<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 1998
REGISTRATION NO. 333-42481
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
BLOUNT, INC.
BLOUNT INTERNATIONAL, INC.
(EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
63-0593908
DELAWARE 63-0780521
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBERS)
</TABLE>
4520 EXECUTIVE PARK DRIVE
MONTGOMERY, AL 36116-1602
(334) 244-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
------------------------
HAROLD E. LAYMAN
BLOUNT INTERNATIONAL, INC.
4520 EXECUTIVE PARK DRIVE
MONTGOMERY, ALABAMA 36116-1602
(334) 244-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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DAVID LOPEZ, ESQ. MARY A. BERNARD, ESQ.
CLEARY, GOTTLIEB, STEEN & HAMILTON KING & SPALDING
ONE LIBERTY PLAZA 1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10006 NEW YORK, NEW YORK 10036
(212) 225-2000 (212) 556-2100
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable following 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, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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, AS AMENDED, 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> 2
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 ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 2, 1998
PROSPECTUS
[BLOUNT INC. LOGO]
BLOUNT, INC.
$150,000,000
% Senior Notes due June , 2008
Fully and Unconditionally Guaranteed by
BLOUNT INTERNATIONAL, INC.
Interest payable June and December
ISSUE PRICE: %
Interest on the % Senior Notes due June , 2008 (the "Notes") of Blount,
Inc. (the "Company") is payable semi-annually on June and December of each
year, beginning December , 1998. The Notes are being offered by the Company
and will be fully and unconditionally guaranteed (the "Guarantee") by Blount
International, Inc. ("Blount" or the "Guarantor"). The Notes are redeemable, in
whole or in part, at the option of the Company, at any time, at a redemption
price equal to the greater of (i) 100% of the principal amount of such Notes and
(ii) as determined by the Quotation Agent (as defined herein), the sum of the
present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of
the date of redemption) discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate (as defined herein), plus basis points plus, in each
case, accrued and unpaid interest thereon to the date of redemption. See
"Description of Notes -- Optional Redemption" herein.
The Notes will be represented by one or more Global Securities registered in the
name of The Depository Trust Company (the "Depositary") or its nominee.
Interests in the Global Securities will be shown on, and transfers thereof will
be effected only through, records maintained by the Depositary and its
participants. Except as provided herein, Notes will not be issued in definitive
form. See "Description of Notes."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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- --------------------------------------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
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<S> <C> <C> <C>
Per Note % % %
- --------------------------------------------------------------------------------------------------------------
Total $ $ $
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from June , 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $393,750.
The Notes are offered, subject to prior sale, when, as and if accepted by the
Underwriters and subject to approval of certain legal matters by King &
Spalding, counsel for the Underwriters. It is expected that delivery of the
Notes will be made on or about June , 1998 through the facilities of the
Depositary, against payment therefor in immediately available funds.
J.P. MORGAN & CO. SALOMON SMITH BARNEY
June , 1998
<PAGE> 3
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SPECIFICALLY,
THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID FOR
AND PURCHASE THE NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by Blount, the Company or any Underwriter. This Prospectus does not constitute
an offer to sell or the solicitation of an offer to buy the Notes by anyone in
any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or solicitation. Neither
the delivery of this Prospectus, nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of Blount or the Company since the date hereof or that the information
contained or incorporated by reference herein is correct as of any time
subsequent to the date of such information.
------------------------
TABLE OF CONTENTS
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PAGE
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Available Information....................................... 3
Incorporation of Certain Documents by Reference............. 3
The Company................................................. 5
Federal Cartridge Acquisition............................... 7
Use of Proceeds............................................. 8
Capitalization.............................................. 9
Selected Financial Data..................................... 10
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 12
Description of Notes........................................ 15
Underwriting................................................ 24
Legal Matters............................................... 25
Experts..................................................... 25
</TABLE>
2
<PAGE> 4
AVAILABLE INFORMATION
Blount 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 concerning Blount can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices at Seven World Trade Center, 13th Floor, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates, or
at the Commission's worldwide website at http://www.sec.gov. Blount's Class A
Common Stock and Class B Common Stock are listed on the New York Stock Exchange,
Inc., and such material may also be inspected at the offices of such Exchange,
20 Broad Street, New York, New York 10005.
Although the Company, a wholly-owned subsidiary of Blount, was not subject
to the informational requirements of the Exchange Act immediately prior to the
date hereof, the Company presently is required to file reports with the
Commission pursuant to the Indenture dated as of July 1, 1993 governing its 9%
Senior Subordinated Notes due 2003 ("Subordinated Notes"), which the Company
plans to repay with a portion of the net proceeds from the sale of the Notes
offered hereby. See "Use of Proceeds." Upon repayment of the Subordinated Notes,
the Company will no longer be obligated to file reports with the Commission
pursuant to such Indenture. As a result of the filing of the Registration
Statement (as defined herein) with the Commission, the Company will nevertheless
become subject to the informational requirements of the Exchange Act and in
accordance therewith will be required to file reports and other information with
the Commission. The Company intends to seek a letter from the staff of the
Commission relieving the Company from the informational requirements of the
Exchange Act pursuant to Staff Accounting Bulletin No. 53 and Rule 12(h) under
the Exchange Act.
Blount and the Company have filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the Notes. This Prospectus does
not contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement and to the exhibits thereto. Statements contained herein
concerning the provisions of certain documents are not necessarily complete, and
in each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Commission pursuant to Section 13
of the Exchange Act, are incorporated herein by reference as of their respective
dates: (i) the Annual Reports on Form 10-K of Blount and the Company for the
period ended December 31, 1997, (ii) the Current Reports on Form 8-K/A of Blount
and the Company dated January 20, 1998, (iii) the Annual Report on Form 10-K/A
of Blount dated March 27, 1998 and (iv) the Quarterly Reports on Form 10-Q of
Blount and the Company for the period ended March 31, 1998.
All reports and definitive proxy or information statements filed by Blount
and the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of this Prospectus and prior to the termination of
this offering shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall 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
3
<PAGE> 5
statement. Any statements so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
Blount and the Company will provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
on the written or oral request of any such person, a copy of any or all of the
documents incorporated by reference herein, except the exhibits to such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to Executive Vice
President -- Administration, Blount International, Inc., P.O. Box 949,
Montgomery, Alabama 36101-0949 (telephone number: (334) 244-4000).
4
<PAGE> 6
THE COMPANY
The Company is an international industrial company with operations in three
business segments: Outdoor Products, Industrial and Power Equipment and Sporting
Equipment. The Company's focus is on manufacturing and distributing products
which hold leading market share positions in a number of attractive niche
markets. The Company is a wholly-owned subsidiary of the Guarantor, which is a
holding company conducting all of its operations through the Company. The
principal offices of the Company and the Guarantor are located at 4520 Executive
Park Drive, Montgomery, Alabama 36116 (telephone number: (334) 244-4000).
OUTDOOR PRODUCTS
The Company's Outdoor Products segment (44.5% of consolidated sales for the
year ended December 31, 1997) is comprised of the Oregon Cutting Systems
Division ("Oregon"), Dixon Industries, Inc. ("Dixon") and Frederick
Manufacturing Corporation ("Frederick") (which includes the operations conducted
by Orbex, Inc. ("Orbex") prior to its merger into Frederick on March 24, 1998).
Oregon produces a wide variety of saw chain, chain saw guide bars, saw chain
drive sprockets and accessories for use primarily on portable gasoline and
electric chain saws, and mechanical timber harvesting equipment. The Oregon
trademark is well known to end-users and the Company believes that it is the
world leader in the production of saw chain. Oregon's saw chain and related
products are used primarily by professional loggers, construction workers,
farmers, arborists and homeowners. Oregon also markets an Industrial Cutting
System ("ICS"), a diamond-segmented chain cutting system for concrete (including
steel-reinforced concrete). ICS is a faster and more flexible concrete cutting
method than others currently employed in the construction and demolition
industries.
Oregon sells its products to distributors, dealers and mass merchandisers
serving the retail replacement market. In addition, Oregon currently sells its
products to more than 50 original equipment manufacturers ("OEMs"). The use of
Oregon cutting chain as original equipment on chain saws is promoted through
cooperation with OEMs in improving the design and specifications of chain and
saws. Due to the high level of technical expertise and capital investment
required to manufacture saw chain and guide bars, the Company believes that it
is able to produce durable, high-quality saw chain and guide bars more
efficiently than most of its competitors.
The Company has Oregon marketing personnel throughout the United States and
in a number of foreign countries. Sales derived from operations outside the
United States accounted for 37%, and export sales accounted for an additional
22%, of Oregon's sales during the year ended December 31, 1997.
Dixon, acquired by the Company in early fiscal 1991, has manufactured ZTR
(zero turning radius) lawn mowers and related attachments since 1973. Dixon
pioneered the development of ZTR lawn mowers and is the only manufacturer to
offer a full line of ZTR lawn mowers for both homeowner and commercial
applications.
The key element which differentiates lawn mowers manufactured by Dixon from
those of its competitors is Dixon's unique mechanical transaxle. The transaxle
transmits power independently to the rear drive wheels and enables the operator
to move the back wheels at different speeds and turn the mower in a circle no
larger than the machine, a "zero radius turn." This transmission enables the
Dixon mower to out-maneuver conventional ride-on mowers available in the market
today and provides a cost advantage over the more expensive hydrostatic drives
used by competitors in the market.
Dixon sells its products through full-service dealers, North American
distributors and export distributors. Sales by Dixon accounted for 14% of sales
attributable to the Outdoor Products segment in the year ended December 31,
1997.
In January 1997 the Company acquired Frederick and Orbex for an aggregate
of $19 million in cash plus the assumption of certain indebtedness. Frederick is
(and Orbex, prior to its merger into Frederick in March 1998, was) a supplier of
outdoor products, primarily accessories for lawn mowers, and sporting goods. The
sales of Frederick and Orbex for 1997 accounted for approximately 7% of sales of
the Outdoor Products segment.
5
<PAGE> 7
In 1997, approximately 16.8% of the sales of the Outdoor Products segment
were to one customer. See Note 10 of Notes to Consolidated Financial Statements
contained in the 1997 Forms 10-K incorporated herein by reference.
INDUSTRIAL AND POWER EQUIPMENT
The Company's Industrial and Power Equipment segment (33.4% of consolidated
sales for the year ended December 31, 1997) manufactures equipment for timber
harvesting and log loading, industrial tractors and loaders, rotation bearings
and mechanical power transmission components. The Company believes that it is a
world leader in the manufacture of hydraulic timber harvesting equipment, which
includes a line of truck-mounted, trailer-mounted, stationary-mounted and
self-propelled loaders and crawler feller bunchers (tractors with hydraulic
attachments for felling timber) under the Prentice brand name; a line of
rubber-tired feller bunchers and related attachments under the Hydro-Ax brand
name; and a line of delimbers and slashers under the CTR brand name. Major users
of these products include logging contractors, harvesters, lumber and pulp
mills, land reclamation companies, utility contractors, building material
distributors, scrap yard operators and waste treatment facilities.
The Company sells this segment's products through a network of
approximately 250 dealers in over 400 locations in the United States and
currently has an additional 20 dealers overseas, primarily in the timber
harvesting regions of South America and Southeast Asia. Over 85% of the sales
attributable to the Industrial and Power Equipment segment for the year ended
December 31, 1997 were in the United States, primarily in the southeastern and
south central states.
The Company emphasizes the quality, safety, comfort, durability and
productivity of its products and the after-market service provided by its
distribution and support network. The Company's Industrial and Power Equipment
segment competes primarily on the basis of quality with a number of domestic and
foreign manufacturers of log loaders and feller bunchers.
The Company attempts to capitalize on its technological and manufacturing
expertise as a means of increasing its participation in the market for
replacement parts for products which it manufactures, as well as of developing
new product applications both within and beyond the timber, material handling,
scrap, land clearing and gear industries. The Company is committed to continuing
research and development in this segment to respond quickly to increasing
mechanization and environmental awareness in the timber harvesting industry.
Approximately 20% of total sales attributable to the Industrial and Power
Equipment segment during the year ended December 31, 1997 were derived from Gear
Products, Inc. ("Gear"), acquired by the Company in March 1991, and CTR
Manufacturing, Inc. ("CTR"), acquired by the Company in April 1994. Gear
designs, manufactures and distributes rotation bearings and mechanical power
transmission components for manufacturers of equipment that serve the utility,
man-lift, construction, forestry and marine industries.
SPORTING EQUIPMENT
In November 1997, the Company acquired the Federal Cartridge Company
("Federal"), a subsidiary of Pentair, Inc., which manufactures and markets
shotshell, centerfire, and rimfire cartridges, ammunition and clay targets. The
Federal Acquisition (as defined herein) complements and significantly expands
the product offerings of the Company's Sporting Equipment segment. See "Federal
Cartridge Acquisition."
The Company's Sporting Equipment segment (which, including the contribution
of Federal following the Federal Acquisition, accounted for 22.1% of
consolidated sales for the year ended December 31, 1997) manufactures small arms
ammunition, reloading equipment, primers, gun care products and accessories, and
is a distributor of imported sports optical products under the Simmons and
Weaver brand names. Sales by Simmons Outdoor Corporation, acquired in December
1995, accounted for 22% of sales attributable to the Sporting Equipment segment
for the year ended December 31, 1997. Principal products in this segment include
CCI and Speer ammunition sold for use by hunters, sportsmen and law enforcement
and military personnel; RCBS reloading equipment for use by hunters and
sportsmen who prefer to reload their own ammunition; Outers gun care and
trap-shooting products; Ram-Line synthetic
6
<PAGE> 8
stocks and other shooting sports accessories; Weaver mounting systems; and
Simmons and Weaver optics. The Company believes that it is a market leader in
the domestic gun care and reloading markets with high levels of brand name
recognition in each of these areas. The Sporting Equipment segment also produces
industrial powerloads which are used in the construction industry to drive
fastening pins into metal or concrete.
The market for Sporting Equipment products is characterized by a high
degree of customer loyalty to brand names and historically has remained
relatively stable notwithstanding adverse economic conditions. A continuing
focus on new and better technologies has enabled the Company to introduce a
number of new and improved products in recent years. These products include new
rifle ammunition, which was previously available only to handloaders, Speer Gold
Dot high performance pistol ammunition, which the Company believes is gaining
favor with law enforcement agencies around the world, and Clean-Fire and
non-toxic ammunition used extensively for indoor training. The Company's
exclusive aluminum case technology continues to provide low cost Blazer
ammunition to consumers for law enforcement training applications. New for 1998
is a series of fully automatic electric traps specifically designed for
commercial trap, skeet and sporting clays applications.
FEDERAL CARTRIDGE ACQUISITION
On November 4, 1997 the Company acquired Federal (the "Federal
Acquisition") for a purchase price of approximately $129 million in cash
(including post-closing adjustments and acquisition expenses of approximately
$17 million). The Federal Acquisition was funded with borrowings under the $150
million unsecured revolving credit agreement (the "Credit Agreement") between
the Company, Blount (as guarantor) and a syndicate of banks, other short-term
borrowings and internally-generated funds. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
Federal manufactures and markets shotshell, centerfire, and rimfire
cartridges, ammunition components, and clay targets. These products are
distributed throughout the United States through a network of distributors and
directly to large retail chains, the U.S. government and law enforcement
agencies. The acquisition of Federal, which in 1997 had sales in the ammunition
business of approximately $140 million (including approximately $14 million
subsequent to the Federal Acquisition), represented an increase of approximately
95% in annual sales attributable to the Company's Sporting Equipment segment for
the year ended December 31, 1997 and places the Company among the leading United
States producers of ammunition products.
The Federal Acquisition both complements and significantly expands the
Sporting Equipment segment's product offerings. Shotgun shells, a product not
previously manufactured or sold by the Company, represented approximately 42% of
Federal's sales for the year ended December 31, 1997. Federal is also a
significant producer and marketer of centerfire rifle ammunition, products as to
which the Company's market share is much smaller. In addition, Federal has
strong sales to the law enforcement market, a market on which the Company only
recently began to focus.
A significant portion of Federal's sales is to mass merchandisers, such as
Wal-Mart Stores, Inc., to whom the Company's Sporting Equipment sales have been
much less significant. The Company believes that as a result of the Federal
Acquisition, the Company's Sporting Equipment product lines, particularly its
optical products, may gain greater access to such mass merchandisers.
The Company believes that in recent years Federal's margins for its
products generally have been lower than those of the Company's Sporting
Equipment segment. The Company believes that the profitability of the Sporting
Equipment segment (including Federal) can be improved through cost savings to be
phased in over several years. Such savings are expected to result primarily from
the specialization and rationalization of production activities, combined
purchasing of goods and services and more efficient marketing and distribution.
7
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USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby are estimated to
be approximately $148.6 million. The Company will use approximately $58 million
of such net proceeds to repay outstanding indebtedness incurred in connection
with the Federal Acquisition under the Credit Agreement. See "Federal Cartridge
Acquisition." Morgan Guaranty Trust Company of New York ("Morgan Guaranty"), an
affiliate of J.P. Morgan Securities Inc. which is one of the Underwriters, is
one of the banks and acts as agent under the Credit Agreement. See
"Underwriting." The Credit Agreement provides for interest rates to be
determined at the time of borrowings based on a choice of formulas specified in
the Credit Agreement. Interest rates and commitment fees may vary based on the
ratio of cash flow to debt as defined in the Credit Agreement or on the
Company's credit rating. As of June 1, 1998 the Company had an aggregate of
approximately $58 million outstanding under the Credit Agreement, which
borrowings bore interest at such date at a weighted average rate of
approximately 5.89% per annum. The Credit Agreement terminates in April 2002.
The Company also plans to use a portion of the net proceeds from the sale
of the Notes to redeem all of the outstanding Subordinated Notes of the Company,
which become redeemable by the Company on June 15, 1998. If the Company redeems
the Subordinated Notes, the redemption price per Subordinated Note, as specified
in the governing indenture, will be the principal amount thereof plus a premium
equal to 3.375% of such principal amount, plus accrued and unpaid interest to
the date of redemption. If the Company repurchases Subordinated Notes through a
tender offer or open market or negotiated purchases, the purchase price per
Subordinated Note will be a negotiated price or the prevailing market price. As
of June 1, 1998, the Company had $68.8 million aggregate principal amount of
Subordinated Notes outstanding.
The Company will use the remaining net proceeds for general corporate
purposes, which may include future acquisitions.
Pending application of the net proceeds as described above, the Company
intends to invest the net proceeds in short-term, interest-bearing,
investment-grade obligations.
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CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of Blount at March 31, 1998, and as adjusted to give effect to
the sale of the Notes offered hereby and the application of the net proceeds
therefrom. See "Use of Proceeds."
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MARCH 31, 1998
--------------------
ACTUAL AS ADJUSTED
------ -----------
(in millions)
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SHORT-TERM NOTES AND CURRENT MATURITIES OF LONG-TERM DEBT... $ 7.7 $ 7.7
====== ======
LONG-TERM DEBT:
Credit Agreement(1)....................................... $ 58.0 $ --
Other (less current maturities)........................... 13.6 13.6
Notes offered hereby...................................... -- 150.0
9% Subordinated Notes due 2003............................ 68.8 --
------ ------
Total long-term debt................................... 140.4 163.6
------ ------
STOCKHOLDERS' EQUITY:
Common stock, par value $0.01 per share:
Class A -- 60 million shares authorized, 27,281,739
shares issued, 25,925,228 shares outstanding.......... 0.3 0.3
Class B -- 14 million shares authorized, 11,619,936
shares issued and outstanding......................... 0.1 0.1
Capital in excess of par value of stock................... 37.7 37.7
Retained earnings......................................... 310.7 308.7
Accumulated other comprehensive income.................... 7.0 7.0
Less Class A treasury stock at cost, 1,356,511 shares..... (27.3) (27.3)
------ ------
Total stockholders' equity............................. 328.5 326.5
------ ------
Total capitalization.............................. $468.9 $490.1
====== ======
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(1) As of June 1, 1998, Blount had approximately $58 million of long-term debt
outstanding under the Credit Agreement, primarily reflecting borrowings to
fund normal, recurring seasonal cash needs and the Federal Acquisition,
which borrowings bore interest at such date at a weighted average rate of
approximately 5.89% per annum. See "Federal Cartridge Acquisition."
