Rule 424 under the Act with the
Commission./*/
(m) Use of Proceeds. The Company will use the proceeds received from
the sale of the Notes in the manner specified in the Prospectus.
(n) Securities Exchange Listing. If any Notes are to be listed on a
securities exchange, the Company will use its best efforts to cause such Notes
to be so listed, subject only to official notice of issuance.
SECTION 4. PAYMENT OF EXPENSES
The Company will pay:
(i) the costs incident to the authorization, issuance, sale and
delivery of the Notes and any taxes payable in that connection,
(ii) the costs incident to the preparation, printing and filing of the
Registration Statement (including the basic prospectus and each Prospectus)
and any amendments and exhibits thereto,
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/*/ If clause (b)(3) of Rule 424 is applicable, such filing shall be
made no later than the fifth business day following the earlier of the date of
determination of the settlement information described below or the date such
Pricing Supplement is first used. If clause (b)(2) or (b)(5) of Rule 424 is
applicable, such filing shall be made no later than the second business day
following the earlier of the date of determination of the settlement
information or the date such Pricing Supplement is first used.
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(iii) the costs incident to the preparation, printing and filing of any
document and any amendments and exhibits thereto required to be filed by
the Company under the Exchange Act,
(iv) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), the basic
prospectus as supplemented by the Prospectus Supplement, each Prospectus,
any supplement or amendment to any Prospectus and any documents
incorporated by reference in any of the foregoing documents, all as
provided in this Agreement,
(v) the fees and disbursements of the Trustee, any paying agent, any
calculation agent, any exchange rate agent and any other agents appointed
by the Company, and their respective counsel,
(vi) the applicable costs and fees in connection with the listing of
the Notes on any securities exchange,
(vii) the cost and fees in connection with any required filings with
the National Association of Securities Dealers, Inc.,
(viii) the fees and disbursements of counsel to the Company and counsel
to the Agents,
(ix) the fees paid to rating agencies in connection with the rating of
the Notes,
(x) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in Section 3(j)
and of preparing and printing a Blue Sky Memorandum and a memorandum
concerning the legality of the Notes as an investment (including related
fees and expenses of counsel for the Agents in connection therewith),
(xi) all advertising expenses in connection with the offering of the
Notes incurred with the consent of the Company,
(xii) the cost of printing certificates representing the Notes,
(xiii) the cost and charges of The Depository Trust Company, Inc. and
its nominee in connection with the Notes, including the book-entry
ownership system for the Notes, to the extent that the Notes are to be
delivered in book-entry form,
(xiv) the costs of duplicating this Agreement, and
(xv) all other costs and expenses arising out of the transactions
contemplated hereunder and incident to the performance of the Company's
obligations under this Agreement
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or otherwise in connection with the activities of the Agents under this
Agreement.
SECTION 5. CONDITIONS OF OBLIGATIONS OF AGENT
The obligation of the Agents, as agents of the Company, under this
Agreement to solicit offers to purchase the Notes, the obligation of any person
who has agreed to purchase Notes to make payment for and take delivery of such
Notes, and the obligation of any Agent to purchase Notes pursuant to any
Purchase Agreement, is subject to the accuracy, on each Representation Date, of
the representations and warranties of the Company contained herein, to the
accuracy of the statements of the Company's officers made in any certificate
furnished pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder, and to each of the following additional terms and
conditions:
(a) Registration Statement. The Prospectus as amended or supplemented
(including the Pricing Supplement) with respect to such Notes shall have been
filed with the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the 1933 Act Regulations
and in accordance with Section 3(l) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof nor any order
directed to any document incorporated by reference in any Prospectus shall have
been issued and no stop order proceeding shall have been initiated or threatened
by the Commission and no challenge shall have been made to the accuracy or
adequacy of any document incorporated by reference in any Prospectus; any
request of the Commission for inclusion of additional information in the
Registration Statement or any Prospectus or otherwise shall have been complied
with; and the Company shall not have filed with the Commission any amendment or
supplement to the Registration Statement or any Prospectus (or any document
incorporated by reference therein) without the consent of the Agents.
(b) No Suspension of Sale of the Notes. No order suspending the sale of
the Notes in any jurisdiction designated by the Agents pursuant to Section 3(j)
hereof shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened.
(c) No Material Omissions or Untrue Statements. The Agents shall not have
discovered and disclosed to the Company that the Registration Statement or any
Prospectus contains an untrue statement of a fact which, in the opinion of
counsel for the Agents, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(d) Legal Matters Satisfactory to Counsel. All corporate proceedings and
other legal matters incident to the authorization, form and validity of this
Agreement, the Notes, the Indenture, the form of the Registration Statement,
each Prospectus (other than financial statements and other financial data) and
all other legal
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matters relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all respects to counsel for the Agents and the Company
shall have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(e) Opinion of Company Counsel. At the Closing Date, the Agents shall have
received the opinion, addressed to the Agents and dated the Closing Date, of
Miles & Stockbridge, a Professional Corporation, counsel to the Company, in form
and substance satisfactory to the Agents and their counsel, to the effect that:
(i) The Company and each of the Subsidiaries listed on Schedule 1 to
such counsel's opinion (the "Principal Subsidiaries") have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations
in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses require such
qualifications (other than those jurisdictions in which the failure to so
qualify would not have a material adverse effect on the Corporation and its
Subsidiaries taken as a whole), and have all corporate power and authority
necessary to own or hold their respective properties and conduct the
businesses in which they are engaged;
(ii) The Company has the requisite corporate power and authority to
issue and deliver the Notes in a form contemplated by the Indenture. The
Designated Notes covered by an applicable Purchase Agreement, if any, are
in a form contemplated by the Indenture and have been duly authorized by
the Company (subject to the determination of certain terms and conditions
by duly authorized officers of the Company) and, assuming the Designated
Notes have been authenticated in accordance with the terms of the
Indenture and delivered to and paid for in accordance with the terms of
this Agreement as supplemented by the applicable Purchase Agreement, if
any, and when the terms of the Designated Notes and of their issue and
sale have been duly established in accordance with the Indenture and this
Agreement, such Designated Notes will be legal, valid and binding
obligations of the Company, entitled to the benefits provided by the
Indenture and enforceable against the Company in accordance with their
terms;
(iii) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture has been duly authorized, executed and delivered by the Company
and is the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms;
(iv) The Indenture has been qualified under the Trust Indenture Act;
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<PAGE>
(v) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
applicable Purchase Agreement, if any. This Agreement and the applicable
Purchase Agreement, if any, have been duly authorized, executed and
delivered by the Company;
(vi) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable; and all of the issued shares of capital stock of each Principal
Subsidiary have been duly and validly authorized and issued and are fully
paid, non-assessable and (except for directors' qualifying shares) owned
directly and indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims except for such liens, encumbrances,
equities or claims as would not have a material adverse effect on the
business or financial condition of the Company and its Subsidiaries taken
as a whole;
(vii) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which
the Company or any of its Subsidiaries is a party or of which any property
of the Company or any of its Subsidiaries is the subject which are
reasonably likely to have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, business
or prospects of the Company and its Subsidiaries taken as a whole; and, to
such counsel's knowledge, except as described in the Prospectus, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(viii) The Registration Statement was declared effective under the Act
as of the date and time specified in such opinion and no stop orders
suspending the effectiveness of the Registration Statement has been issued
and, to the knowledge of such counsel, no proceeding for that purpose is
pending or threatened by the Commission;
(ix) The Registration Statement and the Prospectus (other than the
financial statements and related schedules and other financial data and
statistical data therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the Act
and the 1933 Act Regulations; and the documents incorporated by reference
in the Prospectus (other than the financial statements and related
schedules and other financial data and statistical data therein, as to
which such counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder;
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<PAGE>
(x) The statements with respect to United States federal tax
considerations for holders of Notes contained in the Prospectus under the
heading "Certain United States Tax Consequences," while not purporting to
discuss all possible tax consequences, insofar as they describe federal
statutes, rules and regulations, constitute a fair summary thereof;
(xi) To such counsel's knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Act or by the 1933 Act
Regulations which have not been described or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the 1933 Act Regulations;
(xii) The execution, delivery and performance of the Indenture, this
Agreement, the applicable Purchase Agreement, and the Notes (and the
issuance and sale of the Notes), if any, the compliance by the Company with
the terms therein and the consummation by the Company of the transactions
contemplated hereby, thereby and by the Registration Statement will not (i)
to such counsel's knowledge, conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Subsidiaries is
subject the effect of which breach or violation would be material to the
Company and its Subsidiaries as a whole or would adversely affect the
consummation of the transactions contemplated hereby or thereby, (ii)
result in any violation of the provisions of the charter or bylaws of the
Company or any of its Subsidiaries or (iii) to such counsel's knowledge,
result in any violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their properties the effect of
which violation would be material to the Company and its Subsidiaries as a
whole or would adversely affect the consummation of the transactions
contemplated hereby or thereby. Except (i) for the registration of the
Designated Notes under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Exchange Act, the Trust Indenture Act and applicable state or foreign
securities laws and (ii) such consents, approvals, authorizations,
registrations and qualifications as have been obtained or made and are in
full force and effect at the applicable Time of Delivery, to such counsel's
knowledge no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the valid authorization, issuance, sale and delivery of the
Designated Notes or the authorization, execution, delivery and performance
of this Agreement and the applicable Purchase Agreement, if any, by the
Company and the consummation of the transactions contemplated hereby and
thereby or for the due authorization, execution, delivery and performance
of the
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<PAGE>
Indenture and the consummation of the transactions contemplated thereby.
(xiii) To such counsel's knowledge, other than rights in favor of Newell
Co. which have been waived or satisfied in respect of the Registration
Statement, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(xiv) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" and
"Description of Notes" insofar as they constitute summaries of documents,
are accurate in all material respects; and the Indenture and the Designated
Notes covered by the applicable Purchase Agreement, if any, conform in all
material respects to the descriptions thereof in the Prospectus and the
applicable Prospectus Supplement.
In rendering such opinion such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America
and the laws of the States of Maryland and New York. As to matters governed by
the laws of the State of New York, Miles & Stockbridge, a Professional
Corporation may rely on the opinion of Simpson Thacher & Bartlett, counsel to
the Agents. In addition, Miles & Stockbridge, a Professional Corporation shall
state that, while they have not themselves checked the accuracy and completeness
of or otherwise verified, and are not passing upon and assume no responsibility
for the accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, except to the limited extent stated in
paragraphs (x) and (xiv) above, in the course of their review and discussion of
the contents of the Registration Statement and Prospectus with certain officers
and employees of the Company and its independent auditors but without
independent check or verification, no facts have come to their attention which
cause them to believe that (a) the Registration Statement, including the
documents incorporated by reference therein (other than the financial statements
and schedules and other financial data and statistical data contained or
incorporated by reference therein or omitted therefrom, as to which such counsel
need express no view), at the time the same became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, or (b) the Prospectus, including the documents incorporated by
reference therein (other than the financial statements and schedules and other
financial data and statistical data contained or incorporated by reference
therein or omitted therefrom, as to which such counsel need express no view),
relating
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to the Designated Notes on the date of such Prospectus and at the applicable
Time of Delivery contained or contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.
In rendering the foregoing opinion, such counsel may also state that the
opinions in paragraphs (ii) and (iii) above are subject to the qualification
that the enforceability of the Company's obligations under the Indenture and the
Designated Notes may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered a proceeding in equity
or at law) and by an implied covenant in good faith of their dealing.
(f) Officers' Certificate. The Company shall have furnished to the Agents
on the Closing Date a certificate, dated the Closing Date, of its President or a
Vice President and its Treasurer or an Assistant Treasurer stating that:
(i) The representations, warranties and agreements of the Company in
Section 1 hereof are true and correct as of the Closing Date; the Company
has complied with all its agreements contained herein; and the conditions
set forth in Sections 5(a), 5(b) and 5(i) (iv) hereof have been
fulfilled; and
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion, (A) the Registration Statement, as of its
effective date, did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, (B) the Prospectus does not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and (C) since the effective date of the Registration
Statement there has not occurred any event required to be set forth in an
amended or supplemented prospectus which has not been so set forth.
(g) Accountant's Letter. The Company shall furnish the Agents on the
Closing Date a letter of Ernst & Young addressed jointly to the Company and the
Agents and dated the Closing Date, of the type described in the American
Institute of Certified Public Accountants Statement on Auditing Standards No.
72, in form and substance reasonably satisfactory to the Agents confirming that
they are independent accountants within the meaning of the Act and the
applicable 1933 Act Regulations and containing statements and information of
the type ordinarily included in an accountant's "comfort letter" to agents with
respect to financial statements and certain financial information contained in
the Registration
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Statement and the Prospectus, including the documents incorporated by reference
therein.
(h) The Agents shall have received from Simpson Thacher & Bartlett,
counsel to the Agents, such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Notes, the Indenture, the Registration
Statement, the Prospectus and other related matters as the Agents may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such matters.
(i) Additional Conditions. There shall not have occurred: (i) any change
in the capital stock or debt of the Company or any of its Subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, stockholders' equity, business, properties,
condition (financial or other), results of operations or prospects of the
Company and its Subsidiaries that in the opinion of the Agents, materially
impairs the investment quality of the Notes; (ii) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange,
the American Stock Exchange or the over-the-counter market or the establishment
of minimum prices on such exchanges or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction; (iii) a general moratorium on commercial banking activities
declared by Federal or New York State authorities; (iv) any downgrading in the
rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national calamity or
emergency; or (vi) any material adverse change in the existing financial,
political or economic conditions in the United States, including any effect of
international conditions on the financial markets in the United States, that in
the judgment of the Agents makes it impracticable or inadvisable to proceed with
the solicitation of offers to purchase Notes or the purchase of Notes from the
Company as principal pursuant to the applicable Purchase Agreement, as the case
may be.
(j) Securities Exchange Listings. If the Designated Notes are to be
listed on a securities exchange, such Designated Notes shall have been duly
authorized for listing on such securities exchange, subject to official notice
of issuance thereof and notice of a satisfactory distribution of the Designated
Notes.
(k) Other Information and Documentation. Prior to the Closing Date, the
Company shall have furnished to the Agents such
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further information, certificates and documents as the Agents or counsel to the
Agents may reasonably request.
SECTION 6. ADDITIONAL COVENANTS OF THE COMPANY.
The Company covenants and agrees that:
(a) Acceptance Affirms Representations and Warranties. Each acceptance by
it of an offer for the purchase of Notes shall be deemed to be an affirmation
that the representations and warranties of the Company contained in this
Agreement and in any certificate theretofore given to the Agents pursuant hereto
are true and correct at the time of such acceptance, and an undertaking that
such representations and warranties will be true and correct at the time of
delivery to the purchaser or his agent of the Notes relating to such acceptance
as though made at and as of each such time (and such representations and
warranties shall relate to the Registration Statement and the Prospectus as
amended or supplemented to each such time).
(b) Subsequent Delivery of Officers' Certificates. The Company agrees
that during each Marketing Period, each time that the Registration Statement or
any Prospectus shall be amended or supplemented (other than by a Pricing
Supplement providing solely for the interest rates or maturities of the Notes or
the principal amount of Notes remaining to be sold or similar changes), each
time the Company sells Notes to an Agent as principal and the applicable
Purchase Agreement specifies the delivery of an officers' certificate under this
Section 6(b) as a condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any document incorporated by
reference into any Prospectus, the Company shall submit to the Agents a
certificate, (i) as of the date of such amendment, supplement, Time of Delivery
relating to such sale or filing, or (ii) if such amendment, supplement or filing
was not filed during a Marketing Period, as of the first day of the next
succeeding Marketing Period, representing that the statements contained in the
certificate referred to in Section 5(f) hereof which was last furnished to the
Agents are true and correct at the time of such amendment, supplement or filing,
as the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and each
Prospectus as amended and supplemented to such time).
(c) Subsequent Delivery of Legal Opinions. The Company agrees that during
each Marketing Period, each time that the Registration Statement or any
Prospectus shall be amended or supplemented (other than by a Pricing Supplement
providing solely for the interest rates or maturities of the Notes or the
principal amount of Notes remaining to be sold or similar changes), each time
the Company sells Notes to an Agent as principal and the applicable Purchase
Agreement specifies the delivery of a legal opinion under this Section 6(c) as a
condition to the purchase of Notes pursuant to such Purchase Agreement or the
Company files with the Commission any document incorporated by reference into
any Prospectus, the
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Company shall, (i) concurrently with such amendment, supplement, Time of
Delivery relating to such sale or filing, or (ii) if such amendment, supplement
or filing was not filed during a Marketing Period, on the first day of the next
succeeding Marketing Period, furnish the Agents with the written opinion of
Miles & Stockbridge, a Professional Corporation, addressed to the Agents and
dated the date of delivery of such opinion, in form satisfactory to the Agents,
of the same effect as the opinion referred to in Section 5(e) hereof, but
modified, as necessary, to relate to the Registration Statement and each
Prospectus as amended or supplemented to the time of delivery of such opinion;
provided, however, that in lieu of such opinion, such counsel may furnish the
Agents with a letter to the effect that the Agents may rely on such prior
opinion to the same extent as though it was dated the date of such letter
authorizing reliance (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and each Prospectus as amended or
supplemented to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Accountant's Letters. The Company agrees that
during each Marketing Period, each time that the Registration Statement or any
Prospectus shall be amended or supplemented to include additional financial
information, each time the Company sells Notes to an Agent as principal and the
applicable Purchase Agreement specifies the delivery of a letter under this
Section 6(d) as a condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any document incorporated by
reference into any Prospectus which contains additional financial information,
the Company shall cause Ernst & Young (or other independent accountants of the
Company acceptable to the Agents) to furnish the Agents, (i) concurrently with
such amendment, supplement, Time of Delivery relating to such sale or filing, or
(ii) if such amendment, supplement, or filing was not filed during a Marketing
Period, on the first day of the next succeeding Marketing Period, a letter,
addressed jointly to the Company and the Agents and dated the date of delivery
of such letter, in form and substance reasonably satisfactory to the Agents, of
the same effect as the letter referred to in Section 5(g) hereof but modified to
relate to the Registration Statement and each Prospectus, as amended and
supplemented to the date of such letter, with such changes as may be necessary
to reflect changes in the financial statements and other information derived
from the accounting records of the Company; provided, however, that if the
Registration Statement or any Prospectus is amended or supplemented solely to
include financial information as of and for a fiscal quarter, such accountants
may limit the scope of such letter to the unaudited financial statements
included in such amendment or supplement unless there is contained therein any
other accounting, financial or statistical information that, in the reasonable
judgment of the Agents, should be covered by such letter, in which event such
letter shall also cover such other information.
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(e) Opinion on Settlement Date. On any settlement date for the sale of
Notes, the Company shall, if requested by the Agent that solicited or received
the offer to purchase the Notes being delivered on such settlement date, furnish
such Agent with a written opinion of counsel for the Company, dated such
settlement date, in form satisfactory to the Agent, to the effect set forth in
Section 5(e) hereof, but modified, as appropriate, to relate to the Prospectus
relating to the Notes to be delivered on such settlement date; provided,
however, that in lieu of such opinion, such counsel may furnish the Agents with
a letter to the effect that the Agents may rely on such prior opinion to the
same extent as though it was dated such settlement date (except that statements
in such prior opinion shall be deemed to relate to the Registration Statement
and such Prospectus as amended or supplemented to the time of delivery of such
letter authorizing reliance).
SECTION 7. INDEMNIFICATION AND CONTRIBUTION
(a) Indemnification of Agent. The Company shall indemnify and hold
harmless each Agent and each person, if any, who controls any Agent within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Notes), to which that
Agent or controlling person may become subject, under the Act, the Exchange Act
or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement as originally filed or
any amendment thereof or any Preliminary Prospectus or Prospectus, or any
amendment or supplement to any of the foregoing or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
each Agent and each controlling person promptly upon demand for any legal or
other expenses reasonably incurred by the Agent or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made (a) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through, by
or on behalf of any Agent specifically for inclusion therein or (b) in that part
of the Registration Statement which constitutes the Statement of Eligibility and
Qualification on Form T-1 of any Trustee under the Trustee Indenture Act (except
for statements or omissions made in such Statement in reliance upon information
furnished to the Trustee by or on behalf of the Company for inclusion therein).
Notwithstanding the foregoing, it is understood that, as to any preliminary
Prospectus this indemnity agreement shall not inure to
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the benefit of any Agent or person who controls that Agent on account of any
loss, claim, damage, liability or action arising from the sale of Notes to any
person by that Agent if that Agent failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in such Preliminary Prospectus was corrected in the Prospectus, unless such
failure resulted from noncompliance by the Company with Section 3(b). For
purposes of the second proviso to the immediately preceding sentence, the term
Prospectus shall not be deemed to include the documents incorporated therein by
reference, and no Agent shall be obligated to send or give any supplement or
amendment to any document incorporated by reference in any Preliminary
Prospectus or any Prospectus to any person other than a person to whom such
Agent had delivered such incorporated document or documents in response to a
written request therefor. The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Agent or controlling
person.
(b) Indemnification of the Company. Each Agent, severally and not
jointly, shall indemnify and hold harmless the Company, each of its directors,
each of its officers who signed the Registration Statement and each person who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the Act
or the Exchange Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement as
originally filed or any amendment thereof, or any Preliminary Prospectus or the
Prospectus, or in any amendment or supplement to any of the foregoing or (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through, by or on
behalf of that Agent specifically for inclusion therein, and shall reimburse
promptly upon demand the Company or any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Company and
any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Agent may
otherwise have to the Company or any such director, officer or controlling
person.
(c) Notice. Promptly after receipt by an indemnified party under this
Section of notice of any claim or the commencement of
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any action, the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section, notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section, except to the extent it
has been materially prejudiced by such failure and, provided, further, that the
failure to notify the indemnifying party shall not relieve the indemnifying
party from any liability which it may have to an indemnified party otherwise
than under this Section. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than reasonable costs of investigation; provided,
however, that the Agents shall have the right to employ counsel to represent
jointly the Agents and their controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Agents against the Company under this Section if, in the reasonable judgment of
the Agents, it is advisable for the Agents and their controlling persons to be
jointly represented by separate counsel and in that event the fees and expenses
of such separate counsel shall be paid by the Company. No indemnifying party
shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) Contribution. If the indemnification provided for in this Section 7
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 7(a) or 7(b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Agents on the other
from the offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Agents on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage
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or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Agents on the other with respect to an offering of Notes shall
be deemed to be in the same proportion as the total net proceeds from such
offering of Notes (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Agents with
respect to such Notes, in each case as set forth on the cover page of the
applicable Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Agents, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Agents agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were to be determined
by pro rata allocation (even if the Agents were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7(d) shall be
deemed to include, for purposes of this Section 7(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes sold
through such Agent and distributed to the public were offered to the public
exceeds the amount of any damages which the Agent has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7(d), each person, if any, who controls an Agent within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as such Agent, and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of the
first sentence of this Section 7(d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for a contribution may
be made against another party or parties from whom contribution may be sought,
notify such other party or parties, provided, however, that the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7(d) except to the extent such party or parties has or have been
materially prejudiced by such failure, and
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provided, further that the failure to notify a party or parties from whom
contribution may be sought shall not relieve such party or parties from any
contribution obligation otherwise than under this Section 7. No party shall be
liable for contribution with respect to any action or claim settled without its
consent; provided, however, that such consent was not unreasonably withheld.
The Agents' obligations to contribute as provided in this Section 7(d) are
several and not joint.
SECTION 8. STATUS OF EACH AGENT
In soliciting offers to purchase the Notes from the Company pursuant to
this Agreement (other than in respect of any Purchase Agreement), each Agent is
acting individually and not jointly and is acting solely as agent for the
Company and not as principal. Each Agent will make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Notes from the Company has been solicited by such Agent and accepted by the
Company but such Agent shall have no liability to the Company in the event any
such purchase is not consummated for any reason. If the Company shall default
in its obligations to deliver Notes to a purchaser whose offer it has accepted,
the Company shall hold the Agents harmless against any loss, claim or damage
arising from or as a result of such default by the Company.
SECTION 9. REPRESENTATIONS, WARRANTIES AND OBLIGATIONS TO SURVIVE DELIVERY
The respective indemnities, agreements, representations, warranties and
other statements of the Company and the Agents contained in this Agreement, or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Agent or any person controlling any Agent or by or
on behalf of the Company, and shall survive each delivery of and payment for any
of the Notes.
SECTION 10. TERMINATION
This Agreement may be terminated for any reason with respect to any party
hereto, at any time, by any party hereto upon the giving of one day's written
notice of such termination to the other parties hereto; provided, however, if
such terminating party is an Agent, such termination shall be effective only
with respect to such terminating party. If, at the time of a termination, an
offer to purchase any of the Notes has been accepted by the Company but the time
of delivery to the purchaser has not occurred, the provisions of this Agreement
shall remain in effect subject to the conditions set forth herein until such
Notes are delivered. Notwithstanding the foregoing, the provisions of Sections
2(c), 3(d), 3(h), 3(i), 4, 7, 8 and 9 hereof shall survive any termination of
this Agreement.
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SECTION 11. SALES OF NOTES DENOMINATED IN A FOREIGN CURRENCY AND INDEXED
NOTES
If at any time the Company and any of the Agents shall determine to issue
and sell Notes denominated in a currency or currency unit other than U.S.
Dollars, which other currency may include a composite currency, or with respect
to which an index is used to determine the amounts of payments of principal and
any premium or interest, the Company and any such Agent shall execute and
deliver an Amendment (a "Foreign Currency Amendment" or "Indexed Note
Amendment," as the case may be) in the form attached hereto as Exhibit D. Such
amendment shall establish, as appropriate additions and modifications that shall
apply to the sales, whether offered on an agency or principal basis, of the
Notes covered thereby. The Agents are authorized to solicit offers to purchase
Notes with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, and the Company shall agree
to any sales of such Notes (whether offered on an agency or principal basis),
only in a minimum aggregate amount of $10,000,000.
SECTION 12. NOTICES
Except as otherwise provided herein, all notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to an
Agent shall be directed to it as follows: Lehman Brothers Inc., 3 World
Financial Center, New York, New York 10285, Attention: Medium Term Note
Department, 9th Floor; Telephone No.: (212) 526-8400; Telecopy No.: (212) 528-
7035; Citicorp Securities, Inc., 399 Park Avenue, New York, New York 10043;
Telephone No.: (212) 291-7231; Telecopy No.: (212) 291-3910; Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Credit Department;
Telephone No.: (212) 902-1031; Telecopy No.: (212) 363-7609; Morgan Stanley &
Co. Incorporated, 1221 Avenue of the Americas, New York, New York 10020,
Attention: Manager - Continuously Offered Securities; Telephone No.: (212) 296-
6700; Telecopy No.: (212) 764-7490; NationsBanc Capital Markets, Inc., 100 North
Tryon Street, NC1-007-06-07, Charlotte, North Carolina 28255, Attention: Tom
Mooney; Telephone No.: (704) 386-9690; Telecopy No.: (704) 388-9212; Salomon
Brothers Inc, Seven World Trade Center, New York, New York 10048, Attention:
Medium Term Note Group; Telephone No.: (212) 783-6848; Telecopy No. (212) 783-
2274; notices to the Company shall be directed to it as follows: The Black &
Decker Corporation, 701 East Joppa Road, Towson, Maryland 21286, Attention:
Treasurer; Telephone No.: (410) 716-3900; Telecopy No.: (410) 716-3778.
SECTION 13. BINDING EFFECT; BENEFITS
This Agreement shall be binding upon each Agent, the Company, and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (a) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be
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deemed to be for the benefit of the person or persons, if any, who control any
Agent within the meaning of Section 15 of the Act, and (b) the indemnity
agreement of the Agents contained in Section 7 hereof shall be deemed to be for
the benefit of directors of the Company, officers of the Company who have signed
the Registration Statement and any person controlling the Company. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the person referred to in this Section, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
SECTION 14. GOVERNING LAW; COUNTERPARTS
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. This Agreement may be executed in counterparts
and the executed counterparts shall together constitute a single instrument.
SECTION 15. PARAGRAPH HEADINGS
The paragraph headings used in this Distribution Agreement are for
convenience of reference only, and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
THE BLACK & DECKER CORPORATION
By:________________________________
Authorized Signatory
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CONFIRMED AND ACCEPTED,
as of the date first above written:
LEHMAN BROTHERS INC.
By:_________________________________
Authorized Signatory
CITICORP SECURITIES, INC.
By:_________________________________
Authorized Signatory
____________________________________
(GOLDMAN, SACHS & CO.)
MORGAN STANLEY & CO. INCORPORATED
By:_________________________________
Authorized Signatory
NATIONSBANC CAPITAL MARKETS, INC.