9
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SELECTED FINANCIAL DATA
The following selected consolidated financial data of Blount and its
subsidiaries (including the Company) for the years ended the last day of
February 1994 through 1996, for the ten months ended December 31, 1996 and for
the year ended December 31, 1997 are derived from the consolidated financial
statements of Blount and its subsidiaries (including the Company) for such years
and period, which have been audited by Coopers & Lybrand L.L.P., independent
accountants. The selected consolidated financial data for the twelve months
ended December 31, 1996 and for the three months ended March 31, 1997 and 1998
are derived from unaudited consolidated financial statements of Blount and, in
the opinion of management, reflect all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the data presented for such
periods. The following information should be read in conjunction with the
consolidated financial statements and notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included or
incorporated by reference herein.
<TABLE>
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FOR THE THREE
FOR THE YEARS ENDED THE FOR THE TEN FOR THE TWELVE MONTHS MONTHS ENDED
LAST DAY OF FEBRUARY, MONTHS ENDED ENDED DECEMBER 31, MARCH 31,
------------------------ DECEMBER 31, ---------------------- ---------------
1994 1995 1996 1996(1) 1996(1) 1997 1997 1998
------ ------ ------ ------------ ------------ ------- ------ ------
(Unaudited) (Unaudited)
(Dollar amounts in millions, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Sales............................ $488.0 $588.4 $644.3 $526.7 $649.3 $716.9 $170.1 $199.7
Cost of sales.................... 330.1 390.8 427.3 346.5 426.9 482.9 113.8 139.2
Selling, general and
administrative expenses........ 114.1 121.0 126.5 105.2 130.0 134.6 33.2 35.6
Income from operations........... 43.9 76.6 90.5 75.0 92.4 99.4 23.1 24.9
Interest expense, net............ (9.5) (8.5) (7.4) (5.6) (7.5) (7.0) (1.6) (2.7)
Income from continuing operations
before income taxes............ 33.9 67.4 83.7 69.6 85.4 93.7 21.5 22.3
Income from continuing
operations..................... 21.6 40.7 53.6 44.0 53.8 59.1 13.6 13.7
Net income....................... 11.3 40.7 53.6 45.4 55.2 59.1 13.6 13.7
Per Share:
Basic:
Income from continuing
operations................... .58 1.08 1.41 1.14 1.40 1.57 0.36 0.37
Net income..................... .30 1.08 1.41 1.18 1.44 1.57 0.36 0.37
Diluted:
Income from continuing
operations................... .56 1.05 1.38 1.13 1.38 1.53 0.35 0.36
Net Income..................... .29 1.05 1.38 1.16 1.41 1.53 0.35 0.36
Cash dividends declared per
common share:
Class A........................ 0.154 0.173 0.198 0.228 0.228 0.261 0.063 0.071
Class B........................ 0.138 0.156 0.181 0.212 0.212 0.244 0.059 0.067
OTHER DATA:
EBITDA(2)........................ $ 67.6 $101.0 $116.3 $ 96.6 $118.2 $127.9 $ 29.7 $ 32.6
Depreciation and amortization.... 22.8 22.9 22.2 19.2 23.3 25.0 6.1 7.4
Property, plant and equipment
additions(3)................... 14.7 14.7 19.3 18.7 21.3 78.5 7.3 6.1
Ratio of earnings to fixed
charges(4)(5).................. 3.5x 6.2x 7.4x 8.2x 8.1x 9.2x 8.9x 7.4x
Long-term debt to total
capitalization(6).............. 38.3% 32.1% 27.3% 22.5% 22.5% 30.5% 22.7% 29.9%
BALANCE SHEET DATA (AT PERIOD END):
Working capital.................. $105.1 $123.3 $136.2 $166.2 $166.2 $171.1 $155.6 $185.7
Total assets..................... 499.6 520.8 546.5 533.8 533.8 637.8 534.2 664.9
Short-term notes and current
maturities of long-term debt... 6.1 7.8 11.7 1.2 1.2 1.5 1.7 7.7
Long-term debt (less current
maturities).................... 106.2 98.3 95.9 84.6 84.6 138.8 85.1 140.4
Stockholders' equity............. 171.0 207.7 255.0 290.8 290.8 316.1 289.7 328.5
</TABLE>
- ---------------
(1) In April 1996, Blount and the Company changed their fiscal year from one
ending on the last day of February to one ending on December 31. Unaudited
financial data for the twelve months ended December 31, 1996 is presented in
the table above for comparative purposes only.
10
<PAGE> 12
(2) Represents income from continuing operations before income taxes, interest
expense and depreciation and amortization. EBITDA should not be considered
as an alternative to, or more meaningful than, (i) operating income (as
determined in accordance with generally accepted accounting principles) as
an indicator of operating performance or (ii) cash flows from operating
activities (as determined in accordance with generally accepted accounting
principles) as a measure of liquidity. EBITDA is presented to provide
information with respect to debt service capability.
(3) Includes property, plant and equipment of acquired companies at date of
purchase of $5.0 million, $0.6 million and $59.8 million in the twelve
months ended the last day of February 1995 and 1996 and the twelve months
ended December 31, 1997, respectively, and $3.8 million in the three months
ended March 31, 1997.
(4) The ratio of earnings to fixed charges is determined by dividing pretax
income from continuing operations before interest expense, debt expense
amortization and the portion of rental expense deemed representative of the
interest factor by the sum of interest expense, capitalized interest, debt
expense amortization and the portion of rental expense deemed representative
of the interest factor.
(5) The following unaudited pro forma ratios of earnings to fixed charges
reflect the sale of the Notes offered hereby and the application of the net
proceeds therefrom, as described under "Use of Proceeds."
<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS ENDED FOR THE THREE MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1998
--------------------------- ---------------------------
ACTUAL PRO FORMA ACTUAL PRO FORMA
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Ratio of earnings to fixed
charges..................... 9.2x 10.5x 7.4x 7.8x
</TABLE>
(6) Total capitalization is defined as the sum of long-term debt (excluding
current maturities) and stockholders' equity.
11
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the consolidated financial statements and notes thereto of Blount incorporated
by reference in this Prospectus.
RESULTS OF OPERATIONS
In April 1996, Blount changed its fiscal year from one ending on the last
day of February to one ending on December 31. As a result of the change in
fiscal year, the audited financial statements, incorporated in this Prospectus
by reference, include the results for the ten-month transition period ended
December 31, 1996 ("transition period"). The following discussion and analysis
includes a discussion of the year ended December 31, 1997 compared to the
similar period for the prior calendar year. Per share amounts for periods prior
to 1997 have been restated to reflect a 2-for-1 stock split effected on December
8, 1997. All references to earnings per share in the following discussion are to
diluted earnings per share in accordance with Statement of Financial Accounting
Standards No. 128.
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997
Sales for the three months ended March 31, 1998, were $199.7 million
compared to $170.1 million for the comparable period of the prior year. Net
income for the first quarter of 1998 was $13.7 million ($.36 per share) compared
to net income of $13.6 million ($.35 per share) for the comparable period of the
prior year. These operating results reflect improved operating income from the
Industrial and Power Equipment and the Sporting Equipment segments, and lower
income from the Outdoor Products segment. Selling, general and administrative
expenses were higher during the first quarter of 1998, reflecting the addition
of Federal, acquired during the fourth quarter of the prior year. Higher
interest expense during the three months ended March 31, 1998, reflects higher
debt levels during the current year, principally due to the Federal Acquisition.
The principal reasons for these results and the status of Blount's financial
condition are set forth below and should be read in conjunction with Blount's
Annual Report on Form 10-K for the year ended December 31, 1997.
Sales for the Outdoor Products segment for the first quarter of 1998 were
$77.5 million compared to $82.2 million during the first three months of 1997.
Operating income was $16.0 million during the first quarter of 1998 compared to
$17.4 million in the first three months of 1997. The lower sales and operating
income resulted principally from a lower volume of saw chain sales, primarily
due to poor economic conditions in Asia, and lower lawn mower sales, reflecting
unfavorable weather conditions.
Sales for the Industrial and Power Equipment segment were a first quarter
record of $60.9 million during the first quarter of 1998 compared to $54.3
million during the comparable period of the prior year. Operating income was
$10.0 million for the first quarter compared to $6.8 million for the comparable
period of the prior year. The improved sales and operating income resulted
primarily from higher sales of forestry harvesting equipment due to improved
market conditions.
Sales for the Sporting Equipment segment were $61.3 million in the first
quarter of 1998 compared to $33.6 million in the comparable period of the prior
year. Operating income was $4.1 million during the first three months of the
current year compared to $3.5 million during the comparable period of the prior
year. The improved results are primarily due to the additional sales and income
from Federal whose principal selling season and income normally occurs later
during the year.
Blount's total backlog at March 31, 1998 was $90.9 million compared to
$117.9 million at December 31, 1997 and $75.3 million at March 31, 1997.
TWELVE MONTHS ENDED DECEMBER 31, 1997 (AUDITED) COMPARED TO TWELVE MONTHS ENDED
DECEMBER 31, 1996 (UNAUDITED)
Sales in 1997 were $716.9 million compared to $649.3 million in 1996.
Income from continuing operations improved to $59.1 million ($1.53 per share) in
1997 from $53.8 million ($1.38 per share)
12
<PAGE> 14
during 1996. Net income for 1996 included income of $1.4 million ($.03 per
share) from discontinued operations. The sales increase reflected higher sales
in 1997 by each operating segment, while the income increase resulted primarily
from improved performance by the Outdoor Products segment.
Selling, general and administrative expenses were 19% of sales in 1997
compared to 20% in 1996. Total selling, general and administrative expenses
increased by $4.6 million in 1997 principally due to the Federal Acquisition and
the acquisitions of Frederick and Orbex. Other income was higher in 1997 as a
result of gains on sales of securities.
Total backlog was $117.9 million at December 31, 1997 compared to $74.2
million at December 31, 1996, reflecting improved backlogs at each operating
segment, particularly at the Industrial and Power Equipment segment due to
improved market conditions. In 1998, Blount believes that the difficult economic
conditions in certain international markets and the adverse impact of a strong
U.S. dollar will likely continue to affect Blount's operations. However, Blount
expects continued sales and income growth in 1998, aided by the recent
acquisition of Federal.
Sales and operating income for the Outdoor Products segment for 1997 were
$319.3 million and $67.1 million, respectively, compared to $292.7 million and
$61.4 million during 1996. The operating results for this segment reflect an
increase in sales and operating income of $25.7 million and $7.2 million,
respectively, at Oregon and flat sales and lower operating income at Dixon.
Oregon's results reflect a 7% increase in the sales volume of saw chain and a
15% increase in the sales volume of saw bars, Oregon's two principal products,
partially offset by lower average selling prices, due to a higher percentage of
lower priced sales to original equipment manufacturers and unfavorable exchange
rates. Additionally, the acquisition of Frederick and Orbex increased sales by
8.8% in 1997. Oregon has foreign manufacturing or distribution operations in
Canada, Europe, Brazil, Japan and Russia and, as a result, fluctuations in
foreign exchange rates impact the amount of reported sales and operating
margins. Approximately 24% and 36% of Oregon's sales and operating costs and
expenses, respectively, were transacted in foreign currencies in 1997. Blount
estimates that unfavorable exchange rates in 1997, as compared to 1996, reduced
operating income by approximately $2.0 million. Operations in Brazil have
historically been significantly affected by high inflation, currency devaluation
and resulting governmental policies. During 1997, operating income from Brazil
was $2.6 million compared to $0.3 million during 1996, principally as a result
of improved economic conditions. Dixon's sales and operating income were $45.4
million and $7.1 million, respectively, in 1997 compared to $44.9 million and
$8.4 million during 1996 as the effects of reduced volume and higher costs were
partially offset by higher average selling prices.
Sales and operating income for the Industrial and Power Equipment segment
were $239.1 million and $32.7 million, respectively, in 1997 compared to $209.5
million and $31.9 million in 1996. The higher sales during 1997 were principally
due to a higher volume of forestry equipment sold as a result of improving
market conditions and higher average selling prices. The improved demand is
reflected in the Industrial and Power Equipment segment's backlog, which has
increased by 92% since the end of 1996. Operating income increased by $0.8
million during 1997 as higher forestry equipment product and warranty costs
offset much of the effect of the sales increase. The operating results of the
Industrial and Power Equipment segment's Gear subsidiary continued to improve in
1997 as its sales and operating income increased by 8% and 15%, respectively,
primarily due to higher volume.
Sales for the Sporting Equipment segment were $158.5 million in 1997
compared to $147.1 million in 1996. Operating income was $18.1 million during
1997, compared to $19.8 million during 1996. Sales reflect a higher volume of
ammunition products sales and the contribution by Federal since it was acquired
in November 1997, partially offset by a lower volume of sales of sports optics.
Operating income was lower in 1997 as lower sports optics sales offset the
effect of higher ammunition products sales. Additionally, operating income for
1996 included the positive effect of reduced environmental cost estimates of
$1.9 million resulting from the resolution of an environmental matter.
13
<PAGE> 15
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company had approximately $58 million outstanding
under the Credit Agreement primarily representing amounts borrowed in connection
with the Federal Acquisition and $68.8 million aggregate principal amount of the
Subordinated Notes were outstanding which mature in 2003. The long-term debt to
equity ratio was .4 to 1 at March 31, 1998 and December 31, 1997. The Company
plans to use the proceeds of the Notes to repay outstanding indebtedness under
the Credit Agreement and to redeem all of its outstanding Subordinated Notes.
The balance of the proceeds will be used for general corporate purposes. See
Note 3 of Notes to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997, for
the terms and conditions of the Credit Agreement and the Subordinated Notes.
Cash balances at March 31, 1998 were $4.3 million compared to $4.8 million
at December 31, 1997. Working capital was $185.7 million at March 31, 1998
compared to $171.1 million at December 31, 1997, reflecting increases in
accounts receivable, inventory and accounts payable, principally reflecting
seasonal selling patterns and the related inventory buildup. At March 31, 1998,
borrowings under short-term lines to meet short-term seasonal needs were $6.8
million.
On November 4, 1997, the Company acquired Federal for approximately $129
million in cash (including post-closing adjustments and acquisition expenses of
approximately $17 million). See "Federal Cartridge Acquisition." The sources of
the $112 million paid at closing consisted of borrowings under the Credit
Agreement, other short-term borrowings and internally-generated funds. A portion
of the net proceeds from the sale of the Notes offered hereby will be used to
repay borrowings outstanding under the Credit Agreement. See "Use of Proceeds."
Management believes that the net proceeds from the sale of the Notes
offered hereby, together with borrowings available under the Credit Agreement
and cash from operations, will be sufficient to fund Blount's cash needs for the
foreseeable future.
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information." Statement No. 131 establishes standards for public business
enterprises reporting information about operating segments in annual and interim
financial statements. It also establishes standards for related disclosures
about products and services and geographic areas.
This statement is effective for fiscal years beginning after December 15,
1997. Blount does not believe that this statement will have a material effect on
its results of operations, financial condition or cash flows.
14
<PAGE> 16
DESCRIPTION OF NOTES
The Notes are to be issued under an Indenture, to be dated as of June ,
1998 (the "Indenture"), among the Company, the Guarantor, and LaSalle National
Bank, as Trustee (the "Trustee"), a copy of which is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all of the provisions of the Indenture,
including the definitions therein of certain terms. Wherever particular Sections
or defined terms of the Indenture are referred to herein, such Sections or
defined terms are incorporated herein by reference.
The following sets forth certain general terms and provisions of the Notes
offered hereby.
GENERAL
The Notes will be unsecured and unsubordinated obligations of the Company,
will be limited to $150,000,000 aggregate principal amount and will mature on
June , 2008. Payment of principal of (and premium, if any) and interest on
the Notes will be fully, unconditionally and irrevocably guaranteed by the
Guarantor.
The Notes will bear interest at % per annum, payable semiannually in
arrears on June and December of each year, commencing December , 1998,
to the persons in whose names the Notes are registered at the close of business
on the and , as the case may be, next preceding such interest
payment dates. Interest on the Notes will be computed on the basis of a 360-day
year of twelve 30-day months.
Payment of the principal of (and premium, if any) and interest on the Notes
will be made at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York or at such other office or
agency of the Company as may be maintained for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
The Notes will be sold in minimum denominations of $1,000 and integral
multiples thereof.
The Notes will not be subject to any sinking fund.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in same-day
funds. All payments of principal and interest will be made by the Company in
immediately available funds.
GLOBAL NOTES
The Notes may be issued in the form of one or more fully registered Global
Notes (referred to herein as the "Global Securities") that will be deposited
with, or on behalf of, the Depositary and registered in the name of the
Depositary's nominee. Unless and until it is exchanged in whole or in part for
Notes in definitive registered form, a Global Security may not be registered for
transfer or exchange except as a whole by the Depositary to a nominee of such
Depositary. (Sections 202 and 305).
The Depositary has advised the Company as follows: The Depositary is a
limited purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code, as amended, and a "Clearing Agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities for its participating organizations
(collectively, "participants") and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical transfer and delivery of certificates. Participants include securities
brokers and dealers, banks, trust companies and clearing
15
<PAGE> 17
corporations and may include certain other organizations. Indirect access to the
Depositary system is available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly ("indirect participants").
Upon the issuance of a Global Security, the Depositary will credit, on its
internal system, the respective principal amount of the individual beneficial
interests represented by such Global Securities to the accounts of participants
or persons who hold interests through participants. Ownership of beneficial
interests in the Global Securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary or
its nominee (with respect to interests of participants) or by the participants
and the indirect participants (with respect to other owners of beneficial
interests in Global Securities).
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such laws, as well as
the limits on participation in the Depositary's book-entry system, may impair
the ability to transfer beneficial interests in a Global Security.
So long as the Depositary or its nominee is the registered owner of a
Global Security, such Depositary or such nominee will be considered the sole
owner or holder of the Notes represented by such Global Security for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Notes represented by
such Global Security registered in their names, will not receive or be entitled
to receive physical delivery of such Notes in definitive form, and will not be
considered the owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on Notes
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Security representing such Notes. The Company expects that the Depositary
or its nominee, upon receipt of any payment of principal, premium or interest,
will credit immediately participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of the Global Security for such Notes, as shown on the records of the Depositary
or its nominee. The Company also expects that payments by participants and
indirect participants to owners of beneficial interests in such Global Security
held through such persons will be governed by standing instructions and
customary practices, as is now the case with securities registered in "street
name," and will be the responsibility of such participants and indirect
participants. None of the Company, the Guarantor and the Trustee will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Global
Security for such Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests. (Section 308).
If the Depositary at any time notifies the Company that it is unwilling or
unable to continue as Depositary or ceases to be a clearing agency registered
under the Exchange Act and any other applicable statute or regulation, the
Company has agreed to appoint a successor depositary. If such a successor is not
appointed by the Company within 90 days, the Company will issue Notes in
definitive form (having endorsed thereon Guarantees duly executed by the
Guarantor) in exchange for the Global Security representing such Notes. In
addition, the Company may at any time and in its sole discretion determine not
to have the Notes represented by a Global Security, and, in such event, the
Company will issue Notes in definitive form (having endorsed thereon Guarantees
duly executed by the Guarantor) in exchange for the Global Security representing
such Notes. Further, if the Company so specifies with respect to the Notes, an
owner of a beneficial interest in a Global Security representing Notes may, on
terms acceptable to the Company, the Trustee and the Depositary for such Global
Security, receive Notes in definitive form (having endorsed and thereon
Guarantees duly executed by the Guarantor). In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Notes represented by such Global Security (having endorsed
and thereon Guarantees duly executed by the Guarantor) equal in principal amount
to such beneficial interest and to have such Notes registered in its name.