By:_________________________________
Authorized Signatory
SALOMON BROTHERS INC
By:_________________________________
Authorized Signatory
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================================================================================
THE BLACK & DECKER CORPORATION
Issuer
and
MARINE MIDLAND BANK
Trustee
_____________
INDENTURE
Dated as of __________ ___, 1994
_____________
Debt Securities
================================================================================
<PAGE>
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
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SECTION 101. Definitions............................... 1
SECTION 102. Compliance Certificates and Opinions...... 10
SECTION 103. Form of Documents Delivered to Trustee.... 10
SECTION 104. Acts of Holders........................... 11
SECTION 105. Notices................................... 12
SECTION 106. Notice to Holders; Waiver................. 13
SECTION 107. Conflict with Trust Indenture Act......... 14
SECTION 108. Effect of Headings and Table of
Contents.................................. 14
SECTION 109. Successors and Assigns.................... 14
SECTION 110. Separability Clause....................... 15
SECTION 111. Benefits of Indenture..................... 15
SECTION 112. Governing Law............................. 15
SECTION 113. Non-Business Day.......................... 15
SECTION 114. Immunity of Incorporators, Stockholders,
Employees, Officers and Directors......... 15
SECTION 115. Certain Matters Relating to Currencies.... 15
SECTION 116. Language of Notices, Etc.................. 16
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms of Securities....................... 16
SECTION 202. Form of Trustee's Certificate of
Authentication............................ 17
SECTION 203. Securities in Global Form................. 17
ARTICLE THREE
THE SECURITIES
SECTION 301. Title, Payment and Terms.................. 18
SECTION 302. Denominations and Currencies.............. 22
SECTION 303. Execution, Authentication, Delivery and
Dating.................................... 22
SECTION 304. Temporary Securities and Exchange of
Securities................................ 23
SECTION 305. Registration, Registration of Transfer
and Exchange.............................. 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities and Coupons.................... 31
SECTION 307. Payment of Interest; Interest Rights
Preserved................................. 32
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SECTION 308. Persons Deemed Owners..................... 34
SECTION 309. Cancellation.............................. 35
SECTION 310. Computation of Interest................... 36
SECTION 311. Currency and Manner of Payments in
Respect of Securities..................... 36
SECTION 312. Appointment and Resignation of Successor
Currency Determination Agent.............. 40
ARTICLE FOUR
SATISFACTION, DISCHARGE AND DEFEASANCE
SECTION 401. Satisfaction and Discharge of Securities
of any Series Under Limited
Circumstances............................. 41
SECTION 402. Satisfaction and Discharge................ 42
SECTION 403. Defeasance of Certain Obligations......... 45
SECTION 404. Application of Trust Money................ 47
SECTION 405. Repayment to Company...................... 47
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default......................... 47
SECTION 502. Acceleration.............................. 49
SECTION 503. Other Remedies............................ 49
SECTION 504. Waiver of Past Defaults................... 50
SECTION 505. Control by Majority....................... 50
SECTION 506. Limitation on Suits....................... 50
SECTION 507. Rights of Holders to Receive Payment...... 51
SECTION 508. Collection Suit by Trustee................ 51
SECTION 509. Trustee May File Proofs of Claim.......... 51
SECTION 510. Priorities................................ 51
SECTION 511. Undertaking for Costs..................... 52
SECTION 512. Judgment Currency......................... 52
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities....... 53
SECTION 602. Notice of Defaults........................ 54
SECTION 603. Certain Rights of Trustee................. 54
SECTION 604. May Hold Securities....................... 56
SECTION 605. Money Held in Trust....................... 56
SECTION 606. Compensation and Reimbursement............ 56
SECTION 607. Disqualification; Conflicting Interests... 57
SECTION 608. Corporate Trustee Required, Different
Trustees for Different Series;
Eligibility............................... 57
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SECTION 609. Resignation and Removal, Appointment of
Successor................................. 58
SECTION 610. Acceptance of Appointment by Successor.... 60
SECTION 611. Merger, Conversion, Consolidation or
Succession to Business.................... 61
SECTION 612. Preferential Collection of Claims Against
Company................................... 61
SECTION 613. Authenticating Agents..................... 61
SECTION 614. Reports by Trustee to Holders............. 63
ARTICLE SEVEN
MERGER, CONSOLIDATION, CONVEYANCE OR TRANSFER
SECTION 701. Where Company May Merge, Etc.............. 63
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures Without Consent
of Holders................................ 64
SECTION 802. Supplemental Indentures With Consent of
Holders................................... 65
SECTION 803. Execution of Supplemental Indentures...... 67
SECTION 804. Effect of Supplemental Indentures......... 67
SECTION 805. Conformity With Trust Indenture Act....... 67
SECTION 806. Reference in Securities to Supplemental
Indentures................................ 67
ARTICLE NINE
COVENANTS
SECTION 901. Certain Definitions....................... 68
SECTION 902. Payment of Securities..................... 69
SECTION 903. Limitation on Liens....................... 69
SECTION 904. Limitation on Sale-Leaseback
Transactions.............................. 70
SECTION 905. No Lien Created, etc...................... 71
SECTION 906. Compliance Certificate.................... 71
SECTION 907. Commission Reports........................ 71
SECTION 908. Money for Securities Payments to Be Held
in Trust.................................. 71
SECTION 909. Maintenance of Office or Agency........... 73
ARTICLE TEN
REDEMPTION OF SECURITIES
SECTION 1001. Applicability of This Article............. 75
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SECTION 1002. Election to Redeem; Notice to Trustee..... 75
SECTION 1003. Selection by Trustee of Securities to Be
Redeemed.................................. 75
SECTION 1004. Notice of Redemption...................... 76
SECTION 1005. Deposit of Redemption Price............... 77
SECTION 1006. Securities Payable on Redemption Date..... 77
SECTION 1007. Securities Redeemed in Part............... 78
ARTICLE ELEVEN
HOLDERS' MEETINGS
SECTION 1101. Purposes of Meetings...................... 79
SECTION 1102. Call of Meetings by Trustee............... 79
SECTION 1103. Call of Meetings by Company or Holders.... 79
SECTION 1104. Qualifications for Voting................. 80
SECTION 1105. Regulations............................... 80
SECTION 1106. Voting.................................... 81
SECTION 1107. No Delay of Rights by Meeting............. 81
</TABLE>
EXHIBIT A. Form of Certificate to Be Delivered to Euroclear or CEDEL,
S.A. by or on behalf of a Beneficial Owner of Securities in
Order to Receive a Definitive Bearer Security in Exchange
for an Interest in a Temporary Global Security or to
Exchange an Interest in a Temporary Global Security for an
Interest in a Permanent Global Security in Definitive Form.
EXHIBIT B.
Form of Certificate to Be Given to the Appropriate Trustee
by Euroclear and CEDEL, S.A. Regarding the Exchange of a
Temporary Global Security for Definitive Securities or for a
Portion of a Permanent Global Security in Definitive Form.
EXHIBIT C. Form of Certificate to Be Given to the Appropriate Trustee
by Euroclear and CEDEL, S.A. Regarding Payments on a
Temporary Global Security Prior to an Exchange Date.
EXHIBIT D. Form of Certificate to be Delivered to Euroclear to CEDEL,
S.A. by or on behalf of a Beneficial Owner of Securities, in
Order to Receive Payment on a Temporary Global Security
Prior to an Exchange Date.
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INDENTURE dated as of __________ ___, 1994, between The Black & Decker
Corporation, a Maryland corporation (the "Company"), and Marine Midland Bank,
a banking corporation and trust company organized under the laws of the State
of New York, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and, as to
each series of Securities, for the equal and ratable benefit of the Holders of
that series of the Company's Securities issued pursuant to this Indenture:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture and all Securities issued hereunder,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States at the date or time of such computation;
(4) the words "herein," "hereof" and "hereunder," and other words of
similar import, refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(5) any gender used in this Indenture shall be deemed to include the
neuter, masculine or feminine genders; and
(6) provisions apply to successive events and transactions.
Certain terms, used principally in Article Three, Article Six and Article
Nine, are defined in those Articles.
<PAGE>
"Act," when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," "controlling" and "controlled" by, when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Attributable Debt" has the meaning specified in Section 901.
"Authenticating Agent" means any individual authorized to authenticate and
deliver Securities in the name of the Trustee for the Securities of any series
pursuant to Section 613.
"Authorized Newspaper" means a newspaper customarily published at least
once a day for at least five days in each calendar week and of general
circulation in New York City and in London and, so long as the Securities are
listed on the Stock Exchange and the Stock Exchange shall so require, in
Luxembourg or, if it shall be impracticable in the opinion of the Trustee for
the Securities of the appropriate series to make such publication, in another
capital city in Western Europe. Such publication (which may be in different
newspapers) is expected to be made in the Eastern edition of The Wall Street
Journal, in the London edition of the Financial Times and in the Luxemburger
Wort.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
committee of that board.
"Board Resolution" means a resolution of the Board of Directors or of a
committee or person to which or to whom the Board of Directors has properly
delegated the appropriate authority, a copy of which has been certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day," when used with respect to any particular Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or obligated
by law to close, and shall otherwise mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions, at the
place where any specified act pursuant to this Indenture is to occur, are
authorized or obligated by law to close.
2
<PAGE>
"CEDEL, S.A." means Centrale de Livraison de Valeurs Mobilieres, S.A.
"Certificate of a Firm of Independent Public Accountants" means a
certificate signed by any firm of independent public accountants of recognized
standing selected by the Company. The term "Independent" when used with respect
to any specified firm of public accountants means a firm that is or would be
qualified to act as the Company's accountants within the meaning of Section
210.2-01 of Regulation S-X as promulgated by the Commission, and any successor
thereto.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Commission" means the United States Securities and Exchange Commission.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by (1) the Chairman of the Board, the
President or any Vice President of the Company and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary of the Company or (2) by any two Persons designated in a
Company Order previously delivered to the Trustee for Securities of any series
by any two of the foregoing officers and delivered to the Trustee for Securities
of that series.
"Component Currency" has the meaning specified in Section 311(h).
"Consolidated Net Tangible Assets" has the meaning specified in Section
901.
"Conversion Date" has the meaning specified in Section 311(d).
"Conversion Event" means, in the good faith judgment of the Company, the
unavailability of any Foreign Currency or currency unit, due to the imposition
of exchange controls or other circumstances beyond the control of the Company.
"Corporate Trust Office" means the office of the Trustee for Securities of
any series at which at any particular time its corporate trust business shall be
principally administered, which office of Marine Midland Bank, at the date
of the execution of this Indenture, is located at 140 Broadway, New York, New
York 10015.
"corporation" includes corporations, limited liability companies,
associations, companies and business trusts.
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"Coupon" means any interest coupon appertaining to a Bearer Security.
"Currency Determination Agent," with respect to Securities of any series,
means a New York Clearing House bank designated pursuant to Section 301 or
Section 312.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series issuable
or issued in the form of a global Security, the Person designated as Depositary
by the Company pursuant to Section 301 until a successor Depositary shall have
been appointed pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
"Depositary" as used with respect to the Securities of any such series shall
mean the Depositary with respect to the Securities of that series.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 311(g).
"Dollar Equivalent of the Foreign Currency" has the meaning specified in
Section 311(f).
"Dollars" and the sign "$" mean the 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" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 311(h).
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, or its successor, as operator of the Euroclear system.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Exchange Rate Officers' Certificate" means a certificate or facsimile
thereof setting forth (i) the applicable Market Exchange Rate and (ii) the
Dollar, Foreign Currency or currency unit amounts of principal (and premium, if
any) and interest, if any (on an aggregate basis and on the basis of a Security
having the lowest denomination principal amount determined in accordance with
Section 302 in the relevant currency or currency unit), payable with respect to
a Security of any series on the basis of such
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Market Exchange Rate, signed by the Treasurer, the Controller, any Vice
President, any Assistant Treasurer or any Assistant Controller of the Company.
"Exempted Debt" has the meaning specified in Section 901.
"Floating Rate Security" means a Security that provides for the payment of
interest at a variable rate determined periodically by reference to an interest
rate index or any other index specified pursuant to Section 301.
"Foreign Currency" means a currency issued and actively maintained as a
country's or countries' recognized unit of domestic exchange by the government
of any country other than the United States.
"Funded Debt" has the meaning specified in Section 901.
"Global Exchange Agent" has the meaning specified in Section 304.
"Government Obligations" means the following obligations: (i) direct
obligations of the government that issued the currency in which the Securities
of a particular series are payable or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the government that
issued the currency in which the Securities of such series are payable, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation of such government.
"Holder," when used with respect to any Security, means in the case of a
Registered Security the Person in whose name a Security is registered in the
Security Register, and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means any bearer thereof.
"Indenture" means this instrument 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 301.
"interest," when used with respect to an Original Issue Discount Security
that by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Market Exchange Rate" means (i) for any conversion involving a currency
unit on the one hand and Dollars or any Foreign Currency on the other, the
exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method
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specified pursuant to Section 301 for the Securities of the relevant series,
(ii) for any conversion of Dollars into any Foreign Currency, the noon (New York
City time) buying rate for such Foreign Currency for cable transfers quoted in
New York City as certified for customs purposes by the Federal Reserve Bank of
New York, (iii) for any conversion of one Foreign Currency into Dollars or
another Foreign Currency, the spot rate at noon local time in the relevant
market at which, in accordance with normal banking procedures, the Dollars or
Foreign Currency into which conversion is being made could be purchased with the
Foreign Currency from which conversion is being made from major banks located in
either New York City, London or any other principal market for Dollars or such
purchased Foreign Currency, in each case determined by the Currency
Determination Agent in its sole discretion and without liability on its part.
In the event of the unavailability of any of the exchange rates provided for
in the foregoing clauses (i), (ii) and (iii) the Currency Determination Agent
shall use, in its sole discretion and without liability on its part, such
quotation of the Federal Reserve Bank of New York as of the most recent
available date, or quotations from one or more major banks in New York City,
London or any other principal market for such currency or currency unit in
question, or such other quotations as the Currency Determination Agent shall
deem appropriate. Unless otherwise specified by the Currency Determination
Agent, if there is more than one market for dealing in any currency or
currency unit by reason of foreign exchange regulations or otherwise, the
market to be used in respect of such currency or currency unit shall be that
upon which a nonresident issuer of securities designated in such currency or
currency unit would purchase such currency or currency unit in order to make
payments in respect of such securities. For purposes of this definition, a
"nonresident issuer" shall mean an issuer that is not a resident of the
country or countries that issue such currency or whose currencies are included
in such currency unit.
"Maturity," when used with respect to any Security, means the date on which
the principal of that Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, request for redemption or otherwise.
"Officer" means the Chairman of the Board, the Vice Chairman of the Board,
the President, any Vice President, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a Certificate signed by two Officers or by an
Officer and any Assistant Treasurer or Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion of counsel of who may be an
employee of or counsel to the Company or may be other counsel satisfactory to
the Trustee for the Securities of any series.
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"Original Issue Discount Security" means any Security that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee for such
Securities or delivered to the Trustee for cancellation;
(2) Securities or portions thereof for whose payment or redemption
money in the necessary amount and in the required currency or currency unit
has been theretofore deposited with the Trustee for such Securities or any
Paying Agent (other than the Company or any other obligor upon the
Securities) in trust or set aside and segregated in trust by the Company or
any other obligor upon the Securities (if the Company or any other obligor
upon the Securities shall act as its own Paying Agent) for the Holders of
such Securities; provided, however, that, if such Securities or portions
thereof are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture, or provision therefor satisfactory to the
Trustee has been made; and
(3) Securities that have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented proof satisfactory to the
Trustee for such Securities that any such Securities are held by bona fide
holders in due course;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (a) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee for such
Securities shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. Securities so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor and (b) 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
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date of such determination upon a declaration of acceleration pursuant to
Section 502.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest, if any, on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
particular series, means the place or places where the principal of (and
premium, if any) and interest if any, on the Securities of that series are
payable, as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by that
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in lieu of a mutilated, destroyed,
lost or stolen Security or a Security to which a mutilated, destroyed, lost or
stolen coupon appertains shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Security or the Security to which the
mutilated, destroyed, lost or stolen coupon appertains, as the case may be.
"Principal Property" has the meaning specified in Section 901.
"Redemption Date," when used with respect to any Security to be redeemed in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means an amount in the currency or currency unit in which such Security is
denominated or which is otherwise provided for pursuant hereto, equal to the
principal amount thereof (and premium, if any, thereon) together with accrued
interest, if any, to the Redemption Date.
"Registered Security" means any Security established pursuant to Section
201 that is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of any series, means the date, if any, specified
for that purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee for any series
of Securities, means any officer of the Trustee with direct responsibility for
the administration of this Indenture, and also means, with respect to a
particular corporate trust matter,
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any other officer or employee to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" means securities evidencing indebtedness of the Company
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
A "series" of Securities means all Securities denominated as part of the
same series authorized by or pursuant to a particular Board Resolution.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee for such
series pursuant to Section 307.
"Specified Amount" has the meaning specified in Section 311(h).
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Stock Exchange," unless specified otherwise with respect to any particular
series of Securities, means the Luxembourg Stock Exchange.
"Subsidiary" has the meaning specified in Section 901.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture and, subject to the provisions of Section 611 hereof, shall
also include its successors and assigns as Trustee hereunder from and after
the time a successor Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean and include
each Person who is then a Trustee hereunder. If there shall be at one time
more than one Trustee hereunder, "Trustee" shall mean each such Trustee and
shall apply to each such Trustee only with respect to those series of
Securities with respect to which it is serving as Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in effect (unless otherwise stated
herein) on the date of this Indenture; provided, however, that in the event
that the Trust Indenture Act is hereafter amended, "Trust Indenture Act" shall
mean, to the extent required by such amendment, Trust Indenture Act as so
amended.
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"United States" has the meaning specified in Section 901.
"Valuation Date" has the meaning specified in Section 311(c).
"Voting Stock" has the meaning specified in Section 901.
"Yield to Maturity," when used with respect to any Original Issue Discount
Security, means the yield to maturity, if any, set forth on the face thereof.
SECTION 102. Compliance Certificates and Opinions.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee (i) an
Officers' Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include (i) a statement that the
person making such certificate or opinion has read such certificate or
condition, (ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based, (iii) a statement that, in the opinion of such
person, the person has made such examination or investigation as is necessary to
enable the person to express an informed opinion as to whether such covenant or
condition has been complied with, and (iv) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous.
Any such certificate or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Company stating that the information with
respect to such factual matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements,
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opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee for the appropriate series of Securities and, where it is hereby
expressly required, to the Company. Such instrument or instruments and any such
record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments or so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this Indenture and,
subject to Section 601, conclusive in favor of the Trustee for the appropriate
series of Securities, the Company and any agent of such Trustee or the Company,
if made in the manner provided in this Section.
The Company may set a record date for purposes of determining the identity
of Holders of Registered Securities entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture, which record date
shall be the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Holders furnished to the Trustee prior to
such solicitation. If a record date is fixed, those Persons who were Holders of
Registered Securities at such record date (or their duly designated proxies),
and only those Persons, shall be entitled with respect to such Securities to
take such action by vote or consent or to revoke any vote or consent previously
given, whether or not such Persons continue to be Holders after such record
date.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged the execution thereof. Where such
execution is by an officer of a corporation or association or a member of a
partnership, or an official of a public or governmental body, on behalf of
such corporation, association, partnership or public or governmental body or
by a fiduciary, such certificate or affidavit shall also constitute sufficient
proof of this authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee for the appropriate series
of Securities deems sufficient.
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(d) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.
(e) The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee for such Securities to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate of the Person holding
such Bearer Securities, if such certificate is deemed by such Trustee to be
satisfactory. The Trustee for such Securities and the Company may assume that
such ownership of any Bearer Security continues until (1) another certificate
bearing a later date issued in respect of the same Bearer Security is produced,
(2) such Bearer Security is produced to such Trustee by some other Person, (3)
such Bearer Security is surrendered in exchange for a Registered Security or (4)
such Bearer Security is no longer Outstanding. The principal amount and serial
numbers of Bearer Securities held by any Person, and the date of holding the
same, may also be proved in any other manner that the Company and the Trustee
for such Securities deem sufficient.
(f) In determining whether the Holders of the requisite principal amount
of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver under this Indenture, the principal amount
of an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section
502 at the time the taking of such action by the Holders of such requisite
principal amount is evidenced to the Trustee for such Securities.
(g) 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
anything done, omitted or suffered to be done by the Trustee for such
Securities, the Security Registrar, any Paying Agent, the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
SECTION 105. Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by first-class mail addressed as follows:
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if to the Company:
The Black & Decker Corporation
701 East Joppa Road
Towson, Maryland 21286
Attention: Treasurer
with a copy to:
The Black & Decker Corporation
701 East Joppa Road
Towson, Maryland 21286
Attention: Vice President and General Counsel
if to the Trustee:
Marine Midland Bank
Corporate Trust Administration
140 Broadway
New York, New York 10005
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications. If the Trustee
of any series of Securities is other than the Trustee initially named in this
Indenture or any successor thereto, any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed to that Trustee at the address provided for in the
supplemental indenture executed in connection with the appointment of that
Trustee in respect of the applicable series of Securities.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, (1) such
notice shall be sufficiently given (unless otherwise herein expressly provided)
to Holders of Registered Securities if in writing and mailed, first class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice and (2)
such notice shall be sufficiently given (unless otherwise herein expressly
provided) to Holders of Bearer Securities who have filed their names and
addresses with the Trustee for such purpose within the previous two years if in
writing and mailed, first class postage prepaid, to each such Holder at his
address as so filed not later than the latest date and not earlier than the
earliest date prescribed for the giving of such notice, or to all other Holders
of Bearer Securities if published in an Authorized Newspaper on a Business Day
at least twice, the first such publication to be not earlier than the earliest
date, and the second such publication to be not later than the latest date,
prescribed herein for the giving of such notice.
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In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice mailed in the manner prescribed by this
Indenture shall be deemed to have been given whether or not received by any
particular Holder. In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Securities by mail, then such notification as shall be
made with the approval of the Trustee for such Securities shall constitute a
sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be made
with the approval of the Trustee for such Securities shall constitute sufficient
notice to such Holders for every purpose hereunder. Neither the failure to give
notice by publication to Holders of Bearer Securities as provided above, nor any
defect in any notice so published, shall affect the sufficiency of any notice to
Holders of Registered Securities given as provided herein.
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 for such
Securities, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the duties
imposed by any of Sections 310 through 317, inclusive, of the Trust Indenture
Act through the operation of Section 318(c) thereof, such imposed duties shall
control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
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SECTION 110. Separability Clause.
In any case any provision in this Indenture or in the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities or in any coupons
appertaining thereto, expressed or implied, shall give to any Person, other than
the parties hereto, any Paying Agent, any Security Registrar and their
successors hereunder and the Holders of Securities or coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture shall be governed by and construed in accordance with the
laws of the State of New York.
SECTION 113. Non-Business Day.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of a Security of any particular series shall not be a Business Day at
any Place of Payment with respect to Securities of that series, then
(notwithstanding any other provision of this Indenture or of the Securities or
coupons) payment of principal of (and premium, if any) and interest, if any,
with respect to such Security need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
SECTION 114. Immunity of Incorporators, Stockholders, Employees, Officers and
Directors.
A director, officer, employee, stockholder or incorporator, as such, of the
Company shall not have any liability for any obligation of the Company under the
Securities or the Indenture or for any claim based on, with respect to or by
reason of such obligations or their creation. All such liability is waived and
released as a condition of, and as partial consideration for, the execution of
this Indenture and the issue of the Securities.
SECTION 115. Certain Matters Relating to Currencies.
Subject to Section 311, each reference to any currency or currency unit in
any Security, or in the Board Resolution or supplemental indenture relating
thereto, shall mean only the
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referenced currency or currency unit and no other currency or currency unit.
The Trustee shall segregate moneys, funds and accounts held by the Trustee
in one currency or currency unit from any moneys, funds or accounts held in any
other currencies or currency units, notwithstanding any provision herein which
would otherwise permit the Trustee to commingle such amounts.
Whenever any action or Act is to be taken hereunder by the Holders of
Securities denominated in different currencies or currency units, then for
purposes of determining the principal amount of Securities held by such Holders,
the aggregate principal amount of the Securities denominated in a Foreign
Currency or currency unit shall be deemed to be that amount of Dollars that
could be obtained for such principal amount on the basis of a spot rate of
exchange specified to the Trustee for such series in an Officers' Certificate
for such Foreign Currency or currency unit into Dollars as of the date the
taking of such action or Act by the Holders of the requisite percentage in
principal amount of the Securities is evidenced to such Trustee.
SECTION 116. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language, and
any published notice may also be in an official language of the country or
province of publication.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms of Securities.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be substantially in
such form or forms (including global form) as shall be established by or
pursuant to a Board Resolution, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture or any indenture supplemental hereto. Each security may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required by law, rule of any securities
exchange or to conform to usage. If temporary Securities of any series are
issued in global form as permitted by Section 304, the form thereof shall be
established as provided in the preceding sentence.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
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Prior to the first delivery of a Security of any series to the Trustee for
authentication, the Company shall deliver to the Trustee the following:
(1) a copy of the Board Resolution, by or pursuant to which such form
of Security to be endorsed thereon has been approved;
(2) an Officers' Certificate dated the date such Certificate is
delivered to such Trustee stating that all conditions precedent provided
for in this Indenture relating to the authentication and delivery of
Securities in such form have been complied with; and
(3) an Opinion of Counsel stating that each of the Securities,
together with any coupons appertaining thereto, in such form, when (a)
completed by appropriate insertions and executed and delivered by the
Company to such Trustee for authentication in accordance with this
Indenture, (b) authenticated and delivered by such Trustee in accordance
with this Indenture within the authorization as to aggregate principal
amount established from time to time by the Board of Directors, and (c)
sold in the manner specified in such Opinion of Counsel, will be the legal,
valid and binding obligations of the Company, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other laws generally
affecting creditors' rights, to general equitable principles, to an implied
covenant of good faith and fair dealing, and to such other qualifications
as such counsel shall conclude do not materially affect the rights of
Holders of such Securities.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Certificate of Authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities of the series designated in, and issued
under, the Indenture described herein.
Marine Midland Bank
----------------------------------,
as Trustee
By:
---------------------------------
Authorized Signatory"
SECTION 203. Securities in Global Form.
If any Security of a series is issuable in global form, such Security may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and may also provide that the aggregate
amount of Outstanding Securities represented thereby may from time to time be
reduced to
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reflect exchanges. Any endorsement of a Security in global form to reflect the
amount, or any increase or decrease in the amount, of Outstanding Securities
represented thereby shall be made by the Trustee and in such manner as shall be
specified in such Security. Any instructions by the Company with respect to a
Security in global form, after its initial issuance, shall be in writing but
need not comply with Section 102.
Global Securities may be issued in either registered or bearer form and in
either temporary or permanent form. Permanent global Securities will be issued
in definitive form.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title, Payment and Terms.
The principal amount of Securities that may be authenticated and delivered
and Outstanding under this Indenture is not limited. The Securities may be
issued up to the aggregate principal amount of Securities from time to time
authorized by or pursuant to a Board Resolution.
The Securities may be issued in one or more series, each of which shall be
issued pursuant to a Board Resolution or Board Resolutions that shall specify:
(1) the title of the Securities of that series (which shall
distinguish the Securities of that series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the Securities
of that 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 that series pursuant to Section 304, 305, 306, 806 or 1007);
(3) whether Securities of that series are to be issuable as
Registered Securities, Bearer Securities or both;
(4) the date or dates (or manner of determining the same) on which
the principal of the Securities of that series is payable (which, if so
provided in such Board Resolution, may be determined by the Company from
time to time and set forth in the Securities of the series issued from time
to time);
(5) the rate or rates (or the manner of calculation thereof) at which
the Securities of that series shall bear interest (if any), the date or
dates from which such interest shall accrue (which, in either case or both,
if so provided in
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such Board Resolution, may be determined by the Company from time to time
and set forth in the Securities of the series issued from time to time),
the Interest Payment Dates on which such interest shall be payable (or the
manner of determining the same) and the Regular Record Date for the
interest payable on any Registered Securities on any Interest Payment Date
and the extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if other
than in the manner provided in Section 307;
(6) the place or places where, subject to the provisions of Section
909, the principal of (and premium, if any) and interest, if any, on
Securities of that series shall be payable, any Registered Securities of
that series may be surrendered for registration of transfer, any
Securities of that series may be surrendered for exchange, and notices
and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served;
(7) the period or periods within which, the price or prices at which,
the currency or currency unit in which, and the terms and conditions on
which, Securities of that series may be redeemed or converted into another
security, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of that series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof (or to convert such
Securities into other securities at the option of the Holder), and the
period or periods within which, the price or prices at which, the currency
or currency unit in which, and the terms and conditions upon which,
Securities of that series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(9) if denominated in Dollars, the denominations in which any
Registered Securities of that series shall be issuable, if other than
denominations of $1,000 and any integral multiple thereof, and the
denominations in which any Bearer Securities of that series shall be
issuable, if other than the denomination of $5,000;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of that series which shall be payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(11) any Events of Default in addition to the Events of Default
described in Section 501 and any covenants of the Company with respect to
the Securities of that series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set forth
herein;
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(12) if a Person other than Marine Midland Bank is to act as
Trustee for the Securities of that series, the name and location of the
Corporate Trust Office of such Trustee;
(13) if other than Dollars, the currency or currency unit in which
payment of the principal of (and premium, if any) or interest, if any, on
the Securities of that series shall be made or in which the Securities of
that series shall be denominated (and the denominations thereof) and the
particular provisions applicable thereto in accordance with, in addition to
or in lieu of the provisions of Section 311;
(14) if the principal of (and premium, if any) and interest, if any,
on the Securities of that series are to be payable, at the election of the
Company or a Holder thereof, in a currency or currency unit other than that
in which such Securities are denominated or stated to be payable, in
accordance with provisions in addition to or in lieu of, or in accordance
with the provisions of Section 311, the period or periods within which
(including the Election Date), and the terms and conditions upon which,
such election may be made, and the time and manner of determining the
exchange rate between the currency or currency unit in which such
Securities are denominated or stated to be payable and the currency or
currency unit in which such Securities are to be so payable;
(15) the designation of the original Currency Determination Agent, if
any;
(16) the index, if any, used to determine the amount of payments of
principal of (and premium, if any) or interest, if any, on the Securities
of that series;
(17) if the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of that series may be determined
with reference to an index based on a currency or currency unit other than
that in which such Securities are denominated, the manner in which such
amounts shall be determined;
(18) if other than as set forth in Section 401, provisions for the
satisfaction and discharge of this Indenture with respect to the Securities
of that series;
(19) the provisions, if any, restricting defeasance of the
Securities of that series;
(20) the date as of which any Bearer Securities of that series and
any global Security representing Outstanding Securities of that series
shall be dated if other than the
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date of original issuance of the first Security of that series to be
issued;
(21) whether the Securities of the series shall be issued in whole or
in part in the form of a global Security or Securities and, in such case,
the Depositary and Global Exchange Agent, if any, for such global Security
or Securities, whether such global form shall be permanent or temporary
and, if applicable, the Exchange Date;
(22) if Securities of the series are to be issuable initially in the
form of a temporary global Security, the circumstances under which the
temporary global Security can be exchanged for definitive Securities and
whether the definitive Securities will be Registered Securities and/or
Bearer Securities and will be in global form and whether interest in
respect of any portion of such global Security payable in respect of an
Interest Payment Date prior to the Exchange Date shall be paid to any
clearing organization with respect to a portion of such global Security
held for its account and, in such event, the terms and conditions
(including any certification requirements) upon which any such interest
payment received by a clearing organization will be credited to the Persons
entitled to interest payable on such Interest Payment Date if other than as
provided in this Article Three;
(23) if convertible into the Securities of another series, the terms
upon which the Securities of that series will be convertible into
Securities of such other series;
(24) if the right of payment with respect to Securities of that
series is subordinated to the right of payment with respect to any other
indebtedness of the Company, the terms and conditions of such
subordination; and
(25) any other terms of that series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any particular series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except as to
denomination, rate of interest, Stated Maturity and the date from which
interest, if any, shall accrue, and except as may otherwise be provided in or
pursuant to such Board Resolution relating thereto. The terms of such
Securities, as set forth above, may be determined by one or more authorized
officers of the Company from time to time if so provided in or established
pursuant to the authority granted in a Board Resolution. All Securities of any
one series need not be issued at the same time, and unless otherwise provided, a
series may be reopened for issuance of additional Securities of such series.
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SECTION 302. Denominations and Currencies.
Unless otherwise provided with respect to any series of Securities as
contemplated by Section 301, any Registered Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof, and any
Bearer Securities of a series shall be issuable in the denomination of $5,000,
and Registered and Bearer Securities shall be payable in Dollars. References
herein to currencies shall include ECUs, unless otherwise specified or unless
the context otherwise requires.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any related coupons shall be executed on behalf of the
Company by two Officers by manual or facsimile signature. The Securities shall
be so executed under the corporate seal of the Company reproduced thereon.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
A Security shall not be valid until the Trustee manually signs the
Certificate of Authentication on the Security. The signature of the Trustee
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall not be required to authenticate any Securities if the
issuance thereof will adversely affect the Trustee's rights, duties or
immunities under the Securities of this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series together with any
coupons appertaining thereto, executed by the Company to the Trustee for the
Securities of such series for authentication, together with a Company Order for
the authentication and delivery of such Securities, and such Trustee, in
accordance with the Company Order, shall authenticate and deliver such
Securities; provided, however, that, in connection with its sale, during the
"restricted period" (as defined in Section 1.163-5(c)(2)(i)(D)(7), and any
successor thereto, of the United States Treasury Regulations), no Bearer
Security shall be mailed or otherwise delivered to any location in the United
States; and provided, further that such Bearer Security (other than a temporary
global Security in bearer form) may be delivered outside the United States in
connection with its original issuance only if the Person entitled to receive
such Bearer Security shall have furnished to Euroclear or CEDEL S.A. a
certificate substantially in the form set forth in Exhibit A to this Indenture.
If any Security shall be represented by a permanent global Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with the original issuance of such beneficial owner's interest in
such
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permanent global Security. Except as permitted by Section 306 or 307, the
Trustee for the Securities of a series shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured other
than matured coupons in default have been detached and cancelled. If all the
Securities of any one series are not to be issued at one time and if a Board
Resolution relating to such Securities shall so permit, the Company Order may
set forth procedures acceptable to the Trustee for the issuance of such
Securities, including, without limitation, procedures with respect to interest
rate, Stated Maturity, date of issuance and date from which interest, if any,
shall accrue.
Notwithstanding any contrary provision herein, if all Securities of a
series are not to be originally issued at one time, it shall not be necessary to
deliver the Board Resolution, Officers' Certificate and Opinion of Counsel
otherwise required pursuant to Sections 102 and 201 at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Registered Security shall be dated the date of its authentication,
and, unless otherwise specified as contemplated by Section 301, each Bearer
Security shall be dated as of the date of original issuance of the first
Security of such series to be issued.
Each Depositary designated pursuant to Section 301 for a global Security in
registered form must, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and any other applicable statute or
regulation.
SECTION 304. Temporary Securities and Exchange of Securities.
Pending the preparation of definitive Securities of any particular series,
the Company may execute, and upon Company Order the Trustee for the Securities
of such series shall authenticate and deliver, in the manner specified in
Section 303, temporary Securities that are printed, lithographed, typewritten,
photocopied or otherwise produced, in any denomination, with like terms and
conditions as the definitive Securities of the series in lieu of which they are
issued in registered form or, if authorized, in bearer form with one or more
coupons or without coupons, and with such appropriate insertions, omissions,
substitutions and other variations as the Officers executing such Securities may
determine, as evidenced by their execution of such Securities. Any such
temporary Securities may be in global form, representing such of the Outstanding
Securities of such series as shall be specified therein.
Except in the case of temporary Securities in global form (which shall be
exchanged only in accordance with the provisions of the following paragraphs),
if temporary Securities of any
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particular series are issued, the Company will cause definitive Securities of
that series to be prepared without unreasonable delay. After the preparation of
such definitive Securities, the temporary Securities of such series shall be
exchangeable for such definitive Securities and of a like Stated Maturity and
with like terms and provisions upon surrender of the temporary Securities of
such series, together with all unmatured and matured coupons in default, if any,
at the office or agency of the Company in a Place of Payment for that series,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities of any particular series, the Company shall execute
and (in accordance with a Company Order delivered at or prior to the
authentication of the first definitive Security of such series) the Trustee for
the Securities of such series shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations of the same series and of a like Stated Maturity and with like
terms and provisions; provided, however, unless otherwise specified pursuant to
Section 301, no definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security, and provided, further, that a definitive Bearer
Security (including a permanent global Bearer Security) shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in Section 303. Until exchanged as hereinabove provided, the
temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of the same series and
with like terms and conditions, except as to payment of interest, if any,
authenticated and delivered hereunder.
Any temporary global Security and any permanent global Security shall,
unless otherwise provided therein, be delivered to a Depositary designated
pursuant to Section 301.
Without unnecessary delay but in any event not later than the date
specified in or determined pursuant to the terms of any such temporary global
Security, which (subject to any applicable laws and regulations) shall be 40
days after the closing of the sale of the Securities or within a reasonable
period of time thereafter (the "Exchange Date"), the Securities represented by
any temporary global Security of a series of Securities issuable in bearer form
may be exchanged for definitive Securities (subject to the second succeeding
paragraph), including one or more permanent global Securities in definitive
form, without interest coupons. On or after the Exchange Date, such temporary
global Security shall be surrendered by the Depositary to the Trustee for such
Security, as the Company's agent for such purpose, or the agent appointed by the
Company pursuant to Section 301 to effect the exchange of the temporary global
Security for definitive Securities (including any director or officer of the
Global Exchange Agent authorized by the Trustee as an Authenticating Agent
pursuant to Section 613) (the "Global Exchange Agent"), and following such
surrender, such Trustee or the Global Exchange Agent shall (1) endorse the
temporary global Security to reflect the reduction of its principal
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amount by an equal aggregate principal amount of such Security, (2) endorse any
applicable permanent global Security to reflect the initial amount, or an
increase in the amount of Securities represented thereby, (3) manually
authenticate such definitive Securities (including any permanent global
Security), (4) subject to Section 303, either deliver such definitive Securities
to the Holder thereof or, if such definitive Security is a permanent global
Security, deliver such permanent global Security to the Depositary to be held
outside the United States for the accounts of Euroclear and CEDEL, S.A., for
credit to the respective accounts at Euroclear and CEDEL, S.A., designated by or
on behalf of the beneficial owners of such Securities (or to such other accounts
as they may direct) and (5) redeliver such temporary global Security to the
Depositary, unless such temporary global Security shall have been cancelled in
accordance with Section 309 hereof, provided, however, that, unless otherwise
specified in such temporary global Security, upon such presentation by the
Depositary, such temporary global Security shall be accompanied by a certificate
dated the Exchange Date or a subsequent date and signed by Euroclear as to the
portion of such temporary global Security held for its account then to be
exchanged for definitive Securities (including any permanent global Security)
and a certificate dated the Exchange Date or a subsequent date and signed by
CEDEL, S.A., as to the portion of such temporary global Security held for its
account then to be exchanged for definitive Securities (including any permanent
global Security), each substantially in the form set forth in Exhibit B to this
Indenture. Each certificate substantially in the form of Exhibit B hereto of
Euroclear or CEDEL, S.A., as the case may be, shall be based on certificates of
the account holders listed in the records of Euroclear or CEDEL, S.A., as the
case may be, as being entitled to all or any portion of the applicable temporary
global Security. An account holder of Euroclear or CEDEL, S.A., as the case may
be, desiring to effect the exchange of an interest in a temporary global
Security for an interest in definitive Securities (including any permanent
global Security) shall instruct Euroclear or CEDEL, S.A., as the case may be, to
request such exchange on its behalf and shall deliver to Euroclear or CEDEL,
S.A., as the case may be, a certificate substantially in the form of Exhibit A
hereto and dated no earlier than 15 days prior to the Exchange Date. Until so
exchanged, temporary global Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities (including any
permanent global Security) of the same series authenticated and delivered
hereunder, except as provided in the fourth succeeding paragraph.
The delivery to the Trustee for the Securities of the appropriate series or
the Global Exchange Agent by Euroclear or CEDEL, S.A. of any certificate
substantially in the form of Exhibit B hereto may be relied upon by the Company
and such Trustee or the Global Exchange Agent as conclusive evidence that a
corresponding certificate or certificates has or have been delivered to
Euroclear or to CEDEL, S.A., as the case may be, pursuant to the terms of this
Indenture.
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On or prior to the Exchange Date, the Company shall deliver to the Trustee
for the Securities of the appropriate series or the Global Exchange Agent
definitive Securities in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. At any time
on or after the Exchange Date, upon 30 days' notice to the Trustee for the
Securities of the appropriate series or the Global Exchange Agent by Euroclear
or CEDEL, S.A., as the case may be, acting at the request of or on behalf of the
beneficial owner, a Security represented by a temporary global Security or a
permanent global Security, as the case may be, may be exchanged, in whole or
from time to time in part, for definitive Securities without charge and such
Trustee or the Global Exchange Agent shall authenticate and deliver, in exchange
for each portion of such temporary global Security or such permanent global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and with like terms and provisions as
the portion of such temporary global Security or such permanent global Security
to be exchanged, which, unless the Securities of the series are not issuable
both as Bearer Securities and as Registered Securities, as contemplated by
Section 301, shall be in the form of Bearer Securities or Registered Securities,
or any combination thereof, as shall be specified by the beneficial owner
thereof, provided, however, that definitive Bearer Securities shall be delivered
in exchange for a portion of the temporary global Security only in compliance
with the requirements of the second preceding paragraph. On or prior to the
thirtieth day following receipt by the Trustee for the Securities of the
appropriate series or the Global Exchange Agent of such notice with respect to a
Security, or, if such day is not a Business Day, the next succeeding Business
Day, the temporary global Security or the permanent global Security, as the case
may be, shall be surrendered by the Depositary to such Trustee, as the Company's
agent for such purpose, or the Global Exchange Agent to be exchanged in whole,
or from time to time in part, for definitive Securities or other definitive
Securities, as the case may be, without charge following such surrender, upon
the request of Euroclear or CEDEL, S.A., as the case may be, and such Trustee or
the Global Exchange Agent shall (1) endorse the applicable temporary global
Security or the permanent global Security to reflect the reduction of its
principal amount by the aggregate principal amount of such Security, (2) in
accordance with procedures acceptable to the Trustee cause the terms of such
Security and coupons, if any, to be entered on a definitive Security, (3)
manually authenticate such definitive Security and (4) if a Bearer Security is
to be delivered, deliver such definitive Security outside the United States to
Euroclear or CEDEL, S.A., as the case may be, for or on behalf of the beneficial
owner thereof, in exchange for a portion of such permanent global Security.
Unless otherwise specified in such temporary global Security or permanent
global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security or permanent global
Security, except that a Person
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receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Securities in person at the offices of Euroclear or CEDEL,
S.A. Definitive Securities in bearer form to be delivered in exchange for any
portion of a temporary global Security shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, any temporary global
Security or definitive permanent global Security shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
the same series and with like terms and conditions, except as to payment of
interest, if any, authenticated and delivered hereunder. Unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Bearer Security on an Interest Payment Date for Securities of such series shall
be payable to Euroclear and CEDEL, S.A. on such Interest Payment Date upon
delivery by Euroclear and CEDEL, S.A. to the Trustee for the Securities of the
appropriate series or the Global Exchange Agent in the case of payment of
interest on a temporary global Security with respect to an Interest Payment Date
occurring prior to the applicable Exchange Date of a certificate or certificates
substantially in the form set forth in Exhibit C to this Indenture, for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of such global
Security on such Interest Payment Date and who have, in the case of payment of
interest on a temporary global Security with respect to an Interest Payment Date
occurring prior to the applicable Exchange Date, each delivered to Euroclear or
CEDEL, S.A., as the case may be, a certificate substantially in the form set
forth in Exhibit D to this Indenture.
Any definitive Bearer Security authenticated and delivered by the Trustee
for the Securities of the appropriate series or the Global Exchange Agent in
exchange for a portion of a temporary global Security shall not bear a coupon
for any interest which shall theretofore have been duly paid by such Trustee to
Euroclear or CEDEL, S.A. or by the Company to such Trustee in accordance with
the provisions of this Section.
With respect to Exhibits A, B, C and D to this Indenture, the Company may,
in its discretion and if required or desirable under applicable law, substitute
one or more other forms of such exhibits for such exhibits, eliminate the
requirement that any or all certificates be provided, or change the time that
any certificate may be required, provided that such substitute form or forms or
notice of elimination or change of such certification requirement have
theretofore been delivered to the Trustee with a Company Request and such form
or forms, elimination or change is reasonably acceptable to the Trustee.
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SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee for the Securities of each series a security register (the security
register maintained in such office being herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities. The Trustee for the
Securities of each series is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities of such series as herein provided.
Upon surrender for registration of transfer of any Registered Security of
any particular series at the office or agency of the Company in a Place of
Payment for that series, the Company shall execute, and the Trustee for the
Securities of each series shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities of
any authorized denominations, and of a like Stated Maturity and of a like series
and aggregate principal amount and with like terms and conditions.
Except as set forth below, at the option of the Holder, Registered
Securities of any particular series may be exchanged for other Registered
Securities of any authorized denominations, and of a like Stated Maturity and of
a like series and aggregate principal amount and with like terms and conditions,
upon surrender of the Registered Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee for such Securities shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive. Except as otherwise specified pursuant to Section 301, Registered
Securities may not be exchanged for Bearer Securities.
Notwithstanding any other provision of this Section or Section 304, unless
and until it is exchanged in whole or in part for Registered Securities in
definitive form, a global Security representing all or a portion of the
Registered Securities of a series may not be transferred except as a whole by
the Depositary for such series to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and with like terms and
provisions upon surrender of the Bearer Securities to be exchanged at any office
or agency of the
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Company in a Place of Payment for that series, with all unmatured coupons and
all matured coupons in default thereto appertaining. If the Holder of a Bearer
Security is unable to produce any such unmatured coupon or coupons or matured
coupon or coupons in default, such exchange may be effected if the Bearer
Securities are accompanied by payment in funds acceptable to the Company (or to
the Trustee for the Security in case of matured coupons in default) in an amount
equal to the face amount of such missing coupon or coupons, or the surrender of
such missing coupon or coupons may be waived by the Company and such Trustee if
there is furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to any Paying Agent any such missing coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; provided, however, that, except
as otherwise provided herein, interest represented by coupons shall be payable
only upon presentation and surrender of those coupons at an office or agency of
the Company in a Place of Payment for that series located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and with like terms and conditions after the close
of business at such office or agency on or after (i) any Regular Record Date and
before the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any Special Record Date and before the opening of business
at such office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date for payment, as the case may be
(or, if such coupon is so surrendered with such Bearer Security, such coupon
shall be returned to the Person so surrendering the Bearer Security), and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due upon presentment
of such coupon in accordance with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee for such Securities shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
If at any time the Depositary for Securities of a series in registered form
notifies the Company that it is unwilling or unable to continue as Depositary
for the Securities of such series or if at any time the Depositary for the
Securities for such series shall no longer be eligible under Section 303, the
Company shall appoint a successor Depositary with respect to the Securities for
such series. If a successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such
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ineligibility, the Company's election pursuant to Section 301 shall no longer be
effective with respect to the Securities for such series and the Company will
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of definitive Securities of such series, will authenticate and
deliver Securities of such series in definitive form, in an aggregate principal
amount equal to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Registered Securities of any series issued in the form of one or more global
Securities shall no longer be represented by such global Security or Securities.
In such event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Registered
Securities of such series, will authenticate and deliver Registered Securities
of such series in definitive form, and in an aggregate principal amount equal to
the principal amount of the global Security or Securities representing such
series in exchange for such global Security or Securities.
If specified by the Company pursuant to Section 301 with respect to a
series of Securities in registered form, the Depositary for such series of
Securities may surrender a global Security for such series of Securities in
exchange in whole or in part for Securities of such series of like tenor and
terms and in definitive form on such terms as are acceptable to the Company and
such Depositary. Thereupon the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge, (i) to each Person specified
by such Depositary a new Security or Securities of the same series, of like
tenor and terms, and of any authorized denomination as requested by such Person
in aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the global Security, and (ii) to such Depositary a new
global Security of like tenor and terms and in a denomination equal to the
difference, if any, between the principal amount of the surrendered global
Security and the aggregate principal amount of Securities delivered to Holders
thereof.
Upon the exchange of a global Security for Securities in definitive form,
such global Security shall be cancelled by the Trustee. Registered Securities
issued in exchange for a global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the Depositary
for such global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee in writing. The Trustee
shall deliver such Registered Security to the Persons in whose names such
Securities are so requested.
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
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benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee for such Security)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar for such series duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 806 or 1007 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1004 and ending
at the close of business on (A) if Securities of the series are issuable only as
Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption as a whole or in part, except the unredeemed
portion of any Security being redeemed in part, or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series and like tenor provided,
however, that such Registered Security shall be simultaneously surrendered for
redemption.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.
If (i) any mutilated Security or a Security with a mutilated coupon
appertaining thereto is surrendered to the Trustee for such Security or the
Company and the Trustee for the Security receives evidence to its satisfaction
of the destruction, loss or theft of any Security or coupon and (ii) there is
delivered to the Company and such Trustee such security or indemnity as may be
required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or such Trustee that
such Security or coupon has been acquired by a bona fide purchaser, the
Company shall execute and upon its request such Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security or in exchange
for such mutilated Security, or in exchange for the Security to which a
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mutilated, destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not mutilated, destroyed, lost or stolen) a new Security of the same
series and in a like principal amount and of a like Stated Maturity and with
like terms and conditions and bearing a number not contemporaneously outstanding
with coupons corresponding to the coupons, if any, appertaining to such
mutilated, destroyed, lost or stolen Security or to the Security to which such
mutilated, destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or coupon (without
surrender thereof except in the case of a mutilated Security or coupon) if the
applicant for such payment shall furnish to the Company and the Trustee for such
Security such security or indemnity as may be required by them to save each of
them harmless, and in case of destruction, loss or theft, evidence satisfactory
to the Trustee and any agent of the Trustee of the destruction, loss or theft
of such Security and the ownership thereof; provided, however, that the
principal of (and premium, if any) and interest, if any, on Bearer Securities
shall, except as otherwise provided herein, be payable only at an office or
agency located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on a Bearer Security shall be
payable only upon presentation and surrender of the coupons appertaining
thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
all fees and expenses of the Trustee to such Security) connected therewith.
Every new Security of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security or in exchange
for any mutilated Security, or in exchange for a Security to which a mutilated,
destroyed, lost or stolen coupon appertains shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security and its coupons, if any, or the destroyed, lost or
stolen coupon shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Securities of the same series and their coupons, if any.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date
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shall, if so provided in such Security, be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest payment; provided,
however, that interest, if any, that is payable at Maturity or upon redemption
will be payable to the Person to whom principal shall be payable.
Unless otherwise provided with respect to the Securities of any series
pursuant to Section 301, payment of interest may be made at the option of the
Company (i) in the case of Registered Securities, by check mailed or delivered
to the address of the Person entitled thereto as such address shall appear in
the Security Register or by wire transfer to an account maintained by the
payee with a bank located inside the United States according to the written
instructions of the payee signed by two authorized officers of the payee, if
any, or (ii) in the case of Bearer Securities, except as otherwise provided in
Section 909, upon presentation and surrender of the appropriate coupon
appertaining thereto at an office or agency of the Company in a Place of
Payment located outside the United States or by transfer to an account
maintained by the payee with a bank located outside the United States.
Unless otherwise provided or contemplated by Section 301, every permanent
global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to each of Euroclear and CEDEL, S.A. with respect to
that portion of such permanent global Security held for its account by the
Depositary. Each of Euroclear and CEDEL, S.A. will in such circumstances credit
the interest received by it in respect of such permanent global Security to the
accounts of the beneficial owners thereof.
Any interest on any Registered Security of any particular series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered Holder on the relevant Regular Record Date by virtue
of having been such Holder; and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of that series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee for the Registered Securities of such series in writing
of the amount of Defaulted Interest proposed to be paid on each Registered
Security of that series and the date of the proposed payment, and at the
same time the Company shall deposit with such Trustee an amount of money in
the currency or currency unit in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities
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of such series and except as provided in Sections 311(b), 311(d) and
311(e)) equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to such
Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon
such Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall not be more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by such Trustee of the notice of the proposed payment.
Such Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Registered Securities of that series at his address as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
Such Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in a
newspaper published in the English language, customarily on each Business
Day and of general circulation in New York, New York, but such publication
shall not be a condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of that series (or their respective Predecessor
Securities) are registered on such Special Record Date and shall no longer
be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
Registered Securities of any particular series in any other lawful manner
not inconsistent with the requirements of any securities exchange on which
the Registered Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice is given by the Company to the
Trustee for the Securities of such series of the proposed manner of payment
pursuant to this clause, such manner of payment shall be deemed practicable
by such Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee for such
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Security and any agent of the Company or such Trustee may treat the Person in
whose name any such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of (and premium, if any) and, subject
to Section 307, interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
such Trustee nor any agent of the Company or such Trustee shall be affected by
notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee for such Security and any agent of
the Company or such Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon as the absolute owner of such Bearer Security or coupon for
the purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, such Trustee nor any agent of the Company or such Trustee
shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 309. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Security Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee and no one else shall cancel or destroy all
Securities surrendered for registration of transfer, exchange, payment or
cancellation, and shall so certify to the Company.
All Bearer Securities and unmatured coupons so delivered to the Trustee for
such Securities shall be cancelled by such Trustee. Notwithstanding any other
provision of this Indenture to the contrary, in the case of a series, all the
Securities of which are not to be originally issued at one time, a Security of
such series shall not be deemed to have been Outstanding at any time hereunder
if and to the extent that, subsequent to the authentication and delivery
thereof, such Security is delivered to the Trustee for such Security for
cancellation by the Company or any agent thereof upon the failure of the
original purchaser thereof to make payment therefor against delivery thereof,
and any Security so delivered to such Trustee shall be promptly cancelled by it.
No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities and coupons held by the Trustee for
such Securities shall be disposed of by such Trustee in accordance with its
standard procedures and a
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certificate of disposition evidencing such disposition of Securities and coupons
shall be provided to the Company by such Trustee. In the case of any temporary
global Security, which shall be disposed of if the entire aggregate principal
amount of the Securities represented thereby has been exchanged, the certificate
of disposition shall state that all certificates required pursuant to Section
304 hereof, substantially in the form of Exhibit B hereto (or in the form of any
substitute exhibit as provided in the last paragraph of Section 304), to be
given by Euroclear or CEDEL, S.A., have been duly presented to the Trustee for
such Securities by Euroclear or CEDEL, S.A., as the case may be. Permanent
global Securities shall not be disposed of until exchanged in full for
definitive Securities or until payment thereon is made in full.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any particular series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months and, in the case
of an incomplete month, the number of days elapsed, the amount of interest
payable on the Securities of any series for any period to be equal to the
product of (i) the principal amount of the Securities of such series Outstanding
during such period, (ii) the stated rate of interest per annum (expressed as a
decimal fraction) payable on the Securities of such series and (iii) a fraction,
the numerator of which is the total number of full months elapsed in such period
multiplied by 30, plus the number of days in any incomplete month during which
such Securities were Outstanding, and the denominator of which is 360.
SECTION 311. Currency and Manner of Payments in Respect of Securities.
(a) With respect to Registered Securities of any series not permitting the
election provided for in paragraph (b) below or the Holders of which have not
made the election provided for in paragraph (b) below, and with respect to
Bearer Securities of any series, except as provided in paragraph (d) below,
payment of the principal of and interest, if any, on any Registered or Bearer
Security of such series will be made in the currency or currency unit in which
such Registered Security or Bearer Security, as the case may be, is payable.
(b) It may be provided pursuant to Section 301 with respect to Registered
Securities of any series that Holders shall have the option, subject to
paragraphs (d) and (e) below, to receive payments of principal of (and premium,
if any) or interest, if any, on such Registered Securities in any of the
currencies or currency units which may be designated for such election by
delivering to the Trustee for such series of Registered Securities a written
election with signature guarantees and in form and substance satisfactory to
such Trustee, not later than the close of business on the Election Date
immediately preceding the applicable payment
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date. If a Holder so elects to receive such payments in any such currency or
currency unit, such election will remain in effect for such Holder until changed
by such Holder by written notice to the Trustee for such series of Registered
Securities (but any such change must be made not later than the close of
business on the Election Date immediately preceding the next payment date to be
effective for the payment to be made on such payment date and no such change of
election may be made with respect to payments to be made on any Registered
Security of such series with respect to which an Event of Default has occurred
or notice of redemption has been given by the Company pursuant to Article Ten).
In the event any Holder makes any such election pursuant to the preceding
sentence, such election will not be effective on any transferee of such Holder
and such transferee shall be paid in the currency or currency unit indicated
pursuant to paragraph (a) above unless such transferee makes an election
pursuant to the preceding sentence; provided, however, that such election, if in
effect while funds are on deposit with respect to the Securities of such series
as described in Section 401(1)(B), Section 402(1) or Section 403(1), will be
effective on any transferee of such Holder unless otherwise specified pursuant
to Section 301 for the Securities of such series. Any Holder of any such
Registered Security who shall not have delivered any such election to the
Trustee of such series of Registered Securities not later than the close of
business on the applicable Election Date will be paid the amount due on the
applicable payment date in the relevant currency or currency unit as provided in
paragraph (a) of this Section. In no case may a Holder of Securities of any
series elect to receive payments in any currency or currency unit as described
in this Section 311(b) following a deposit of funds with respect to the
Securities of such series as described in Section 401(1)(B), Section 402(1) or
Section 403(1). The Trustee for each such series of Registered Securities shall
notify the Currency Determination Agent as soon as practicable after the
Election Date of the aggregate principal amount of Registered Securities for
which Holders have made such written election.
(c) If the election referred to in paragraph (b) above has been provided
for pursuant to Section 301, then not later than the fourth Business Day after
the Regular Record Date for each payment date for Registered Securities of any
series, the Currency Determination Agent will deliver to the Company a written
notice specifying, in the currency or currency unit in which Registered
Securities of such series are payable, the respective aggregate amounts of
principal of (and premium, if any) and interest, if any, on the Registered
Securities to be made on such payment date, specifying the amounts in such
currency or currency unit so payable in respect of the Registered Securities of
such series as to which the Holders thereof shall have elected to be paid in a
currency or currency unit other than that in which such series is denominated as
provided in paragraph (b) above. If the election referred to in paragraph (b)
above has been provided for pursuant to Section 301 and if at least one Holder
has made such election, then, on the second Business Day preceding such payment
date the Company will
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deliver to the Trustee for such series of Registered Securities an Exchange Rate
Officers' Certificate in respect of the Dollar, Foreign Currency, ECU or
currency unit payments to be made on such payment date. The Dollar, Foreign
Currency, ECU or currency unit amount receivable by Holders of Registered
Securities who have elected payment in a currency or currency unit as provided
in paragraph (b) above shall, unless otherwise provided pursuant to Section 301,
be determined by the Company on the basis of the applicable Market Exchange Rate
in effect on the third Business Day (the "Valuation Date") immediately preceding
each payment date.
(d) If a Conversion Event occurs with respect to a Foreign Currency, the
ECU or any other currency unit in which any of the Securities are denominated or
payable other than pursuant to an election provided for pursuant to paragraph
(b) above, then with respect to each date for the payment of principal of (and
premium, if any) and interest, if any, on the applicable Securities denominated
or payable in such Foreign Currency, the ECU or such other currency unit
occurring after the last date on which such Foreign Currency, the ECU or such
other currency unit was available (the "Conversion Date"), the Dollar shall be
the currency of payment for use on each such payment date. The Dollar amount to
be paid by the Company to the Trustee of each such series of Securities and by
such Trustee or any Paying Agent to the Holders of such Securities with respect
to such payment date shall be the Dollar Equivalent of the Foreign Currency or,
in the case of a currency unit, the Dollar Equivalent of the Currency Unit, in
each case as determined by the Currency Determination Agent in the manner
provided in paragraph (f) or (g) below.
(e) If the Holder of a Registered Security denominated in any currency or
currency unit shall have elected to be paid in another currency or currency unit
as provided in paragraph (b) above, and a Conversion Event occurs with respect
to such elected currency or currency unit, such Holder shall receive payment in
the currency or currency unit in which payment would have been made in the
absence of such election. If a Conversion Event occurs with respect to the
currency or currency unit in which payment would have been made in the absence
of such election, such Holder shall receive payment in Dollars as provided in
paragraph (d) of this Section 311.
(f) The "Dollar Equivalent of the Foreign Currency" shall be determined by
the Currency Determination Agent and shall be obtained for each subsequent
payment after the Conversion Date by converting the specified Foreign Currency
into Dollars at the Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined by
the Currency Determination Agent and subject to the provisions of paragraph (h)
below shall be the sum of each amount obtained by converting the Specified
Amount of each Component Currency into Dollars at the Market Exchange Rate for
such Component Currency on the Valuation Date with respect to each payment.
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(h) For purposes of this Section 311 the following terms shall have the
following meanings:
A "Component Currency" shall mean any currency which, on the Conversion
Date, was a component currency of the relevant currency unit, including, but not
limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the number of units
of such Component Currency or fractions thereof which were represented in the
relevant currency unit, including, but not limited to, the ECU, on the
Conversion Date. If after the Conversion Date the official unit of any
Component Currency is altered by way of combination or subdivision, the
Specified Amount of such Component Currency shall be divided or multiplied in
the same proportion. If after the Conversion Date two or more Component
Currencies are consolidated into a single currency, the respective Specified
Amounts of such Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single currency, and such
amount shall thereafter be a Specified Amount and such single currency shall
thereafter be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more currencies, the Specified Amount of
such Component Currency shall be replaced by amounts of such two or more
currencies, each of whose Dollar Equivalent at the Market Exchange Rate on the
date of such replacement shall be equal to the Dollar Equivalent of the
Specified Amount of such former Component Currency at the Market Exchange Rate
on such date divided by the number of currencies into which such Component
Currency was divided, and such amounts shall thereafter be Specified Amounts and
such currencies shall thereafter be Component Currencies. If, after the
Conversion Date of the relevant currency unit, including, but not limited to,
the ECU, a Conversion Event (other than any event referred to above in this
definition of "Specified Amount") occurs with respect to any Component Currency
of such currency unit and is continuing on the applicable Valuation Date, the
Specified Amount of such Component Currency shall, for purposes of calculating
the Dollar Equivalent of the Currency Unit, be converted into Dollars at the
Market Exchange Rate in effect on the Conversion Date of such Component
Currency.