(Section 305). Notes so issued in definitive form will be issued in
denominations of $1,000 and integral multiples thereof.
16
<PAGE> 18
GUARANTEE
The Guarantor will irrevocably and unconditionally guarantee (the
"Guarantee") the punctual payment when due, whether at maturity, upon redemption
or by acceleration or otherwise, the principal of (and premium, if any) and
interest on the Notes. The Guarantee will be a continuing guaranty and shall (a)
remain in full force and effect until payment in full of the guaranteed
obligations, (b) be binding upon Guarantor and (c) inure to the benefit of and
be enforceable by the Trustee, the Holders and their successors, transferees and
assigns.
OPTIONAL REDEMPTION
The Notes will be redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of such Notes or (ii) as determined by the Quotation Agent
(as defined below), the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including any portion of such
payments of interest accrued as of the date of redemption) discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate plus
basis points, plus, in each case, accrued and unpaid interest thereon to the
date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means (i) each of J.P. Morgan Securities Inc.
and Salomon Brothers Inc and their respective successors; provided, however,
that if either of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute another Primary Treasury Dealer; and (ii) any other Primary
Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Notes to be redeemed.
Unless the Company defaults in payment of the redemption price, on and
after the redemption date, interest will cease to accrue on the Notes or
portions thereof called for redemption.
17
<PAGE> 19
CERTAIN COVENANTS
RESTRICTION ON SECURED DEBT
The Indenture provides that so long as any Notes are Outstanding, the
Company and the Guarantor will not, and will not permit any Subsidiary to,
incur, issue, assume or guarantee any Debt secured by a Mortgage on any
Principal Property of the Company, the Guarantor or any Subsidiary or any shares
of Capital Stock or Debt of any Subsidiary, without effectively providing that
the Notes then Outstanding (together with, if the Company or the Guarantor shall
so determine, any other Debt of the Company, the Guarantor or such Subsidiary
then existing or thereafter created which is not subordinate to the Notes then
Outstanding) shall be secured equally and ratably with (or, at the option of the
Company and the Guarantor, prior to) such secured Debt, for so long as such
secured Debt shall be so secured; provided, however, that this restriction will
not apply to:
(i) Mortgages on Principal Property, shares of Capital Stock or Debt
of any corporation existing at the time such corporation becomes a
Subsidiary;
(ii) Mortgages on Principal Property or shares of Capital Stock
existing at the time of the acquisition of such Principal Property or
Capital Stock by the Company, the Guarantor or a Subsidiary;
(iii) Mortgages to secure the payment of all or any part of the price
of acquisition, construction or improvement of Principal Property or
Capital Stock by the Company, the Guarantor or a Subsidiary, or to secure
any Debt incurred by the Company, the Guarantor or a Subsidiary, prior to,
at the time of, or within 180 days after, the later of the acquisition or
completion of construction (including any improvements on an existing
property), which Debt is incurred for the purpose of financing all or any
part of the purchase, construction or improvement of such Principal
Property;
(iv) Mortgages securing any Debt of a Subsidiary owing to the
Guarantor or the Company or to another Subsidiary;
(v) Mortgages on property or assets of a corporation existing at the
time such corporation is merged into or consolidated with the Company, the
Guarantor or a Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company, the Guarantor or a Subsidiary
in accordance with the terms of the Indenture;
(vi) Mortgages on property or assets of a Person existing at the time
the Guarantor or the Company is merged into or consolidated with such other
Person or at the time of a sale, lease or other disposition of the
properties of the Guarantor or the Company as an entirety or substantially
as an entirety to such other Person in accordance with the terms of the
Indenture;
(vii) Mortgages on property or assets of the Company, the Guarantor or
a Subsidiary securing Debt issued by the United States of America or any
State thereof or any department, agency or instrumentality or political
subdivision thereof, or by any other country or any political subdivision
thereof, for the purpose of financing all or any part of the purchase price
of (or, in the case of real property, the cost of construction on or
improvement of) any property or assets subject to such Mortgages
(including, but not limited to, Mortgages incurred in connection with
pollution control, industrial revenue or similar financings);
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any
Mortgages referred to in the foregoing clauses (i) to (vii) inclusive;
provided, that the principal amount of the Debt being extended, renewed or
replaced shall not be increased and such extension, renewal or replacement,
in the case of Debt secured by a Mortgage, shall be limited to all or a
part of the same property, shares of Capital Stock or Debt that secured the
Mortgage extended, renewed or replaced (plus improvements on such
property); and
18
<PAGE> 20
(ix) Mortgages not permitted by clauses (i) through (viii) above if at
the time of and after giving effect to, the creation or assumption of any
such Mortgage, the aggregate amount of all Debt of the Company, the
Guarantor and the Subsidiaries secured by such Mortgages not so permitted
by clauses (i) through (viii) above together with the Attributable Debt in
respect of Sale and Lease-Back Transactions permitted by the Indenture does
not exceed 15% of Consolidated Net Tangible Assets. (Section 1006).
The Indenture will not restrict the incurrence of unsecured Debt by the
Guarantor or any Subsidiary.
RESTRICTION ON SALE AND LEASE-BACK TRANSACTIONS
The Indenture provides that so long as any Notes are Outstanding, the
Company and the Guarantor will not, and will not permit any Subsidiary to, enter
into any Sale and Lease-Back Transaction unless:
(i) the Company, the Guarantor or such Subsidiary would, at the time
of entering into such Sale and Lease-Back Transaction, be entitled, as
described in clauses (i) through (ix) set forth under "Restriction on
Secured Debt," above, to incur Debt secured by a Mortgage on the Principal
Property to be leased in an amount at least equal to the Attributable Debt
in respect of such Sale and Lease-Back Transaction without equally and
ratably securing the Notes then Outstanding;
(ii) the direct or indirect proceeds of the sale of the Principal
Property to be leased are at least equal to the fair value of such
Principal Property (as determined by the Board of Directors of the
Guarantor) and an amount at least equal to the net proceeds from the sale
of the Principal Property so leased is applied, within 180 days of the
effective date of any such Sale and Lease-Back Transaction, (a) to the
purchase or acquisition of (or, in the case of real property, the
commencement of construction on or improvement of) property or assets, or
(b) to the retirement or repayment (other than at maturity or pursuant to a
mandatory sinking fund or mandatory redemption provision) of (1) Notes or
Funded Debt of the Company or the Guarantor ranking on a parity with or
senior to the Notes, or Funded Debt of a Subsidiary or (2) Debt incurred by
the Company, the Guarantor or a Subsidiary within 180 days prior to the
effective date of any such Sale and Lease-Back Transaction that (A) was
used solely to finance the acquisition of the Principal Property that is
the subject of such Sale and Lease-Back Transaction and (B) is secured by a
Mortgage on the Principal Property that is the subject of such Sale and
Lease-Back Transaction; provided, however, that the amount to be so applied
will be reduced by (x) the principal amount of Notes delivered to the
Trustee for retirement and cancellation (other than at maturity or pursuant
to a mandatory sinking fund or mandatory redemption provision) within 180
days before or after such sale or transfer and (y) the principal amount of
any such Debt of the Company, the Guarantor or a Subsidiary (other than
Notes) voluntarily retired (other than at maturity or pursuant to a
mandatory sinking fund or mandatory redemption provision) by the Company,
the Guarantor or such Subsidiary within 180 days before or after such sale
or transfer; or
(iii) the lease in such Sale and Lease-Back Transaction secures or
relates to Debt or other obligations issued by the United States of America
or any State thereof or any department, agency or instrumentality or
political subdivision thereof, or by any other country or any political
subdivision thereof, for the purpose of financing all or any part of the
purchase price of (or, in the case of real property, the cost of
construction on or improvement of) any property or assets subject to such
leases (including, but not limited to, leases incurred in connection with
pollution control, industrial revenue or similar financings). (Section
1007).
CERTAIN DEFINITIONS
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable, at any date as of which the amount thereof is to
be determined, the total net amount of rent required to be paid by such Person
under such lease during the remaining term thereof (excluding any subsequent
renewal or other extension options held by the lessee), discounted from the
respective due dates thereof to such date of determination at the rate of
interest per annum implicit in the terms of such lease, as
19
<PAGE> 21
determined in good faith by the Guarantor, compounded annually. The net amount
of rent required to be paid under any such lease for any such period shall be
the amount of the rent payable by the lessee with respect to such period, after
excluding amounts required to be paid on account of maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates and similar charges
and contingent rents (such as those based on sales). In the case of any lease
which is terminable by the lessee upon the payment of a penalty, such net amount
shall also include the amount of such penalty, but no rent shall be considered
as required to be paid under such lease subsequent to the first date upon which
it may be so terminated.
"Capital Stock," as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless of
whether such capital stock shall be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such corporation.
"Consolidated Net Tangible Assets" means, with respect to any Person, on
the date on which the determination is being made, the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (i) all current liabilities (excluding current maturities of
long-term debt and capitalized lease obligations), and (ii) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly balance sheet of such
Person and its consolidated Subsidiaries and computed in accordance with
generally accepted accounting principles.
"Debt" means indebtedness for money borrowed.
"Funded Debt" means, on the date on which the determination is being made,
any Debt maturing by its terms more than 12 months from such date, including any
Debt renewable or extendible at the option of the borrower to a date later than
12 months from such date of determination.
"Mortgage" means and includes any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Principal Property" means, on any date of determination, any manufacturing
plant or manufacturing facility (i) owned by the Company, the Guarantor or any
Subsidiary of either of the foregoing, (ii) located in the continental United
States of America and (iii) having a gross book value, on such date, in excess
of (a) with respect to any such plant or facility owned as of such date by the
Guarantor or a Subsidiary of the Guarantor, 2% of the Consolidated Net Tangible
Assets of the Guarantor or (b) if the Company is not a Subsidiary of the
Guarantor as of such date, with respect to any such plant or facility owned by
the Company or a Subsidiary of the Company, 2% of the Consolidated Net Tangible
Assets of the Company; provided, however, that the term "Principal Property"
shall not include (x) any plant or facility described in clause (a) of this
sentence if, in the opinion of the Board of Directors of the Guarantor, or (y)
any plant or facility described in clause (b) of this sentence, if, in the
opinion of the Board of Directors of the Company, in either case, as set forth
in, and effective as of the date of, a Board Resolution, such plant or facility
is not of material importance to the business conducted by the Guarantor and its
Subsidiaries or the Company and its Subsidiaries, respectively, taken as a
whole.
"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Company, the Guarantor or any Subsidiary of any
Principal Property, whether owned at the date of the Indenture or thereafter
acquired (except for temporary leases for a term, including any renewal thereof,
of not more than three years and except for leases between the Company or the
Guarantor and any Subsidiary, between any Subsidiary and the Company or the
Guarantor or between Subsidiaries (in each case, including the Company)), which
Principal Property has been or is to be sold or transferred by the Guarantor or
such Subsidiary to such Person with the intention of taking back a lease of such
Principal Property.
"Significant Subsidiary" means, with respect to any Person, any Subsidiary
that would be a "Significant Subsidiary" of such Person within the meaning of
Rule 1-02 under Regulation S-X promulgated by the Commission.
20
<PAGE> 22
"Subsidiary" means a corporation of which more than 50% of the outstanding
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote generally in the election of directors
thereof is owned, directly or indirectly, by the Company or the Guarantor, as
the context requires, or by one or more other Subsidiaries, or by the Company or
the Guarantor, as the context requires, and one or more other Subsidiaries.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Notes: (a) failure to pay any interest on any Note
when due at its Stated Maturity, continued for 30 days; (b) failure to pay
principal of (or premium, if any, on) any Note at its Maturity; (c) failure to
perform, or breach of any other covenant or warranty of the Guarantor or the
Company in the Indenture, continued for 90 days after written notice as provided
in the Indenture; (d) default under any bond, debenture, note or other evidence
of indebtedness for money borrowed by the Guarantor, the Company or any
Subsidiary of the Guarantor or under any mortgage, indenture or instrument under
which there may be secured or evidenced any indebtedness for money borrowed by
the Guarantor or any Subsidiary of the Guarantor, which default constitutes the
failure to pay indebtedness in a principal amount in excess of $20 million when
due and payable at the final maturity thereof, after the expiration of any
applicable grace period, or which shall have resulted in such indebtedness in a
principal amount in excess of $20 million becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or such acceleration
having been rescinded or annulled, within a period of 30 days after written
notice as provided in the Indenture specifying such default and requiring the
Guarantor or the Company, as the case may be, to cause such indebtedness to be
discharged or such acceleration to be rescinded or annulled; or (e) certain
events of bankruptcy, insolvency or reorganization of the Guarantor or any
Significant Subsidiary. (Section 501).
If an Event of Default with respect to the Notes occurs and is continuing,
either the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Notes may declare the principal amount of all the Notes to be
due and payable immediately. At any time after a declaration of acceleration
with respect to Notes has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in principal amount of
Outstanding Notes may, under certain circumstances, rescind and annul such
acceleration. (Section 502).
Under the Indenture, the Trustee shall, within 90 days after the occurrence
of a default with respect to the Notes, give the holders of the Notes notice of
such default known to it (the term "default" to mean the events specified above
without notice or grace periods); provided that, except in the case of a default
in the payment of principal of (or premium, if any) or interest on any of the
Notes, the Trustee shall be protected in withholding such notice if it in good
faith determines the withholding of such notice is in the interests of the
holders of the Notes; and provided, further, that the Trustee will not give such
notice with respect to certain defaults until at least 60 days after the
occurrence thereof. (Section 602).
The Indenture provides that, subject to the duty of the Trustee during a
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee indemnity reasonably satisfactory to it. (Sections 601,
603). Subject to such provisions for the indemnification of the Trustee and to
certain other conditions, the Holders of at least a majority in principal amount
of the Outstanding Notes will have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Notes. (Section 512).
No Holder of Notes will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee a written notice of a continuing Event of
Default and unless the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made a written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee, and the
Trustee shall not have received from the Holders of a
21
<PAGE> 23
majority in principal amount of the Outstanding Notes a direction inconsistent
with such request and shall have failed to institute such a proceeding within 60
days. (Section 507). However, such limitations do not apply to a suit instituted
by a Holder of a Note for enforcement of payment of the principal of and any
premium or interest on such Note on or after the respective due dates expressed
in such Note. (Section 508).
Each of the Company and the Guarantor is required to furnish to the Trustee
annually a statement as to any default by the Company or the Guarantor as the
case may be, in the performance of certain of its respective obligations under
the Indenture. (Section 1004).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company or
the Guarantor and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the Outstanding Notes affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Note affected thereby,
(i) change the Stated Maturity of the principal of or interest on, any Note;
(ii) reduce the principal amount of, the rate of interest on, or premium payable
on any redemption of any Note; (iii) change any Place of Payment where, or the
coin or currency in which, any Note or any premium or interest thereon is
payable; (iv) impair the right to institute suit for the enforcement of any
payment on any Note on or after the Stated Maturity thereof; (v) reduce the
percentage in principal amount of Outstanding Notes, the consent of whose
Holders 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; or (vi) modify any of the provisions described in this paragraph or
set forth in certain other sections of the Indenture, except to increase any
such percentage or to limit the ability of Holders to modify or waive certain
other provisions of the Indenture. (Section 902).
The Holders of at least a majority in principal amount of the Outstanding
Notes may, on behalf of all Holders, waive compliance by the Company with
certain restrictive provisions of the Indenture. (Section 1008). The Holders of
not less than a majority in principal amount of the Outstanding Notes may, on
behalf of all Holders, waive any past default under the Indenture, except a
default in the payment of principal of or any premium or interest on any Note
and in respect of a covenant or provision of the Indenture that cannot be
modified or amended without the consent of the Holder of each Outstanding Note
affected thereby. (Section 513).
CONSOLIDATION, MERGER AND SALE OF ASSETS
Neither the Guarantor nor the Company may consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person and may not permit any Person to
consolidate with or merge into the Guarantor or the Company or convey, transfer
or lease its properties and assets substantially as an entirety to the Guarantor
or the Company, unless (i) any successor or purchaser is a corporation,
partnership or trust organized under the laws of the United States of America,
or any State thereof or the District of Columbia, and any such successor or
purchaser expressly assumes the Guarantor's or the Company's obligations on the
Guaranty or the Notes, as the case may be, under a supplemental indenture and
the performance or observance of every covenant of the Indenture to be performed
by the Guarantor or the Company, as the case may be, (ii) immediately after
giving effect to the transaction and treating any indebtedness which becomes an
obligation of the Guarantor, the Company or a Subsidiary as a result of such
transaction as having been incurred by the Guarantor, the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing, (iii) if as a result of such transaction
properties or assets of the Guarantor or the Company could become subject to a
Mortgage not permitted by the Indenture, the Guarantor or the Company or such
successor Person, as the case may be, takes such steps as shall be necessary
effectively to secure the Notes equally and ratably with (or prior to) all
indebtedness secured thereby, and (iv) the
22
<PAGE> 24
Guarantor or the Company, as the case may be, has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel stating compliance with these
provisions. (Section 801).
DEFEASANCE AND COVENANT DEFEASANCE
The Company and the Guarantor, at their option, (a) will be discharged from
any and all obligations in respect of the Notes (except for certain obligations
to register the transfer or exchange of Notes, replace stolen, lost or mutilated
Notes, maintain paying agencies and hold moneys for payment in trust) or (b)
need not comply with certain restrictive covenants of the Indenture, including
those described under "Certain Covenants," and "Consolidation, Merger and Sale
of Assets" and the occurrence of an event described in clause (c) or clause (d)
under "Events of Default" shall no longer be an Event of Default, in each case,
if the Company irrevocably deposits, in trust, with the Trustee money and/or
U.S. Government Obligations, which through the scheduled payment of interest
thereon and principal thereof in accordance with their terms will provide money
in an amount sufficient, without reinvestment, in the written opinion of a
nationally recognized firm of independent public accountants, to pay all the
principal of (and premium, if any) and interest (to the Maturity or to the
redemption date, as the case may be) on the Outstanding Notes or analogous
payments on the dates such payments are due in accordance with the terms of the
Outstanding Notes and the Indenture. The option described above may only be
exercised if, among other things, (i) no Event of Default or event which with
the giving of notice or lapse of time or both would become an Event of Default
under the Indenture shall have occurred and be continuing on the date of such
deposit, and (ii) the Company shall have delivered an Opinion of Counsel to the
effect that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax in the same manner as if such defeasance had not occurred. In
the event the Company omits to comply with its remaining obligations under the
Indenture after a defeasance of the Indenture with respect to the Notes as
described under clause (b) above and the Notes are declared due and payable
because of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations on deposit with the Trustee may not be sufficient to pay
amounts due on the Notes at the time of the acceleration resulting from such
Event of Default. However, the Company and the Guarantor will remain liable with
respect to such payments. (Article 12).
GOVERNING LAW
The Indenture and the Notes will be governed by and construed in accordance
with the laws of the State of New York. (Section 112).
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<PAGE> 25
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT OF NOTES
----------- ---------------
<S> <C>
J.P. Morgan Securities Inc. ................................ $
Salomon Brothers Inc........................................
------------
Total.................................................. $150,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to purchase all of the Notes if any are purchased.
The Underwriters initially propose to offer the Notes to the public at the
initial public offering price set forth on the cover page of this Prospectus and
to certain dealers at such price less a concession not in excess of % of
the principal amount of the Notes. The Underwriters may allow, and such dealers
may reallow, a concession not in excess of % of the principal amount of the
Notes to certain other dealers. After the initial public offering, the public
offering price and such concession may be changed by the Underwriters.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend to
make a market in the Notes but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes or the price at which the Notes
will trade.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company expects to use a portion of the net proceeds from the sale of
the Notes to repay indebtedness owed to a bank syndicate in which Morgan
Guaranty, an affiliate of J.P. Morgan Securities Inc., is a lender and acts as
agent. Morgan Guaranty is expected to receive approximately 8% of such net
proceeds. See "Use of Proceeds."
In connection with the offering of the Notes, the Underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriters may overallot in connection with the
offering of the Notes, creating a syndicate short position. In addition, the
Underwriters may bid for, and purchase, Notes in the open market to cover
syndicate short positions or to stabilize the price of the Notes. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the Notes in the offering of the Notes, if the syndicate repurchases previously
distributed Notes in syndicate covering transactions, stabilization transactions
or otherwise. Any of these activities may stabilize or maintain the market price
of the Notes above independent market levels. The Underwriters are not required
to engage in any of these activities, and may end any of them at any time.
In the ordinary course of their respective businesses, the Underwriters and
certain of their affiliates have provided, and may in the future provide,
investment banking and/or commercial banking services to the Company and have
received and will receive customary fees and compensation therefor.
24
<PAGE> 26
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the
Company and Blount by Cleary, Gottlieb, Steen & Hamilton, New York, New York and
for the Underwriters by King & Spalding, New York, New York.
EXPERTS
The consolidated financial statements and financial statement schedules of
Blount and the Company incorporated by reference in this Prospectus have been
audited by Coopers & Lybrand L.L.P., independent accountants, to the extent and
for the periods indicated in their reports thereon which appear in Blount's and
the Company's Annual Reports on Form 10-K for the period ended December 31,
1997. The financial statements of Federal incorporated by reference in this
Prospectus have been audited by Deloitte & Touche LLP, independent auditors, to
the extent and for the periods indicated in their report thereon which appear in
Blount's and the Company's Current Reports on Form 8-K/A dated January 20, 1998.
The consolidated financial statements and financial statement schedules covered
by the reports of Coopers & Lybrand L.L.P. have been incorporated by reference
herein in reliance upon the reports of said firm and upon the authority of said
firm as experts in accounting and auditing. The financial statements of Federal
covered by the reports of Deloitte & Touche LLP have been incorporated by
reference herein in reliance upon the reports of said firm and upon the
authority of said firm as experts in accounting and auditing.
25
<PAGE> 27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<TABLE>
<S> <C>
Commission Registration Fee................................. $ 44,250
Accounting Fees and Expenses................................ $ 50,000
Trustees' Fees and Expenses................................. $ 2,000
Printing Fees............................................... $ 35,000
Rating Agency Fees.......................................... $ 82,500
Legal Fees and Expenses..................................... $170,000
Miscellaneous............................................... $ 10,000
--------
Total.................................................. $393,750
========
</TABLE>
- ---------------
* All amounts are estimated except for the Commission registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware Corporation Law authorizes a court to award, or
a corporation to grant, indemnity to directors and officers in terms
sufficiently broad to permit indemnification under certain circumstances against
liabilities (including expenses incurred) arising under the securities laws.
Article VI of the By-laws of each of Blount and the Company provides for
indemnification of the respective company's directors and officers against
certain liabilities, including certain liabilities under the securities laws,
incurred in their capacity as such.
The Underwriting Agreement (Exhibit 1 hereto) provides for indemnification
by each Underwriter of the Company and Blount and, each of their directors, each
of their officers who signs this Registration Statement and each person who
controls the Company or Blount within the meaning of the Securities Act of 1933,
as amended, from certain liabilities under the securities laws.
In addition, the Company and Blount maintain officers' and directors'
liability insurance.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1 Form of Underwriting Agreement.
2 Stock Purchase Agreement, dated November 4, 1997, by and
among Blount, Inc., Hoffman Enclosures Inc., Pentair, Inc.
and Federal-Hoffman, Inc., relating to the acquisition of
Federal Cartridge Company (filed by incorporation by
reference to Exhibit 2 to Form 8-K dated November 4, 1997,
file no. 001-11549).
4(a) Form of Indenture relating to the Notes and Guarantee
between the Company, the Guarantor and LaSalle National
Bank, as Trustee.
4(b) Form of Note and Guarantee (included in Sections 202 and 203
of Exhibit 4(a) above).
5 Opinion of Cleary, Gottlieb, Steen & Hamilton as to legality
of the Notes and Guarantee.
12 Computation of ratio of earnings to fixed charges.
23(a) Consent of Coopers & Lybrand L.L.P., Independent
Accountants.
23(b) Consent of Deloitte & Touche LLP, Independent Auditors.
23(c) Consent of Cleary, Gottlieb, Steen & Hamilton (included in
their opinion filed as Exhibit 5).
</TABLE>
II-1
<PAGE> 28
<TABLE>
<C> <S>
*24 Powers of Attorney.
25 Form T-1 Statement of Eligibility and Qualification of
LaSalle National Bank under the Trust Indenture Act of 1939.
</TABLE>
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrants have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereby, the registrants will,
unless in the opinion of their counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by them is against public policy as
expressed in such Act and will be governed by the final adjudication of such
issue.
The undersigned registrants hereby undertake that:
For purposes of determining any liability under the Securities Act of
1933, as amended, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
For the purpose of determining any liability under the Securities Act
of 1933, as amended, 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.
For purposes of determining any liability under the Securities Act of
1933, each filing of the registrants' annual reports pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-2
<PAGE> 29
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANTS
CERTIFY THAT THEY HAVE REASONABLE GROUNDS TO BELIEVE THAT THEY MEET ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAVE DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON THEIR BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED, IN THE CITY OF MONTGOMERY, STATE OF ALABAMA, ON THE
2ND DAY OF JUNE, 1998.
<TABLE>
<S> <C>
BLOUNT INTERNATIONAL, INC. BLOUNT, INC.
By: /s/ HAROLD E. LAYMAN By: /s/ HAROLD E. LAYMAN
------------------------------------------------- -------------------------------------------------
Name: Harold E. Layman Name: Harold E. Layman
Title: Executive Vice President -- Finance Title: Executive Vice President -- Finance Operations
Operations and Chief Financial Officer and Chief Financial Officer
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES (FOR BOTH REGISTRANTS) AND ON THE DATES
INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>
* Chairman of the Board and Director June 2, 1998
- ------------------------------------------------
Winton M. Blount
* President and Chief Executive June 2, 1998
- ------------------------------------------------ Officer and Director
John M. Panettiere
* Director June 2, 1998
- ------------------------------------------------
Haley Barbour
Director June 2, 1998
- ------------------------------------------------
Samuel R. Blount
* Director June 2, 1998
- ------------------------------------------------
W. Houston Blount
* Director June 2, 1998
- ------------------------------------------------
R. Eugene Cartledge
* Director June 2, 1998
- ------------------------------------------------
C. Todd Conover
</TABLE>
II-3
<PAGE> 30
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>
* Director June 2, 1998
- ------------------------------------------------
H. Corbin Day
* Director June 2, 1998
- ------------------------------------------------
Emory M. Folmar
* Director June 2, 1998
- ------------------------------------------------
Mary D. Nelson
* Director June 2, 1998
- ------------------------------------------------
Arthur P. Ronan
* Director June 2, 1998
- ------------------------------------------------
Andrew A. Sorensen
/s/ HAROLD E. LAYMAN Executive Vice June 2, 1998
- ------------------------------------------------ President -- Finance Operations
Harold E. Layman and Chief Financial Officer
/s/ RODNEY W. BLANKENSHIP Vice President and Controller June 2, 1998
- ------------------------------------------------ (Chief Accounting Officer)
Rodney W. Blankenship
*By: /s/ RICHARD H. IRVING, III Attorney-in-fact June 2, 1998
------------------------------------------
Richard H. Irving, III
</TABLE>
II-4
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
1 Form of Underwriting Agreement..............................
2 Stock Purchase Agreement, dated November 4, 1997, by and
among Blount, Inc., Hoffman Enclosures Inc., Pentair, Inc.
and Federal-Hoffman, Inc., relating to the acquisition of
Federal Cartridge Company (filed by incorporation by
reference to Exhibit 2 to Form 8-K dated November 4, 1997,
file no. 001-11549).........................................
4(a) Form of Indenture relating to the Notes and Guarantee
between the Company and LaSalle National Bank, as Trustee...
4(b) Form of Note and Guarantee (included in Sections 202 and 203
of Exhibit 4(a) above)......................................
5 Opinion of Cleary, Gottlieb, Steen & Hamilton as to legality
of the Notes and Guarantee..................................
12 Computation of ratio of earnings to fixed charges...........
23(a) Consent of Coopers & Lybrand L.L.P., Independent
Accountants.................................................
23(b) Consent of Deloitte & Touche LLP, Independent Auditors......
23(c) Consent of Cleary, Gottlieb, Steen & Hamilton (included in
their opinion filed as Exhibit 5)...........................
*24 Powers of Attorney..........................................
25 Form T-1 Statement of Eligibility and Qualification of
LaSalle National Bank under the Trust Indenture Act of
1939........................................................
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 1
$150,000,000
BLOUNT, INC.
___% Senior Notes Due ______________, 2008
Guaranteed by
BLOUNT INTERNATIONAL, INC.
Underwriting Agreement
________________, 1998
J.P. Morgan Securities Inc.
Salomon Brothers Inc
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
Blount, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), $150,000,000 principal amount of its _____% Senior Notes Due
__________, 2008 (the "Notes"). The Notes will be unconditionally guaranteed
(the "Guarantees" and, together with the Notes, the "Securities") as to payment
of principal, premium (if any) and interest by Blount International, Inc., a
Delaware corporation, as guarantor (the "Guarantor"). The Securities will be
issued pursuant to the provisions of an Indenture to be dated as of
____________, 1998 among the Company, the Guarantor and LaSalle National Bank,
as Trustee (the "Trustee").
The Company and the Guarantor have prepared and filed with the
Securities and Exchange Commission (the "Commission"), in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities Act"), a
registration statement on Form S-3 (file
<PAGE> 2
no. 333-42481), including a prospectus, relating to the Securities. The
registration statement as amended at the time of its effectiveness, or, if a
post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including in each
case information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the form first used to confirm sales of Securities is referred to
in this Agreement as the "Prospectus". If the Company and the Guarantor have
filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the effective date of the
Registration Statement or the date of such preliminary prospectus or the
Prospectus, as the case may be, and any reference to "amend" "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein.
The Company and the Guarantor hereby agree with the Underwriters as
follows:
1. The Company and the Guarantor agree to issue and sell the Securities
to the several Underwriters as hereinafter provided, and each Underwriter, upon
the basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees to purchase, severally and not
jointly, from the Company and the Guarantor the respective principal amount of
Securities set forth opposite such Underwriter's name in Schedule I hereto at a
price equal to ______% of their principal amount plus accrued interest, if any,
from ______________, 1998 to the date of payment and delivery.
2. The Company and the Guarantor understand that the Underwriters
intend (i) to make a public offering of their respective portions of the
Securities as soon after (A) the Registration Statement has become effective and
(B) the parties hereto have executed and delivered this Agreement, as in the
judgment of the Representatives is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
3. Payment for the Securities shall be made by wire transfer to an
account previously specified by the Company to the Representatives in same day
funds not later than 10:00 a.m. on _______________, 1998, or at such other time
on the same or such other date, not later than the third Business Day
thereafter, as the Representatives and the Company may agree upon in writing.
The time and date of such payment is referred to herein as the
2
<PAGE> 3
"Closing Date". As used herein, the term "Business Day" means any day other than
a day on which banks are permitted or required to be closed in New York City.
Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes
(collectively, the "Global Note") representing the Securities, with any transfer
taxes payable in connection with the transfer to the Underwriters of the
Securities duly paid by the Company and the Guarantor. The Global Note will be
made available for inspection by the Representatives at the office of the
Trustee, Corporate Trust Services, 135 South LaSalle Street, Chicago, Illinois
60603, not later than 1:00 P.M., New York City time, on the Business Day prior
to the Closing Date.
4. Each of the Company and the Guarantor, jointly and severally,
represents and warrants to each Underwriter that, as of the date on which this
Agreement becomes effective pursuant to Section 9 hereof:
(a) no order preventing or suspending the use of any
preliminary prospectus has, to the best knowledge of the Company and
the Guarantor, been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, complied when so filed in
all material respects with the Securities Act, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company and the Guarantor in writing by such Underwriter expressly
for use therein;
(b) the Registration Statement has been declared effective by
the Commission under the Securities Act, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company and the Guarantor, threatened by the Commission; and the
Registration Statement and Prospectus (as amended or supplemented if
the Company and the Guarantor shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may be, in all
material respects with the Securities Act and the Trust Indenture Act
of 1939, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Trust Indenture Act") and do not and
will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the date of the
Prospectus and any amendment or supplement thereto, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading, and the Prospectus, as amended or supplemented, if
applicable, at the
3
<PAGE> 4
Closing Date will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; except that the foregoing representations and
warranties shall not apply to (i) that part of the Registration
Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture Act,
and (ii) statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company and the Guarantor
in writing by such Underwriter expressly for use therein;
(c) the documents incorporated by reference in the Prospectus,
when they become effective or were filed with the Commission as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act as applicable and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(d) the financial statements of the Company and the Guarantor,
including the related notes and schedules thereto, included or
incorporated by reference in the Registration Statement and the
Prospectus (i) present fairly the consolidated financial position of
the Company and the Guarantor, as the case may be, and their respective
consolidated subsidiaries taken as a whole as of the dates indicated
and the consolidated results of their respective operations and the
changes in their respective consolidated cash flows for the periods
specified in conformity with generally accepted accounting principles
("GAAP") in the United States applied on a consistent basis throughout
the periods involved, except as stated therein or in the reports
related thereto and (ii) have been prepared in accordance with the
applicable accounting requirements of Regulation S-X promulgated under
the Securities Act ("Regulation S-X") in all material respects; the
financial statement schedules included in the Registration Statement
include in all material respects the information required to be
included therein; and the pro forma financial information, and the
related notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus have been prepared in
accordance with the requirements of the Securities Act and the Exchange
Act, as applicable, and are based on good faith estimates and
assumptions believed by the Company and the Guarantor to be reasonable;
(e) the financial statements of Federal Cartridge Company
("Federal"), including the related notes thereto, included or
incorporated by reference in the Registration Statement and the
Prospectus (i) present fairly the financial position of Federal as of
the dates indicated and the results of its operations and the changes
in its cash flows for the periods specified in conformity with GAAP in
the United States applied on a consistent basis throughout the periods
involved, and (ii) have been
4
<PAGE> 5
prepared in accordance with the applicable accounting requirements of
Regulation S-X in all material respects;
(f) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth or contemplated therein or in Annex B hereto, there has not been
any change in the capital stock or long-term debt of the Guarantor or
any of its subsidiaries (including the Company, the "Subsidiaries"), or
any material adverse change in the business, prospects, management,
operations or condition, financial or otherwise of the Guarantor and
the Subsidiaries, taken as a whole (a "Material Adverse Change," and
any event or state of facts that could reasonably be expected to result
in a Material Adverse Change is herein referred to as a "Prospective
Material Adverse Change"), otherwise than as set forth or contemplated
in the Prospectus; and except as set forth or contemplated in the
Prospectus, neither the Guarantor nor any of the Subsidiaries has
entered into any transaction or agreement (other than those in the
ordinary course of business) materially adverse to the Guarantor and
the Subsidiaries taken as a whole;
(g) each of the Company and the Guarantor has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with full corporate power and
authority to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on the general affairs, business, prospects,
management, financial position, operations or condition, financial or
otherwise, of the Guarantor and the Subsidiaries, taken as a whole
("Material Adverse Effect");
(h) each of the Subsidiaries (other than the Company) has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a Material Adverse Effect; except as set
forth in the Registration Statement and the Prospectus, all the
outstanding shares of capital stock of each Subsidiary listed on Annex
A hereto, which constitute all of the "significant" Subsidiaries as
defined in Rule 1-02(w) of Regulation S-X (the "Significant
Subsidiaries") has been duly authorized and validly issued, are
fully-paid and non-assessable, and (except, in the case of foreign
Subsidiaries, for directors' qualifying shares and transfer
restrictions imposed by local law the compliance with
5
<PAGE> 6
which, singly or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect) are owned by the Guarantor, directly or
indirectly, free and clear of all liens, encumbrances, security
interests and claims; and except as set forth in the Registration
Statement and the Prospectus or in Annex A, there are no outstanding
(a) securities or obligations of the Guarantor or the Company
convertible into or exchangeable for any shares of capital stock of the
Guarantor or the Company or any Significant Subsidiary, (b) rights,
warrants or options to acquire or purchase from the Guarantor or the
Company any shares of capital stock of the Guarantor, the Company or
any Significant Subsidiary or any such convertible or exchangeable
securities or obligations or (c) obligations or understandings of the
Guarantor or the Company to issue or sell any shares of capital stock
of the Guarantor, the Company or any Significant Subsidiary, any such
convertible or exchangeable securities or obligations, or any such
warrants, rights or obligations;
(i) this Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor;
(j) the issuance and sale by the Company of, and the
performance by the Company of its obligations under, the Notes have
been duly authorized by all necessary corporate action on the part of
the Company, and, when executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement, the Notes will be entitled to the benefits of
the Indenture and will constitute legal, valid and binding obligations
of the Company enforceable against the Company in accordance with their
terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally and subject, as to enforcement, to general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity); the execution and
delivery by the Guarantor of, and the performance by the Guarantor of
its obligations under, the Guarantees have been duly authorized by all
necessary corporate action on the part of the Guarantor, and when the
Notes have been duly authenticated by the Trustee in accordance with
the terms of the Indenture and the Securities have been delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement, will constitute valid and binding obligations of the
Guarantor entitled to the benefits provided by the Indenture, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights
generally and subject, as to enforcement, to general principles of
equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); the execution and delivery by the
Company and the Guarantor of, and the performance by each of the
Company and the Guarantor of its respective obligations under, the
Indenture have been duly authorized by all necessary corporate action
of the Company and the Guarantor, and the Indenture has been duly
authorized and upon effectiveness of the Registration Statement will
have been duly qualified
6
<PAGE> 7
under the Trust Indenture Act and, when executed and delivered by the
Company, the Guarantor and the Trustee, the Indenture will constitute a
valid and binding agreement of the Company and the Guarantor
enforceable against the Company and the Guarantor in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally and subject as to enforcement, to general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity); and the Securities and
the Indenture will conform in all material respects to the descriptions
thereof in the Prospectus;
(k) neither the Guarantor nor the Company is in violation of
its Certificate of Incorporation or Bylaws or is, or with the giving of
notice or lapse of time or both would be, in violation of or in default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Guarantor or any of the
Subsidiaries is a party or by which it or any of them is bound or to
which any of their respective properties is subject, except for
violations and defaults which individually and in the aggregate would
not reasonably be expected to have a Material Adverse Effect;
(l) the execution and delivery by the Company of the Notes and
the execution and delivery by the Guarantor of the Guarantees and the
performance by each of the Company and the Guarantor of its respective
obligations under the Securities, the Indenture and this Agreement and
the consummation of the transactions herein and therein contemplated do
not result in any violation of the Certificate of Incorporation or
Bylaws of the Guarantor or the Company, and do not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or give rise to any right to
accelerate the maturity or require the prepayment of any indebtedness
or the purchase of any capital stock under, or result in the creation
or imposition of any lien, charge or encumbrance upon any material
property or assets of the Guarantor or any Subsidiary of the Guarantor
under, (i) any indenture, mortgage, loan agreement, note, lease,
partnership agreement or other agreement or instrument to which the
Guarantor or any such Subsidiary is a party or by which any of them may
be bound or to which any of their properties may be subject, (ii) any
existing applicable law, rule or regulation (other than the securities
or Blue Sky laws of the various states of the United States of America)
or (iii) any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Guarantor or any such Subsidiary or any of their respective
properties, except, in the case of clause (i), for such violations,
conflicts, breaches, defaults, rights, liens, charges and encumbrances
that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect or a material adverse effect
on the ability of the Guarantor or the Company to perform their
respective obligations under this Agreement; and no consent, approval,
authorization,
7
<PAGE> 8
order, license, registration or qualification of or with any such court
or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company and the Guarantor of
the transactions contemplated by this Agreement or the Indenture,
except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been or will be prior to the
Closing Date obtained under the Securities Act, the Trust Indenture Act
and as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters;
(m) except as described in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any
government, governmental instrumentality or court, domestic or foreign,
now pending or, to the knowledge of the Guarantor or the Company,
threatened against or affecting the Guarantor or any of its
Subsidiaries that is reasonably likely to have a Material Adverse
Effect or that is reasonably likely to have a material adverse effect
on the consummation of the transactions contemplated in this Agreement.