"Election Date" shall mean any date for any series of Registered Securities
as specified pursuant to Section 301(14) by which the written election referred
to in Section 311(b) may be made, such date to be not later than the Regular
Record Date for the earliest payment for which such election may be effective.
All decisions and determinations of the Currency Determination Agent
regarding the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent
of the Currency Unit, the Market Exchange Rate and changes in the Specified
Amounts as specified above shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and irrevocably
binding upon the
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Company, the Trustee for the appropriate series of Securities and all Holders of
such Securities denominated or payable in the relevant currency or currency
units. The Currency Determination Agent shall promptly give written notice to
the Company and the Trustee for the appropriate series of Securities of any such
decision or determination.
In the event of a Conversion Event with respect to a Foreign Currency, the
Company, after learning thereof, will immediately give written notice thereof to
the Trustee of the appropriate series of Registered Securities and Currency
Determination Agent (and such Trustee will promptly thereafter give notice in
the manner provided in Section 106 to the Holders) specifying the Conversion
Date. In the event of a Conversion Event with respect to the ECU or any other
currency unit in which Registered Securities are denominated or payable, the
Company, after learning thereof, will immediately give written notice thereof to
the Trustee of the appropriate series of Registered Securities and Currency
Determination Agent (and such Trustee will promptly thereafter give notice in
the manner provided in Section 106 to the Holders) specifying the Conversion
Date and the Specified Amount of each Component Currency on the Conversion Date.
In the event of any subsequent change in any Component Currency as set forth in
the definition of Specified Amount above, the Company, after learning thereof,
will similarly give written notice to the Trustee of the appropriate series of
Registered Securities and Currency Determination Agent.
The Trustee of the appropriate series of Registered Securities shall be
fully justified and protected in relying and acting upon information received by
it from the Company and the Currency Determination Agent and shall not otherwise
have any duty or obligation to determine such information independently.
SECTION 312. Appointment and Resignation of Successor Currency Determination
Agent.
(a) If and so long as the Securities of any series (i) are denominated in
a currency unit or a currency other than Dollars or (ii) may be payable in a
currency unit or a currency other than Dollars, or so long as it is required
under any other provision of this Indenture, then the Company will maintain with
respect to each such series of Securities, or as so required, a Currency
Determination Agent. The Company will cause the Currency Determination Agent to
make the necessary foreign exchange determinations at the time and in the manner
specified pursuant to Section 301 for the purpose of determining the applicable
rate of exchange and for the purpose of converting the issued currency or
currency unit into the applicable payment currency or currency unit for the
payment of principal (and premium, if any) and interest, if any, pursuant to
Section 311.
(b) No resignation of the Currency Determination Agent and no appointment
of a successor Currency Determination Agent pursuant to
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this Section shall become effective until the acceptance of appointment by the
successor Currency Determination Agent as evidenced by a written instrument
delivered to the Company and the Trustee of the appropriate series of Securities
accepting such appointment executed by the successor Currency Determination
Agent.
(c) If the Currency Determination Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Currency
Determination Agent for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a successor
Currency Determination Agent or Currency Determination Agents with respect to
the Securities of that or those series (it being understood that any such
successor Currency Determination Agent may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
only be one Currency Determination Agent with respect to the Securities of any
particular series).
ARTICLE FOUR
SATISFACTION, DISCHARGE AND DEFEASANCE
SECTION 401. Satisfaction and Discharge of Securities of any Series Under
Limited Circumstances.
The Company shall be deemed to have satisfied and discharged the entire
indebtedness on all the Securities of any particular series and, so long as to
the knowledge of the Responsible Officers of the Trustee no Event of Default
shall be continuing, the Trustee for the Securities of such series, upon
Company Request and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of such indebtedness,
when:
(1) either
(A) all Securities of such series theretofore authenticated
and delivered and all coupons, if any, appertaining thereto (other
than (i) coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived as provided in
Section 305, (ii) any Securities and coupons of such series which have
been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption Date,
whose surrender is not required as provided in Section 1006 and (iv)
Securities and coupons of such series for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust as provided in Section 405) have been delivered to such
Trustee for cancellation; or
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(B) except as otherwise specified pursuant to Section 301
for the Securities of such series, with respect to all Outstanding
Securities of such series described in (A) above (and, in the case of
Bearer Securities, any coupons appertaining thereto) not theretofore
so delivered to the Trustee for the Securities of such series for
cancellation shall have become due and payable and the Company has
deposited or caused to be deposited with such Trustee as trust funds
in trust an amount in the currency or currency unit in which the
Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except
as provided in Sections 311(b), 311(d) and 311(e), in which case the
deposit to be made with respect to Securities for which an election
has occurred pursuant to Section 311(b), or a Conversion Event has
occurred as provided in Sections 311(d) and 311(e), shall be made in
the currency or currency unit in which such Securities are payable as
a result of such election or Conversion Event), sufficient to pay and
discharge the entire indebtedness on all such Outstanding Securities
of such series and any related coupons for principal (and premium, if
any) and interest, if any, to the Stated Maturity or any Redemption
Date, as the case may be; and
(2) the Company has paid or caused to be paid all other sums
payable with respect to the Securities of such series and any related
coupons.
The Company will reimburse the Trustee for any subsequent costs or expenses
reasonably and properly incurred by the Trustee in connection with this
Indenture or the Securities of such series.
SECTION 402. Satisfaction and Discharge.
The Company may take any action provided for in this Section unless
otherwise specified pursuant to Section 301 for the Securities of any particular
series. The Company at any time at its option may terminate all of its
obligations under the Securities of a series previously authenticated and any
related coupons and its obligations under this Indenture with respect to such
series (except as provided below), and the Trustee, at the expense of the
Company, shall, upon the request of the Company, execute proper instruments
acknowledging satisfaction of and discharging this Indenture with respect to
Securities of that series, effective on the date the following conditions are
satisfied:
(1) with reference to this Section,
(i) the Company has deposited or caused to be deposited
with such Trustee as trust funds in trust an amount in the
currency or currency unit in which
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the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such
series and except as provided in Sections 311(b), 311(d) and
311(e), in which case the deposit to be made with respect to
Securities for which an election has occurred pursuant to Section
311(b), or a Conversion Event has occurred as provided in
Sections 311(d) and 311(e), shall be made in the currency or
currency unit in which such Securities are payable as a result of
such election or Conversion Event), sufficient to pay and
discharge the entire indebtedness on all such Outstanding
Securities of such series and any related coupons for principal
(and premium, if any) and interest, if any, to the Stated
Maturity or any Redemption Date as contemplated by this Section,
as the case may be; or
(ii) the Company has deposited or caused to be deposited
with such Trustee as obligations in trust such amount of
Government Obligations as will, as evidenced by a Certificate of
a Firm of Independent Public Accountants delivered to such
Trustee, together with the predetermined and certain income to
accrue thereon (without consideration of any reinvestment
thereof), be sufficient to pay and discharge when due the entire
indebtedness on all such Outstanding Securities of such series
and any related coupons for unpaid principal (and premium, if
any) and interest, if any, to the Stated Maturity or any
Redemption Date as contemplated by this Section, as the case may
be; or
(iii) the Company has deposited or caused to be deposited
with such Trustee in trust an amount equal to the amount referred
to in clause (i) or (ii) in any combination of currency or
currency unit or Government Obligations;
and 91 days have passed during which no Event of Default under Section
501(5) or 501(6) has occurred;
(2) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(3) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have
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been the case if such deposit, defeasance and discharge had not occurred;
(4) if the Securities are then listed on any securities exchange,
the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that such deposit, defeasance and discharge will not cause such
Securities to be delisted; and
(5) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, complying with Section 102 relating to the
Company's exercise of such option.
The trust established pursuant to Subsection 402(1) above shall be
irrevocable and shall be made under the terms of an escrow trust agreement in
form and substance satisfactory to the Trustee. The escrow trust agreement may,
at the Company's election, grant the Company the right to substitute Government
Obligations from time to time for any or all of the Government Obligations
deposited with the Trustee pursuant to this Section and the escrow trust
agreement; provided, however, that the condition specified in subsection (1)
above is satisfied immediately following any such substitution or substitutions.
If any Securities of a series are to be redeemed prior to their stated maturity
pursuant to optional redemption provisions the applicable escrow trust agreement
shall provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
Upon the satisfaction of the conditions set forth in this Section with
respect to the Securities of a particular series, the terms and conditions of
the Securities of that series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company.
Notwithstanding the satisfaction and discharge of this Indenture, (i) the
Company shall not be discharged from any payment obligations in respect of
Securities of any series and any related coupons which are deemed not to be
Outstanding under clause (3) of the definition thereof if such obligations
continue to be valid obligations of the Company under applicable law and (ii)
the obligations of the Company under Sections 304, 305, 306, 311, 512, 606, 609,
610, and 909 with respect to the Securities of that series shall survive until
the Securities of that series are no longer Outstanding. Notwithstanding the
satisfaction of the conditions set forth in this Section, with respect to all
the Securities of any series not denominated in Dollars, upon the happening of
any Conversion Event the Company shall be obligated to make the payments in
Dollars required by Section 311(d) to the extent that the Currency Determination
Agent is unable to convert any Foreign Currency or Currency Unit in its
possession pursuant to
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Section 402(1) into the Dollar Equivalent of the Foreign Currency or the Dollar
Equivalent of the Currency Unit, as the case may be. If, after the deposit
referred to in Section 402(1) has been made, a Conversion Event occurs as
contemplated in Section 311(d) or 311(e), then the indebtedness represented by
such Security shall be fully discharged if the deposit made with respect to such
Security shall be converted into the Currency Unit in which such Security is
payable at the Dollar Equivalent of the Foreign Currency or the Dollar
Equivalent of the Currency Unit. The Trustee for such series of Securities
shall return to the Company any non-converted funds or securities in its
possession after such payments have been made.
SECTION 403. Defeasance of Certain Obligations.
The Company may take any action provided for in this Section unless
otherwise specified pursuant to Section 301 for the Securities of any particular
series. The Company at any time at its option may cease to be under any
obligation to comply with Sections 903, 904 and 906 with respect to Securities
of a series effective on the date the following conditions are satisfied:
(1) with reference to this Section,
(i) the Company has deposited or caused to be
deposited with such Trustee as trust funds in trust an amount in
the currency or currency unit in which the Securities of such
series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series and except as
provided in Sections 311(b), 311(d) and 311(e), in which case the
deposit to be made with respect to Securities for which an
election has occurred pursuant to Section 311(b), or a Conversion
Event has occurred as provided in Sections 311(d) and 311(e),
shall be made in the currency or currency unit in which such
Securities are payable as a result of such election or Conversion
Event), sufficient to pay and discharge the entire indebtedness
on all such Outstanding Securities of such series and any related
coupons for principal (and premium, if any) and interest, if any,
to the Stated Maturity or any Redemption Date as contemplated by
Section 402, as the case may be; or
(ii) the Company has deposited or caused to be
deposited with such Trustee as obligations in trust such amount
of Government Obligations as will, as evidenced by a Certificate
of a Firm of Independent Public Accountants delivered to such
Trustee, together with the predetermined and certain income to
accrue thereon (without consideration of any reinvestment
thereof), be
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sufficient to pay and discharge when due the entire indebtedness
on all such Outstanding Securities of such series and any related
coupons for unpaid principal (and premium, if any) and interest,
if any, to the Stated Maturity or any Redemption Date as
contemplated by Section 402, as the case may be; or
(iii) the Company has deposited or caused to be
deposited with such Trustee in trust an amount equal to the
amount referred to in clause (i) or (ii) in any combination of
currency or currency unit or Government Obligations; and
(2) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(3) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that Holders of the Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred;
(4) if the Securities are then listed on any securities exchange,
the Company has delivered to the Trustee an Opinion of Counsel to the
effect that such deposit and defeasance will not cause such Securities to
be delisted; and
(5) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel complying with Section 102 relating to the
Company's exercise of such option.
The trust established pursuant to Subsection 403(1) above shall be
irrevocable and shall be made under the terms of an escrow trust agreement in
form and substance satisfactory to the Trustee. The escrow trust agreement may,
at the Company's election, grant the Company the right to substitute Government
Obligations from time to time for any or all of the Government Obligations
deposited with the Trustee pursuant to this Section and the escrow trust
agreement; provided, however, that the condition specified in subsection (1)
above is satisfied immediately following any such substitution or substitutions.
If any Securities of a series are to be redeemed prior to their stated maturity
pursuant to optional redemption provisions the applicable escrow trust agreement
shall provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
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The Company's exercise of its option under this Section shall not preclude
the Company from subsequently exercising its option under Section 402 hereof and
the Company may so exercise that option by providing the Trustee with written
notice to such effect.
SECTION 404. Application of Trust Money.
The Trustee shall hold in trust money and Government Obligations deposited
with it pursuant to Sections 401, 402 or 403. It shall apply the deposited
money and Government Obligations through the Paying Agent and in accordance with
this Indenture, to the payment of principal (and premium, if any) and interest,
if any, on the Securities of the series for the payment of which such money and
Government Obligations has been deposited. The Holder of any Security or
coupons appertaining thereto replaced pursuant to Section 306 shall not be
entitled to any such payment and shall look only to the Company for any payment
which such Holder may be entitled to collect. In connection with the
satisfaction and discharge of this Indenture or the defeasance of certain
obligations under this Indenture with respect to Securities of a series pursuant
to Section 402 or 403 hereof, respectively, the escrow trust agreement may, at
the Company's election, (1) enable the Company to direct the Trustee to invest
any money received by the Trustee on the Government Obligations deposited in
trust thereunder in additional Government Obligations, and (2) enable the
Trustee for any series of Securities to deliver or pay to the Company from time
to time upon the request of the Company any money or Government Obligations held
by it as provided in Sections 401, 402 and 403 which, as evidenced by a
Certificate of a Firm of Independent Public Accountants, are in excess of the
amount thereof which would then have been required to be deposited for the
purpose for which such money or Government Obligations were deposited or
received.
SECTION 405. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee
and the Paying Agent shall pay, unless otherwise prohibited by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, to the
Company upon request any money held by them for the payment of principal or
interest that remains unclaimed for two years.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
An "Event of Default" occurs with respect to a series of Securities if:
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(1) the Company defaults in the payment of interest on any Security
of that series or a related coupon, if any, when the same becomes due and
payable and the default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal (and
premium, if any) of any Security of that series when the same becomes due
and payable at maturity, upon redemption or otherwise;
(3) the Company fails to comply with any of its other agreements in
the Securities of that series or this Indenture for the benefit of that
series and the default continues for the period and after the notice
specified in this Section;
(4) the Company or any Subsidiary fails to pay, in accordance with
its terms and when payable, any of the principal of or interest on any Debt
(other than the Securities) having, in the aggregate, a then outstanding
principal amount in excess of $20,000,000 or the maturity of any Debt in
such amount shall have been accelerated by any holder or holders thereof or
any trustee or agent acting on behalf of such holder or holders, or any
Debt in such amount shall have been required by such holder, holders,
trustee or agent to be prepaid prior to the stated maturity thereof, in
accordance with the provisions of any contract evidencing, providing for
the creation of or concerning such Debt;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
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(C) orders the winding up or liquidation of the Company, and the
order or decree remains unstayed and in effect for 60 days;
or
(7) there occurs any other event specifically described as an Event
of Default by the Securities of that series.
The term "Bankruptcy Law" means Title 11, United States Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A default under clause (3) is not an Event of Default with respect to a
series of Securities until the Trustee or the Holders of at least 25% in
principal amount of the Securities of that series notify the Company (and the
Trustee if such notice is given by Holders) of the default and the Company
does not cure the default within 30 days after receipt of the notice. The
notice must specify the default, demand that it be remedied and state that the
notice is a "Notice of Default." Subject to the provisions of Article Six, the
Trustee shall not be charged with knowledge of any default unless written
notice thereof shall have been given to the Trustee by the Company, the Paying
Agent, the Holder of a Security or an agent of such Holder.
SECTION 502. Acceleration.
If an Event of Default with respect to a series of Securities occurs and is
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in principal amount of the Securities of that series by notice to the Company
and the Trustee may declare the principal (and premium, if any) (or, in the case
of Original Issue Discounted Securities, such amount of principal as may be
provided for in such Securities) of and accrued interest on all the Securities
of that series to be due and payable immediately. Upon a declaration such
principal (and premium, if any) and interest shall be due and payable
immediately. The Holders of a majority in principal amount of the Securities of
any series by notice to the Trustee may rescind an acceleration (and upon such
rescission any past Event of Default caused by such acceleration shall be deemed
cured) with respect to that series and its consequences if all existing Events
of Default with respect to the series have been cured or waived, if the
rescission would not conflict with any judgment or decree, and if all payment
due to the Trustee and any predecessor Trustee under Section 606 have been made.
No such rescission shall affect any subsequent Default or impair any rights
consequent thereto.
SECTION 503. Other Remedies.
If an Event of Default with respect to a series of Securities occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of (and premium, if any) (or, in
the case of Original Issue Discounted Securities, such amount of principal as
may be provided for in such Securities) or interest on the Securities or
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related coupons of that series or to enforce the performance of any provision of
such Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or related coupons or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are cumulative
to the extent permitted by law.
SECTION 504. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Securities of a series
by notice to the Trustee may waive an existing Default or Event of Default with
respect to that series and its consequences. When a Default or Event of Default
is waived, it is cured and stops continuing, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 505. Control by Majority.
The Holders of a majority in principal amount of the Securities of a series
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on
it with respect to that series. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, or, subject to Section 601,
that the Trustee determines is unduly prejudicial to the rights of other Holders
of Securities of the same series or would involve the Trustee in personal
liability.
SECTION 506. Limitation on Suits.
No Holder of a Security of any series may pursue any remedy with respect to
this Indenture or the Securities or related coupons unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default with respect to the Securities of the series is
continuing;
(2) the Holders of at least 25% in principal amount of the Securities
of that series make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
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(5) during such 60-day period the Holders of a majority in principal
amount of the Securities of that series do not give the Trustee a
direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over the other Holder.
SECTION 507. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of (and premium, if any) and interest, if
any, on the Security or related coupons, as the case may be, on or after the
respective due dates expressed in the Security or related coupons, as the case
may be, or to bring suit for the enforcement of any such payment on or after
such respective date, shall not be impaired or affected without the consent of
the Holder.
SECTION 508. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal (and premium, if
any) specified in Section 501(1) or (2) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal (and premium, if any) and
interest, if any, remaining unpaid.
SECTION 509. Trustee May File Proofs of Claim.
The Trustee may 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 and the
Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property, and unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions.
SECTION 510. Priorities.
If the Trustee collects any money pursuant to this Article with respect to
the Securities of any series, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 606.
Second: to the Holders of Securities and related coupons of that series
for amounts due and unpaid on such Securities and related coupons for principal
and interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Securities and related coupons for principal
(and premium, if any) and interest, if any, respectively; and
Third: to the Company.
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The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section.
SECTION 511. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit other than the Trustee of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit including the
Trustee, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder pursuant to Section 507 or a suit by Holders of
more than 10% in principal amount of the Securities of any series.
SECTION 512. 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 or any related
coupon it shall become necessary to convert into any other currency or currency
unit any amount in the currency or currency unit due hereunder or under such
Security or coupon then such conversion shall be made by the Currency
Determination Agent at the Market Exchange Rate as in effect on the date of
entry of the judgment (the "Judgment Date"). If pursuant to any such judgment,
conversion shall be made on a date (the "Substitute Date") other than the
Judgment Date and there shall occur a change between the Market Exchange Rate as
in effect on the Judgment Date and the Market Exchange Rate as in effect on the
Substitute Date, the Company agrees to pay such additional amounts (if any) as
may be necessary to ensure that the amount paid is equal to the amount in such
other currency or currency unit which, when converted at the Market Exchange
Rate as in effect on the Judgment Date, is the amount due hereunder or under
such Security or coupon. Any amount due from the Company under this Section
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 or coupon. In no event, however, shall the Company be required to pay
more in the currency or currency unit due hereunder or under such Security or
coupon at the Market Exchange Rate as in effect on the Judgment Date than the
amount of currency or currency unit stated to be due hereunder or under such
Security or coupon so that in any event the Company's obligations hereunder or
under such Security or coupon will be effectively maintained as obligations in
such currency or currency unit, and the Company shall be entitled to withhold
(or be reimbursed for, as the case may be) any excess of the amount actually
realized upon any such conversion on the Substitute Date over the amount due and
payable on the Judgment Date.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with respect to
the Securities of any series for which the Trustee is serving as such,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against such
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
such Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to such Trustee, such
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to a series of Securities has
occurred and is continuing, the Trustee for the Securities of such series shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee for Securities of any series from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) such Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) such Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in principal
amount of the Outstanding Securities of any particular series relating
to the time, method and place of conducting any proceeding for any remedy
available to such Trustee, or exercising any trust or power conferred upon
such
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Trustee, under this Indenture with respect to the Securities of that
series; and
(4) no provision of this Indenture shall require the Trustee for any
series of Securities to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(d) 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 for any series of Securities shall be subject to the
provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to Securities of any particular series, the Trustee for the Securities of such
series shall give to Holders of Securities of that series, in the manner set
forth in Section 106, notice of such default if known to such Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of that series, or in the deposit of any
sinking fund payment with respect to Securities of that series, such Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of such Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
that series and related coupons; and provided, further, that in the case of any
default of the character specified in Section 501(3) with respect to Securities
of that series no such notice to Holders shall be given until at least 60 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of that series.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee for any series of Security may rely and shall be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
discretion, consent, order, bond, debenture, coupon or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
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(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, such Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) such Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
committed by it hereunder in good faith and in reliance thereon;
(e) such Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series pursuant to this
Indenture for which it is acting as Trustee, unless such Holders shall have
offered to such Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) such Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but such Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters at it may see fit, and, if such Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney;
(g) such 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 such 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;
(h) such Trustee shall not be charged with knowledge of any Event of
Default with respect to the Securities of any series for which it is acting
as Trustee unless either (1) a Responsible Officer of the Trustee assigned
to the Corporate Trust Department of the Trustee (or any successor division
or department of the Trustee) shall have actual knowledge of the Event of
Default or (2) written notice of such Event of Default shall have been
given to the Trustee by the Company or
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any other obligor on such Securities or by any Holder of such Securities;
(i) such Trustee shall not be liable for any action taken, suffered
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; and
(j) such Trustee shall have no duties or responsibilities with
respect to and shall have no liability for the actions taken or the
failures to act of any other Trustees appointed hereunder.
SECTION 604. May Hold Securities.
The Trustee for any series of Securities, any Paying Agent, Security
Registrar or any other agent of the Company or of such Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to Sections 607 and 612, may otherwise deal with the
Company with the same rights it would have if it were not such Trustee, Paying
Agent, Security Registrar or such other agent.
The recitals contained herein and in the Securities, except the
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. Money Held in Trust.
Money held by the Trustee for any series of Securities in trust hereunder
need not be segregated from other funds except as provided in Section 115 and
except to the extent required by law. The Trustee for any series of Securities
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation for all services rendered by it hereunder as the Company and
the Trustee shall mutually agree upon (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee for any series of Securities upon its request for all reasonable
expenses, disbursements and advances incurred or made by such Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify such Trustee and its agents, including any
Authenticating Agent, for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance or administration
of this trust including the costs and expenses of defending themselves
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against any claim or liability in connection with the exercise or
performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee for any series of Securities shall have a senior claim
to which the Securities are hereby made subordinate on all money or property
held or collected by the Trustee as such, except funds held in trust for the
payment of principal of (and premium, if any) or interest if any, on particular
Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(5) or (6), the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy law.
The Company's obligations under this Section 606 and any lien arising
hereunder shall survive the resignation or removal of any Trustee, the
discharge of the Company's obligation pursuant to Article Four of this
Indenture and the termination of this Indenture.
SECTION 607. Disqualification; Conflicting Interests.
The Trustee for the Securities shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act during the period of time required
thereby. Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the penultimate paragraph of Section
310(b) of the Trust Indenture Act. In determining whether the Trustee has a
conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded Securities
of any particular series of Securities other than that series.
The Trustee shall not be deemed to have a conflict of interest under
Section 310(b) of the Trust Indenture Act with respect to any other indenture
entered into with the Company, provided that the Securities issued by the
Company under this Indenture are wholly unsecured.
SECTION 608. Corporate Trustee Required, Different Trustees for Different
Series; Eligibility.
There shall at all times be a Trustee hereunder which shall be (i) a
corporation organized and doing business under the laws of the United States of
America, any state thereof, or the District of Columbia, authorized under such
laws to exercise corporate trust powers, and subject to supervision or
examination by Federal or State authority, or (ii) a corporation or other
Person organized and doing business under the laws of a foreign government that
is permitted to act as Trustee pursuant to a rule, regulation, or other order of
the Commission, authorized under such laws to exercise corporate trust powers,
and subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent to
supervision or examination applicable to United States institutional trustees,
having, in either case, a combined capital and surplus of at least
$10,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any
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Person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as Trustee for the Securities. A different
Trustee may be appointed by the Company for any series of Securities prior to
the issuance of such Securities. If the initial Trustee for any series of
Securities is to be other than Marine Midland Bank, the Company and such
Trustee shall, prior to the issuance of such Securities, execute and deliver an
indenture supplemental hereto, which shall provide for the appointment of such
Trustee as Trustee for the Securities of such series and 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. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereunder specified in this Article.
SECTION 609. Resignation and Removal, Appointment of Successor.
(a) No resignation or removal of the Trustee for the Securities of any
series and no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 610.
(b) The Trustee for the Securities of any series may resign at any time
with respect to the Securities of such series by giving written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee required
by Section 610 shall not have been delivered to the Trustee for the Securities
of such series within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee for the Securities of any series may be removed at any
time with respect to the Securities of such series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series,
delivered to such Trustee and to the Company.
(d) If at any time:
(1) the Trustee for the Securities of any series shall fail to comply
with Section 310(b) of the Trust Indenture Act pursuant to Section 607
hereof after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security of such series for at least six
months, unless the Trustee's duty to resign is stayed in accordance
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with the provisions of Section 310(b) of the Trust Indenture Act, or
(2) such Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) such Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of such Trustee or of its
property shall be appointed or any public officer shall take charge or
control of such Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove such
Trustee or (ii) subject to Section 511, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of such Trustee and the appointment of a successor
Trustee.
(e) If the Trustee for the Securities of any series shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the office
of Trustee for the Securities of any series for any cause, the Company, by a
Board Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of such series and shall comply with the applicable requirements of
Section 610. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of such series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 610, become the successor
Trustee for the Securities of such series and supersede the successor Trustee
appointed by the Company. If no successor Trustee for the Securities of such
series shall have been so appointed by the Company or the Holders and shall have
accepted appointment in the manner required by Section 610, and if such Trustee
is still incapable of acting, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, subject to Section 511, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
and to the extent provided in Section 106. Each notice shall include the name
of the successor Trustee with respect to the Securities of that series and the
address of its Corporate Trust Office.
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SECTION 610. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder with respect to the
Securities of any series shall execute, acknowledge and deliver to the Company
and to the retiring Trustee an instrument accepting such appointment and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the 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, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring 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 each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
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(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
Subsections (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee for the Securities of any series shall
be qualified and eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee for the Securities of any series may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of such Trustee, shall be the successor of such
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee or the
Authenticating Agent for such series then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee, or any successor
Authenticating Agent, as the case may be, may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee or successor Authenticating Agent had itself authenticated
such Securities.
SECTION 612. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in the Trust Indenture Act Section
311(b). A Trustee who has resigned or been removed shall be subject to the
Trust Indenture Act Section 311(a) to the extent indicated therein.
SECTION 613. Authenticating Agents.
From time to time the Trustee for the Securities of any series may, subject
to its sole discretion, appoint one or more Authenticating Agents with respect
to the Securities of such series, which may include any director or officer of
the Company or any Affiliate with power to act in the name of the Trustee and
subject to its discretion in the authentication and delivery of Securities of
such series in connection with registrations of transfers and exchanges under
Sections 304, 305, 306 and 1007 as fully to all intents and purposes as though
such Authenticating Agent had been expressly authorized by those Sections of
this Indenture to authenticate and deliver Securities of such series. For all
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purposes of this Indenture the authentication and delivery of such Securities of
such series by an Authentication Agent for such Securities pursuant to this
Section shall be deemed to be authentication and delivery of such Securities "by
the Trustee" for the Securities of such series. Any such Authenticating Agent
shall at all times be a director or officer of a corporation organized and doing
business under the laws of the United States or of any State thereof, or the
District of Columbia, authorized under such laws to exercise corporate trust
powers, and, if other than an Affiliate of the Trustee, having a combined
capital and surplus of at least $10,000,000, and subject to supervision or
examination by Federal, State, or District of Columbia authority. If such
corporation publishes reports of condition at least annually pursuant to law or
the requirements of such supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
for any series of Securities shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any Authenticating Agent for any series of Securities may resign at any
time by giving written notice of resignation to the Trustee for such series and
to the Company. The Trustee for any series of Securities may at any time
terminate the appointment of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Company in the manner set
forth in Section 105. Upon receiving such a notice of resignation or upon such
a termination, or in case at any time any Authenticating Agent for any series of
Securities shall cease to be eligible under this Section, the Trustee for such
series may appoint a successor Authenticating Agent, shall give written notice
of such appointment to the Company and shall give written notice of such
appointment to all Holders of Securities of such series in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of
his appointment hereunder, shall become vested with all the rights, powers and
duties of his predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to any corporation that has been appointed as
Authenticating Agent for such series from time to time reasonable compensation
for such services.
If an appointment with respect to one or more series of Securities is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's
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certification of authentication, an alternate certificate of authentication in
the following form:
"This is one of the Securities of the series designated therein described
in the within-mentioned Indenture.
Marine Midland Bank
as Trustee
By:
--------------------------------
As Authenticating Agent
By: "
--------------------------------
SECTION 614. Reports by Trustee to Holders.
If required pursuant to Section 313(a) of the Trust Indenture Act, the
Trustee, within 60 days after each May 15, shall mail to each Holder a brief
report dated as of May 15 that complies with Section 313(a) of the Trust
Indenture Act. The Trustee also shall comply with the reporting obligations of
Section 313(b) of the Trust Indenture Act. A copy of each report at the time of
its mailing to Holders shall be filed with the Commission and each stock
exchange on which the Securities are listed.
ARTICLE SEVEN
MERGER, CONSOLIDATION, CONVEYANCE OR TRANSFER
SECTION 701. Where Company May Merge, Etc.
The Company shall not consolidate with or merge into, or transfer, directly
or indirectly, all or substantially all of its assets to another corporation or
other Person unless (1) the resulting, surviving or transferee corporation or
other Person assumes by supplemental indenture all the obligations of the
Company under the Securities and this Indenture, (2) immediately after giving
effect to such transaction, no Event of Default and no circumstances that, after
notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing, and (3) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture comply
with this Indenture, and thereafter all such obligations of the Company shall
terminate.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures Without Consent of Holders.
Without notice to or the consent of any Holders of Securities or coupons,
the Company, when authorized by a Board Resolution and the Trustee for the
Securities of any or all series, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to such
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation or other Person
to the Company, and the assumption by any such successor of the covenants
of the Company herein and in the Securities;
(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any particular series of Securities and any related
coupons (and, if such covenants are to be for the benefit of fewer than all
series of Securities, stating that such covenants are being included solely
for the benefit of such series), to convey, transfer, assign, mortgage or
pledge any property to or with the Trustee or otherwise secure any series
of the Securities or to surrender any right or power herein conferred upon
the Company;
(3) to add any additional Events of Default with respect to any or
all series of Securities (and, if any such Event of Default applies to
fewer than all series of Securities, stating each series to which such
Event of Default applies);
(4) to add to or to change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations, to provide (subject to applicable laws) for the issuance of
uncertificated Securities of any series in addition to or in place of any
certificated Securities and to make all appropriate changes for such
purposes; provided, however, that any such action shall not materially
adversely affect the rights of the Holders of Securities of any series or
any related coupons;
(5) to change or eliminate any of the provisions of this Indenture;
provided, however, that any such change or elimination shall become
effective only when there is no Security Outstanding of any series created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision;
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(6) to evidence and provide for the acceptance of appointment
hereunder of a Trustee other than Marine Midland Bank, as Trustee for a
series of Securities 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 608;
(7) 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 610(b);
(8) to add to the conditions, limitations and restrictions on the
authorized amount, form, terms or purposes of issue, authentication and
delivery of Securities, as herein set forth, other conditions, limitations
and restrictions thereafter to be observed;
(9) to add to or change or eliminate any provisions of this Indenture
as shall be necessary or desirable in accordance with any amendments to the
Trust Indenture Act;
(10) to cure any ambiguity, defect or inconsistency; or
(11) to make any other amendment, modification, change or supplement
to this Indenture or the Securities of any series that does not materially
adversely affect the rights of any Holder of any Securities of that series.
The Trustee may waive compliance by the Company with any provision of this
Indenture or the Securities of any series without notice to or consent of any
Holder of any Security of such series if such waiver does not materially
adversely affect the rights of any Holder of any Securities of such series.
SECTION 802. Supplemental Indentures With Consent of Holders.
The Company and the Trustee for the Securities of any or all series may
enter into an indenture or indentures supplemental hereto for the purpose of
amending or supplementing any of the provisions of this Indenture or the
Securities and any related coupons, without notice to any Holder, but with the
consent of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected
thereby, in each case by Act of said Holders of Securities of each such series
delivered to the Company and the Trustee for Securities of each such series.
The Holders of a majority in principal amount of the Securities of each series
affected may waive compliance by the Company with any provision of this
Indenture or the Securities of each such series without notice
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to any Holder, in each case by Act of said Holders of Securities of each such
series delivered to the Company and the Trustee for Securities of each such
series. No such supplemental indenture shall, without the consent of the Holder
of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security or coupon, or
reduce the principal amount thereof or the rate of interest thereon, if
any, or any premium payable upon the redemption thereof, or change any
obligation of the Company to pay additional amounts (except as contemplated
by Section 701(1) and permitted by Section 801(1)) or reduce the amount of
the principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502, or change the Place of Payment or the currency or currency
unit in which any Security or the interest thereon is payable;
(2) reduce the percentage in principal amount of the Outstanding
Securities of any particular series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture; or
(3) modify any of the provisions of this Section except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each Security affected thereby; provided, however, that this
clause shall not be deemed to require the consent of any Holder of a
Security or coupon with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of this
proviso, in accordance with the requirements of Sections 608, 610(b),
801(6) and 801(7).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
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.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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SECTION 803. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee for any series of Securities
shall be entitled to receive, and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee for any series of Securities may, but shall not (except to the extent
required in the case of a supplemental indenture entered into under Section
801(6) or 801(7)) be obligated to, enter into any such supplemental indenture
which affects such Trustee's own rights, liabilities, duties or immunities under
this Indenture or otherwise.
SECTION 804. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining thereto shall be bound thereby.
SECTION 805. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 806. Reference in Securities to Supplemental Indentures.
Securities of any particular series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee for the Securities of such series, bear a notation in
form approved by such Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of any series and
any related coupons so modified as to conform, in the opinion of the Trustee for
the Securities of such series, to any such supplemental indenture may be
prepared and executed by the Company and such Securities may be authenticated
and delivered by such Trustee in exchange for Outstanding Securities of such
series and any related coupons.
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ARTICLE NINE
COVENANTS
SECTION 901. Certain Definitions.
"Attributable Debt" for a lease means the carrying value of the capitalized
rental obligation determined under generally accepted accounting principles
whether or not such obligation is required to be shown on the balance sheet as a
long-term liability. The carrying value may be reduced by the capitalized value
of the rental obligations, calculated on the same basis, that any sublessee has
for all or part of the sample property.
"Consolidated Net Tangible Assets" means total assets less (1) total
current liabilities (excluding any Debt which, at the option of the borrower, is
renewable or extendible to a term exceeding 12 months and which is included in
current liabilities and further excluding any deferred income taxes which are
included in current liabilities) and (2) goodwill, patents, trademarks and other
like intangibles, all as stated on the Company's most recent quarter-end
consolidated balance sheet preceding the date of determination.
"Debt" means any debt for borrowed money, capitalized lease obligations and
purchase money obligations, or any guarantee of such debt, in any such case
which would appear on the consolidated balance sheet of the Company as a
liability.
"Exempted Debt" means the sum, without duplication, of the following items
outstanding as of the date Exempted Debt is being determined: (i) Debt incurred
after the date of this Indenture and secured by liens created or assumed or
permitted to exist pursuant to Section 903(b), and (ii) Attributable Debt of
the Company and its Subsidiaries in respect of all sale and lease-back
transactions with regard to any Principal Property entered into pursuant to
Section 904(b).
"Funded Debt" means all Debt having a maturity of more than one year from
the date of its creation or having a maturity of less than one year but by its
terms being renewable or extendible, at the option of the obligor in respect
thereof, beyond one year from its creation.
"Principal Property" means land, land improvements, buildings and
associated factory and laboratory equipment owned or leased pursuant to a
capital lease and used by the Company or any Subsidiary primarily for
manufacturing, assembling, processing, producing, packaging or storing its
products, raw materials, inventories or other materials and supplies located in
the United States and having an acquisition cost plus capitalized improvements
in excess of 2% of Consolidated Net Tangible Assets as of the date of
determination, but shall not include any such property financed through the
issuance of tax exempt governmental obligations, or any such property that has
been determined by Board Resolutions of the
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Company not to be of material importance to the respective businesses conducted
by the Company and its Subsidiaries taken as a whole, effective as of the date
such resolution is adopted.
"Subsidiary" means a corporation a majority of the Voting Stock of which is
owned by the Company, the Company and one or more Subsidiaries, or one or more
Subsidiaries.
"United States" means the United States of America, but excluding the
Commonwealth of Puerto Rico, the Virgin Islands and other territories and
possessions thereof.
"Voting Stock" means capital stock having voting power under ordinary
circumstances to elect directors.
SECTION 902. Payment of Securities.
The Company shall promptly pay the principal of (and premium, if any) and
interest, if any, on the Securities and related coupons on the dates and in the
manner provided in the Securities.
To the extent lawful, the Company shall pay interest on overdue principal
at the rate borne by the Securities and shall pay interest on overdue
installments of interest at the same rate.
SECTION 903. Limitation on Liens.
(a) The Company will not, and will not permit any Subsidiary to, directly
or indirectly, as security for any Debt, mortgage, pledge or create or permit to
exist any lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property, whether such shares of stock, indebtedness
or other obligations of a subsidiary or Principal Property are owned at the date
of this Indenture or hereafter acquired, unless the Company secures or causes to
be secured any outstanding Securities equally and ratably with all Debt secured
by such mortgage, pledge or lien, so long as that Debt shall be secured;
provided, however, that this covenant shall not apply in the case of (i) the
creation of any mortgage, pledge or other lien on any shares of stock,
indebtedness or other obligations of a Subsidiary or a Principal Property
hereafter acquired (including acquisitions by way of merger or consolidation) by
the Company or a Subsidiary contemporaneously with such acquisition, or within
120 days thereafter, to secure or provide for the payment or financing of any
part of the purchase price thereof, or the assumption of any mortgage, pledge or
other lien upon any shares of stock, indebtedness or other obligations of a
Subsidiary or a Principal Property hereafter acquisitions existing at the time
of such acquisition, or the acquisition of any shares of stock, indebtedness or
other obligations of a Subsidiary or a Principal Property subject to any
mortgage, pledge or other lien without the assumption thereof, provided that any
mortgage, pledge or lien referred to in this clause (i) shall attach only to the
shares of stock, indebtedness or other obligations of a Subsidiary or a
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Principal Property so acquired and fixed improvements thereon; (ii) as to any
particular series of Securities, any mortgage, pledge or other lien on any
shares of stock, indebtedness or other obligations of a Subsidiary or a
Principal Property existing on the date that Securities of such series are first
issued; (iii) any mortgage, pledge or other lien on any shares of stock,
indebtedness or other obligations of a Subsidiary or a Principal Property in
favor of the Company or any other Subsidiary; (iv) any mortgage, pledge or other
lien on a Principal Property being constructed or improved securing Debt
incurred to finance the construction or improvements; (v) any mortgage, pledge
or other lien on shares of stock, indebtedness or other obligations of a
Subsidiary or a Principal Property incurred in connection with the issuance by a
state or political subdivisions thereof of any securities the interest on which
is exempt from Federal income taxes by virtue of Section 103 of the United
States Internal Revenue Code of 1986, as amended, or any other laws and
regulations in effect at the time of such issuance; and (vi) any renewal of or
substitution for any mortgage, pledge or other lien permitted by any of the
preceding clauses (i) through (v), provided, in the case of a mortgage, pledge
or other lien permitted under clause (i), (ii) or (iv), the Debt secured is not
increased nor the line extended to any additional assets.
(b) Notwithstanding the provisions of paragraph (a) of this Section 903,
the Company or any Subsidiary may create or assume liens in addition to those
permitted by paragraph (a) of this Section 903, and renew, extend or replace
such liens, provided, that at the time of such creation, assumption, renewal,
extension or replacement, and after giving effect thereto, Exempted Debt does
not exceed 10% of Consolidated Net Tangible Assets.
SECTION 904. Limitation on Sale-Leaseback Transactions.
(a) The Company will not, and will not permit, any Subsidiary to, sell or
transfer, directly or indirectly, except to the Company or a Subsidiary, a
Principal Property as an entirety, or any substantial portion thereof, with the
intention of taking back a lease of all or part of such property except a lease
for a period of three years or less at the end of which it is intended that the
use of such property by the lessee will be discontinued; provided that,
notwithstanding the foregoing, the Company or any Subsidiary may sell a
Principal Property and lease it back for a longer period (i) if the Company or
such Subsidiary would be entitled, pursuant to the provisions of Section 903(a),
to create a mortgage on the property to be leased securing Debt in an amount
equal to the Attributable Debt with respect to the sale and lease-back
transaction without equally and ratably securing the outstanding Securities or
(ii) if (A) the Company promptly informs the Trustee of such transactions, (B)
the net proceeds of such transactions are at least equal to the fair value (as
determined by a Board Resolution) of such property and (C) the Company causes an
amount equal to the net proceeds of the sale to be applied to the retirement
(whether by redemption, cancellation after open-market
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purchases, or otherwise), within 120 days after receipt of such proceeds, of
Funded Debt (including the Securities) and having an outstanding principal
amount equal to the net proceeds.
(b) Notwithstanding the provisions of paragraph (a) of this Section 904,
the Company or any Subsidiary may enter into sale and lease-back transactions in
addition to those permitted by paragraph (a) of this Section 904 and without any
obligation to retire any outstanding Securities or other Funded Debt, provided
that at the time of entering into such sale and lease-back transactions and
after giving effect thereto, Exempted Debt does not exceed 10% of Consolidated
Net Tangible Assets.
SECTION 905. No Lien Created, etc.
This Indenture and the Securities do not create a lien, charge or
encumbrances on any property of the Company or any Subsidiary.
SECTION 906. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company an Officers' Certificate signed by the
principal executive officer, principal financial officer or principal
accounting officer of the Company stating whether or not the signers know of
any Default or Event of Default. If they know of a Default or Event of
Default, the certificate shall describe the Default or Event of Default. The
certificate need not comply with Section 102.
SECTION 907. Commission Reports.
The Company shall file with the Trustee within 15 days after it files them
with the Commission copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) which the Company is
required to file with the Commission pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934. The Company also shall comply with the other
provisions of Section 314(a) of the Trust Indenture Act.
SECTION 908. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any particular series of Securities and any related coupons, it will, on or
before each date of the principal of (and premium, if any) or interest, if any,
on any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the currency or currency unit
in which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series and except
as provided in Sections 311(b), 311(d) and 311(e)) sufficient to pay the
principal (and premium, if any) and interest, if any, so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided,
and will
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promptly notify the Trustee for the Securities of such series of its action or
failure to so act.
Whenever the Company shall have one or more Paying Agents for any
particular series of Securities and any related coupons, the Company will, on or
prior to each due date of the principal of (and premium, if any) or interest, if
any, on any such Securities, deposit with a Paying Agent for the Securities of
such series a sum (in the currency or currency unit described in the preceding
paragraph) sufficient to pay the principal (and premium, if any) and interest,
if any, so becoming due, such sum to be held in trust for the benefit of the
Persons entitled thereto, and (unless such Paying Agent is the Trustee for the
Securities of such series) the Company will promptly notify such Trustee of its
action or failure so to act.
The Company will cause each Paying Agent for any particular series of
Securities other than the Trustee for the Securities of such series to execute
and deliver to such Trustee an instrument in which such Paying Agent shall agree
with such Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest, if any, on Securities of that series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give such Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal of (or
premium, if any) and interest, if any, on Securities of that series; and
(3) at any time during the continuation of any such default, upon the
written request of such Trustee, forthwith pay to such Trustee all sums so held
in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee for the Securities of any
series all sums held in trust by the Company or such Paying Agent, such sums to
be held by such Trustee upon the same trusts as those upon which sums were held
by the Company or such Paying Agent; and, upon such payment by any Paying Agent
to such Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee for the Securities of any series or
any Paying Agent, or then held by the Company, in trust for the payment of the
principal of (and premium, if any) and interest, if any, on any Securities of
any particular series and remaining unclaimed for two years after such principal
(and premium, if any) and interest, if any, has become due and payable shall,
unless otherwise required by mandatory provisions of
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applicable escheat, or abandoned or unclaimed property law, be paid to the
Company on Company Request or (if then held by the Company) shall be discharged
from such trusts; and the Holder of such Security shall, thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of such Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that such Trustee or such Paying Agent, before being
required to make any such repayment may give written notice to the Holder of
such Security in the manner set forth in Section 106, or may, in its discretion,
in the name and at the expense of the Company, cause to be published at least
once in a newspaper published in the English language, customarily on each
Business Day and of general circulation in New York, New York notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will, unless otherwise required by
mandatory provisions of applicable escheat, or abandoned or unclaimed property
law, be repaid to the Company.
SECTION 909. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for that series an office or
agency where Securities of that series may be presented or surrendered for
payment, and an office or agency where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company with respect to the Securities of that series and
this Indenture may be served. If Securities of a series are issuable as Bearer
Securities, the Company will maintain (A) an office or agency in a Place of
Payment for that series in the United States where any Registered Securities of
that series may be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange for Registered
Securities, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise), (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment; provided, however, that if the Securities
of that series are listed on the Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Securities of that series in
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Securities of that series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, in a
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Place of Payment for that series located outside the United States an office or
agency where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee for the Securities of that series of
the location, and any change in the location, of any such office or agency. If
at any time the Company shall fail to maintain any such required office or
agency in respect of any series of Securities or shall fail to furnish the
Trustee for the Securities of that series with the address thereof, such
presentations (to the extent permitted by law) and surrenders of Securities of
that series may be made and notices and demands may be made or served at the
Corporate Trust Office of such Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment at
the offices specified in the Security, and the Company hereby appoints the same
as its agent to receive such respective presentations, surrenders, notices and
demands.
No payment of principal (and premium, if any) or interest, if any, on
Bearer Securities shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.
Payments will not be made in respect of Bearer Securities or coupons
appertaining thereto pursuant to presentation to the Company or their respective
designated Paying Agents within the United States. Notwithstanding the
foregoing, payment of principal of (and premium, if any) and interest, if any,
on any Bearer Security denominated and payable in Dollars will be made at the
office of the Company's Paying Agent in the United States, if, and only if,
payment in Dollars of the full amount of such principal, premium or interest, as
the case may be, at all offices or agencies outside the United States maintained
for that purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other offices
or agencies (in or outside the Place of Payment) where the Securities of one or
more series may be presented or surrendered for any or all of the purposes
specified above in this Section and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for such purpose. The Company will give prompt written
notice to the Trustee for the Securities of each series so affected of any such
designation or rescission and of any change in the location of any such office
or agency.
If and so long as the Securities of any series (i) are denominated in a
currency other than Dollars or (ii) may be payable
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in a currency other than Dollars, or so long as it is required under any other
provision of the Indenture, then the Company will maintain with respect to each
such series of Securities, or as so required, a Currency Determination Agent.
ARTICLE TEN
REDEMPTION OF SECURITIES
SECTION 1001. Applicability of This Article.
Redemption of Securities of any series (whether by operation of a sinking
fund or otherwise) as permitted or required by any form of Security issued
pursuant to this Indenture shall be made in accordance with such form of
Security and this Article, provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern.
SECTION 1002. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities of any series shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company of less than all of the Securities of any particular
series, the Company shall, at least 60 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee for
the Securities of such series) notify such Trustee by Company Request of such
Redemption Date and of the principal amount of Securities of that series to be
redeemed and shall deliver to such Trustee such documentation and records as
shall enable such Trustee to select the Securities to be redeemed pursuant to
Section 1003. In the case of any redemption of Securities of any series prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee for Securities of such series with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 1003. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the Company may select
the series to be redeemed, and if less than all of the Securities of any series
are to be redeemed, the particular Securities of that series to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee for the Securities of such series, from the Outstanding Securities of
that series not previously called for redemption, by such method as such Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series, or any integral multiple thereof) of the principal
amount of Securities of that series of a denomination larger than the minimum
authorized
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denomination for Securities of that series pursuant to Section 302 in the
currency or currency unit in which the Securities of such series are
denominated.
The Trustee for the Securities of any series to be redeemed shall promptly
notify the Company in writing of the Securities of such series selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Securities which has been or is to be redeemed.
SECTION 1004. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106
not later than the thirtieth day and not earlier than the sixtieth day prior to
the Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of a particular series
are to be redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the particular Securities
to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date,
(5) the place or places where such Securities, together in the case
of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date are to be surrendered for payment of the
Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case,
(7) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing coupon or coupons will be
deducted from the Redemption Price or security or indemnity satisfactory to
the
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Company, the Trustee for such series and any Paying Agent is furnished, and
(8) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 305 or otherwise,
the last date, as determined by the Company, on which such exchanges may be
made.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee for such Securities in the name and at the expense of the Company.
SECTION 1005. Deposit of Redemption Price.
At or prior to the opening of business on any Redemption Date, the
Company shall deposit with the Trustee for the Securities to be redeemed or
with a Paying Agent for such Securities (or, if the Company is acting as its
own Paying Agent for such Securities, segregate and hold in trust) an amount
of money in the currency or currency unit in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series and except as provided in Sections 311(b),
311(d) and 311(e)) sufficient to pay the principal amount of (and premium, if
any, thereon), and (except if the Redemption Date shall be an Interest Payment
Date) any accrued interest on, all the Securities which are to be redeemed on
that date.
SECTION 1006. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currency unit in which the
Securities of such series are payable (except as otherwise provided pursuant to
Section 301 for the Securities of such series and except as provided in Sections
311(b), 311(d) and 311(e)) and from and after such date (unless the Company
shall default in the payment of the Redemption Price) such Securities shall
cease to bear interest and the coupons for such interest appertaining to any
Bearer Securities so to be redeemed, except to the extent provided below, shall
be void. Upon surrender of such Security for redemption in accordance with said
notice together with all coupons, if any, appertaining thereto maturing after
the Redemption Date, such Security or specified portions thereof shall be paid
by the Company at the Redemption Price; provided, however, that installments of
interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only at an office or agency located outside the
United States and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of coupons for
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such interest, and provided, further, that unless otherwise specified as
contemplated by Section 301, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all coupons appertaining thereto maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons or the surrender of such missing
coupon or coupons may be waived by the Company if there is furnished to the
Company, the Trustee for such Security and any Paying Agent such security or
indemnity as they may require to save the Company, such Trustee and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
such Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency located
outside the United States and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof (and premium, if any, thereon)
shall, until paid, bear interest from the Redemption Date at a rate per annum
equal to the rate borne by the Security (or, in the case of Original Issue
Discount Securities, the Security's Yield to Maturity).
SECTION 1007. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at the Place of Payment (with, if the Company or the Trustee for
such Security so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Security Registrar for such
Security duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute and such Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Registered
Security or Securities, of any authorized denomination as requested by such
Holder, of the same series and having the same terms and provisions and in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Registered Security so surrendered.
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ARTICLE ELEVEN
HOLDERS' MEETINGS
SECTION 1101. Purposes of Meetings.
A meeting of Holders of any or all series may be called at any time and
from time to time pursuant to the provisions of this Article Eleven for any of
the following purposes:
(1) to give any notice to the Company or to the Trustee for such
series, or to give any directions to the Trustee for such series, 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 Five;
(2) to remove the Trustee for such series and appoint a successor
Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Article Eight; or
(4) to take any other action authorized to be taken by or on behalf
of the Holders of any specified aggregate principal amount of the
Outstanding Securities of any one or more or all series, as the case may
be, under any other provision of this Indenture or under applicable law.
SECTION 1102. Call of Meetings by Trustee.
The Trustee for any series may at any time call a meeting of Holders of
such series to take any action specified in Section 1101, to be held at such
time or times and at such place or places as the Trustee for such series shall
determine. Notice of every meeting of the Holders of any 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 given to Holders of such series in the
manner and to the extent provided in Section 106. Such notice shall be given
not less than 20 days nor more than 90 days prior to the date fixed for the
meeting.
SECTION 1103. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board Resolution, or the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of a series or of all series, as the case may be, shall have
requested the Trustee for such series to call a meeting of Holders of any or
all such series by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 20 days after the receipt of such
request, then the Company or such Holders may determine the
79
<PAGE>
time or times and the place or places for such meetings and may call such
meetings to take any action authorized in Section 1101, by given notice thereof
as provided in Section 1102.
SECTION 1104. Qualifications for Voting.
To be entitled to vote at any meeting of Holders a Person shall be (a)
a Holder of a Security of the series with respect to which such meeting is being
held or (b) a Person appointed by an instrument in writing as agent or proxy by
such Holder. The only Persons who shall be entitled to be present or to speak
at any meeting of Holders shall be the Persons entitled to vote at such meeting
and their counsel and any representatives of the Trustee for the series with
respect to which such meeting is being held and its counsel and all
representatives of the Company and its counsel.
SECTION 1105. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee
for any series may make such reasonable regulations as it may deem advisable for
any meeting of Holders of such series, in regard to proof of the holding of
Securities of such series 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
appropriate.
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 such series as provided in Section 1103, 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 a majority vote of the meeting.
Subject to the provisos in the definition of "Outstanding," at any
meeting each Holder of a Security of the series with respect to which such
meeting is being held or proxy therefor shall be entitled to one vote for each
$1,000 principal amount (or such other amount as shall be specified as
contemplated by Section 301) of Debt Securities of such series held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any 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 by virtue of Outstanding
Securities of such series held by him or instruments in writing duly designating
him as the person to vote on behalf of Holders of Securities of such series.
Any meeting of Holders with respect to which a meeting was duly called pursuant
to the provisions of Section 1102 or 1103 may be adjourned from time to time by
a majority of such Holders present and the meeting may be held as so adjourned
without further notice.
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<PAGE>
SECTION 1106. Voting.
The vote upon any resolution submitted to any meeting of Holders with
respect to which such meeting is being held shall be by written ballots on which
shall be subscribed the signatures of such 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 taken
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 transmitted as provided in Section
1102. 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 1107. No Delay of Rights by Meeting.
Nothing contained in this Article Eleven shall be deemed or construed
to authorize or permit, by reason of any call of a meeting of Holders 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 any Holder under any of the provisions of this
Indenture or of the Securities of any series.
* * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
THE BLACK & DECKER CORPORATION
[SEAL] By:___________________________
Title:
Attest:___________________________
Secretary
MARINE MIDLAND BANK,
TRUSTEE
[SEAL] By:_________________________________
Title:
Attest:___________________________
Title:
83
<PAGE>
EXHIBIT A
[FORM OF CERTIFICATE TO BE DELIVERED TO EUROCLEAR OR CEDEL, S.A. BY OR ON BEHALF
OF A BENEFICIAL OWNER OF SECURITIES, IN ORDER TO RECEIVE A DEFINITIVE BEARER
SECURITY IN EXCHANGE FOR AN INTEREST IN A TEMPORARY GLOBAL SECURITY OR TO
EXCHANGE AN INTEREST IN A TEMPORARY GLOBAL SECURITY FOR AN INTEREST IN A
PERMANENT GLOBAL SECURITY IN DEFINITIVE FORM]
The Black & Decker Corporation
[Insert title or description of Securities]
Reference is hereby made to the Indenture dated as of ________ __, 1994
(the "Indenture") between The Black & Decker Corporation (the "Issuer") and
Marine Midland Bank, as Trustee. Unless otherwise herein defined, terms used
herein have the same meaning as in the Indenture.
This is to certify that as of the date hereof and except as set forth
below, ________ principal amount of the above-captioned Securities held by you
for our account (i) is owned by person(s) that are not United States person(s)
(as defined below), (ii) is owned by United States person(s) that are (a)
foreign branches of United States financial institutions (as defined in Section
1.165-12(c)(1)(v) of the United States Treasury regulations) ("financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in either case (a) or (b),
each such United States financial institution hereby agrees, on its own behalf
or through its agent that you may advise the Issuer or the Issuer's agent that
it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the Treasury
regulations thereunder), or (iii) is owned by United States or foreign financial
institution(s) for the purpose of resale during the restricted period (as
defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury
regulations), and in addition if the owner of the Securities is a United States
or foreign financial institution described in clause (iii) above (whether or not
also described in clause (i) or (ii)) this is to further certify that such
financial institution has not acquired the Securities for the purpose of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the beneficial
interest in the temporary global Security held by you for our account in
accordance with your operating procedures if any applicable statement herein is
not
A-1
<PAGE>
correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
This certificate excepts and does not relate to _______ principal amount of
Securities held by you for our account as to which we are not able to provide a
certificate in this form. We understand that exchange of such portion of the
temporary global Security for definitive Bearer Securities or interests in a
permanent global Security cannot be made until we are able to provide a
certificate in this form.
We understand that this certificate is required in connection with certain
tax laws and regulations of the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States and any estate or trust the income of which is subject
to United States federal income taxation regardless of its source. "United
States" means the United States of America (including the States and the
District of Columbia); and its "possessions" include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Marina
Islands.
By:_________________________________ Dated:_________________________
As, or as agent for, the beneficial [Not earlier than 15 days
owner(s) of the portion of the prior to Exchange Date]
temporary global Security to which
this certificate relates.
A-2
<PAGE>
EXHIBIT B
[FORM OF CERTIFICATE TO BE GIVEN TO THE APPROPRIATE TRUSTEE BY EUROCLEAR OR
CEDEL, S.A. REGARDING THE EXCHANGE OF A TEMPORARY GLOBAL SECURITY FOR DEFINITIVE
SECURITIES OR FOR A PORTION OF A PERMANENT GLOBAL SECURITY IN DEFINITIVE FORM]
The Black & Decker Corporation
[Insert title or description of Securities]
Reference is hereby made to the Indenture dated as of ________ __, 1994
(the "Indenture") between The Black & Decker Corporation (the "Issuer") and
Marine Midland Bank, as Trustee. Unless otherwise herein defined, terms used
herein shall have the same meaning as in the Indenture.
The undersigned certifies that based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Indenture as of the date hereof, _____ principal
amount of the above-captioned Securities (i) is owned by person(s) that are
not United States person(s) (as defined below), (ii) is owned by United States
person(s) that are (a) foreign branches of United States financial
institutions (as defined in Section 1.165-12(c)(1)(v) of the United States
Treasury regulations) ("financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution has agreed, on its own behalf or through its agent, that
we may advise the Issuer or the Issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the United States Internal
Revenue Code of 1986, as amended, and the Treasury regulations thereunder), or
(iii) is owned by United States or foreign financial institution(s) for the
purpose of resale during the restricted period (as defined in Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations), and in
addition United States or foreign financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for the purpose of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
We further certify (i) that we are not making available for exchange or
collection of any interest any portion of the temporary global Security excepted
in such certifications and (ii) that as of the date hereof we have not received
any notification from any of
B-1
<PAGE>
our Member Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange or collection of any interest are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certificate is required in connection with certain
tax laws and regulations of the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States and any estate or trust the income of which is subject
to United States federal income taxation regardless of its source. "United
States" means the United States of America (including the States and the
District of Columbia), and its "possessions" include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Marina
Islands.
By:__________________________________ Dated: ___________________
[Not earlier than
Exchange Date]
B-2
<PAGE>
EXHIBIT C
[FORM OF CERTIFICATE TO BE GIVEN TO THE APPROPRIATE TRUSTEE BY EUROCLEAR OR
CEDEL, S.A. REGARDING PAYMENTS ON A TEMPORARY GLOBAL SECURITY PRIOR TO AN
EXCHANGE DATE]
The Black & Decker Corporation
[Insert title or description of Securities]
Reference is hereby made to the Indenture dated as of ________ __, 1994
(the "Indenture") between The Black & Decker Corporation (the "Issuer") and
Marine Midland Bank, as Trustee. Unless otherwise herein defined, terms used
herein shall have the same meaning as in the Indenture.