There is no action, suit or proceeding before or by any government,
governmental instrumentality or court, now pending, or to the knowledge
of the Guarantor or the Company, threatened against or affecting the
Guarantor or any of its Subsidiaries that is required to be described
in the Registration Statement or the Prospectus that is not so
described. The aggregate of all pending legal or governmental
proceedings known to the Guarantor or the Company to which the
Guarantor or any of its Subsidiaries is a party or that affect any of
their properties that are not referred to or described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to its business, is not reasonably likely to have
a Material Adverse Effect;
(n) Coopers & Lybrand L.L.P. who have audited certain
financial statements of the Guarantor and the Company incorporated by
reference into the Registration Statement are independent public
accountants of the Company and the Guarantor as required by the
Securities Act;
(o) Deloitte & Touche LLP who have audited certain financial
statements of Federal incorporated by reference into the Registration
Statement are independent public accountants of Federal as required by
the Securities Act;
(p) each of the Guarantor and the Subsidiaries owns, possesses
or has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies), and all courts and
other tribunals, domestic or foreign, necessary to own or lease, as the
case may be, and to operate its properties and to carry on its business
as conducted as of the date hereof, except in each case where the
failure to obtain licenses, permits, certificates, consents, orders,
approvals and other authorizations, or to make all
8
<PAGE> 9
declarations and filings, would not have a Material Adverse Effect, and
neither the Guarantor nor any such Subsidiary has received any notice
of any proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and
the Prospectus and except, in each case, where such revocation or
modification would not reasonably be expected to have a Material
Adverse Effect; and each of the Guarantor and the Subsidiaries is in
material compliance with all laws and regulations relating to the
conduct of its respective business as conducted as of the date hereof,
except where noncompliance with such laws and regulations would not
reasonably be expected to have a Material Adverse Effect;
(q) there are no labor disputes with the employees of the
Guarantor or any of the Subsidiaries which are reasonably likely to
have a Material Adverse Effect;
(r) the Guarantor and its Subsidiaries are in material
compliance with all applicable existing federal, state, local and
foreign laws and regulations relating to protection of human health or
the environment or imposing liability or standards of conduct
concerning any Hazardous Material (as hereinafter defined)
("Environmental Laws"), except, in each case, where noncompliance,
singly or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect. The term "Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl, and (v) any pollutant or contaminant or
hazardous, dangerous, or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law;
(s) the conditions for use of a Registration Statement on Form
S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the Guarantor and the
transactions contemplated by this Agreement, the Indenture and the
Registration Statement.
5. Each of the Company and the Guarantor covenants and agrees
with each of the several Underwriters as follows:
(a) to use its reasonable best efforts to cause the
Registration Statement to become effective at the earliest possible
time and, if required, to file the final Prospectus with the Commission
within the time periods specified by Rule 424(b) and Rule 430A under
the Securities Act; and to file promptly all reports and any definitive
proxy or information statements required to be filed by it with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in
9
<PAGE> 10
connection with the offering or sale of the Securities; and to use its
reasonable best efforts to furnish copies of the Prospectus to the
Underwriters in New York City prior to 2:00 p.m., New York City time,
on the Business Day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company and the
Guarantor, to the Representatives, three conformed copies of the
Registration Statement (as originally filed) and each amendment thereto
together with one set of original signature pages thereto, in each case
including exhibits but excluding documents incorporated by reference
therein, and to each other Underwriter a conformed copy of the
Registration Statement (as originally filed) and each amendment
thereto, in each case without exhibits or documents incorporated by
reference therein and, during the period from the effectiveness of this
Agreement through the time period referred to in the first clause of
the first sentence of paragraph (e) below (and subject to the
provisions of paragraph (e)), to each of the Underwriters as many
copies of the Prospectus (including all amendments and supplements
thereto) as the Representatives may reasonably request;
(c) during the period from the effectiveness of this Agreement
through the end of the time period referred to in the first clause of
the first sentence of paragraph (e) below, before filing any amendment
or supplement to the Registration Statement or the Prospectus, to
furnish to the Representatives a copy of the proposed amendment or
supplement for review and not to file any such proposed amendment or
supplement to which the Representatives reasonably object unless, in
the judgment of the Company and the Guarantor and their counsel, such
amendment is required by law;
(d) during the period from the effectiveness of this Agreement
through the end of the time period referred to in the first clause of
the first sentence of paragraph (e) below, to advise the
Representatives promptly, and to confirm such advice in writing, (i)
when the Registration Statement has become effective, (ii) when any
amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amendment
to the Prospectus has been filed and to furnish the Representatives
with copies thereof, (iv) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for any additional information, (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus or the Prospectus
or the initiation or threatening of any proceeding for that purpose,
(vi) of the occurrence of any event, within the period referenced in
paragraph (e) below, as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, and (vii) of
the receipt
10
<PAGE> 11
by the Company or the Guarantor of any notification with respect to any
suspension of the qualification of the Securities for offer and sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its reasonable best efforts to prevent the
issuance of any such stop order, or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any order suspending any such qualification of the Securities, or
notification of any such order and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Securities as in the reasonable opinion of
counsel for the Underwriters a prospectus relating to the Securities is
required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at the expense of the Company and the
Guarantor if during the nine-month period immediately following the
date on which a Prospectus is first provided to the Underwriters
hereunder and at the expense of the Underwriters thereafter, to the
Underwriters and to the dealers (whose names and addresses the
Representatives will furnish to the Company and the Guarantor) to which
Securities may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon written request, such
amendments or supplements to the Prospectus as may be necessary so that
the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances when the Prospectus is delivered
to a purchaser, be misleading or so that the Prospectus will comply
with law;
(f) to use their best efforts (A) to qualify the Securities
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives shall reasonably request and (B)
to continue such qualification in effect so long as reasonably required
for distribution of the Securities; provided that neither the Company
nor the Guarantor shall be required to qualify the Securities in any
jurisdiction where, as a result of such qualification, the Company or
the Guarantor would be required to qualify as a foreign corporation, to
file a general consent to service of process or to become subject to
taxation in any jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement which
will satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Commission promulgated thereunder covering a period of
at least twelve months beginning with the first fiscal quarter of the
Company and the Guarantor occurring after the "effective date" (as
defined in Rule 158) of the Registration Statement, provided that in no
event shall the Company and the Guarantor be required to provide such
statement prior to ninety days following the end of such twelve month
period; provided, however, that
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<PAGE> 12
the Company shall not be obligated to make such an earnings statement
available if, at the time when the Guarantor makes such an earnings
statement available, (i) the Company would be required to file periodic
reports and other documents and information with the Commission but for
exemptive relief granted by the Commission or in a no-action position
taken by the staff of the Commission with respect to the Company
allowing such requirement to be satisfied by the filing of such
reports, documents and information by the Guarantor and (ii) the
Guarantor complies with any applicable requirements set forth in such
exemptive relief or in a letter stating such no-action position;
(h) so long as the Securities are outstanding, until five
years after the Closing Date, to furnish to the Representatives copies
of all reports or other communications (financial or other) furnished
to holders of the Securities, and copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange;
(i) During the period beginning the date hereof and continuing
until the Business Day following the Closing Date, without the prior
written consent of the Underwriters, not to offer, sell, contract to
sell, or otherwise dispose of any debt securities of or guaranteed by
the Company or the Guarantor which are substantially similar to the
Securities;
(j) to use the net proceeds received by the Company from the
sale of the Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the Securities,
including any expenses of the Trustee, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the
Securities under the laws of such jurisdictions as the Underwriters may
designate (including reasonable fees of counsel for the Underwriters
and their disbursements related to such registration or qualification,
provided that such fees and disbursements payable by the Company
pursuant to this clause (iii) shall not exceed $1,000), (iv) in
connection with the listing of the Securities on any stock exchange,
(v) consisting of any fees payable to the National Association of
Securities Dealers, Inc. in connection with the offering of the
Securities, (vi) in connection with the printing (including word
processing and
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<PAGE> 13
duplication costs) and delivery of this Agreement, the Indenture, the
Preliminary and Supplemental Blue Sky Memoranda and any Legal
Investment Survey and the furnishing to Underwriters and dealers of
copies of the Registration Statement and, subject to Section 5(e)
hereof, the Prospectus, including mailing and shipping, as herein
provided, (vii) payable to rating agencies in connection with the
rating of the Securities, (viii) any expenses incurred by the Company
and the Guarantor in connection with a "road show" presentation to
potential investors (provided that the Company shall be obligated to
reimburse the Underwriters pursuant to this clause (viii) only for such
expenses as are reasonably incurred by the Underwriters on behalf of
the Company) and (ix) the cost and charges of any transfer agent; and
(l) prior to the Closing Date, the Company and the Guarantor
shall disclose to the Representatives any transaction or agreement
(other than those in the ordinary course of business) that the
Guarantor or a Subsidiary has entered into since the respective dates
that information is given in the Registration Statement and Prospectus
that is material to the Guarantor and the Subsidiaries taken as a
whole.
6. The several obligations of the Underwriters hereunder to
purchase the Securities on the Closing Date are subject to the performance by
each of the Company and the Guarantor of its respective obligations hereunder
and to the following additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
this Agreement becomes effective pursuant to Section 9 hereof;
provided, however, that if the Registration Statement becomes effective
pursuant to Rule 430A and a post-effective amendment is thereafter
filed, such post-effective amendment shall have become effective not
later than 5:00 p.m., New York City time, on the Business Day following
the day on which such post-effective amendment is filed; and no stop
order suspending the effectiveness of the Registration Statement or any
post-affective amendment shall be in effect, and no proceedings for
such purpose shall be pending before or threatened by the Commission;
the Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional
information by the Commission shall have been complied with to the
reasonable satisfaction of the Representatives;
(b) the representations and warranties of each of the Company
and the Guarantor contained herein are true and correct on and as of
the Closing Date as if made on and as of the Closing Date and each of
the Company and the Guarantor shall have complied with all agreements
and all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date;
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<PAGE> 14
(c) subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company or the
Guarantor by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(d) since the respective dates as of which information is
given in the Registration Statement and the Prospectus there shall not
have been any Material Adverse Change or any development involving a
Prospective Material Adverse Change, otherwise than as set forth or
contemplated in the Registration Statement and the Prospectus, the
effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the Closing Date on the terms and in the
manner contemplated in the Registration Statement and the Prospectus;
(e) the Representatives shall have received on and as of
the Closing Date a certificate of Harold E. Layman, Chief Financial
Officer of the Company and the Guarantor, John M. Panettiere, Chief
Executive Officer of the Company and the Guarantor or Rodney W.
Blankenship, Chief Accounting Officer of the Company and the Guarantor
reasonably satisfactory to the Representatives to the effect set forth
in subsections (a) through (c) of this Section and to the further
effect that since the respective dates as of which information is given
in the Registration Statement and the Prospectus there has not occurred
any Material Adverse Change, or any development involving a Prospective
Material Adverse Change, otherwise than as set forth or contemplated in
the Registration Statement and the Prospectus;
(f) Richard H. Irving III, General Counsel for the
Company and the Guarantor, shall have furnished to the Representatives
his written opinion, dated the Closing Date, to the effect that:
(i) each of the Company and the Guarantor has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware;
(ii) each of the Company and the Guarantor has been
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification,
other than where the failure to be so qualified or in good
standing would not have a Material Adverse Effect;
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<PAGE> 15
(iii) each [Significant Subsidiary incorporated under
the laws of any State in the States of the United States] has
been duly incorporated and is validly existing as a
corporation under the laws of its jurisdiction of
incorporation with corporate power and corporate authority to
own its properties and conduct its business as described in
the Prospectus and is qualified as a foreign corporation for
the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified
and in good standing would not have a Material Adverse Effect;
(iv) such counsel does not know of any action, suit
or proceeding before or by any government, governmental
instrumentality or court now pending or threatened against or
affecting the Guarantor or the Company or any of their
respective properties that is required to be described in the
Registration Statement or the Prospectus and is not so
described (provided that for such purpose such counsel need
not regard any suit or proceeding to be "threatened" unless
the potential litigant or instrumentality has manifested to
the management of the Company or to such counsel a present
intention to initiate such suit or proceedings) or of any
contract or other document that is required to be described in
the Registration Statement or the Prospectus, or to be filed
as an exhibit to the Registration Statement, that is not
described or filed, as required;
(v) the issue and sale by the Company of the Notes
and by the Guarantor of the Guarantees and the performance by
each of the Company and the Guarantor of its respective
obligations under the Securities, the Indenture and this
Agreement and the consummation of the transactions herein and
therein contemplated will not (i) result in any violation of
the Certificate of Incorporation or Bylaws of the Guarantor or
the Company, (ii) contravene any judgment, order or decree
known to such counsel by which the Company or any Subsidiary
is bound or by which their assets may be affected or (iii)
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness or the
purchase of any capital stock under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
material properties or assets of the Guarantor or the Company,
pursuant to the terms of any agreement known to such counsel,
except for such violations, contraventions, conflicts,
breaches, defaults, rights, liens, charges or encumbrances
that would not have a Material Adverse Effect;
Such opinions (other than the opinion described in clause
(iii) above) may be limited to the laws of the State of Delaware and
the federal laws of the United States.
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<PAGE> 16
In rendering the opinion described in clause (iii) above, such counsel
may rely, as to matters involving the application of laws other than
the laws of the United States and the States of Delaware, with respect
to the opinion that each Significant Subsidiary "is in good standing
under the laws of each other jurisdiction in which it owns or leases
property" solely upon a certificate of the Secretary of State of such
jurisdiction certifying that such Significant Subsidiary is in good
standing in such jurisdiction as of the date specified in such
certificate. In rendering such opinions, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on originals
or copies certified or otherwise identified to such counsel's
satisfaction of corporate records of the Company and the Guarantor and
other certificates and other written statements of public officials,
officers and representatives of the Company and the Guarantor and other
persons. The opinion of such counsel for the Company and the Guarantor
shall state that the opinion of any such other counsel upon which they
relied is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon.
The opinion of Richard H. Irving III described above shall be
rendered to the Underwriters at the request of the Company and the
Guarantor and shall so state therein.
(g) Cleary, Gottlieb, Steen & Hamilton, counsel for the
Company and the Guarantor, shall have furnished to the Representatives
their written opinion, dated the Closing Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) each of the Company and the Guarantor is validly
existing as a corporation in good standing under the laws of
the State of Delaware, and has the corporate power to own,
lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus;
(ii) based solely on the inquiry of Richard H. Irving
III, General Counsel of the Company and the Guarantor, and of
the lawyers currently with Cleary, Gottlieb, Steen & Hamilton
who, according to the records of such firm, have performed
legal services for the Company and the Guarantor since
February 1, 1995, such counsel does not know of any action,
suit or proceeding before or by any government, governmental
instrumentality or court now pending or threatened against or
affecting the Guarantor or the Company or any of their
respective properties that is required to be described in the
Registration Statement or the Prospectus and is not so
described (provided that for such purpose such counsel need
not regard any suit or proceeding to be "threatened" unless
the potential litigant or instrumentality has manifested to
the management of the Company or to such counsel a present
intention to initiate such suit or proceedings) or of any
contract or other document that is required to be
16
<PAGE> 17
described in the Registration Statement or the Prospectus, or
to be filed as an exhibit to the Registration Statement, that
is not described or filed, as required;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor;
(iv) the issuance and sale of, and the performance
of all obligations under, the Notes have been duly authorized
by all necessary corporate action of the Company, and the
Notes, when executed and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the
Under writers in accordance with the terms of this Agreement,
will constitute valid and binding obligations of the Company
entitled to the benefits provided by the Indenture subject to
applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws now or hereafter in effect relating to
creditors' rights generally and subject, as to enforceability,
to general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity);
(v) the execution, delivery and performance of the
Guarantees have been duly authorized by all necessary
corporate action of the Guarantor, and when the Notes have
been duly authenticated in accordance with the terms of the
Indenture and the Securities have been delivered to and paid
for by the Underwriters in accordance with the terms of this
Agreement, the Guarantees will constitute valid and binding
obligations of the Guarantor entitled to the benefits provided
by the Indenture subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and subject, as
to enforcement, to general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or
in equity);
(vi) the execution, delivery and performance of the
Indenture have been duly authorized by all necessary corporate
action of the Company and the Guarantor, and the Indenture has
been duly executed and delivered by the Company and the
Guarantor and, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and
binding instrument of each of the Company and the Guarantor
enforceable against them in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and subject, as to enforcement,
to general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity);
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<PAGE> 18
(vii) the execution and delivery by each of the
Company and the Guarantor of, and the performance by each of
the Company and the Guarantor of its respective obligations
under, the Securities, the Indenture and this Agreement and
the consummation of the transactions herein and therein
contemplated, will not (i) result in any violation of the
Certificate of Incorporation or Bylaws of the Guarantor or the
Company, (ii) violate any provision of any of the laws, rules
and regulations of the United States of America, the State of
Delaware and the State of New York (collectively, the
"Applicable Laws") (assuming for this purpose that (A) the
Registration Statement, at the time it becomes effective, does
not contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading and
(B) the Prospectus, as of the date thereof, does not contain
any untrue statement of 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), except that such counsel need not
express any opinion with respect to state securities laws;
(iii) contravene any judgment, order or decree known to such
counsel by which the Company or any Subsidiary is bound or by
which their assets may be affected; (iv) conflict with or
result in a breach of any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or give
rise to any right to accelerate the maturity or require the
prepayment of any indebtedness or the purchase of any capital
stock under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material properties or
assets of the Guarantor or the Company, pursuant to the terms
of any agreement identified on a schedule to this opinion
(which schedule shall be in form and substance satisfactory to
the Underwriters and their counsel), except for such
conflicts, breaches, violations, defaults, accelerations,
repayments, repurchases, liens, charges or encumbrances that
would not have a Material Adverse Effect; or (v) based on such
counsel's review of the Applicable Laws, require any consent,
approval or authorization or order of, or qualification of or
with any governmental agency, except such as have been
obtained under the Securities Act and the Trust Indenture Act
and as may be required under state securities or Blue Sky laws
in connection with the offer and sale of the Securities;
(viii) the statements in the Prospectus under
"Description of Notes", insofar as such statements purport to
summarize certain provisions of the Securities and the
Indenture provide a fair summary of such provisions;
(ix) the Registration Statement and the Prospectus
(except for the financial statements, schedules and other
financial and statistical data, included in the Registration
Statement and the Prospectus, as to which counsel need not
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<PAGE> 19
opine) appear on their face to be appropriately responsive in
all material respects to the requirements of the Securities
Act and the rules and regulations of the Commission
thereunder;
(x) the documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Guarantor or the Company prior to the Closing Date
(other than the financial statements, schedules and other
financial and statistical data included therein, as to which
such counsel need express no opinion), when they were filed
with the Commission, appear on their face to be appropriately
responsive in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder;
(xi) neither the Company nor the Guarantor is and,
after giving effect to the offering and sale of the
Securities, neither will be an "investment company" or an
entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act; and
(xii) the conditions for use of a Registration
Statement on Form S-3 set forth in the General Instructions to
Form S-3 have been satisfied with respect to the Company and
the Guarantor and the transactions contemplated by this
Agreement and the Registration Statement.