The undersigned certifies that based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Indenture as of the date hereof, _____ principal
amount of the above-captioned Securities (i) is owned by person(s) that are
not United States person(s) (as defined below), (ii) is owned by United States
person(s) that are (a) foreign branches of United States financial
institutions (as defined in Section 1.165-12(c)(1)(v) of the United States
Treasury regulations) ("financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution has agreed, on its own behalf or through its agent, that
we may advise the Issuer or the Issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the United States Internal
Revenue Code of 1986, as amended, and the Treasury regulations thereunder), or
(iii) is owned by United States or foreign financial institution(s) for the
purpose of resale during the restricted period (as defined in Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations), and in
addition United States or foreign financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have certified
that they have not acquired the Securities for the purpose of resale directly
or indirectly to a United States person or to a person within the United
States or its possessions.
We further certify (i) that we are not making available for exchange or
collection of any interest any portion of the temporary global Security excepted
in such certificates and (ii) that as of the date hereof we have not received
any notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part
C-1
<PAGE>
submitted herewith for exchange or collection of any interest are no longer true
and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection with certain
tax laws and regulations of the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate of a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States and any estate or trust the income of which is subject
to United States federal income taxation regardless of its source. "United
States" means the United States of America (including the States and the
District of Columbia); and its "possessions" include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Marina
Islands.
Dated: [Not earlier than Payment Date]
By:_________________________________
C-2
<PAGE>
EXHIBIT D
[FORM OF CERTIFICATE TO BE DELIVERED TO EUROCLEAR OR CEDEL, S.A. BY OR ON BEHALF
OF A BENEFICIAL OWNER OF SECURITIES, IN ORDER TO RECEIVE PAYMENT ON A TEMPORARY
GLOBAL SECURITY PRIOR TO AN EXCHANGE DATE]
The Black & Decker Corporation
[Insert title or description of Securities]
Reference is hereby made to the Indenture dated as of ________ __, 1994
(the "Indenture") between The Black & Decker Corporation (the "Issuer") and
Marine Midland Bank, as Trustee. Unless otherwise herein defined, terms used
herein have the same meaning as in the Indenture.
This is to certify that as of the date hereof and except as set forth
below, ______ principal amount of the above-captioned Securities held by you
for our account (i) is owned by person(s) that are not United States person(s)
(as defined below), (ii) is owned by United States person(s) that are (a)
foreign branches of United States financial institutions (as defined in
Section 1.165-12(c)(1)(v) of the United States Treasury regulations)
("financial institutions") purchasing for their own account or for resale, or
(b) United States person(s) who acquired the Securities through foreign
branches of United States financial institutions and who hold the Securities
through such United States financial institutions on the date hereof (and in
either case (a) or (b), each such United States financial institution hereby
agrees, on its own behalf or through its agent, that you may advise the Issuer
or the Issuer's agent that it will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986,
as amended, and the Treasury regulations thereunder), or (iii) is owned by
financial institution(s) for the purpose of resale during the restricted
period (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States
Treasury regulations), and in addition if the owner of the Securities is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)) this is to further
certify that such financial institution has not acquired the beneficial
interest in the Securities for the purpose of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
We undertake to advise you promptly by tested telex if the foregoing
statement as to beneficial ownership is not correct on the [insert relevant
payment date], and in the absence of any such notification it may be assumed
that this certification applies as of such date.
D-1
<PAGE>
This certificate excepts and does not relate to ______ principal amount of
Securities held by you for our account as to which we are not able to provide a
certificate in this form. We understand that payments, if any, due prior to the
Exchange Date with respect to such portion of the temporary Global Security
cannot be made until we are able to provide a certificate in this form.
We understand that this certificate is required in connection with certain
tax laws and regulations of the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States and any estate or trust the income of which is subject
to United States federal income taxation regardless of its source. "United
States" means the United States of America (including the States and the
District of Columbia); and its "Possessions" include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Marina
Islands.
Dated: [Not earlier than 15 days prior to Payment Date]
By:_________________________________
As, or as agent for, the beneficial
owner(s) of the portion of the
temporary global Security to which
this certificate relates.
D-2
<PAGE>
[FACE OF SECURITY APPEARS HERE]
REGISTERED
REGISTERED
No. FXR-
CUSIP
THE BLACK & DECKER CORPORATION
MEDIUM TERM NOTE, SERIES A
(Fixed Rate)
[Insert if the Security is to be a global Security -- This Security is a
global Security within the meaning of the Indenture hereinafter referred to
and is registered in the name of a Depositary or a nominee of a Depositary.
This global Security is exchangeable for Securities registered in the name of
a Person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Security
(other than a transfer of this Security as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary) may be registered except in such limited
circumstances.
Unless this Security is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Security
issued upon registration of transfer of, or in exchange for, or in lieu of, this
Security is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
THE FOLLOWING SUMMARY OF TERMS IS SUBJECT TO THE INFORMATION SET FORTH ON THE
REVERSE HEREOF:
PRINCIPAL AMOUNT:
<TABLE>
<C> <C> <S>
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY:
SPECIFIED CURRENCY: OPTION TO ELECT PAYMENT IN U.S. AUTHORIZED DENOMINATIONS (if
DOLLARS (only applicable if Specified Specified Currency is U.S. dollars):
Currency is other than U. S. dollars): $1,000 and any integral multiple of
$1,000 in excess thereof
[ ] Yes [ ] No (if Specified Currency is other than
U.S. dollars):
CURRENCY DETERMINATION THIS SECURITY IS A:
AGENT:
[ ] Global Security
[ ] Certificated Security (only
applicable if Specified Currency
is other than U.S. dollars)
INTEREST PAYMENT DATES:
</TABLE>
<PAGE>
<TABLE>
<S> <C>
REDEMPTION DATE(S): REDEMPTION PRICE(S):
REPAYMENT DATE(S): REPAYMENT PRICE(S):
ORIGINAL ISSUE DISCOUNT SECURITY: OTHER PROVISIONS:
[ ] Yes [ ] No
</TABLE>
[If this Security was issued with "original issue discount" for purposes of
Section 1273 of the Internal Revenue Code of 1986, as amended, the following
shall be completed:
<TABLE>
<C> <C> <S>
ORIGINAL ISSUE DISCOUNT SECURITY: TOTAL AMOUNT OF OID: ISSUE PRICE (expressed as a percentage of
aggregate principal amount):
[ ] Yes [ ] No
YIELD TO MATURITY: SHORT ACCRUAL PERIOD OID: METHOD USED TO DETERMINE YIELD
FOR SHORT ACCRUAL PERIOD:
[ ] Approximate [ ] Exact]
</TABLE>
The Black & Decker Corporation, a Maryland corporation (herein called the
"Corporation," which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to [Insert if the Security is to be a global Security -- Cede & Co., as nominee
for The Depository Trust Company] [____________________________], or registered
assigns, the principal amount stated above at Stated Maturity shown above [If
the Security is to bear interest prior to Stated Maturity, insert --, and to pay
interest thereon from the Original Issue Date shown above or, in the case of a
Security issued upon registration of transfer or exchange, from the most recent
Interest Payment Date to which interest has been paid or duly provided for, on
[_______] of each year and at Stated Maturity, commencing on the first such
Interest Payment Date next succeeding the Original Issue Date, provided that if
the Original Issue Date is after a Regular Record Date and before the Interest
Payment Date immediately following such Regular Record Date, interest payments
will commence on the second Interest Payment Date following the Original Issue
Date, at the rate per annum set forth above, until the principal hereof is paid
or made available for payment. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the [________ ] (whether or not a
Business Day), as the case may be, next preceding the [_________] Interest
Payment Dates; provided, however, that interest payable at Stated Maturity or
upon redemption will be payable to the Person to whom principal shall be
payable. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be
-2-
<PAGE>
fixed by the Trustee, notice whereof shall be given to Holders of Securities of
this series not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
[If the Security is not to bear interest prior to Stated Maturity, insert
- -- The principal of this Security shall not bear interest except in the case of
a default in the payment of principal upon acceleration, upon redemption or at
Stated Maturity, and in such case the overdue principal of this Security shall
bear interest at the interest rate per annum specified above (or, if this
Security is an Original Issue Discount Security, the Yield to Maturity specified
above) (to the extent that the payment of such interest shall be legally
enforceable), which shall accrue from the date of such default in payment to the
date payment of such principal has been made or duly provided for. Interest on
any overdue principal shall be payable on demand. Any such interest on any
overdue principal that is not so paid on demand shall bear interest at the
interest rate per annum specified above (or, if this Security is an Original
Issue Discount Security, the Yield to Maturity specified above) (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
The principal of (and premium, if any) and interest on this Security are
payable by the Corporation in currency or units based on or relating to
currencies as specified above (the "Specified Currency"). If the Specified
Currency is other than United States dollars, the Holder hereof may, if so
indicated above, elect to have all such payments converted into United States
dollars in the manner described on the reverse side hereof by delivery of a
written election with signature guarantees to the Trustee on or prior to the
applicable Regular Record Date or at least 15 days prior to the Stated Maturity,
as the case may be. Such election may be in writing (mailed or hand delivered)
or by cable, telex or other form of facsimile transmission. A Holder of such a
Security may elect to receive payment in United States dollars for all principal
(and premium, if any) and interest payments and need not file a separate
election for each payment. Such election will remain in effect until revoked by
written notice to the Trustee, but written notice of such revocation must be
received by the Trustee on or prior to the applicable Regular Record Date or at
least 15 days prior to the Stated Maturity, as the case may be (but no such
revocation may be made with respect to payments to be made on such a Security if
an Event of Default has occurred with respect thereto or upon the giving of a
notice of redemption).
The Corporation will appoint and at all times maintain a Paying Agent
(which may be the Trustee) authorized by the Corporation to pay the principal of
(and premium, if any) and interest on any Securities of this series on behalf of
the Corporation and having an office or agency in The City of New York, where
Securities of this series may be presented or surrendered for payment and where
notices, designations or requests in respect of payments with respect to
Securities of this series may be served. The Corporation has initially appointed
Marine Midland Bank as such Paying Agent, with its Corporate Trust Office
currently at 140 Broadway, Level A, New York, New York 10005-1180, Attention:
Corporate Trust Operations. The Corporation will give prompt written notice to
the Trustee of any change in such appointment.
-3-
<PAGE>
Payment of the principal of (and premium, if any) and any interest on this
Security due at Maturity in United States dollars will be made in immediately
available funds upon surrender of this Security at the Corporate Trust Office of
the Paying Agent, provided that this Security is presented to the Paying Agent
in time for the Paying Agent to make such payment in accordance with its normal
procedures. Payments of interest and, in the case of amortizing notes, principal
(and premium, if any) on this Security to be made in United States dollars
(other than at Maturity) will be made by check mailed to the address of the
Person entitled thereto as it appears in the Security Register on the relevant
Regular Record Date or, under certain circumstances at the option of the
Corporation, by wire transfer to such account as may have been appropriately
designated in writing no later than the relevant Regular Record Date to the
Paying Agent by such Person and maintained with a bank located in the United
States. Notwithstanding the foregoing, a Holder of $10,000,000 or more in
aggregate principal amount of Certificated Notes of like tenor and terms shall
be entitled to receive such payments in U.S. dollars by wire transfer of
immediately available funds, but only if appropriate instructions have been
received in writing by the Paying Agent not less than 15 Business Days prior to
the applicable Interest Payment Date.
[Insert in place of the preceding paragraph if the Security is to be a
global Security -- Funds for the payment of the principal of (and premium, if
any) and interest on this Security due in United States dollars on any Interest
Payment Date or at maturity will be made available to the Trustee on such date.
As soon as possible thereafter, the Trustee will pay such funds to the
Depositary (referred to on the reverse hereof), and the Depositary will allocate
and pay such funds to the owners of beneficial interests in this Security in
accordance with standing instructions and customary practices.]
All payments of principal of (and premium, if any) and interest in a
Specified Currency other than United States dollars will be made in the manner
set forth on the reverse hereof.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an Authenticating
Agent, by manual signature of an authorized signatory, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated: THE BLACK & DECKER CORPORATION
[CORPORATE SEAL] By: _______________________________
APPEARS HERE] Nolan D. Archibald
Chairman, President and
Chief Executive Officer
-4-
<PAGE>
By:_________________________________
Barbara B. Lucas
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated in, and issued under, the
Indenture described herein.
MARINE MIDLAND BANK,
as Trustee
By_____________________________________
Authorized Signatory
-5-
<PAGE>
[BACK OF SECURITY]
THE BLACK & DECKER CORPORATION
MEDIUM TERM NOTE, SERIES A
(Fixed Rate)
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture dated as of ______ __, 1994, as supplemented from
time to time (herein called the "Indenture"), among the Corporation and Marine
Midland Bank, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Corporation, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof. The Securities of
this series may be denominated in different currencies, bear different dates,
mature at different times and bear interest at different rates. The Securities
of this series may be issued from time to time in an aggregate initial offering
price not to exceed $500,000,000 (or the equivalent thereof in one or more
foreign denominated currencies or units based on or relating to currencies
(including European Currency Units), subject to reduction, under certain
circumstances, as the result of the sale of other securities of the Corporation
under the Prospectus).
Interest payments for this Security will include interest accrued to but
excluding the Interest Payment Dates. Interest payments for this Security shall
be computed and paid on the basis of a 360-day year of twelve 30-day months.
Any payment on this Security due on any day which is not a Business Day in
The City of New York (and, if the Specified Currency shown on the face hereof is
other than United States dollars, in the country issuing such Specified Currency
(or, for European Currency Units ("ECUs"), Brussels)) need not be made on such
day, but may be made on the next succeeding Business Day in The City of New York
(and, if the Specified Currency on the face hereof is other than United States
dollars, in the country issuing such Specified Currency (or, for ECUs,
Brussels)) with the same force and effect as if made on such due date, and no
interest shall be payable on the date of payment for the period from and after
such due date.
"Business Day", for any particular location, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is neither a legal holiday nor a day on
which banking institutions in such location are authorized or obligated by law
to close.
Unless one or more Redemption Dates are specified on the face hereof, this
Security shall not be redeemable at the option of the Corporation before the
Stated Maturity specified on the face hereof. If one or more Redemption Dates
(or ranges of Redemption Dates) are so specified, this Security is subject to
redemption on any such date (or during any such range) at the option of the
Corporation, upon notice by first-class mail, mailed not less than 30 days nor
more than 60 days prior to the Redemption Date specified in such notice, at the
applicable Redemption Price specified on the face hereof (expressed as a
percentage of the principal amount of
-6-
<PAGE>
this Security), together in the case of any such redemption with accrued
interest to the Redemption Date, but interest installments whose Stated Maturity
is prior to the Redemption Date will be payable to the Holder of this Security,
or one or more Predecessor Securities, of record at the close of business on
the relevant Regular Record Date referred to on the face hereof or as
otherwise provided in the Indenture. The Corporation may elect to redeem less
than the entire principal amount hereof, provided that the principal amount,
if any, of this Security that remains outstanding after such redemption is an
Authorized Denomination as defined herein. In the event of any redemption in
part, the Corporation will not be required to (i) issue, register the transfer
of, or exchange any Security during a period beginning at the opening of
business 15 days before the day of a mailing of a notice of redemption of
Securities for redemption and ending at the close of business on the date of
the mailing of the relevant notice of redemption, or (ii) register the
transfer of or exchange any Security, or any portion thereof, selected for
redemption, except the unredeemed portion of any Security being redeemed in
part.
Unless one or more Repayment Dates is specified on the face hereof, this
Security shall not be repayable at the option of the Holder on any date prior to
the Stated Maturity specified on the face hereof. If one or more Repayment Dates
(or ranges of Repayment Dates) are so specified, this Security is subject to
repayment on any such date (or during any such range) at the option of the
Holder at a price equal to 100% of the principal amount hereof or, if this
Security is an Original Issue Discount Security (as specified on the face
hereof), the applicable Repayment Price specified on the face hereof (expressed
as a percentage of the principal amount of this Security), together in the case
of any such repayment with accrued interest to the Repayment Date, but interest
installments whose Stated Maturity is prior to the Repayment Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Regular or Special Record
Dates referred to on the face hereof, all as provided in the Indenture. For this
Security to be repaid at the option of the Holder, the Paying Agent must receive
at the Corporate Trust Office, at least 30 days but not more than 45 days prior
to the Repayment Date on which this Security is to be repaid, (i) this Security
with the form entitled "Option to Elect Repayment" below duly completed or (ii)
a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States setting forth
the name of the Holder of this Security, the principal amount of this Security,
the principal amount of this Security to be repaid, the certificate number or a
description of the tenor and terms of this Security, a statement that the option
to elect repayment is being exercised thereby and a guarantee that this
Security, together with the duly completed form entitled "Option to Elect
Repayment" on this Security, will be received by the Paying Agent not later than
the fifth Business Day after the date of such telegram, telex, facsimile
transmission or letter, provided, however, that such telegram, telex, facsimile
transmission or letter shall only be effective if this Security with such form
duly completed is received by the Paying Agent by such fifth Business Day.
Exercise of the repayment option by the Holder shall be irrevocable, except a
Holder who has tendered this Security for repayment pursuant to a Reset Notice
or an Extension Notice (each as defined in the Prospectus Supplement related
hereto). The repayment option with respect to this Security may be exercised by
the Holder for less than the entire principal amount hereof, provided that the
principal amount, if any, of this Security that remains outstanding after such
repayment must be an Authorized Denomination as defined herein. No transfer or
exchange of any Note (or, in the event that any Note is to be repaid in part,
the portion of the Note to be repaid) will be permitted after exercise of a
repayment option.
-7-
<PAGE>
In the event of redemption or repayment of this Security in part only, a
new Security or Securities of this series and of like tenor and for a principal
amount equal to the unredeemed or unrepaid portion will be delivered to the
registered Holder upon the cancellation hereof.
If the Specified Currency is other than United States dollars and the
Holder has exercised its option (if any) to elect payment in United States
dollars, payment in respect of this Security shall be made in United States
dollars based on the highest firm bid quotation in The City of New York received
by the Currency Determination Agent as of approximately noon, New York City
time, on the third Business Day next preceding the applicable payment date from
three recognized foreign exchange dealers in The City of New York selected by
the Currency Determination Agent and approved by the Corporation (one of which
may be the Currency Determination Agent) for the purchase by the quoting dealer
of the Specified Currency for United States dollars, for settlement on such
payment date, of the aggregate amount of the Specified Currency payable to all
Holders of Securities denominated in such Specified Currency electing to receive
United States dollar payments on such payment date and at which the applicable
dealer commits to execute a contract. If three such bid quotations are not
available on the third Business Day preceding the date of payment of principal
(and premium, if any) or interest for any such Security, such payment will be
made in the Specified Currency, unless such Specified Currency is unavailable
due to the imposition of exchange controls or to other circumstances beyond the
Corporation's control, in which case the Corporation will be entitled to make
payments in respect hereof in United States dollars as provided below. All
currency exchange costs will be borne by the Holders of such Securities by
deductions from such payments. The Corporation will appoint and at all times
maintain a banking institution that is not an Affiliate of the Corporation as
Currency Determination Agent hereunder. The Corporation has initially appointed
Marine Midland Bank as such Currency Determination Agent and will give prompt
written notice to the Trustee of any change in such appointment.
If the Specified Currency is other than United States dollars and the
Holder has not elected to receive payments in United States dollars as described
above, payments of principal (and premium, if any) and interest on any Security
of this series will be made by wire transfer to an account maintained by the
Holder with a bank located in the country issuing the Specified Currency (or,
with respect to Securities denominated in ECUs, Brussels) or such other
jurisdiction acceptable to the Corporation and the Trustee as shall have been
designated in writing at least 15 days prior to the Interest Payment Date or
Stated Maturity, as the case may be, by the Holder of such Security on the
relevant Regular Record Date or at Maturity; provided, however, that with
respect to payments of principal of (and premium, if any) and any interest due
at Maturity, this Security is presented to the Paying Agent in time for the
Paying Agent to make such payments in such funds in accordance with its normal
procedures. Such designation shall be made by filing the appropriate information
with the Trustee at its Corporate Trust Office in The City of New York, and,
unless revoked, any such designation made with respect to any Security by a
Holder will remain in effect with respect to any further payments with respect
to such Security payable to such Holder. If a payment with respect to any such
Security cannot be made by wire transfer because the required designation has
not been received by the Trustee on or before the requisite date or for any
other reason, a notice will be mailed to the Holder at its registered address
requesting a designation pursuant to which such wire transfer can be made and,
upon the Trustee's receipt of such a designation, such payment will be made
within 15 days of receipt. The Corporation will pay any administrative costs
imposed by banks in connection with making payments
-8-
<PAGE>
by wire transfer, but any tax, assessment or governmental charge imposed upon
payments will be borne by the Holders of Securities in respect of which payments
are made.
If payment on this Security is required to be made in a Specified Currency
other than United States dollars and such currency is unavailable in the good
faith judgment of the Corporation due to the imposition of exchange controls or
to other circumstances beyond the Corporation's control, then all payments due
on that due date with respect to this Security shall be made in United States
dollars until the Specified Currency is available again. The amount so payable
on any date in such Specified Currency shall be converted into United States
dollars at a rate determined by the Currency Determination Agent on the basis of
the noon buying rate for cable transfers for such Specified Currency in The City
of New York as determined by the Federal Reserve Bank of New York (the "Market
Exchange Rate") on the last date such Specified Currency was available (the
"Conversion Date"). Any payment made under such circumstances in United States
dollars where the required payment is in other than United States dollars will
not constitute an Event of Default under the Indenture.
If payment on this Security is required to be made in any currency unit
(e.g., ECUs) and such currency unit is unavailable in the good faith judgment of
the Corporation due to the imposition of exchange controls or other
circumstances beyond the Corporation's control, then all payments in respect of
this Security shall be made in United States dollars until such currency unit is
again available. The amount of each payment in United States dollars shall be
computed on the basis of the equivalent of the currency unit in United States
dollars, which, as of any date, shall be determined by the Corporation or the
Currency Determination Agent on the following basis. The component currencies of
the currency unit for this purpose (the "Component Currencies") shall be the
currency amounts that were components of the currency unit as of Conversion Date
for such currency unit. The equivalent of the currency unit in United States
dollars shall be calculated by aggregating the United States dollar equivalents
of the Component Currencies. The United States dollar equivalent of each of the
Component Currencies shall be determined by the Corporation or the Currency
Determination Agent on the basis of the Market Exchange Rate for each such
Component Currency that is available as of the third Business Day prior to the
date on which the relevant payment is due and for each such Component Currency
that is unavailable, if any, as of the Conversion Date for such Component
Currency.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Corporation or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on Holders of this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series (or, in
the case of any
-9-
<PAGE>
Securities of this series that are Original Issue Discount Securities, an amount
of principal thereof determined in accordance with the provisions of this
Security set out in the next paragraph (the "Default Amount")) may be declared
due and payable in the manner and with the effect provided in the Indenture.
If this Security is an Original Issue Discount Security and if an Event of
Default with respect to Securities of this series shall have occurred and be
continuing, the Default Amount of principal of this Security may be declared due
and payable in the manner and with the effect provided in the Indenture. Such
Default Amount shall be equal to the sum of (i) the aggregate principal amount
of such Original Issue Discount Security multiplied by the Issue Price plus (ii)
the portion of the difference between the Issue Price and the principal amount
of such Original Issue Discount Security that has accrued at the Yield to
Maturity (computed in accordance with generally accepted United States bond
yield computation principles) to such date of declaration, but in no event shall
the Default Amount of an Original Issue Discount Security exceed its principal
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Corporation's obligations in respect of the payment of the principal
of and interest, if any, on this Security shall terminate.
Other Provisions:
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
ATTACHED HERETO, IF ANY, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Corporation and the Trustee with
the consent of the Holders of a majority in principal amount of the Securities
at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting, with certain exceptions as therein provided, the
Holders of not less than a majority in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Corporation with certain provisions
of the Indenture and certain past or existing defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the right of the Holder of this Security,
which is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and interest on this Security at the times, places and rate,
and in the currency or currencies, herein prescribed.
The Indenture contains provisions, which apply to this Security, for
defeasance of (i) the entire indebtedness of this Security and (ii) certain
restrictive covenants, subject in either case to compliance by the Corporation
with conditions set forth in the Indenture.
-10-
<PAGE>
As provided in the Indenture and subject to certain limitations set forth
therein (including, in the case of any global Security, certain additional
limitations) and as may be set forth on the face hereof, the transfer of this
Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of the Corporation
in any place where the principal of (and premium, if any) and interest on this
Security are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Corporation and the Security Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series of like tenor, of
Authorized Denominations (as defined below) and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
interest coupons in denominations of (i) if denominated in United States
dollars, U.S. $1,000 and any integral multiple of U.S. $1,000 in excess thereof
or (ii) if denominated in a Specified Currency other than United States dollars,
the amount of such Specified Currency equivalent, at the Market Exchange Rate on
the first Business Day in The City of New York and in the country issuing such
currency (or, for ECUs, Brussels) next preceding the Original Issue Date, to
U.S. $1,000 (rounded down to an integral multiple of 10,000 units of the
Specified Currency) and any greater amount that is an integral multiple of
10,000 units of such Specified Currency (in each case, an "Authorized
Denomination"). The Securities of this series may be issued, in whole or in
part, in the form of one or more global Securities and issued to The Depository
Trust Company as depositary for the global Securities of this series (the
"Depositary") or its nominee and registered in the name of the Depositary or
such nominee. As provided in the Indenture and subject to certain limitations
set forth therein and as may be set forth on the face hereof, Securities of this
series are exchangeable for a like aggregate principal amount of Securities of
this series of like tenor and like terms of a different Authorized Denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentation of this Security for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities endorsed thereon shall be governed by and
construed in accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-11-
<PAGE>
OPTION TO ELECT REPAYMENT
-------------------------
TO BE COMPLETED ONLY IF THIS SECURITY PROVIDES THAT IT IS REPAYABLE AT THE
OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Corporation
to repay the within Security (or portion thereof specified below) pursuant to
its terms at a price equal to 100% of the principal amount thereof or, if the
within Security is an Original Issue Discount Security, the applicable Repayment
Price specified on the face thereof (expressed as a percentage of the principal
amount of the Security) together in the case of any such repayment with interest
to the Repayment Date, to the undersigned, at
____________________________________________________________.
For the within Security to be repaid at the option of the Holder, the
Paying Agent must receive at its Corporate Trust Office, at least 30 days but
not more than 45 days prior to the Repayment Date on which the within Security
is to be repaid, (i) the within Security with this "Option to Elect Repayment"
form duly completed or (ii) a telegram, telex, facsimile transmission or a
letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the Holder of the Security, the
principal amount of the Security, the principal amount of the Security to be
repaid, the certificate number or a description of the tenor and terms of the
Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Security, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, will be
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, telex, facsimile transmission or letter, provided,
however, that such telegram, telex, facsimile transmission or letter shall only
be effective if the within Security with such form duly completed are received
by the Paying Agent by such fifth Business Day.
If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof which the Holder elects to have repaid:
______; and specify the denomination or denominations (which must be an
Authorized Denomination) of the Security or Securities to be issued to the
Holder for the portion of the within Security not being repaid (in the absence
of any specification, one such Security will be issued for the portion not being
repaid):___________.
Dated:______________ _______________________________________________
Signature
NOTICE: The signature to this Option to Elect
Repayment must correspond with the name as written
upon the face of the within instrument in every
particular, without alteration or enlargement or
any change whatever.
-12-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - _____________ Custodian __________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
___________________________________
(State)
Additional abbreviations may also be used though not in the above list.
-13-
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[___________]
_________________________________________________________________
_______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_______________________________________________________________________________
the within Security and all rights thereunder, and hereby
irrevocably constitute(s) and appoint(s)_______________________________________
________________________________________________________________________________
attorney to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated:______________ ____________________________________________
Signature
NOTICE: The signature to this Assignment Form
must correspond with the name as written upon
the face of the within instrument in every
particular, without alteration or enlargement
or any change whatever.
-14-
<PAGE>
[FACE OF SECURITY]
REGISTERED REGISTERED
No. FLR-
CUSIP
THE BLACK & DECKER CORPORATION
MEDIUM TERM NOTE, SERIES A
(Floating Rate)
[Insert if the Security is to be a global Security - This Security is a
global Security within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
global Security is exchangeable for Securities registered in the name of a
Person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Security
(other than a transfer of this Security as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in such limited
circumstances.
Unless this Security is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Security
issued upon registration of transfer of, or in exchange for, or in lieu of, this
Security is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
THE FOLLOWING SUMMARY OF TERMS IS SUBJECT TO THE INFORMATION SET FORTH ON THE
REVERSE HEREOF:
<TABLE>
<S> <C> <C>
PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: STATED MATURITY:
SPECIFIED CURRENCY: OPTION TO ELECT PAYMENT AUTHORIZED DENOMINATIONS
IN U.S. DOLLARS (only (if Specified Currency
applicable if Specified is U.S. dollars):
Currency is other than
U.S. dollars):
[_] Yes [_] No (if Specified Currency is other than U.S.
dollars): $1,000 and any integral multiple
of $1,000 in excess thereof
CURRENCY DETERMINATION AGENT: THIS SECURITY IS A:
[_] Global Security
[_] Certificated Security (only applicable
if Specified Currency is other than
U.S. dollars)
INDEX MATURITY: INTEREST PAYMENT DATES: SPREAD (plus or minus):
SPREAD MULTIPLIER:
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
MAXIMUM RATE: MINIMUM RATE: INTEREST RESET DATE:
INTEREST RESET PERIOD: CALCULATION DATES:
INTEREST DETERMINATION CALCULATION AGENT: INTEREST RATE BASIS: (check one)
DATES:
[_] CD Rate
[_] Commercial Paper Rate
[_] Federal Funds Effective Rate
REDEMPTION DATE(S): REDEMPTION PRICE(S): [_] LIBOR
[_] LIBOR REUTERS
[_] LIBOR TELERATE
REPAYMENT DATE(S): REPAYMENT PRICE(S): [_] Treasury Rate
[_] Prime Rate
[_] CMT Rate
CMT Telerate Page:
CMT Maturity Index:
ORIGINAL ISSUE DISCOUNT OTHER PROVISIONS: [_] 11th District Cost of Funds Rate
SECURITY:
[_] Yes [_] No [_] J.J. Kenny Rate
[_] Other _______ (see attached)
</TABLE>
[If this Security was issued with "original issue discount" for
purposes of Section 1273 of the Internal Revenue Code of 1986, as amended,
the following shall be completed:
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DISCOUNT TOTAL AMOUNT OF OID: ISSUE PRICE (expressed as
SECURITY: a percentage of aggregate
principal amount):
[_] Yes [_] No
YIELD TO MATURITY: SHORT ACCRUAL PERIOD OID: METHOD USED TO DETERMINE YIELD
FOR SHORT ACCRUAL PERIOD:
[_] Approximate [_] Exact]
</TABLE>
-2-
<PAGE>
THE BLACK & DECKER CORPORATION, a Maryland corporation (the "Corporation,"
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay to [Insert if
the Security is to be a global Security -- Cede & Co., as nominee for The
Depository Trust Company][_________________], or registered assigns, the
principal amount stated above at Stated Maturity shown above, and to pay
interest thereon from the Original Issue Date shown above or from the most
recent Interest Payment Date to which interest has been paid or duly provided,
to but not including the applicable Interest Payment Date or the Stated
Maturity, as the case may be, provided, that if the Interest Reset Dates
specified above are daily or weekly, interest payable on any Interest Payment
Date, but not interest payable on the Stated Maturity which shall include
interest accrued to such date, will include interest accrued from but excluding
the second preceding Regular Record Date to and including the next preceding
Regular Record Date, provided, further, that if the Original Issue Date is after
a Regular Record Date and before the Interest Payment Date immediately following
such Regular Record Date, interest payments will commence on the second Interest
Payment Date following the Original Issue Date, at the rate per annum equal to
the Initial Interest Rate specified above until the first Interest Reset Date
following the Original Issue Date and on and after such Interest Reset Date at
the rate determined in accordance with the provisions on the reverse hereof,
depending on the Interest Rate Basis or Bases specified above, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the fifteenth
calendar day (whether or not such date is a Business Day) next preceding each
Interest Payment Date; provided, however, that interest payable at Stated
Maturity or upon redemption will be payable to the Person to whom principal is
payable. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture.
The principal of (and premium, if any) and interest on this Security are
payable by the Corporation in the Specified Currency specified above. If the
Specified Currency is other than United States dollars, the Holder hereof may,
if so indicated above, elect to have all such payments converted into United
States dollars in the manner described on the reverse side hereof by delivery of
a written request with signature guarantees to the Trustee on or prior to the
applicable Regular Record Date or at least 15 days prior to Maturity, as the
case may be. Such election may be in writing (mailed or hand delivered) or by
cable, telex or other form of facsimile transmission. A Holder of such a
Security may elect to receive payment in United States dollars for all principal
(and premium, if any) and interest payments and need not file a separate
election for each payment. Such election will remain in effect until
-3-
<PAGE>
revoked by written notice to the Trustee, but written notice of such revocation
must be received by the Trustee on or prior to the applicable Regular Record
Date or at least 15 days prior to Maturity, as the case may be (but no such
revocation may be made with respect to payments to be made on such a Security if
an Event of Default has occurred with respect thereto or upon the giving of a
notice of redemption).
The Corporation will appoint and at all times maintain a Paying Agent
(which may be the Trustee) authorized by the Corporation to pay the principal of
(and premium, if any) and interest on any Securities of this series on behalf of
the Corporation and having an office or agency in The City of New York, where
Securities of this series may be presented or surrendered for payment and where
notices, designations or requests in respect of payments with respect to
Securities of this series may be served. The Corporation has initially appointed
Marine Midland Bank as such Paying Agent, with its Corporate Trust Office
currently at 140 Broadway, New York, New York 10005, Attention: Corporate Trust
Administration. The Corporation will give prompt written notice to the Trustee
of any change in such appointment.
Payment of the principal of (and premium, if any) and any interest on this
Security due at Maturity in United States dollars will be made in immediately
available funds upon surrender of this Security at the Corporate Trust Office of
the Paying Agent, provided that this Security is presented to the Paying Agent
in time for the Paying Agent to make such payment in accordance with its normal
procedures. Payments of interest and, in the case of amortizing notes, principal
(and premium, if any) on this Security to be made in United States dollars
(other than at Maturity) will be made by check mailed to the address of the
Person entitled thereto as it appears in the Security Register on the relevant
Regular Record Date or by wire transfer to such account as may have been
appropriately designated in writing no later than the relevant Regular Record
Date to the Paying Agent by such Person and maintained with a bank located in
the United States. Notwithstanding the foregoing, a Holder of $10,000,000 or
more in aggregate principal amount of Certificated Notes of like tenor and terms
shall be entitled to receive such payments in U.S. dollars by wire transfer of
immediately available funds, but only if appropriate instructions have been
received in writing by the Paying Agent not less than 15 Business Days prior to
the applicable Interest Payment Date.
[Insert in place of the preceding paragraph if the Security is to be a
global Security -- Funds for the payment of the principal of (and premium, if
any) and any interest on this Security due in United States dollars on any
Interest Payment Date or at maturity will be made available to the Trustee on
such date. As soon as possible thereafter, the Trustee will pay such funds to
the Depositary (referred to on the reverse thereof), and the Depositary will
allocate and pay such funds to the owners of beneficial interests in this
Security in accordance with standing instructions and customary practices.]
All payments of principal (and premium, if any) and any interest in a
Specified Currency other the United States dollars will be made in the manner
set forth on the reverse hereof.
-4-
<PAGE>
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an Authenticating
Agent, by manual signature of an authorized signatory, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated: THE BLACK & DECKER CORPORATION
[CORPORATE SEAL] By:_______________________________
Nolan D. Archibald
Chairman, President and
Chief Executive Officer
By:_______________________________
Barbara B. Lucas
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated in, and issued under, the
Indenture described herein.
MARINE MIDLAND BANK,
as Trustee
By:_______________________________
Authorized Signatory
-5-
<PAGE>
[BACK OF SECURITY]
THE BLACK & DECKER CORPORATION
MEDIUM TERM NOTE, SERIES A
(Floating Rate)
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture dated as of ________ __, 1994, as supplemented
from time to time (herein called the "Indenture"), among the Corporation and
Marine Midland Bank as Trustee (the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Corporation, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof. The Securities of this series may
be denominated in different currencies, bear different dates, mature at
different times and bear interest at different rates. The Securities of this
series may be issued from time to time in an aggregate initial offering price
not to exceed $500,000,000 (or the equivalent thereof in one or more foreign
denominated currencies or units based on or relating to currencies (including
European Currency Units), subject to reduction, under certain circumstances, as
the result of the sale of other securities of the Corporation under the
Prospectus).
The rate of interest on this Security will be reset daily, weekly, monthly,
quarterly, semiannually or annually (such period being the "Reset Period" for
such Note, and the first day of each Reset Period an "Interest Reset Date"), as
specified on the face hereof. The Interest Reset Date will be, if this Security
resets daily, each Business Day; if this Security resets weekly (unless the
Interest Rate Basis on the face hereof is the Treasury Rate), the Wednesday of
each week; if this Security resets weekly and the Interest Rate Basis on the
face hereof is the Treasury Rate, the Tuesday of each week; if this Security
resets monthly, the third Wednesday of each month; if this Security resets
quarterly, the third Wednesday of March, June, September and December; if this
Security resets semiannually, the third Wednesday of two months of each year, as
specified on the face hereof; and if this Security resets annually, the third
Wednesday of one month of each year, as specified on the face hereof; provided,
however, that (i) the interest rate in effect from the date of issue to the
first Interest Reset Date will be the Initial Interest Rate specified on the
face hereof and (ii) the interest rate in effect for the 10 days immediately
prior to Stated Maturity, or date of redemption, will be that in effect on the
tenth day preceding such Stated Maturity or date of redemption. Each such
adjusted rate shall be applicable on and after the Interest Reset Date to which
it relates, to, but not including, the next succeeding Interest Reset Date or
until the Stated Maturity, or the date of redemption, as the case may be. If any
Interest Reset Date would otherwise be a day that is not a Market Day, the
Interest Reset Date shall be postponed to the next day that is a Market Day
except that if (i) the Interest Rate Basis on the face hereof is LIBOR and (ii)
such
-6-
<PAGE>
Market Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Market Day.
"Index Maturity" means the period to maturity of the instrument or
obligation on which the interest rate formula is based. "Business Day," for any
particular location, means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in such location are authorized
or obligated by law or executive order to close. "Market Day" means, for any
Security other than a Security whose Interest Rate Basis on the face hereof is
LIBOR, any Business Day in The City of New York, and, for any Security whose
Interest Rate Basis on the face hereof is LIBOR, any Business Day in The City of
New York on which dealings in deposits in United States dollars are transacted
in the London interbank market.
Subject to applicable provisions of law and except as specified herein, on
each Interest Reset Date, the rate of interest on this Security shall be the
rate determined in accordance with the provisions of the applicable heading
below.
Determination of Commercial Paper Rate. If the Interest Rate Basis on
--------------------------------------
this Security is the Commercial Paper Rate, such rate with respect to any
Interest Reset Date shall equal (i) the Money Market Yield (calculated as
described below) of the per annum rate (quoted on a bank discount basis) on
the relevant Commercial Paper Interest Determination Date (as defined
below) for commercial paper having the Index Maturity shown on the face
hereof, as such rate is published by the Board of Governors of the Federal
Reserve System in "Statistical Release H.15(519), Selected Interest Rates,"
or any successor publication of the Board of Governors of the Federal
Reserve System, ("H.15(519)"), under the heading "Commercial Paper," or
(ii) if such rate is not published prior to 9:00 A.M., New York City time,
on the Calculation Date pertaining to such Commercial Paper Interest
Determination Date, the Money Market Yield of the rate on such Commercial
Paper Interest Determination Date for commercial paper having the Index
Maturity specified on the face hereof as published by the Federal Reserve
Bank of New York in its daily statistical release, "Composite 3:30 P.M.
Quotations for U.S. Government Securities" or any successor publication
published by the Federal Reserve Bank of New York ("Composite Quotations")
under the heading "Commercial Paper," or (iii) if such rate is not
published in either H.15(519) or Composite Quotations by 3:00 P.M., New
York City time, on such Calculation Date, the Money Market Yield of the
arithmetic mean (each as rounded, if necessary, to the nearest one hundred-
thousandth of a percentage point) of the offered per annum rates (quoted on
a bank discount basis), as of 11:00 A.M., New York City time, on such
Commercial Paper Interest Determination Date, of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent
for commercial paper having the Index Maturity shown on the face hereof
placed for an industrial issuer whose bond rating is "AA," or the
equivalent, from a nationally recognized rating agency, adjusted in each of
the above cases by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread
Multiplier, if any, specified on the face hereof; provided, however, that
if fewer than three dealers selected as aforesaid by the Calculation Agent
are quoting
-7-
<PAGE>
as mentioned above, the Commercial Paper Rate with respect to such Interest
Reset Date will be the Commercial Paper Rate in effect hereon on such
Commercial Paper Interest Determination Date.
"Money Market Yield" shall be the yield (expressed as a percentage
rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point) calculated in accordance with the following formula:
Money Market Yield = 100 x D x 360
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a
bank discount basis and expressed as a decimal and "M" refers to the actual
number of days of the interest period for which interest is being
calculated.
Determination of Prime Rate. If the Interest Rate Basis on the
---------------------------
Security is the Prime Rate, such rate with respect to any Interest Reset
Date shall equal (i) the rate set forth for the relevant Prime Rate
Interest Determination Date (as defined below) in H.15(519) under the
heading "Bank Prime Loan", or (ii) if such rate is not published by 9:00
A.M., New York City time, on the Calculation Date pertaining to such Prime
Rate Interest Determination Date, the arithmetic mean (rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point) of
the rates of interest publicly announced by each bank that appears on the
display designated as page "NYMF" on the Reuters Monitor Money Rates
Service (or such other page as may replace the NYMF page on that service
for purpose of displaying prime rates or base lending rates of major United
States banks) ("Reuters Screen NYMF Page"), as such bank's prime rate or
base lending rate as in effect for such Prime Rate Interest Determination
Date, or (iii) if fewer than four such rates appear on the Reuters Screen
NYMF Page on such Prime Rate Interest Determination Date, the arithmetic
mean (rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point) of the prime rates (quoted on the basis of the actual
number of days in the year divided by a 360-day year) as of the close of
business on such Prime Rate Interest Determination Date by at least two of
the three major money center banks in The City of New York selected by the
Calculation Agent, adjusted in each case by the addition or subtraction of
the Spread, if any, specified on the face hereof, or by multiplication by
the Spread Multiplier, if any, specified on the face hereof; provided,
however, that if fewer than two banks selected as aforesaid are quoting as
mentioned in this sentence, the Prime Rate shall be calculated by the
Calculation Agent and shall be determined as the arithmetic mean on the
basis of the prime rates in The City of New York on such date by the
appropriate number of substitute banks or trust companies, organized and
doing business under the laws of the United States, or any State thereof,
having total equity capital of at least U.S. $500 million and being subject
to supervision or examination by a Federal or State authority, selected by
the Calculation Agent to quote such rate or rates; provided, however, that
if the Prime Rate is not published in H.15(519) and the banks or trust
companies selected as aforesaid are not quoting, the Prime Rate for such
Interest Reset Period will be the same as the Prime Rate for the
immediately preceding Interest Reset Period
-8-
<PAGE>
(or, if there was no such Interest Reset Period, the Initial Interest
Rate).
Determination of LIBOR. If the Interest Rate Basis on this Security
----------------------
is LIBOR, such rate with respect to any Interest Reset Date shall be
determined in accordance with the following provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR
will be, as specified on the face hereof, either: (a) the arithmetic mean
of the offered rates for deposits in the Designated Deposit Currency (as
defined below) having the Index Maturity designated on the face hereof,
commencing on the second Market Day immediately following such LIBOR
Interest Determination Date, that appear on the Reuters Screen LIBO Page as
of 11:00 A.M., London time, on such LIBOR Interest Determination Date, if
at least two such offered rates appear on the Reuters Screen LIBO Page
("LIBOR Reuters"), or (b) the rate for deposits in the Designated Deposit
Currency having the Index Maturity designated on the face hereof,
commencing on the second Market Day immediately following such LIBOR
Interest Determination Date, that appears on Telerate Page 3750 as of 11:00
A.M., London time, on such LIBOR Interest Determination Date ("LIBOR
Telerate"). "Reuters Screen LIBO Page" means the display designated as
page "LIBO" on the Reuters Monitor Money Rates Service (or such other page
as may replace page LIBO on that service for the purpose of displaying
London interbank offered rates of major banks). "Telerate Page 3750" means
the display designated as page "3750" on the Telerate Service (or such
other page as may replace the 3750 page on that service or such other
service or services as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates for the
Designated Deposit Currency). If neither LIBOR Reuters nor LIBOR Telerate
is specified on the reverse hereof, LIBOR will be determined as if LIBOR
Telerate had been specified. If LIBOR Reuters is specified on the face
hereof and at least two such offered rates appear on the Reuters Screen
LIBO Page, the rate in respect of such LIBOR Interest Determination Date
will be the arithmetic mean of such offered rates as determined by the
Calculation Agent. If fewer than two offered rates appear on the Reuters
Screen LIBO Page, or if no rate appears on Telerate Page 3750, as
applicable, LIBOR in respect of such LIBOR Interest Determination Date will
be determined as if the parties had specified the rate described in (ii)
below.
(ii) With respect to a LIBOR Interest Determination Date for a Note
for which Reuters is specified on the face hereof on which fewer than two
offered rates appear on the Reuters Screen LIBO Page, as specified in
(i)(a) above, or on which LIBOR Telerate is specified on the face hereof no
rate appears on Telerate Page 3750, as specified in (i)(b) above, as
applicable, LIBOR will be determined on the basis of the rates at which
deposits in the Designated Deposit Currency having the Index Maturity
designated on the face hereof are offered at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date by four major banks
in the London interbank market selected by the Calculation Agent (the
"Reference Banks") to prime banks in the London interbank market,
commencing on the second Market Day immediately following such LIBOR
Interest Determination Date and in a
-9-
<PAGE>
principal amount equal to an amount of not less than $1,000,000 that is
representative for a single transaction in such market at such time. The
Calculation Agent will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of such LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of the rates quoted
at approximately 11:00 A.M., New York City time, on such LIBOR Interest
Determination Date by three major banks in The City of New York selected by
the Calculation Agent for loans in the Designated Deposit Currency to
leading European banks having the Index Maturity designated on the face
hereof, commencing on the second London Business Day immediately following
such LIBOR Interest Determination Date and in a principal amount equal to
an amount of not less than $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with respect to such LIBOR Interest
Determination Date will be the interest rate otherwise in effect on such
LIBOR Interest Determination Date.
Determination of Treasury Rate. If the Interest Rate Basis on this
------------------------------
Security is the Treasury Rate, such rate with respect to any Interest Reset
Date shall equal (i) the rate for the most recent auction on the relevant
Treasury Interest Determination Date (as defined below) of direct
obligations of the United States ("Treasury bills") having the Index
Maturity shown on the face hereof as published in H.15(519), under the
heading "U.S. Government Treasury bills--auction average (investment)" or
(ii) if such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to the Reset Period to which such Treasury
Interest Determination Date pertains, the auction average rate (expressed
as a bond equivalent, rounded, if necessary, to the nearest one hundred-
thousandth of a percentage point, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) for such auction as
otherwise announced by the United States Department of the Treasury, or
(iii) if such rate is not published by 3:00 P.M., New York City time, on
the relevant Calculation Date, or if no such auction is held in a
particular week, the yield to maturity (expressed as a bond equivalent,
rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, on the basis of a year of 365 or 366 days as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 P.M., New York City time, on
such Treasury Interest Determination Date, of three leading primary United
States government securities dealers in The City of New York selected,
after consultation with the Corporation, by the Calculation Agent, for the
issue of Treasury bills with a remaining maturity closest to the Index
Maturity shown on the face hereof, in each case, adjusted by the addition
or subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the Treasury Rate with respect to such Interest Reset Date
-10-
<PAGE>
will be the Treasury Rate in effect on such Treasury Interest Determination
Date.
Determination of CD Rate. If the Interest Rate Basis on this Security
------------------------
is the CD Rate, such rate with respect to any Interest Reset Date shall
equal (i) the rate for the relevant CD Interest Determination Date (as
defined below) for negotiable certificates of deposit having the Index
Maturity shown on the face hereof as published in H.15(519) under the
heading "CDs (Secondary Market)," or (ii) if such rate is not published
prior to 9:00 A.M., New York City time, on the relevant Calculation Date,
the rate on such CD Rate Interest Determination Date for negotiable
certificates of deposit having the Index Maturity shown on the face hereof
as published in Composite Quotations under the heading "Certificates of
Deposit," or (iii) if such rate is not published by 3:00 P.M., New York
City time, on such Calculation Date in either H.15(519) or Composite
Quotations, the arithmetic means (rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point) of the secondary market offered
rates as of the opening of business, New York City time, on such CD Rate
Interest Determination Date, of three leading nonbank dealers of negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United
States money market banks of the highest credit standing (in the market for
negotiable certificates of deposit) with a remaining maturity closest to
the Index Maturity shown on the face hereof in a denomination of U.S.
$5,000,000, in each case, adjusted by the addition or subtraction of the
Spread, if any, specified on the face hereof, or by multiplication by the
Spread Multiplier, if any, specified on the face hereof; provided, however,
that if fewer than three dealers selected as aforesaid by the Calculation
Agent are quoting as mentioned in this sentence, the CD Rate with respect
to such Interest Reset Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
Determination of Federal Funds Effective Rate. If the Interest Rate
---------------------------------------------
on this Security is the Federal Funds Effective Rate, such rate with
respect to any Interest Reset Date shall equal (i) the rate on the relevant
Federal Funds Interest Determination Date (as defined below) for Federal
Funds as published in H. 15(519) under the heading "Federal Funds
(Effective)" or (ii) if such rate is not published prior to 9:00 A.M., New
York City time, on the relevant Calculation Date, the rate on such Federal
Funds Interest Determination Date as published in Composite Quotations
under the heading "Federal Funds (Effective)," or (iii) if such rate is not
published by 3:00 P.M., New York City time, on such Calculation Date in
either H.15(519) or Composite Quotations, the arithmetic mean (rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point) of
the rates, as of 11:00 A.M., New York City time, on such Federal Funds
Interest Determination Date, for the last transaction in overnight Federal
Funds arranged by three leading brokers of Federal Funds transactions in
The City of New York selected by the Calculation Agent, in each case,
adjusted by the addition or subtraction of the Spread, if any, specified on
the face hereof, or by multiplication by the Spread Multiplier, if any,
specified on the face hereof; provided, however, that if fewer than three
brokers selected as aforesaid by the Calculation Agent are quoting as
mentioned
-11-
<PAGE>
in this sentence, the Federal Funds Effective Rate with respect to such
Interest Reset Date will be the Federal Funds Effective Rate in effect on
such Federal Funds Interest Determination Date.
Determination of CMT Rate. If the Interest Rate on this Security is
-------------------------
the CMT Rate, such rate with respect to any Interest Reset Date shall equal
(i) the rate on the relevant CMT Rate Interest Determination Date displayed
on the designated CMT Telerate Page under the caption "Treasury Constant
Maturities . . . Federal Reserve Board Release H.15 . . . Mondays
approximately 3:45 p.m.," under the column for the Designated CMT Maturity
Index for (x) if the Designated CMT Telerate Page is 7055, the rate on such
CMT Rate Interest Determination Date and (y) if the Designated CMT Telerate
Page is 7052, the week, or the month, as applicable, ended immediately
preceding the week in which the Related CMT Rate Interest Determination
Date occurs, or (ii) if such rate is no longer displayed on the relevant
page, or if not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such Treasury Constant Maturity Rate for the
Designated CMT Maturity Index as published in the relevant H.15(519), or
(iii) if such rate is no longer published, or if not published by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination Date will be such Treasury
Constant Maturity rate for the Designated CMT Maturity Index (or other
United States Treasury rate for the Designated CMT Maturity Index) for the
CMT Rate Interest Determination Date with respect to such Interest Reset
Date as may then be published by either the Board of Governors of the
Federal Reserve System or the United States Department of the Treasury that
the Calculation Agent determines to be comparable to the rate formerly
displayed on the Designated CMT Telerate Page and published in the relevant
H.15(519), or (iv) if such information is not provided by 3:00 p.m., New
York City time, on the related Calculation Date, then the CMT Rate for the
CMT Rate Interest Determination Date will be calculated by the Calculation
Agent and will be a yield to maturity, based on the arithmetic mean of the
secondary market closing offer side prices as of approximately 3:30 P.M.,
New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of
New York selected by the Calculation Agent (from five such Referenced
Dealers selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct, non-callable fixed rate obligations of the United
States ("Treasury Note") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not less
than such Designated CMT Maturity Index minus one year. If the Calculation
Agent cannot obtain three such Treasury Note quotations, the CMT Rate for
such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic
mean of the secondary market offer side prices as of approximately 3:30
P.M., New York City time, on the CMT Rate Interest Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation
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Agent and eliminating the highest quotation (or, in the event of equality,
one of the highest) and the lowest quotation (or, in the event of equality,
one of the lowest)), for Treasury Notes with original maturity of the
number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least $100,000,000. If three or four
(and not five) of such Reference Dealers are quoting as described above,
then the CMT Rate will be based on the arithmetic mean of the offer prices
obtained and neither the highest nor lowest of such quotes will be
eliminated; provided, however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT
Rate will be the CMT Rate in effect on such CMT Rate Interest Determination
Date. If two Treasury Notes with an original maturity as described in the
third preceding sentence, have remaining terms to maturity equally close to
the Designated CMT Maturity Index, the quotes for the CMT Rate Note with
the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated on the face hereof (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)), for the purpose of
displaying Treasury Constant Maturity as reported in H.15(519). If no such
page is specified on the face hereof, the Designated CMT Telerate Page
shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Determination of Eleventh District Cost of Funds Rate. If the
-----------------------------------------------------
Interest Rate on this Security is the Eleventh District Cost of Funds Rate,
such rate with respect to any Interest Reset Date shall equal (i) the rate
equal to the monthly weighted average cost of funds for the calendar months
preceding such Eleventh District Cost of Funds Rate Interest Determination
Date as set forth under the caption "Eleventh District" on Telerate page
7058 as of 11:00 A.M., San Francisco time, on such Eleventh District Cost
of Funds Rate Interest Determination Date, or (ii) if such rate does not
appear on the Telerate page 7058 on any related Eleventh District Cost of
Funds Rate Interest Determination Date, the Eleventh District Cost of Funds
Rate for such Eleventh District Cost of Funds Rate Interest Determination
Date, the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District that was most
recently announced (the "Index") by the Federal Home Loan Bank (the "FHLB")
of San Francisco as such cost of funds for the calendar month preceding the
date of such announcement, or (iii) if the FHLB of San Francisco fails to
announce such rate for the calendar month next preceding such Eleventh
District Cost of Funds Rate Interest Determination Date, then the Eleventh
District Cost of Funds Rate for such Eleventh District Cost of Funds Rate
Interest Determination Date, the Eleventh District Cost of Funds Rate in
effect on such Eleventh District Cost of Funds Rate
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Interest Determination Date. "Telerate Page 7058" means the display on the
Dow Jones Telerate Service on such page (or such other page as may replace
such page on that service for the purpose of displaying the Eleventh
District Cost of Funds Rate) for the purpose of displaying the monthly
average cost of funds paid by member institutions of the Eleventh Federal
Home Loan Bank District.
Determination of J.J. Kenny Rate. If the Interest Rate on this
--------------------------------
Security is the J.J. Kenny Rate, such rate, with respect to any Interest
Reset Date, shall equal the rate on the relevant J.J. Kenny Rate Interest
Determination Date in the high grade weekly index (the "Weekly Index") made
available by Kenny Information Systems ("Kenny") to the Calculation Agent.
The Weekly Index is, and shall be, based upon 30-day yield evaluations at
par of bonds, the interest of which is exempt from federal income taxation
under the Internal Revenue Code of 1986, as amended (the "Code"), of not
less than five high grade component issuers selected by Kenny which shall
include, without limitation, issuers of general obligation bonds. The
specific issuers included among the component issuers may be changed from
time to time by Kenny in its discretion. The bonds on which the Weekly
Index is based shall not include any bonds on which the interest is subject
to a minimum tax or similar tax under the Code, unless all tax-exempt bonds
are subject to such tax. In the event that Kenny ceases to make available
such Weekly Index, a successor indexing agent will be selected by the
Calculation Agent, such index to reflect the prevailing rate for bonds
rated in the highest short-term rating category by Moody's Investor
Service, Inc. and Standard & Poor's Ratings Group in respect of issuer's
most closely resembling the high grade component issuers selected by Kenny
for its Weekly Index, the interest on which is (A) variable on a weekly
basis, (B) exempt from federal income taxation under the Code, and (C) not
subject to a minimum tax or similar tax under the Code, unless all tax-
exempt bonds are subject to such tax. If such successor indexing agent is
not available, the rate for any J.J. Kenny Rate Interest Determination Date
shall be 67% of the rate determined as if the Treasury Rate option had been
originally selected.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Rate, if any, or less than the Minimum Rate, if any,
shown on the face hereof. The interest rate on this Security will in no event be
higher than the maximum rate permitted by New York law as the same may be
modified by United States law of general applicability.
The Corporation will appoint and at all times maintain a banking
institution that is not an Affiliate of the Corporation as Calculation Agent
hereunder. The Corporation has initially appointed Marine Midland Bank as such
Calculation Agent and will give prompt written notice to the Trustee of any
change in such appointment. The Corporation will cause the Calculation Agent to
calculate the interest rate on this Security with respect to any Interest Reset
Date in accordance with the foregoing on or before the Calculation Date
pertaining to the related Interest Determination Date. Except as otherwise
provided herein, all United States dollar amounts used in or resulting from such
calculations will be rounded to the nearest cent (with on-half cent being
rounded upward). The Calculation Agent's determination of any interest rate
will be final and binding in the absence of manifest error.
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The Calculation Agent will, upon the request of the Holder of this
Security, provide to such Holder the interest rate hereon then in effect and, if
determined, the interest rate which will become effective as of the next
Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date if the
Interest Rate Basis on the face hereof is the Commercial Paper Rate (the
"Commercial Paper Interest Determination Date"), the Prime Rate (the "Prime Rate
Interest Determination Date"), LIBOR (the "LIBOR Interest Determination Date"),
the CD Rate (the "CD Interest Determination Date"), the CMT Rate (the "CMT
Interest Determination Date"), the Eleventh District Cost of Funds Rate (the
"Eleventh District Cost of Fund Interest Determination Note"), the J.J. Kenny
Rate (the "J.J. Kenny Rate Interest Determination Date"), or the Federal Funds
Effective Rate (the "Federal Funds Interest Determination Date") will be the
second Market Day preceding such Interest Reset Date with respect to such
Security. The Interest Determination Date pertaining to an Interest Reset Date
if the Interest Rate Basis on the face hereof is the Treasury Rate (the
"Treasury Interest Determination Date") will be the day of the week in which
such Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held on
the following Tuesday, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week. If
an auction date shall fall on any Interest Reset Date, then such Interest Reset
Date shall instead be the first Business Day immediately following such auction
date.
The "Calculation Date" pertaining to an Interest Reset Period with respect
to (i) a CD Rate Note, a Commercial Paper Rate Note, Federal Funds Effective
Rate Note, a Prime Rate Note, a CMT Rate Note, an 11th District Cost of Funds
Rate Note, a J.J. Kenny Rate Note or Treasury Rate Note shall be the tenth
calendar day after the Interest Determination Date pertaining to such Reset
Period or, if such day is not a Market Day, the next succeeding Market Day and
(ii) a LIBOR Note shall be the Interest Determination Date pertaining to such
Reset Period.
"Designated Deposit Currency" means the currency (including a currency
unit), if any, designated on the reverse hereof as the Designated Deposit
Currency. If no such currency is designated, the Designated Deposit Currency
shall be U.S. dollars.
Interest payments for this Security shall be the amount of interest accrued
to, but excluding, the Interest Payment Dates; provided, however, that if the
Interest Reset Dates with respect to such Security are daily or weekly, interest
payable on any Interest Payment Date, other than interest payable on any date on
which principal hereof is payable, will include interest accrued from but
excluding the second preceding Regular Record Date to and including the next
preceding Regular Record Date. Accrued interest hereon from the Original Issue
Date or from the last date to which interest hereon has been paid is calculated
by multiplying the face amount hereof by an accrued interest factor. Such
accrued interest factor is computed by adding the interest factors calculated
for each day from the Original Issue Date or from
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the last date to which interest has been paid, to but excluding the date for
which accrued interest is being calculated. The interest factor (expressed as a
decimal rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point) for each such day shall be computed by dividing the interest
rate (expressed as a decimal rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point) applicable to such day by 360, in the
case of the Commercial Paper Rate, Prime Rate, LIBOR, CD Rate, CMT Rate,
Eleventh District Cost of Funds Rate, J.J. Kenny Rate or Federal Funds Effective
Rate or by the actual number of days in the year in the case of the Treasury
Rate.