Such counsel shall also state that they have been advised by
the Commission that the Indenture has been qualified under the Trust
Indenture Act and that the Registration Statement became effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
Such counsel shall also state that no information has come to
such counsel's attention which causes such counsel to believe that the
Registration Statement (except the financial statements and schedules
and other financial and statistical data contained therein, as to which
such counsel need express no opinion), at the time it became effective,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; or that the Prospectus, as of its
date and as of the Closing Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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<PAGE> 20
In rendering such opinions, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on originals
or copies certified or otherwise identified to such counsel's
satisfaction of corporate records of the Company and the Guarantor and
other instruments and other certificates of public officials, officers
and representatives of the Company and the Guarantor and other persons.
With respect to the matters to be covered in the immediately preceding
paragraphs, such counsel may state that the statements made in such
paragraphs are based upon participation of such counsel (in the course
of acting as special counsel to the Company in connection with the
preparation of the Registration Statement and Prospectus) in
conferences and telephone conversations with representatives of the
Company and the Guarantor, representatives of independent public
accountants for the Company and representatives of the Underwriters and
counsel for the Underwriters but without independent verification of
the accuracy, completeness or fairness of the statements made in the
Registration Statement and Prospectus, except as specified.
The opinion of Cleary, Gottlieb, Steen & Hamilton described
above shall be rendered to the Underwriters at the request of the
Company and the Guarantor and shall so state therein.
(h) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective amendment
to the Registration Statement, if any, and also on the Closing Date,
Coopers & Lybrand L.L.P. with respect to the Company and the Guarantor
and Deloitte & Touche LLP with respect to Federal shall have furnished
to the Representatives letters, dated the respective dates of delivery
thereof, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
(i) the Representatives shall have received on and as of the
Closing Date an opinion of King & Spalding, counsel to the
Underwriters, with respect to the validity of the Indenture, the Notes
and the Guarantees, the Registration Statement, the Prospectus and
other related matters as the Representatives may reasonably request,
and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(j) on or prior to the Closing Date, each of the Company and
the Guarantor shall have furnished to the Representatives such further
certificates and documents as the Representatives shall reasonably
request.
7. The Company and the Guarantor agree, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from
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<PAGE> 21
and against any and all losses, claims, damages and liabilities (including,
without limitation, the reasonable legal fees and other expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company and the Guarantor shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
and the Guarantor in writing by such Underwriter through the Representatives
expressly for use therein; provided that the foregoing indemnity with respect to
any preliminary prospectus shall not inure to the benefit of any Underwriter (or
to the benefit of any person controlling such Underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Securities
if such untrue statement or omission or alleged untrue statement or omission
made in such preliminary prospectus is eliminated or remedied in the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) and, if required by law, a copy of the Prospectus (as so
amended or supplemented) shall not have been furnished to such person at or
prior to the written confirmation of the sale of such Securities to such person.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Guarantor, their respective directors, their
respective officers who sign the Registration Statement and each person who
controls the Company or the Guarantor within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and the Guarantor to each Underwriter, but
only with reference to information relating to such Underwriter furnished to the
Company and the Guarantor in writing by such Underwriter expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any preliminary prospectus. For purposes of this Section 7 and paragraphs (a)
and (b) of Section 4 hereof, the only information furnished in writing by the
Underwriters to the Company and the Guarantor expressly for use in the
Registration Statement and the Prospectus is the information in the last
paragraph on the cover page of the Prospectus, the legend at the top of page 2
of the Prospectus and the list of underwriters set forth in the table under the
caption "Underwriting" in the Prospectus, the second paragraph and the second
sentence of the third paragraph following such table and the sixth paragraph
following such table.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying
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<PAGE> 22
Person, upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Person may designate in such proceeding and shall
pay the reasonable fees and expenses of such counsel actually incurred by such
counsel related to such proceeding. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary, (ii) the Indemnifying Person has failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Underwriters and such control persons
of the Underwriters shall be designated in writing by J.P. Morgan Securities
Inc. and any such separate firm for the Company, the Guarantor, their respective
directors, their respective officers who sign the Registration Statement and
such control persons of the Company and the Guarantor shall be designated in
writing by the Company and the Guarantor. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for reasonable fees and expenses actually incurred by counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages
22
<PAGE> 23
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantor on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantor on the one hand and
the Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of the Company and the Guarantor on the one hand
and the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantor or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Guarantor and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of Securities set forth opposite their names in
Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
Indemnified Person at law or in equity.
23
<PAGE> 24
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of each of the Company and the Guarantor
set forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company or the Guarantor, their respective officers or
directors or any other person controlling the Company or the Guarantor and (iii)
acceptance of and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Company and the Guarantor, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the National Association of
Securities Dealers, Inc., (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iii) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Representatives, is material and adverse and which,
in the judgment of the Representatives, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase Securities which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Securities that any Underwriter
has agreed to purchase pursuant to Section 1 be increased pursuant to this
Section 9 by an amount in excess of one-tenth of such principal amount of
Securities without the written consent of such Underwriter. If on the Closing
Date any Underwriter or Underwriters shall fail or refuse to purchase Securities
which it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities to
be purchased on such date, and arrangements satisfactory to the Representatives
and the Company for the purchase of such
24
<PAGE> 25
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Guarantor. In any such case either the Representatives or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters because
of any failure or refusal on the part of the Company or the Guarantor to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company or the Guarantor shall be unable to perform its
obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, the Company and the Guarantor agree, jointly
and severally, to reimburse the Underwriters for all out-of-pocket expenses
(including the fees and expenses of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Guarantor, the Underwriters, any controlling persons, officers
and directors referred to in Section 7 hereof and their respective successors
and assigns. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260-0060 (telefax:______); Attention: Syndicate Department. Notices to
the Company shall be given to it at Blount, Inc., 4520 Executive Park Drive,
Montgomery, Alabama 36116-1602, (telefax:______); Attention: Chief Financial
Officer, with a copy to the same address, Attention: General Counsel. Notices to
the Guarantor shall be given to it at Blount International, Inc., 4520 Executive
Park Drive, Montgomery, Alabama 36116-1602, (telefax:______); Attention: Chief
Financial Officer, with a copy to the same address, Attention: General Counsel.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
25
<PAGE> 26
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.
26
<PAGE> 27
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
BLOUNT, INC.
By:_______________________
Title:
BLOUNT INTERNATIONAL, INC.
By:_______________________
Title:
Accepted: _________________, 1998
J.P. Morgan Securities Inc.
Salomon Brothers Inc
Acting on behalf of themselves
and the several Underwriters
listed in Schedule I hereto.
By: J.P. Morgan Securities Inc.
By:___________________________
Title:
27
<PAGE> 28
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
SECURITIES TO
UNDERWRITER BE PURCHASED
- ----------- -------------
<S> <C>
J.P. Morgan Securities Inc.................................. $
Salomon Brothers Inc ......................................
------------
Total ............................................. $150,000,000
</TABLE>
28
<PAGE> 29
ANNEX A
SIGNIFICANT SUBSIDIARIES
Blount, Inc.
BI Holdings Corp.
Blount Holdings, Ltd.
Blount Canada, Ltd.
Federal Cartridge Company
29
<PAGE> 30
ANNEX B
Between the respective dates as of which information is given in the
Registration Statement and the Prospectus and the date hereof, there has not
been any change in the capital stock or long-term debt of the Guarantor or any
of the Subsidiaries except (i) such changes as are disclosed therein and (ii)
the following:
(1) Changes in capital stock accounts resulting from the
conversion of shares of Class B Common Stock of the Guarantor into
shares of Class A Common Stock of the Guarantor pursuant to the By-Laws
of the Guarantor;
(2) Changes in capital stock resulting from the issuance of
shares of capital stock of the Guarantor pursuant to the exercise of
(i) options outstanding as of such dates or (ii) options issued between
such dates and the date hereof and exercised upon the retirement of the
grantees of such options;
(3) Changes in capital stock resulting from the repurchase by
the Guarantor of not more than ___shares of Class A Common Stock of the
Guarantor pursuant to its stock buyback program as announced prior to
the date of the Prospectus; and
(4) Changes in long-term debt not in excess of $____________.
30
<PAGE> 1
EXHIBIT 4(a)
BLOUNT, INC.
Issuer
AND
BLOUNT INTERNATIONAL, INC.
Guarantor
AND
LA SALLE NATIONAL BANK
Trustee
INDENTURE
Dated as of __________ , 1998
<PAGE> 2
BLOUNT, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
----------- -----------------
<S> <C>
Section 310(a)(1) ................................................. 609
(a)(2) ................................................. 609
(a)(3) ................................................. Not Applicable
(a)(4) ................................................. Not Applicable
(b) .................................................... 608
........................................................ 610
Section 311(a) .................................................... 613
(b) .................................................... 613
Section 312(a) .................................................... 701
........................................................ 702(a)
(b) .................................................... 702(b)
(c) .................................................... 703(c)
Section 313(a) .................................................... 703(a)
(b) .................................................... 703(a)
(c) .................................................... 703(a)
(d) .................................................... 703(b)
Section 314(a) .................................................... 704
(a)(4) ................................................. 101
........................................................ 1004
(b) .................................................... Not Applicable
(c)(1) ................................................. 102
(c)(2) ................................................. 102
(c)(3) ................................................. Not Applicable
(d) .................................................... Not Applicable
(e) .................................................... 102
Section 315(a) .................................................... 601
(b) .................................................... 602
(c) .................................................... 601
(d) .................................................... 601
(e) .................................................... 514
Section 316(a) .................................................... 101
(a)(1)(A) .............................................. 502
........................................................ 512
(a)(1)(B) .............................................. 513
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
(a)(2) ................................................. Not Applicable
(b) .................................................... 508
(c) .................................................... 104(c)
Section 317(a)(1) ................................................. 503
(a)(2) ................................................. 504
(b) .................................................... 1003
Section 318(a) .................................................... 107
</TABLE>
- ---------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture
ii
<PAGE> 4
TABLE OF CONTENTS(1)
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS OF THE COMPANY
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
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; Record Dates................................................................ 11
SECTION 105. Notices, Etc., to Trustee, Company and Guarantor............................................. 12
SECTION 106. Notice to Holders; Waiver.................................................................... 13
SECTION 107. Conflict with Trust Indenture Act............................................................ 13
SECTION 108. Effect of Headings and Table of Contents..................................................... 13
SECTION 109. Successors and Assigns....................................................................... 14
SECTION 110. Separability Clause.......................................................................... 14
SECTION 111. Benefits of Indenture........................................................................ 14
SECTION 112. Governing Law................................................................................ 14
SECTION 113. Legal Holidays............................................................................... 14
ARTICLE TWO
SECURITY FORMS AND GUARANTEES
SECTION 201. Forms Generally.............................................................................. 15
SECTION 202. Form of Face of Security..................................................................... 15
SECTION 203. Form of Reverse of Security.................................................................. 18
SECTION 204. Form of Trustee's Certificate of Authentication.............................................. 20
SECTION 205. Form of Guarantee............................................................................ 21
SECTION 206. Form of Assignment........................................................................... 22
</TABLE>
- --------
(1)
NOTE: This table of contents shall not, for any purpose, be deemed
to be a part of the Indenture.
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.............................................................................. 23
SECTION 302. Denominations................................................................................ 24
SECTION 303. Execution, Authentication, Delivery and Dating............................................... 24
SECTION 304. Temporary Securities......................................................................... 25
SECTION 305. Registration, Registration of Transfer and Exchange.......................................... 25
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............................................. 28
SECTION 307. Payment of Interest; Interest Rights Preserved............................................... 28
SECTION 308. Persons Deemed Owners........................................................................ 30
SECTION 309. Cancellation................................................................................. 30
SECTION 310. Computation of Interest...................................................................... 31
SECTION 311. Guarantee of Securities...................................................................... 31
SECTION 312. Execution of Guarantees...................................................................... 31
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture...................................................... 32
SECTION 402. Application of Trust Money................................................................... 33
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default............................................................................ 33
SECTION 502. Acceleration of Maturity; Rescission and Annulment........................................... 36
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.............................. 37
SECTION 504. Trustee May File Proofs of Claim............................................................. 38
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.................................. 38
SECTION 506. Application of Money Collected............................................................... 39
SECTION 507. Limitation on Suits.......................................................................... 39
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest..................................................................................... 40
SECTION 509. Restoration of Rights and Remedies........................................................... 40
SECTION 510. Rights and Remedies Cumulative............................................................... 40
SECTION 511. Delay or Omission Not Waiver................................................................. 40
SECTION 512. Control by Holders........................................................................... 41
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C>
SECTION 513. Waiver of Past Defaults...................................................................... 41
SECTION 514. Undertaking for Costs........................................................................ 42
SECTION 515. Waiver of Stay or Extension Laws............................................................. 42
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.......................................................... 43
SECTION 602. Notice of Defaults........................................................................... 44
SECTION 603. Certain Rights of Trustee.................................................................... 44
SECTION 604. Not Responsible for Recitals or Issuance of Securities....................................... 45
SECTION 605. May Hold Securities.......................................................................... 45
SECTION 606. Money Held in Trust.......................................................................... 46
SECTION 607. Compensation and Reimbursement............................................................... 46
SECTION 608. Disqualification; Conflicting Interests...................................................... 46
SECTION 609. Corporate Trustee Required; Eligibility...................................................... 47
SECTION 610. Resignation and Removal; Appointment of Successor............................................ 47
SECTION 611. Acceptance of Appointment by Successor....................................................... 48
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.................................. 49
SECTION 613. Preferential Collection of Claims Against Company
or the Guarantor............................................................................. 49
SECTION 614. Appointment of Authenticating Agent.......................................................... 49
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.................................... 51
SECTION 702. Preservation of Information; Communications to Holders....................................... 51
SECTION 703. Reports by Trustee........................................................................... 52
SECTION 704. Reports by Company and Guarantor............................................................. 52
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company and Guarantor May Consolidate, Etc., Only on Certain
Terms........................................................................................ 53
SECTION 802. Successor Substituted for the Guarantor...................................................... 54
SECTION 803. Successor Substituted for the Company........................................................ 55
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.................................. 55
SECTION 902. Supplemental Indentures With Consent of Holders..................................... 56
SECTION 903. Execution of Supplemental Indentures................................................ 57
SECTION 904. Effect of Supplemental Indentures................................................... 57
SECTION 905. Conformity with Trust Indenture Act................................................. 57
SECTION 906. Reference in Securities to Supplemental Indentures.................................. 57
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.......................................... 58
SECTION 1002. Maintenance of Office or Agency..................................................... 58
SECTION 1003. Money for Securities Payments to be Held in Trust................................... 58
SECTION 1004. Statement by Officers as to Default................................................. 60
SECTION 1005. Existence........................................................................... 60
SECTION 1006. Restrictions on Secured Debt........................................................ 60
SECTION 1007. Restrictions on Sale and Lease-Back Transactions.................................... 62
SECTION 1008. Waiver of Certain Covenants......................................................... 63
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article............................................................ 64
SECTION 1102. Election to Redeem; Notice to Trustee............................................... 64
SECTION 1103. Selection by Trustee of Securities to be Redeemed................................... 64
SECTION 1104. Notice of Redemption................................................................ 64
SECTION 1105. Deposit of Redemption Price......................................................... 65
SECTION 1106. Securities Payable on Redemption Date............................................... 65
SECTION 1107. Securities Redeemed in Part......................................................... 66
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance........................ 66
SECTION 1202. Defeasance and Discharge............................................................ 66
</TABLE>
vi
<PAGE> 8
<TABLE>
<S> <C>
SECTION 1203. Covenant Defeasance................................................................. 67
SECTION 1204. Conditions to Defeasance or Covenant Defeasance..................................... 67
SECTION 1205. Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions................................. 69
SECTION 1206. Reinstatement....................................................................... 69
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS
AND DIRECTORS
SECTION 1301. Immunity of Incorporators, Shareholders, Officers and Directors..................... 70
</TABLE>
vii
<PAGE> 9
INDENTURE, dated as of _________, 1998 between Blount, Inc. a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company") and having its principal office at 4520 Executive
Park Drive, Montgomery, Alabama, 36116-1602, Blount International, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Guarantor") and having its principal office at 4520
Executive Park Drive, Montgomery, Alabama 36116-1602, and LaSalle National Bank,
a national banking association duly organized and existing under the laws of the
United States of America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its ______% Senior Notes due
___________, 2008 (herein called the "Securities") of substantially the tenor
and amount hereinafter set forth.
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance of Guarantees to be endorsed on the
Securities when authenticated and delivered hereunder.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities and the Guarantees by Holders thereof, it is mutually agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
<PAGE> 10
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
this instrument; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price of the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable, at any date as of which the amount thereof is to
be determined, the total net amount of rent required to be paid by such Person
under such lease during the remaining term thereof (excluding any subsequent
renewal or other extension options held by the lessee), discounted from the
respective due dates thereof to such date of determination at the rate of
interest per annum implicit in the terms of such lease, as determined in good
faith by the Company, compounded annually. The net amount of rent required to be
paid under any such lease for any such period shall be the amount of the rent
payable by the lessee with respect to such period, after excluding amounts
required to be paid on account of maintenance and repairs, reconstruction,
insurance, taxes, assessments, water rates and similar charges and contingent
rents (such as those based on sales). In the case of any lease which is
terminable by the lessee upon the payment of a penalty, such net amount shall
also include the amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
"Board of Directors" means either the board of directors of the Company
or the Guarantor, as the context requires, any duly authorized committee of that
board or any officer
2
<PAGE> 11
of the Company or the Guarantor duly authorized by the board of directors of the
Company or the Guarantor, as the case may be, to take a specified action.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or the Guarantor, as the case
may be, to have been duly adopted by the Board of Directors 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 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
or executive order to close.
"Capital Stock", as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless of
whether such capital stock shall be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such corporation.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Chief
Financial Officer, its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee by hand or by facsimile,
courier, registered mail or otherwise.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Securities.
"Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of the Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations; or (ii) if the
3
<PAGE> 12
Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Consolidated Net Tangible Assets" means, with respect to any Person,
on the date on which the determination is being made, the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (i) all current liabilities (excluding current maturities of
long-term debt and capitalized lease obligations), and (ii) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly balance sheet of such
Person and its consolidated Subsidiaries and computed in accordance with
generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of execution of this Indenture is located at LaSalle
National Bank, Corporate Trust Services Division, 135 South LaSalle Street,
Chicago, Illinois 60603, Facsimile number: (312) 904-2236.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Debt" means indebtedness for money borrowed.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means DTC until a successor depositary shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean such successor Depositary.
"DTC" means the Depository Trust Company, a New York corporation.
"Event of Default" has the meaning specified in Section 501.
"Funded Debt" means, on the date on which the determination is being
made, any Debt maturing by its terms more than 12 months from such date,
including any Debt renewable or extendible at the option of the borrower to a
date later than 12 months from such date of determination.
"Global Security" means a Security or Securities, as the case may be,
in the form prescribed in Section 202, issued to the Depositary or its nominee,
and registered in the name of such Depositary or nominee.
"Guarantees" means the guarantees of the Guarantor to be endorsed on
the Securities authenticated and delivered hereunder.
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"Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor Person.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or on the Redemption Date or by
declaration of acceleration or otherwise.
"Mortgage" means and includes any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company or the Guarantor, as
applicable, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company or the Guarantor, as
the case may be.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company or the Guarantor, and who shall be
reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities;
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<PAGE> 14
provided that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities which have been 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 to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(iv) Securities with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article Twelve;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith 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 of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) and interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.