Any payment on this Security due on any day which in not a Market Day (and,
if the Specified Currency shown on the face hereof is other than United States
dollars, a Business Day in the country issuing such Specified Currency (or, for
European Currency Units ("ECUs"), Brussels)) need not be made on such day, but
may be made on the next such succeeding Market Day (or, if the Interest Rate
Basis is LIBOR and the next such succeeding Market Day falls in the next
calendar month, the next such preceding Market Day), with the same force and
effect as if made on the due date, and no interest shall be payable on the date
of payment for the period from and after the due date.
Unless one or more Redemption Dates are specified on the face hereof, this
Security shall not be redeemable at the option of the Corporation before the
Stated Maturity specified on the face hereof. If one or more Redemption Dates
(or ranges of Redemption Dates) are so specified, this Security is subject to
redemption on any such date (or during any such range) at the option of the
Corporation, upon notice by first-class mail, mailed not less than 30 days nor
more than 60 days prior to the Redemption Date specified in such notice, at the
applicable Redemption Price specified on the face hereof (expressed as a
percentage of the principal amount of this Security), together in the case of
any such redemption with accrued interest to the Redemption Date, but interest
installments whose Stated Maturity is prior to the Redemption Date will be
payable to the Holder of this Security, or one or more predecessor Securities,
of record at the close of business on the relevant Regular or Special Record
Dates referred to on the face hereof, all as provided in the Indenture. The
Corporation may elect to redeem less than the entire principal amount hereof,
provided, that the principal amount, if any, of this Security that remains
outstanding after such redemption is an Authorized Denomination as defined
herein. In the event of any redemption in part, the Corporation will not be
required to (i) issue, register the transfer of, or exchange any Security during
a period beginning at the opening of business 15 days before the day of the
mailing of the notice of redemption of Securities selected for redemption and
ending at the close of business on the date of mailing of the relevant notice of
redemption or (ii) register the transfer or exchange of any Security, or any
portion thereof, selected for redemption, except the unredeemed portion of any
Security being redeemed in part.
Unless one or more Repayment Dates are specified on the face hereof, this
Security shall not be repayable at the option of the Holder on any date prior to
the Stated Maturity specified on the face hereof. If one or more Repayment
Dates (or ranges of Repayment Dates) are so specified, this Security is subject
to repayment on any such date (or during any such range) at the option of the
Holder at a price equal to 100% of the principal amount hereof
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<PAGE>
or, if this Security is an Original Issue Discount Security (as specified on the
face hereof), the applicable Repayment Price specified on the face hereof
(expressed as a percentage of the principal amount of this Security), together
in the case of any such repayment with accrued interest to the Repayment Date,
but interest installments whose Stated Maturity is prior to the Repayment Date
will be payable to the Holder of this Security, or one or more predecessor
Securities, of record at the close of business on the relevant Regular Record
Date referred to on the face hereof or as other wise provided in the
Indenture. For this Security to be repaid at the option of the Holder, the
Paying Agent must receive at the Corporate Trust Office, at least 30 days but
not more than 45 days prior to the Repayment Date on which this Security is to
be repaid, (i) this Security with the form entitled "Option to Elect
Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange, or
the National Association of Securities Dealers, Inc. or a commercial bank or
trust company in the United States setting forth the name of the Holder of
this Security, the principal amount of this Security, the principal amount of
this Security to be repaid, the certificate number or a description of the
tenor and terms of this Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that this Security,
together with the duly completed form entitled "Option to Elect Repayment" on
this Security, will be received by the Paying Agent not later than the fifth
Business Day after the date of such telegram, telex, facsimile transmission or
letter, provided, however, that such telegram, telex, facsimile transmission
or letter shall only be effective if this Security with such form duly
completed is received by the Paying Agent by such fifth Business Day. Exercise
of the repayment option by the Holder shall be irrevocable, except a Holder
who has tendered this Security for repayment pursuant to an Extension Notice
(as defined in the Prospectus Supplement related hereto). The repayment option
with respect to this Security may be exercised by the Holder for less than the
entire principal amount hereof, provided that the principal amount, if any, of
this Security that remains outstanding after such repayment must be an
Authorized Denomination as defined herein. No transfer or exchange of any Note
(or, in the event that any Note is to be repaid in part, the portion of the
Note to be repaid) will be permitted after exercise of a repayment option.
In the event of redemption or repayment of this Security in part only, a
new Security or Securities of this series and of like tenor and for a principal
amount equal to the unredeemed or unrepaid portion will be delivered to the
registered Holder upon the cancellation hereof.
If the Specified Currency is other than United States dollars and the
Holder has exercised its option (if any) to elect payment in United States
dollars, payment in respect of this Security shall be made in United States
dollars based on the highest firm bid quotation in The City of New York received
by the Currency Determination Agent as of approximately noon, New York City
time, on the third Business Day next preceding the applicable payment date from
three recognized foreign exchange dealers in The City of New York selected by
the Currency Determination Agent and approved by the Corporation (one of which
may be the Currency Determination Agent) for the purchase by the quoting dealer
of the Specified Currency for United States dollars, for settlement on such
payment date, of the aggregate amount of the Specified Currency payable to all
Holders of Securities denominated in such
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<PAGE>
Specified Currency electing to receive United States dollar payments on such
payment date and at which the applicable dealer commits to execute a contract.
If three such bid quotations are not available on the third Business Day
preceding the date of payment of principal (and premium, if any) or interest for
any such Security, such payment will be made in the Specified Currency, unless
such Specified Currency is unavailable due to the imposition of exchange
controls or to other circumstances beyond the Corporation's control, in which
case the Corporation will be entitled to make payments in respect hereof in
United States dollars as provided below. All currency exchange costs will be
borne by the Holders of such Securities by deductions from such payments. The
Corporation will appoint and at all times maintain a banking institution that is
not an Affiliate of the Corporation as Currency Determination Agent hereunder.
The Corporation has initially appointed Marine Midland Bank as such Currency
Determination Agent and will give prompt written notice to the Trustee of any
change in such appointment.
If the Specified Currency is other than United States dollars and the
Holder has not elected to receive payments in United States dollars as described
above, payments of principal (and premium, if any) and interest on any Security
of this series will be made by wire transfer to an account maintained by the
Holder with a bank located in the country issuing the Specified Currency (or,
with respect to Securities denominated in ECUs, Brussels) or other jurisdiction
acceptable to the Corporation and the Trustee as shall have been designated in
writing at least 15 days prior to the Interest Payment Date or Stated Maturity,
as the case may be, by the Holder of such Security on the relevant Regular
Record Date or at Maturity; provided, however, that with respect to payments of
principal of (and premium, if any) and any interest due at Maturity, this
Security is presented to the Paying Agent in time for the Paying Agent to make
such payments in such funds in accordance with its normal procedures. Such
designation shall be made by filing the appropriate information with the Trustee
at its Corporate Trust Office in The City of New York, and, unless revoked, any
such designation made with respect to any Security by a Holder will remain in
effect with respect to any further payments with respect to such Security
payable to such Holder. If a payment with respect to any such Security cannot
be made by wire transfer because the required designation has not been received
by the Trustee on or before the requisite date or for any other reason, a notice
will be mailed to the Holder at its registered address requesting a designation
pursuant to which such wire transfer can be made and, such payment will be made
within 15 days of the Trustee's receipt of such a designation. The Corporation
will pay any administrative costs imposed by banks in connection with making
payments by wire transfer, but any tax, assessment or governmental charge
imposed upon payments will be borne by the Holders of Securities in respect of
which payments are made.
If payment on this Security is required to be made in a Specified Currency
other than United States dollars and such currency is unavailable in the good
faith judgment of the Corporation due to the imposition of exchange controls or
to other circumstances beyond the Corporation's control, then all payments due
on that due date with respect to this Security shall be made in United States
dollars until such currency is available again. The amount so payable on any
date in such Specified Currency shall be converted into United States dollars at
a rate determined by the Currency Determination Agent on the basis of the noon
buying rate for cable transfers for such Specified Currency
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in The City of New York as determined by the Federal Reserve Bank of New York
(the "Market Exchange Rate") on the last date such Specified Currency was
available (the "Conversion Date"). Any payment made under such circumstances in
United States dollars where the required payment is in other than United States
dollars will not constitute an Event of Default under the Indenture.
If payment on this Security is required to be made in any currency unit
(e.g., ECUs) and such currency unit in the good faith judgment of the Company is
unavailable due to the imposition of exchange controls or other circumstances
beyond the Corporation's control, then all payments in respect of this Security
shall be made in United States dollars until such currency unit is again
available. The amount of each payment in United States dollars shall be
computed on the basis of the equivalent of the currency unit in United States
dollars, which, as of any date, shall be determined by the Corporation or the
Currency Determination Agent on the following basis. The component currencies
of the currency unit for this purpose (the "Component Currencies") shall be the
currency amounts that were components of the currency unit as of the Conversion
Date for such currency unit. The equivalent of the currency unit in United
States dollars shall be calculated by aggregating the United States dollar
equivalents of the Component Currencies. The United States dollar equivalent of
each of the Component Currencies shall be determined by the Corporation or the
Currency Determination Agent on the basis of the Market Exchange Rate for each
such Component Currency that is available as of the third Business Day prior to
the date on which the relevant payment is due and for each such Component
Currency that is unavailable, if any, as of the Conversion Date for such
Component Currency.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Corporation or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on Holders of this Security.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series (or, in
the case of any Securities of this series that are Discounted Securities, an
amount of principal thereof determined in accordance with the provisions of this
Security set out in the next paragraph (the "Default Amount")) may be declared
due and payable in the manner and with the effect provided in the Indenture.
If this Security is an Original Issue Discount Security and if an Event of
Default with respect to Securities of this series shall have occurred and be
continuing, the Default Amount of principal of this Security may be
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declared due and payable in the manner and with the effect provided in the
Indenture. Such Default Amount shall be equal to the adjusted issue price as at
the first day of the accrual period as determined under Proposed Treasury
Regulation Section 1.1272-1(e) (or successor regulation) under the Code, in
which the date of acceleration occurs, increased by the daily portion of the
original issue discount for each day in such accrual period ending on the date
of acceleration, as determined under Proposed Treasury Regulation Section
1.1272-1(c) (or successor regulation) under the Code. Upon payment (i) of the
amount of principal so declared due and payable and (ii) of interest on any
overdue principal and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Corporation's
obligations in respect of the payment of the principal of and interest, if any,
on this Security shall terminate.
Other Provisions:
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
ATTACHED HERETO, IF ANY, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Corporation and the Trustee with
the consent of the Holders of not less than a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting, with certain exceptions as
therein provided, the Holders of not less than a majority in principal amount of
the Securities of each series at the time Outstanding, on behalf of the Holders
of all Securities of such series, to waive compliance by the Corporation with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the right of the Holder of this Security,
which is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and interest on this Security at the times, places and rate,
and in the coin or currency, herein prescribed.
The Indenture contains provisions, which apply to this Security, for
defeasance of (i) the entire indebtedness of this Security and (ii) certain
restrictive covenants, subject in either case to compliance by the Corporation
with conditions set forth in the Indenture.
As provided in the Indenture and subject to certain limitations set forth
therein (including, in the case of any global Security, certain additional
limitations) and as may be set forth on the face hereof, the transfer of this
Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or
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agency of the Corporation in any place where the principal of (any premium, if
any) and any interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series of like tenor, of Authorized Denominations (as defined
below) and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
[The Securities of this series are issuable only in registered form without
interest coupons in denominations of (i) if denominated in United States
dollars, U.S. $1,000 and any integral multiple of U.S. $1,000 in excess thereof
or (ii) if denominated in a Specified Currency other than United States dollars,
the amount of such Specified Currency equivalent, at the Market Exchange Rate on
the first Business Day in The City of New York and in the country issuing such
currency (or, for ECUs, Brussels) next preceding the Original Issue Date, to
U.S. $1,000 (rounded down to an integral multiple of 10,000 units of the
Specified Currency) and any greater amount that is an integral multiple of
10,000 units of such Specified Currency (in each case, an "Authorized
Denomination"). The Securities of this series may be issued, in whole or in
part, in the form of one or more global Securities and issued to The Depository
Trust Corporation as depositary for the global Securities of this series (the
"Depositary") or its nominee and registered in the name of the Depositary or
such nominee. As provided in the Indenture and subject to certain limitations
set forth therein and as may be set forth on the face hereof, Securities of this
series are exchangeable for a like aggregate principal amount of Securities of
this series of like tenor and like terms of a different Authorized Denomination,
as requested by the Holder surrendering the same.]
No service charge shall be made for any such registration of transfer or
exchange, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities endorsed thereon shall be governed by and
construed in accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION
OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Corporation
to repay the within Security (or portion thereof specified below) pursuant to
its terms at a price equal to 100% of the principal amount thereof or, if the
within Security is a Discounted Security, the applicable Repayment Price
specified on the face thereof (expressed as a percentage of the principal amount
of the Security together in the case of any such repayment with interest to the
Repayment Date, to the undersigned, at _______________________________________
___________________.
For the within Security to be repaid at the option of the Holder, the
Paying Agent must receive at its Corporate Trust Office, at least 30 days but
not more than 45 days prior to the Repayment Date on which the within Security
is to be repaid, (i) the within Security with this "Option to Elect Repayment"
form duly completed or (ii) a telegram, telex, facsimile transmission or a
letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the Holder of the Security, the
principal amount of the Security, the principal amount of the Security to be
repaid, the certificate number or a description of the tenor and terms of the
Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Security, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, will be
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, telex, facsimile transmission or letter, provided,
however, that such telegram, telex, facsimile transmission or letter shall only
be effective if the within Security with such form duly completed is received by
the Paying Agent by such fifth Business Day.
If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof which the Holder elects to have repaid:
_______________ and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Security or Securities to be issued to the
Holder for the portion of the within Security not being repaid (in the absence
of any specification, one such Security will be issued for the portion not being
repaid): __________________.
Dated:___________________ _________________________________________
Signature
NOTICE: The signature to this Option to Elect
Repayment must correspond with the name as written
upon the face of the within instrument in every
particular, without alteration or enlargement or
any change whatever.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ALT - _______________ Custodian ______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
[___________]
________________________________________________________________
_____________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_____________________________________________________________________________
the within Security and all rights thereunder and hereby irrevocably
constitute(s) and appoint(s) ________________________________________________
_____________________________________________________________________________
attorney to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated:______________________ _________________________________________
Signature
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement or
any change whatever.
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<PAGE>
THE BLACK & DECKER CORPORATION
MEDIUM TERM NOTES, SERIES A
EXCHANGE RATE AGENT AGREEMENT
EXCHANGE RATE AGENT AGREEMENT (the "Agreement") dated as of ________,
199_, between The Black & Decker Corporation (the "Corporation") and
___________________________________.
PRELIMINARY STATEMENT
A. The Corporation proposes to issue and sell Medium-Term Notes, Series A
(the "Notes") from time to time under and pursuant to the terms of an Indenture,
dated as of _______________, 1994 (the "Indenture"), between the Corporation and
Marine Midland Bank, as trustee under the Indenture (acting in such capacity,
the "Trustee"), and resolutions of the Board of Directors of the Corporation,
dated February 17, 1994 (as they may be amended or supplemented from time to
time, collectively, the "Resolutions"). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Indenture. The Resolutions
provide that the Notes may be denominated in U.S. dollars or in foreign
currencies or currency units (the "Foreign Specified Currency") and may bear
interest at a fixed rate or a floating rate, all as set forth on the face of the
particular Note.
B. The Corporation desires to appoint ______________ as exchange rate
agent of the Corporation to obtain from time to time exchange rates for Foreign
Specified Currencies in which certain Notes are denominated (each such Note a
"Foreign Currency Note") and, upon request, to execute foreign exchange spot
transactions for such Foreign Specified Currencies.
NOW, THEREFORE, the Corporation and _________________________ agree as
follows:
SECTION 1. APPOINTMENT OF EXCHANGE RATE AGENT.
The Corporation hereby appoints _________________, as its agent (in such
capacity, the "Exchange Rate Agent"), at its corporate trust office in
________________, which is presently located at _____________________, and the
Exchange Rate Agent hereby accepts such appointment, as the Corporation's agent
for the purposes of obtaining from time to time exchange rates and executing
foreign exchange spot transactions for Foreign Specified Currencies, upon the
terms and subject to the conditions provided herein.
<PAGE>
SECTION 2. DETERMINATION OF EXCHANGE RATE.
(a) The Corporation shall notify the Exchange Rate Agent at least five
Business Days (as hereafter defined) preceding each date on which a payment in
U.S. dollars or the Foreign Specified Currency is to be made in respect of a
Foreign Currency Note, whether an Interest Payment Date, Maturity or otherwise
(a "Payment Date") on which, or with respect to which, the Corporation desires
the Exchange Rate Agent to either (i) quote an exchange rate for the purchase of
U.S. dollars with a given Foreign Specified Currency or (ii) purchase a given
Foreign Specified Currency with U.S. dollars. As used herein, "Business Day"
means any day other than a Saturday or Sunday or a day on which commercial banks
in New York City and the principal financial center in the country issuing the
Foreign Specified Currency are required or authorized by law or executive order
to close.
(b) The Corporation shall notify the Exchange Rate Agent at least five
Business Days preceding each Payment Date, of each Foreign Specified Currency
for which the Corporation desires to (i) obtain an exchange rate for the
purchase of U.S. dollars or (ii) purchase a given Foreign Specified Currency
with a stated amount of U.S. dollars. In the latter case, the notice shall also
specify the amount of U.S. dollars (the "U.S. Dollar Amount") to be used to
purchase each Foreign Specified Currency, and the account (the "Designated
Account") at _____________________ which the Exchange Rate Agent is authorized
to debit in making payment for the Foreign Specified Currency.
(c) If the Corporation desires the Exchange Rate Agent to obtain an
exchange rate for the purchase of U.S. dollars with a Foreign Specified
Currency, the following procedures shall be followed:
(i) After receipt of the notice referred to in subsection (b) of this
Section, the Exchange Rate Agent, at approximately noon on the third
Business Day next preceding the applicable Payment Date, shall select
(subject to subsection (c) (ii) below) the indicative quotations of the
Foreign Specified Currency appearing at such time on the bank composite or
multi-contributor pages of the Quoting Source (as defined below) for three
(or two if three are not available) Recognized Foreign Exchange Dealers (as
defined below). The Exchange Rate Agent shall then select from among the
selected quotations the one that will yield the largest number of U.S.
dollars upon conversion from such Foreign Specified Currency. By 3:00 p.m.
on the same day, the Exchange Rate Agent shall print the relevant "pages"
from the Quoting Source, circle the selected quotations, indicating which
of the three has the largest yield, and telecopy the same to the
Corporation, the Trustee and the Paying Agent. The "Quoting Source" shall
mean Reuters Monitor Foreign Exchange Service, or if the Exchange Rate
Agent determines that such Service is not available, Telerate Monitor
Foreign Exchange service. If the Exchange
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<PAGE>
Rate Agent determines that neither Service is available, the parties shall
agree on a comparable display or other comparable manner of obtaining
quotations and such display or manner shall become the Quoting Source. As
used herein, "Recognized Foreign Exchange Dealers" means any firm, which
may include the Exchange Rate Agent, selected by the Exchange Rate Agent
from a list of firms located in the City of New York, designated by the
Corporation from time to time in writing as approved "Recognized Foreign
Exchange Dealers," and delivered to the Exchange Rate Agent.
(d) If (1) fewer than three bid quotations are available at the time of a
determination pursuant to subsection (c) above, or (2) the Exchange Rate Agent
receives no later than noon on such Business Day notice that (A) there exist
exchange controls, or (B) the Foreign Specified Currency is no longer used by
the government of the country issuing such currency or for the settlement of
transactions by public institutions of or within the international banking
community, rendering such Foreign Specified Currency unavailable for payment to
the holders of the Foreign Currency Note denominated in such Foreign Specified
Currency, then the Exchange Rate Agent shall, prior to the applicable Payment
Date, notify the Corporation, the Trustee and the Paying Agent of the noon
buying rate in New York City for cable transfer, in the Foreign Specified
Currency indicated in such notice, as certified for customs purposes by the
Federal Reserve Bank of New York (the "Market Exchange Rate") as of the second
Business Day preceding the applicable Payment Date. If the Market Exchange Rate
for such date is not then available, the Exchange Rate Agent shall immediately
notify the Corporation, the Trustee and the Paying Agent of the most recently
available Market Exchange Rate for such Foreign Specified Currency.
(e) If the Corporation desires the Exchange Rate Agent to purchase a given
Foreign Specified Currency with U.S. dollars, the following procedures shall be
followed:
As near as practicable to 11:00 a.m., New York City time, on the second
Business Day preceding the applicable Payment Date, the Exchange Rate Agent
shall solicit bid quotations from three Recognized Foreign Exchange Dealers, for
the aggregate amount of each Foreign Specified Currency in exchange for U.S.
dollars on the Payment Date. If such bid quotations are not available the
Exchange Rate Agent will inform the Corporation that payments on such Payment
Date must be made in U.S. dollars or other specified foreign currency. The
Exchange Rate Agent shall, on behalf of the Corporation, enter into an agreement
to trade such foreign currency or currencies (in such amounts and upon such
terms as indicated in this subsection (d) or subsection (c) above and upon such
further terms as are not inconsistent with the above) with such Recognized
Foreign Exchange Dealer or Dealers as shall have submitted the highest bid with
respect to each applicable foreign currency. The rate of exchange shall be
notified to the Corporation, the Trustee and the Paying Agent. At or before the
opening of business on the
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<PAGE>
Payment Date, the Corporation shall deposit in the Designated Account the U.S.
Dollar Amount for such Date. On the Payment Date, the Exchange Rate Agent will
debit the Designated Account for the U.S. Dollar Amount, exchange the U.S.
Dollar Amount for the contracted amount of the Foreign Specified Currency (the
"Foreign Currency Equivalent") and transfer the Foreign Currency Equivalent to
the Paying Agent. The settlement date for the exchange of the foreign
currencies for U.S. dollars shall be the applicable Payment Date.
SECTION 3. FEES AND EXPENSES.
The Exchange Rate Agent shall be entitled to such compensation for its
services under this Agreement as shall be agreed upon with the Corporation, and
the Corporation shall pay such compensation and shall reimburse the Exchange
Rate Agent for all reasonable expenses, disbursements and advances incurred or
made by it in connection with the services rendered by it under this Agreement
(including reasonable legal fees and expenses), except any expenses,
disbursements or advances attributable to the bad faith, gross negligence or
willful misconduct of the Exchange Rate Agreement. This Section shall survive
the payment in full of all obligations under the Notes, whether by redemption,
repayment or otherwise, the resignation or removal of the Exchange Rate Agent
and the termination of this Agreement.
SECTION 4. RIGHTS AND LIABILITIES OF EXCHANGE RATE AGENT.
The Exchange Rate Agent shall incur no liability for, or in respect of, any
action taken, omitted to be taken or suffered by it hereunder or in reliance
upon any Note, certificate, affidavit, instruction, notice, request, direction,
order, statement or other paper, document or communication reasonably believed
by it to be genuine, unless such action or inaction was the result of bad faith,
willful misconduct or gross negligence. Any order, certificate, affidavit,
instruction, notice, request, direction, statement or other communication from
the Corporation made or given by it and sent, delivered or directed to the
Exchange Rate Agent under, pursuant to, or as permitted by, any provision of
this Agreement shall be sufficient for the purpose of this Agreement if such
communication is in writing and signed by any officer or individual designated
in writing by the Treasurer of the Corporation. The Exchange Rate Agent may
consult with counsel satisfactory to it and the written opinion of such counsel
shall constitute full and complete authorization and protection of the Exchange
Rate Agent with respect to any action taken, omitted to be taken or suffered by
it hereunder in good faith and in accordance with and in reliance upon the
opinion of such counsel.
SECTION 5. RIGHTS OF EXCHANGE RATE AGENT TO OWN NOTES, ETC.
The Exchange Rate Agent may act as Trustee, Paying Agent or Calculation
Agent under the Indenture and it, its officers, employees and shareholders, may
become owners of, or acquire
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<PAGE>
interests in, Notes, with the same rights as if the Exchange Rate Agent were not
the Exchange Rate Agent hereunder. The Exchange Rate Agent may engage in, or
have an interest in, any financial or other transaction with the Corporation or
any of its affiliates (including, without limitation, foreign exchange
transactions of any type or nature and in any currency, whether a spot
transaction, forward transaction, option, future, option on a future or
otherwise) as if the Exchange Rate Agent were not the Exchange Rate Agent
hereunder.
SECTION 6. DUTIES OF EXCHANGE RATE AGENT.
In acting under the Agreement and in connection with the Notes, the
Exchange Rate Agent shall be obligated only to perform such duties as are
specifically set forth herein and no other duties or obligations on the part of
the Exchange Rate Agent, in its capacity as such, shall be implied by this
Agreement. In acting under this Agreement, the Exchange Rate Agent (in its
capacity as such) assumes no obligation towards, or any relationship of agency
or trust for or with, the holders of the Notes.
SECTION 7. TERMINATION, RESIGNATION OR REMOVAL OF EXCHANGE RATE AGENT.
The Exchange Rate Agent may at any time terminate this Agreement by giving
no less than 90 days written notice to the Corporation, unless the Corporation
consents in writing to a shorter time. Upon receipt of notice of termination by
the Exchange Rate Agent, the Corporation agrees promptly to appoint a successor
Exchange Rate Agent. The Corporation may terminate this Agreement at any time
by giving written notice to the Exchange Rate Agent and specifying the date when
the termination shall become effective; provided, however, that no termination
by the Exchange Rate Agent or the Corporation shall become effective prior to
the date of the appointment by the Corporation, as provided in Section 8, of a
successor Exchange Rate Agent and the acceptance of such appointment by such
successor Exchange Rate Agent. If an instrument of acceptance by a successor
Exchange Rate Agent shall not have been delivered to the resigning or terminated
Exchange Rate Agent within 60 days after the giving of such notice of
resignation or termination, the resigning or terminated Exchange Rate Agent may
petition a court of competent jurisdiction for the appointment of a successor
Exchange Rate Agent. Upon termination by either party pursuant to the
provisions of this Section, the Exchange Rate Agent with respect to which this
Agreement has been terminated shall be entitled to the payment of any
compensation owed to it by the Corporation hereunder and to the reimbursement of
all reasonable expenses, disbursements and advances incurred or made by it in
connection with the services rendered by it hereunder. The provisions of this
Section, Section 3 and Section 9 shall remain in effect following such
termination.
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<PAGE>
SECTION 8. APPOINTMENT OF SUCCESSOR EXCHANGE RATE AGENT.
Any successor Exchange Rate Agent appointed by the Corporation or by a
court following termination of this Agreement pursuant to the provisions of
Section 7 shall execute and deliver to the Exchange Rate Agent and to the
Corporation an instrument accepting such appointment, and thereupon such
successor Exchange Rate Agent shall, without any further act or instrument,
become vested with all the rights, immunities, duties and obligations of the
Exchange Rate Agent, with like effect as if originally named as the Exchange
Rate Agent hereunder, and the Exchange Rate Agent shall thereupon be obligated
to transfer and deliver, and such successor Exchange Rate Agent shall be
entitled to receive and accept, copies of any available records maintained by
the Exchange Rate Agent in connection with the performance of its obligations
hereunder.
SECTION 9. INDEMNIFICATION.
The Corporation shall indemnify and hold harmless the Exchange Rate Agent,
its officers and employees from and against all actions, claims, damages,
liabilities, losses and reasonable expenses (including reasonable legal fees and
expenses) relating to or arising out of actions or omissions in any capacity
hereunder, except actions, claims, damages, liabilities, losses and expenses
caused by or resulting from the bad faith, gross negligence or willful
misconduct of the Exchange Rate Agent, its officers or employees. This Section
shall survive the payment in full of all obligations under the Notes, whether by
redemption, repayment or otherwise, the resignation or removal of the Exchange
Rate Agent and the termination of this Agreement.
SECTION 10. MERGER, CONSOLIDATION OR SALE OF BUSINESS BY EXCHANGE RATE
AGENT.
Any corporation into which the Exchange Rate Agent may be merged, converted
or consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Exchange Rate Agent may be a party, or any
corporation to which the Exchange Rate Agent may sell or otherwise transfer all
or substantially all of its corporate trust business, shall, to the extent
permitted by applicable law, become the Exchange Rate Agent under this Agreement
without the execution of any document or any further act by the parties hereto.
SECTION 11. NOTICES.
Any notice or other communication given hereunder shall be delivered in
person, sent by letter, telecopy or telex or communicated by telephone (subject,
in the case of communication by telephone, to written confirmation dispatched
within 24 hours) to the addresses given below or such other address as the party
to receive such notice may have previously specified, in writing:
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<PAGE>
To the Corporation: The Black & Decker Corporation
701 East Joppa Road
Towson, Maryland 21286
Attention: Treasurer
Telecopy No.: (410) 716-3778
with a copy to: The Black & Decker Corporation
701 East Joppa Road
Towson, Maryland 21286
Attention: Vice President and
General Counsel
Telecopy No.: (410) 716-2660
To the Exchange Rate Agent: ______________________________
______________________________
______________________________
Attention: __________________
Telecopy No.: (___) ________
To the Trustee: Marine Midland Bank
Corporate Trust Offices
140 Broadway
New York, New York 10005
Telecopy: (212) 658-6425
Any notice hereunder given by letter, telecopy or telex shall be deemed to
have been received when it would have been received in the ordinary course of
post or transmission, as the case may be.
SECTION 12. BENEFIT OF AGREEMENT.
Except as provided herein, this Agreement is solely for the benefit of the
parties hereto and their successors and assigns and no other person shall
acquire or have any rights under or by virtue hereof.
SECTION 13. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
SECTION 14. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
when executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into as of the day and
year first above written.
THE BLACK & DECKER CORPORATION
By: ___________________________
Title:
[EXCHANGE RATE AGENT]
By: ___________________________
Title:
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<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 33-53807) and related Prospectus of The
Black & Decker Corporation for the registration of debt securities in the
amount of $500,000,000 and to the incorporation by reference therein of our
report dated February 16, 1994, with respect to the consolidated financial
statements and schedules of The Black & Decker Corporation included in its
Annual Report (Form 10-K) for the year ended December 31, 1993, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young
Baltimore, Maryland
July 1, 1994