"Place of Payment" means the place or places where the principal of
(and premium, if any) and interest on the Securities are payable as specified 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 such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means, on any date of determination, any
manufacturing plant or manufacturing facility (i) owned by the Company, the
Guarantor or any Subsidiary of either of the foregoing, (ii) located in the
continental United States of America and (iii) having a gross
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<PAGE> 15
book value, on such date, in excess of (a) with respect to any such plant or
facility owned as of such date by the Guarantor or a Subsidiary of the
Guarantor, 2% of the Consolidated Net Tangible Assets of the Guarantor or (b) if
the Company is not a Subsidiary of the Guarantor as of such date, with respect
to any such plant or facility owned by the Company or a Subsidiary of the
Company, 2% of the Consolidated Net Tangible Assets of the Company; provided,
however, that the term "Principal Property" shall not include (x) any plant or
facility described in clause (a) of this sentence if, in the opinion of the
Board of Directors of the Guarantor, or (y) any plant or facility described in
clause (b) of this sentence, if, in the opinion of the Board of Directors of the
Company, in either case, as set forth in, and effective as of the date of, a
Board Resolution, such plant or facility is not of material importance to the
business conducted by the Guarantor and its Subsidiaries or the Company and its
Subsidiaries, respectively, taken as a whole.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed as specified therein.
"Reference Treasury Dealer" means (i) each of J.P. Morgan Securities
Inc. and Salomon Brothers Inc and their respective successors; provided,
however, that if either of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer; and (ii) any
other Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
"Regular Record Date" for the interest payable with respect to any
Security on any Interest Payment Date means the ____________________ or
____________________ (whether or not a Business Day) next preceding the relevant
Interest Payment Date.
"Remaining Scheduled Payments" means, with respect to any Security, the
remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the related Redemption Date but for
such redemption; provided, however, that, if such Redemption Date is not an
Interest Payment Date with respect to such Security, the
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amount of the next succeeding scheduled interest payment thereon will be reduced
by the amount of interest accrued thereon to such Redemption Date.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Company, the Guarantor or any Subsidiary of any
Principal Property, whether owned at the date of the Indenture or thereafter
acquired (except for temporary leases for a term, including any renewal thereof,
of not more than three years and except for leases between the Company or the
Guarantor and any Subsidiary, between any Subsidiary and the Company or the
Guarantor or between Subsidiaries (in each case, including the Company)), which
Principal Property has been or is to be sold or transferred by the Guarantor or
such Subsidiary to such Person with the intention of taking back a lease of such
Principal Property.
"Securities" has the meaning stated in the first recital of this
Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means, with respect to any Person, any
Subsidiary that would be a "Significant Subsidiary" of such Person within the
meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or interest
thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of interest is due and
payable.
"Subsidiary" means a corporation of which more than 50% of the
outstanding voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote generally in the election of
directors thereof is owned, directly or indirectly, by the Company or the
Guarantor, as the context requires, or by one or more other Subsidiaries, or by
the Company or the Guarantor, as the context requires, and one or more other
Subsidiaries.
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"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean the Person who is then a Trustee hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as amended
and in force at the date as of which this instrument was executed, except as
provided in Section 905.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America for the payment of which its full faith and credit is pledged, or
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, and the payment of which is
unconditionally guaranteed by the United States.
"Vice President", when used with respect to the Company, the Guarantor
or the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
For purposes of Section 311(b)(4) and (6) of the Trust Indenture Act,
the following terms shall mean:
"Cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
"Self-liquidating paper" means any draft, bill of exchange, acceptance
or obligation which is made, drawn, negotiated or incurred by the Company for
the purpose of financing the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivable or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company or the Guarantor to the
Trustee to take any action under any provision of this Indenture, the Company or
the Guarantor, as the case may be, shall furnish to the Trustee 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 an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is
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specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with; provided
however, that, with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or a certificate of public
officials.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous.
Where any Person or Persons is or are required to make, give or execute
two or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
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SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantor. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee, the Company and the Guarantor, if made in the manner provided in
this Section.
Without limiting the generality of the foregoing, a Holder, including a
Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy or proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in this Indenture to
be made, given or taken by Holders, and a Depositary that is a Holder of a
Global Security may provide its proxy or proxies to the beneficial owners of
interests in any such Global Security.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The Company may, at its option, by Board Resolution, set a record
date for determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other Act, or to vote on
any action, authorized or permitted to be given or taken by Holders, but the
Company shall have no obligation to do so. If a record date is set pursuant to
this paragraph, such Act may be given or taken before or after the record date,
by only the Holders of record at the close of business on such record date who
shall be deemed to be Holders for the purpose of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or agreed or
consented to such Act, and for that purpose the Outstanding Securities shall be
computed as of the record date. If a record date is set pursuant to this
paragraph, the Company may, at its option, set an expiration date after which no
such Act purported to be given or taken by any Holder shall be effective
hereunder unless given or taken on or prior to such expiration date by Holders
of the requisite Outstanding Securities on such record date but the Company
shall have no obligation to do so.
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On or prior to any expiration date set pursuant to this paragraph, the Company
may, on one or more occasions at its option, extend such date to any later date.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, the
Company or the Guarantor in reliance thereon, whether or not notation of such
action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee, Company and Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or the
Guarantor shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Department, or
(2) the Company or the Guarantor, as the case may be, by the
Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid or sent by facsimile (with
prompt confirmation by first-class mail, postage prepaid), to the
Company or the Guarantor, as the case may be, addressed to it at the
address of its principal office specified in the first paragraph of
this instrument, Attention: Chief Financial Officer (with a copy to the
same address, Attention: General Counsel) or at any other address
previously furnished in writing to the Trustee by the Company or the
Guarantor.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed
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with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the
Guarantor shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities or the
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture, the Securities or the Guarantees, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture, the Securities and the Guarantees shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the principles of conflicts of law thereof.
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities), payment of principal (and premium, if any) or interest 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, Redemption Date or at the Stated
Maturity, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS AND GUARANTEES
SECTION 201. Forms Generally.
The Securities, the Guarantees and the Trustee's certificates of
authentication shall be in substantially the form set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
The Securities initially shall be issued in the form of a Global
Security.
Any definitive Securities and Guarantees shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities.
SECTION 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the regulations
thereunder.]
[The following legend shall also appear on the face of each Global Security:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO BELOW AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE
OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY
AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.]
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[The following legend shall also appear on the face of each Global Security for
which The Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERENCED
IN THE INDENTURE, THIS 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 SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.]
BLOUNT, INC.
_____% Senior Notes due __________, 2008
No. _______
[$]____________ CUSIP No. ___________
Blount, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ________________________________, or
registered assigns, the principal sum of __________________________________
Dollars on ____________________, and to pay interest thereon from
__________________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on ___________ and
___________ in each year, commencing _______________, 1998 at the rate of ___%
per annum, until the principal hereof is paid or made available for payment, and
(to the extent that the payment of such interest shall be legally enforceable)
at the rate of ____% per annum on any overdue principal and premium and on any
overdue installment of interest. 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
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such interest, which shall be the ________ or _________ (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on 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 not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, the City of New York or at such other
office or agency of the Company as may be maintained for such purpose, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE> 25
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
BLOUNT, INC.
By: ___________________________________
Name:
[CORPORATE SEAL] Title:
Attest:
By: ____________________________
Name:
Title:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company designated as its "_____% Senior Notes due _______, 2008" (herein called
the "Securities"), limited in aggregate principal amount to $150,000,000, issued
under an Indenture, dated as of __________, 1998 (herein called the
"Indenture"), between the Company, Blount International, Inc., as Guarantor (the
"Guarantor") and LaSalle National 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 Company, the Guarantor, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
No sinking fund is provided for the Securities.
The Securities are redeemable, in whole or in part, at the option of
the Company at any time upon not less than 30 days' nor more than 60 days'
notice by mail, at any time, at a redemption price equal to the greater of (i)
100% of the aggregate principal amount of the such Securities or (ii) as
determined by the Quotation Agent, the sum of the present values of the
Remaining Scheduled Payments discounted to the Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate plus _____ basis points plus, in each case, accrued but
unpaid interest thereon to the Redemption Date; provided, however, that interest
installments due on an Interest Payment Date which is on or prior to the
Redemption Date will be payable to Holders who are Holders
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<PAGE> 26
of record of such Securities as of the close of business on the fifteenth day
next preceding such Interest Payment Date.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and the
related Events of Default with respect to this Security, in each case upon
compliance by the Company with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities at any
time by the Company, the Guarantor and the Trustee with the consent of the
Holders of at least a majority in principal amount of the Securities at the time
Outstanding to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities at
the time Outstanding, on behalf of the Holders of all Securities, to waive
compliance by the Company and the Guarantor with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
hereof 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 obligation of the Company which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security Register
upon surrender of this Security for registration of transfer at the office or
agency of the Company 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 Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. A Holder may transfer
or exchange Securities in accordance with the Indenture.
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<PAGE> 27
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse for the payment of the principal of (premium, if any) or
interest on this Security, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor Person, either
directly or through the Company, whether by virtue of any constitution, statute
or rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the issue hereof, expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles as applied in such state.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
LA SALLE NATIONAL BANK
As Trustee
By______________________________
Authorized Officer
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<PAGE> 28
SECTION 205. Form of Guarantee.
A Guarantee substantially in the following form shall be endorsed on
the reverse of each Security:
Blount International, Inc., (the "Guarantor") hereby unconditionally
and irrevocably guarantees to the Holder of this Security the due and punctual
payment of the principal of (and premium, if any) and interest, on this
Security, when and as the same shall become due and payable, whether at maturity
or upon redemption or upon declaration of acceleration or otherwise, according
to the terms of this Security and of the Indenture. The Guarantor agrees that in
the case of default by the Company in the payment of any such principal (and
premium, if any) or interest, the Guarantor shall duly and punctually pay the
same. The Guarantor hereby agrees that its obligations hereunder shall be
absolute and unconditional irrespective of any extension of the time for payment
of this Security, any modification of this Security, any invalidity,
irregularity or unenforceability of this Security or the Indenture, any failure
to enforce the same or any waiver, modification, consent or indulgence granted
to the Company with respect thereto by the Holder of this Security or the
Trustee, or any other circumstances which may otherwise constitute a legal or
equitable discharge of a surety or guarantor. The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger or bankruptcy of the Company, any right to require a demand or
proceeding first against the Company, protest or notice with respect to this
Security or the indebtedness evidenced hereby and all demands whatsoever, and
covenants that this guarantee will not be discharged as to this Security except
by payment in full of the principal of (and premium, if any) and interest on
this Security.
The Guarantor shall be subrogated to all rights of the Holders against
the Company in respect of any amounts paid by the Guarantor pursuant to the
provisions of the Guarantee or this Indenture; provided, however, that the
Guarantor hereby waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of a Holder against the Company with respect to such
payment or otherwise to be reimbursed, indemnified or exonerated by the Company
in respect thereof or (ii) to receive any payment in the nature of contribution
or for any other reason, from any other obligor with respect to such payment, in
each case, until the principal of (and premium, if any) and interest on all
Securities issued hereunder shall have been paid in full.
This Guarantee shall not be valid or become obligatory for any purpose
with respect to this Security until the certificate of authentication on this
Security shall have been signed by the Trustee.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the principles of
conflicts of law thereof.
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<PAGE> 29
IN WITNESS WHEREOF, Blount International, Inc. has caused this
Guarantee to be signed by facsimile by its duly authorized officers and has
caused a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.
BLOUNT INTERNATIONAL, INC.
[CORPORATE SEAL] By____________________________
Attest:
________________________
SECTION 206. Form of Assignment.
For value received ________________________ hereby sells(s), assign(s)
and transfer(s) unto _____________________ (Please insert social security or
other identifying number of assignee) the within Security, and hereby
irrevocably constitutes and appoints _________________________ as attorney to
transfer the said Security on the books of the Company, with full power of
substitution in the premises.
Dated: ___________________________________
Signature(s)
Signature(s) must be guaranteed by
an Eligible Guarantor Institution
with membership in an approved
signature guarantee program
pursuant to Rule l7Ad-15 under the
Securities Exchange Act of 1934.
___________________________________
Signature Guaranteed
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<PAGE> 30
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $150,000,000, except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Sections 304, 305,
306, 906 and 1107.
The Securities shall be known and designated as the "___% Senior Notes
due _______________, 2008" of the Company. Their Stated Maturity shall be
____________, 2008 and they shall bear interest at the rate of ____% per annum
from _____________, 1998 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
semi-annually in arrears on _______ and _________ of each year, commencing
_____________, 1998, until the principal thereof is paid or made available for
payment, provided that any amount of such principal or interest that is overdue
shall bear interest at the rate of ___% per annum (to the extent that payment of
such interest shall be legally enforceable), from the date such amount is due
until it is paid or made available for payment, and such interest on any overdue
amount shall be payable on demand.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York or at such other
office or agency of the Company as may be maintained for such purpose, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
The Securities shall be redeemable at the Company's option, in whole or
in part, at any time as provided in the form of Securities set forth in Section
202 and 203 and Article Eleven.
The Securities are not entitled to the benefit of any sinking fund.
So long as any Global Security issued hereunder is registered in the
name of the Depositary or its nominee, members of, or participants in, the
Depositary ("Agent Members") shall have no rights under this Indenture with
respect to the Global Security held on their behalf by the Depositary (or, if
applicable, the Trustee as custodian for the Depositary) and the Depositary may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
hereunder. Notwithstanding the foregoing, nothing herein shall (i) prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or (ii) impair, as between the Depositary
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<PAGE> 31
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of Securities.
SECTION 302. Denominations.
The Securities shall be issuable in registered form without coupons and
only in denominations of $1,000 and any integral multiple of $1,000 in excess
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
If an officer of the Company whose signature is on a Security no longer
holds that office at the time the Trustee authenticates such Security or at any
time thereafter, the Security shall be valid nevertheless.
Upon issuance of the Global Security referred to in Section 201 hereof,
such Global Security shall be (i) duly executed by the Company and authenticated
by the Trustee as hereinafter provided, (ii) delivered to the Depositary or to
the Trustee as custodian for the Depositary and (iii) registered in the name of
Cede & Co. as nominee of the Depositary.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company,
having endorsed thereon Guarantees duly executed by the Guarantor, to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and having
endorsed thereon Guarantees duly executed by the Guarantor substantially of
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<PAGE> 32
the tenor of the definitive Guarantees, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities and such Guarantees may determine, as evidenced by their execution of
such Securities and such Guarantees.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company in a Place of Payment, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations and having endorsed thereon Guarantees duly executed by the
Guarantor. Until so exchanged the temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities.
For purposes of this Section 304, each Global Security shall be
considered a definitive Security.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively 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 Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency in a Place of Payment, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities, of any authorized denominations and
of a like aggregate principal amount and tenor, each such Security having
endorsed thereon a Guarantee duly executed by the Guarantor.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount and tenor, each such Security having endorsed thereon a Guarantee duly
executed by the Guarantor, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities (having endorsed thereon Guarantees duly executed by the Guarantor)
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities, and the Guarantees endorsed thereon, shall be the valid obligations
of the Company and the Guarantor, respectively, evidencing the same debt, and
entitled to the same benefits under this
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<PAGE> 33
Indenture, as the Securities surrendered upon such registration of transfer or
exchange and the Guarantees endorsed thereon.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities excluding any case in which such Securities have been
mutilated, destroyed, lost or stolen, in which case the Registrar may charge a
reasonable fee for replacement, 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, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 1103 and ending at the close of business
on the day of such mailing, (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part or (iii) to issue, register the
transfer of or exchange any Security which has been surrendered for repayment at
the option of the Holder, except the portion, if any, of such Security not to be
so repaid.
Notwithstanding any other provision of this Section 305, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a portion of the
Securities may not be transferred except as a whole by the Depositary to a
nominee of such Depositary, and a Global Security may not be exchanged for
Securities in definitive form except as hereafter provided in this Section 305.
If at any time the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary or if at any time the Depositary shall cease
to be a clearing agency registered under the Securities Exchange Act of 1934 and
any other applicable statute or regulation, the Company shall appoint a
successor Depositary. If a successor Depositary is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company and the Guarantor will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities will authenticate and deliver Securities in definitive registered
form (having endorsed thereon Guarantees duly executed by the Guarantor), in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Security or Securities, in exchange for such
Global Security or Securities.
The Company may at any time and in its sole discretion determine that
the Securities issued in the form of one or more Global Securities shall no
longer be represented by such
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<PAGE> 34
Global Security or Securities. In such event, the Company and the Guarantor will
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of definitive Securities will authenticate and deliver, Securities
in definitive registered form (having endorsed thereon Guarantees duly executed
by the Guarantor), in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities, in
exchange for such Global Security or Securities.
If specified by the Company with respect to the Securities, a Person
owning a beneficial interest in a Global Security or Securities may instruct the
Depositary to surrender such Global Security in exchange, in whole or in part,
for Securities in definitive registered form (having endorsed thereon Guarantees
duly executed by the Guarantor), on such terms as are acceptable to the Company,
the Trustee and the Depositary. Thereupon, the Company shall execute, and the
Trustee shall authenticate and deliver, without service charge:
(i) to the Person specified by such Depositary a new Security
or Securities of any authorized denomination as requested by such
Person (having endorsed thereon Guarantees duly executed by the
Guarantor), in an 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 (having endorsed
thereon Guarantees duly executed by the Guarantor) 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 authenticated and delivered pursuant to Clause (i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form, such Global Security shall be canceled by the Trustee.
Securities in definitive registered form issued in exchange for a Global
Security pursuant to this Section 305 shall be issued in denominations of $1,000
and integral multiples thereof and registered in such names and as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities
to or as directed by the Persons in whose names such Securities are so
registered.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount (having endorsed
thereon Guarantees duly executed by the Guarantor) and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall
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<PAGE> 35
authenticate and deliver in lieu of any such destroyed, lost or stolen Security,
a new Security of like tenor and principal amount (having endorsed thereon
Guarantees duly executed by the Guarantor) and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
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 the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security, and the related Guarantee, shall constitute
an original additional contractual obligation of the Company and the Guarantor,
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the 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 Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
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<PAGE> 36
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the 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 Securities at
such Holder's address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of 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 Security for registration of transfer,
the Company, the Guarantor, the Trustee, any Authenticating Agent, any Paying
Agent or the Security Registrar and any agent of the Company, the Guarantor, the
Trustee, any Authenticating Agent, any Paying Agent or the Security Registrar
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Guarantor, the Trustee, any Authenticating Agent, any Paying
Agent or the Security Registrar nor any agent of the Company, the Guarantor, the
Trustee, any Authenticating Agent, any Paying Agent or the Security Registrar
shall be affected by notice to the contrary.
None of the Company, the Guarantor, the Trustee, any Authenticating
Agent, 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 in a
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<PAGE> 37
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company or the
Guarantor may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly canceled by the Trustee, except that if a Global
Security is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the Depositary, without service charge, a new Global
Security or Securities in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Global Security so surrendered. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be held by the
Trustee in accordance with its customary practices until destroyed by the
Trustee; provided, however that the Trustee shall not be required to destroy
such Securities.
The Company may not issue new Securities to replace Securities it has
paid in full or delivered to the Trustee for cancellation.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 311. Guarantee of Securities.
The Guarantor hereby unconditionally and irrevocably guarantees to each
Holder the due and punctual payment of the principal of (and premium, if any)
and interest on such Security, when and as the same shall become due and
payable, whether at maturity or upon redemption or upon declaration of
acceleration or otherwise, according to the terms of such Security and of this
Indenture. The Guarantor agrees that in case of default by the Company in the
payment of any such principal (premium, if any) or interest, the Guarantor shall
duly and punctually pay the same. The Guarantee set forth in this Section 311 is
a guarantee of payment and not of collection. The Guarantor hereby agrees that
its obligations hereunder shall be absolute and unconditional irrespective of
any extension of the time for payment of any such Security, any modification of
any such Security, any invalidity, irregularity or unenforceability of any such
Security or this Indenture, any failure to enforce the same or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of such Security or the Trustee, recovery of judgment against the
Company or any other circumstances which may otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor. The Guarantor hereby
waives diligence, presentment, demand of
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payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a demand or proceeding first against the
Company, protest or notice with respect to any such Security or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that this Guarantee
will not be discharged as to any such Security except by payment in full of the
principal of (and premium, if any) and interest on such Security.
The Guarantor shall be subrogated to all rights of the Holders against
the Company in respect of any amounts paid by the Guarantor pursuant to the
provisions of the Guarantee or this Indenture; provided, however, that the
Guarantor hereby waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of a Holder against the Company with respect to such
payment or otherwise to be reimbursed, indemnified or exonerated by the Company
in respect thereof or (ii) to receive any payment in the nature of contribution
or for any other reason, from any other obligor with respect to such payment, in
each case, until the principal of (and premium, if any) and interest on all
Securities issued hereunder shall have been paid in full.
The Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantees not
constitute a fraudulent transfer or conveyance for the purposes of title 11 of
the United States Code, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any other applicable federal, state or foreign law
similar to any of the foregoing. To effectuate the foregoing intention, the
Holders and the Guarantor hereby irrevocably agree that the obligations of the
Guarantor under this Section 311 shall be limited to such maximum amount as
will, after giving effect to all other contingent and fixed liabilities of the
Guarantor, result in the obligations of the Guarantor under the Guarantees not
constituting a fraudulent transfer or conveyance under applicable federal or
state law.
The Guarantee set forth in this Section shall not be valid or become
obligatory for any purpose with respect to a Security until the certificate of
authentication on such Security shall have been signed by the Trustee.
SECTION 312. Execution of Guarantees.
To evidence its Guarantee specified in Section 311 to the Holders of
Securities, the Guarantor hereby agrees to execute the Guarantees in
substantially the form above recited to be endorsed on each Security. Such
Guarantees shall be executed on behalf of the Guarantor by its Chief Executive
Officer, its President or one of its Vice Presidents under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Guarantee may be
manual or facsimile.
If an officer of the Guarantor whose signature is on a Guarantee
endorsed on a Security no longer holds that office at the time the Trustee
authenticates such Security or at any time thereafter, the Security shall be
valid nevertheless.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company or the Guarantor
and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
(B) all Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company or the Guarantor, as the case may be,
in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee
as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the
date of such deposit (in the case of Securities which
have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company or the Guarantor, as the case may be, has paid
or caused to be paid all other sums payable hereunder by the Company;
and
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(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, to the effect that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company and the Guarantor to the Trustee under Section 607,
the obligations of the Trustee to any Authenticating Agent under Section 614,
and, if money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the obligations of the Trustee under Section
402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
Guarantees and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal
(premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest upon any Security
at its Stated Maturity, and continuance of such default for a period of
30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security at its Maturity; or
(3) default in the performance, or breach, of any other
covenant or warranty of the Company or the Guarantor in this Indenture,
the Securities or the Guarantees endorsed thereon (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 90 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
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(4) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Guarantor, the
Company or any Subsidiary of the Guarantor or under any mortgage,
indenture or instrument under which there may be secured or evidenced
any indebtedness for money borrowed by the Guarantor, the Company or
any Subsidiary of the Guarantor, whether such indebtedness now exists
or shall hereafter be created, which default shall constitute a failure
to pay indebtedness in a principal amount in excess of $20 million when
due and payable at the final maturity thereof, after the expiration of
any applicable grace period with respect thereto, or shall have
resulted in such indebtedness in a principal amount in excess of $20
million becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 30 days after there shall
have been given, by registered or certified mail, to the Guarantor and
the Company by the Trustee or to the Guarantor, the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default and
requiring the Guarantor or the Company, as the case may be, to cause
such indebtedness to be discharged or such acceleration to be rescinded
or annulled and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Guarantor, the
Company or any Significant Subsidiary of the Guarantor in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Guarantor, the Company or any Significant
Subsidiary of the Guarantor a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Guarantor, the
Company or any Significant Subsidiary of the Guarantor under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Guarantor, the Company or any Significant Subsidiary of the
Guarantor or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Guarantor, the Company or any
Significant Subsidiary of the Guarantor of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Guarantor, the Company or any Significant Subsidiary of the Guarantor
in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization
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or relief under any applicable Federal or State law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Guarantor, the Company or
any Significant Subsidiary of the Guarantor or of any substantial part
of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Guarantor, the Company or any Significant Subsidiary of
the Guarantor in furtherance of any such action.
Upon receipt by the Trustee of any notice of the type described in
clauses (3) and (4) (a "Notice of Default") from a Holder with respect to
Securities, the Trustee shall establish a record date for determining Holders of
Outstanding Securities entitled to join in such Notice of Default, which record
date shall be at the close of business on the day the Trustee receives such
Notice of Default. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such Notice of
Default, whether or not such Holders remain Holders after such record date;
provided, that unless Holders of at least 25% in principal amount of the
Outstanding Securities, or their proxies, shall have joined in such Notice of
Default prior to the day which is 90 days after such record date, such Notice of
Default shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving (i) after expiration of such 90-day period, a new
Notice of Default identical to a Notice of Default which has been canceled
pursuant to the proviso to the preceding sentence, or (ii) during any such
90-day period, an additional Notice of Default with respect to any new or
different fact or circumstance permitting the giving of a Notice of Default with
respect, in either of which events a new record date shall be established
pursuant to the provisions of this Section 501.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal amount of all of the Securities
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
Securities, by written notice to the Company, the Guarantor and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company or the Guarantor has paid or deposited with
the Trustee a sum sufficient to pay
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(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the
rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of written notice from a Holder declaring
such an acceleration, or rescission and annulment thereof, with respect to
Securities, the Trustee shall establish a record date for determining Holders of
Outstanding Securities entitled to join in such notice, which record date shall
be at the close of business on the day the Trustee receives such notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders
remain Holders after such record date; provided, that unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice
prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, (i) after expiration of such 90-day period, a new
written notice of declaration of acceleration or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, or (ii) during
any such 90-day period, an additional written notice of declaration of
acceleration, or an additional written notice of rescission of annulment of any
declaration of acceleration with respect to any other Event of Default, in
either of which events a new record date shall be established pursuant to the
provisions of this Section 502.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company, the Guarantor or any other obligor upon such Securities and
collect the monies adjudged or decreed to be payable in the manner provided by
law out of the property of the Company, the Guarantor or any other obligor upon
such Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company or the
Guarantor (or any other obligor upon the Securities), their property or their
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to file and
prove a claim for the whole amount of principal (premium, if any) and interest
owing and unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
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counsel) and of the Holders allowed in such judicial proceeding, and to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture, the Securities or
the Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursement and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (and premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
First: To the payment of all amounts due the Trustee under
Section 607;
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
Third: The balance, to the Company and the Guarantor, as the
case may be, or as a court of competent jurisdiction may direct.
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SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on, such Security on the respective Stated Maturities of
such payments expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
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SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Guarantor, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of at least a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, expose the Trustee to personal liability or
be unduly prejudicial to Holders not joining therein, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
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Upon receipt by the Trustee from a Holder of any direction regarding
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or the exercise of any trust or power conferred on the Trustee,
with respect to Securities, the Trustee shall establish a record date for
determining Holders of Outstanding Securities entitled to join in such
direction, which record date shall be at the close of business on the day the
Trustee receives such direction. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
direction, whether or not such Holders remain Holders after such record date;
provided, that unless at least a majority in principal amount shall have been
obtained prior to the day which is 90 days after such record date, such
direction shall automatically and without further action by any Holder be
canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, (i) after expiration of such 90-day
period, a new direction identical to a direction which has been canceled
pursuant to the provisions to the preceding sentence or (ii) during any such
90-day period a new direction contrary to or different from such direction, in
either of which events a new record date shall be established pursuant to the
provisions of this Section 512.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Trustee, by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities, or by any Holder
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for the enforcement of the payment of the principal of or premium or interest on
any Security on or after the Stated Maturity expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company and the Guarantor covenant (to the extent that they may
lawfully do so) that they will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company and
the Guarantor (to the extent that they may lawfully do so) hereby expressly
waive all benefit or advantage of any such law and covenants that they will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(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 the 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 the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision of this Indenture are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
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(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(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 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, the Trustee shall transmit by mail to all Holders of
Securities, as their names and addresses appear in the Security Register, notice
of such default hereunder known to the Trustee, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal (or premium, if any) or interest on any
Security, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee of directors or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Securities; and provided, further, that in the case of any default of the
character specified in Section 501(3) with respect to the Securities, 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 the Securities.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
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indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request 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, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company and the Guarantor, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
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Securities. The Trustee or any Authenticating Agent shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or the Guarantor, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee (and its officers, directors,
agents and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a claim prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Securities.
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SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of Section 310 of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed
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or any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation
or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees and shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the 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 611, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and the Guarantor and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company, the Guarantor or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 607.
(b) Upon request of any such successor Trustee, the Company and the
Guarantor shall execute any and all instruments for more fully and certainly
vesting in and confirming to
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such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) of this Section, as the case may be.
(c) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company or
the Guarantor.
If and when the Trustee shall be or become a creditor of the Company or
the Guarantor (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of Section 311 of the Trust Indenture Act regarding
the collection of claims against the Company or the Guarantor (or any such other
obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or partial
redemption or repayment thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business and in good standing under
the laws of the United States of America, any State or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of no less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined
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capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company and the Guarantor, such resignation
not to take effect until 30 days after the date said written notice is received.
The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company
and the Guarantor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Securities, as their names and addresses
appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment thereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments pursuant to the
provisions of Section 607.
If an Authenticating Agent is appointed with respect to the Securities
pursuant to this Section, the Securities may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
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This is one of the Securities referred to in the within-mentioned
Indenture.
LASALLE NATIONAL BANK,
As Trustee
By: ____________________________,
As Authenticating Agent
By: ____________________________,
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not more than 15 days after each Regular
Record Date, a list, in such form as such Trustee may reasonably
require, of the names and addresses of the Holders of Securities as of
such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
excluding from such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
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(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company, the Guarantor and the Trustee that neither the Company,
the Guarantor nor the Trustee nor any agent of any of them shall be held
accountable by reason of any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders within 60 days after each
_____________ beginning _____________, 1998 such reports dated as of such date,
if any, concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act as amended from time to time at the
times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company and Guarantor.
The Company and the Guarantor shall:
(a) file with the Trustee, within 15 days after the Company or
the Guarantor, as the case may be, are required to file the same with
the Commission, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company or the Guarantor may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company and
the Guarantor are not required to file information, documents, or
reports pursuant to either of such sections, then they will file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of
1934, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations; provided, however, that the Company's obligation
to file such information, documents and reports with the Trustee
pursuant to this paragraph (a) shall be suspended for so long as (i)
the Company would be required to file such information, documents and
reports with the Commission but for exemptive relief granted by the
Commission allowing such requirement to be satisfied by filings of such
information, documents and reports by the Guarantor and (ii) the
Guarantor complies with any applicable requirements set forth in such
exemptive relief.
(b) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents, and reports with
respect to compliance by the Company and
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the Guarantor with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit by mail to the Holders, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company and the
Guarantor pursuant to (a) and (b) in this Section as may be required by
rules and regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company and Guarantor May Consolidate, Etc., Only on
Certain Terms.
Neither the Guarantor nor the Company shall consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Guarantor and the Company
shall not permit any Person to consolidate with or merge into the Guarantor or
the Company or convey, transfer or lease its properties and assets substantially
as an entirety to the Guarantor or the Company, unless:
(1) in case the Guarantor shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Guarantor is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Guarantor substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly guarantee, by
an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all
the Securities and the performance or observance of every covenant of
this Indenture on the part of the Guarantor to be performed or
observed;
(2) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the due and punctual payment of
the principal of (and premium, if any) and interest on all the
Securities and the
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performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(3) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Guarantor, the
Company or a Subsidiary as a result of such transaction as having been
incurred by the Guarantor, the Company or such Subsidiary at the time
of such transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing;
(4) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Guarantor or Company could become subject to a Mortgage which would not
be permitted by this Indenture, the Guarantor or the Company or such
successor Person, as the case may be, shall take such steps as shall be
necessary effectively to secure the Securities equally and ratably with
(or prior to) all indebtedness secured thereby; and
(5) the Guarantor or the Company, as the case may be, has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted for the Guarantor.
Upon any consolidation by the Guarantor with, or merger by the
Guarantor into, any other Person, or the conveyance, transfer or lease of the
properties and assets of the Guarantor substantially as an entirety to any
Person in accordance with Section 801, the successor corporation formed by such
consolidation or into which the Guarantor is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Guarantor under this Indenture with the
same effect as if such successor corporation had been named as the Guarantor in
this Indenture; provided, however, that no such conveyance, transfer or lease
shall have the effect of releasing the Person named as the "Guarantor" in the
first paragraph of this instrument or any successor corporation which shall
theretofore have become such in the manner prescribed in this Article from its
obligations hereunder or its liability as obligor on any of the Outstanding
Securities unless, in the case of a conveyance or transfer (but not a lease),
such conveyance or transfer is followed by the complete liquidation of the
Guarantor or such successor corporation and substantially all of the assets of
the Guarantor or such successor corporation immediately following such
conveyance or transfer are equity securities issued by the transferee.
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SECTION 803. Successor Substituted for the Company.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or the conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company and the Guarantor, when
each is authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company or the Guarantor and the assumption by any such successor of
the covenants of the Company or the Guarantor herein, in the Securities
and in the Guarantees; or
(2) to add to the covenants of the Company or the Guarantor
for the benefit of the Holders of all Securities or to surrender any
right or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal and with or without interest coupons, or to
permit or facilitate the issuance of Securities in uncertificated form;
or
(5) to secure the Securities; or
(6) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the
defeasance and discharge of Securities pursuant to Sections 1202 or
1203; provided, however, that any such action shall not adversely
affect the interests of the Holders of Securities in any material
respect; or
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(7) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (7) shall not adversely affect the
interests of the Holders of Securities in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company, the Guarantor and the Trustee, the Company, when authorized by a
Board Resolution, the Guarantor, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities under this Indenture; provided, however, that 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
interest on, any Security, or reduce the principal amount thereof or
the rate of interest thereon or any premium payable upon the redemption
thereof, or change any Place of Payment where, or the coin or currency
in which, any Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1008, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company, with Guarantees duly executed by the Guarantor endorsed thereon, and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay
the principal of (and premium, if any) and interest on the Securities in
accordance with the terms of the Securities and this Indenture.
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SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company hereby initially appoints the Trustee its
office or agency for each of said purposes. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) and interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or prior to each due date of the principal of (or premium, if any) or interest
on any Securities, deposit with such Paying Agent(s) a sum sufficient to pay
such principal of (or premium, if any) or interest becoming due, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (or premium, if any) or interest on Securities 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;
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(2) will give the Trustee notice of any default by the Company
(or any other obligor upon the Securities) in the making of any payment
in respect of the Securities; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of
the Securities.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (or premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal, premium or interest has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in each Place of
Payment, or mail to each such Holder, or both, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication or mailing, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
(b) The Guarantor will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Guarantor ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Guarantor is in default in the
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performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Guarantor shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company and the Guarantor will do or
cause to be done all things necessary to preserve and keep in full force and
effect (i) their respective corporate existence, and (ii) their respective
material rights (charter and statutory); provided, however, that neither the
Company nor the Guarantor shall be required to preserve any such right if the
Board of Directors of the Company and the Guarantor, as the case may be, shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company or the Guarantor, as the case may be, and that the
loss thereof is not disadvantageous to the Holders in any material respect.
SECTION 1006. Restrictions on Secured Debt.
So long as any Securities are Outstanding, the Company and the
Guarantor will not, and will not permit any Subsidiary to, incur, issue, assume
or guarantee any Debt secured by a Mortgage on any Principal Property of the
Company, the Guarantor or any Subsidiary or any shares of Capital Stock or Debt
of any Subsidiary, without effectively providing that the Securities then
Outstanding (together with, if the Company and the Guarantor shall so determine,
any other Debt of the Company, the Guarantor or such Subsidiary then existing or
thereafter created which is not subordinate to the Securities then Outstanding)
shall be secured equally and ratably with (or, at the option of the Company and
the Guarantor, prior to) such secured Debt, for so long as such secured Debt
shall be so secured; provided, however, that this Section 1006 shall not apply
to:
(1) Mortgages on Principal Property, shares of Capital Stock
or Debt of any corporation existing at the time such corporation
becomes a Subsidiary;
(2) Mortgages on Principal Property or shares of Capital Stock
existing at the time of the acquisition of such Principal Property or
Capital Stock by the Company, the Guarantor or a Subsidiary;
(3) Mortgages to secure the payment of all or any part of the
price of acquisition, construction or improvement of Principal Property
or Capital Stock by the Company, the Guarantor or a Subsidiary, or to
secure any Debt incurred by the Company, the Guarantor or a Subsidiary,
prior to, at the time of, or within 180 days after, the later of the
acquisition or completion of construction (including any improvements
on an existing property), which Debt is incurred for the purpose of
financing all or any part of the purchase, construction or improvement
of such Principal Property;
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(4) Mortgages securing any Debt of a Subsidiary owing to the
Guarantor or the Company or to another Subsidiary;
(5) Mortgages on property or assets of a corporation existing
at the time such corporation is merged into or consolidated with the
Company, the Guarantor or a Subsidiary or at the time of a sale, lease
or other disposition of the properties of a corporation as an entirety
or substantially as an entirety to the Company, the Guarantor or a
Subsidiary in accordance with the terms of this Indenture;
(6) Mortgages on property or assets of a Person existing at
the time the Guarantor or the Company is merged into or consolidated
with such other Person or at the time of a sale, lease or other
disposition of the properties of the Guarantor or the Company as an
entirety or substantially as an entirety to such other Persons in
accordance with the terms of this Indenture;
(7) Mortgages on property or assets of the Company, the
Guarantor or a Subsidiary securing Debt issued by the United States of
America or any State thereof or any department, agency or
instrumentality or political subdivision thereof, or by any other
country or any political subdivision thereof, for the purpose of
financing all or any part of the purchase price of (or, in the case of
real property, the cost of construction on or improvement of) any
property or assets subject to such Mortgages (including, but not
limited to, Mortgages incurred in connection with pollution control,
industrial revenue or similar financings);
(8) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any
Mortgages referred to in the foregoing clauses (1) to (7) inclusive;
provided, that the principal amount of the Debt being extended, renewed
or replaced shall not be increased and such extension, renewal or
replacement, in the case of Debt secured by a Mortgage, shall be
limited to all or a part of the same property, shares of Capital Stock
or Debt that secured the Mortgage extended, renewed or replaced (plus
improvements on such property); and
(9) Mortgages not permitted by clauses (1) through (8) above
if at the time of and after giving effect to, the creation or
assumption of any such Mortgage, the aggregate amount of all Debt of
the Company, the Guarantor and the Subsidiaries secured by such
Mortgages not so permitted by clauses (1) through (8) above together
with the Attributable Debt in respect of Sale and Lease-Back
Transactions permitted by Section 1007 does not exceed 15% of
Consolidated Net Tangible Assets.
The Trustee shall have no duty or liability in monitoring or enforcing the
provisions of this Section, except as otherwise expressly provided in this
Indenture.
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SECTION 1007. Restrictions on Sale and Lease-Back Transactions.
So long as any Securities are Outstanding, the Company and the
Guarantor will not, and will not permit any Subsidiary to, enter into any Sale
and Lease-Back Transaction unless:
(1) the Company, the Guarantor or such Subsidiary would, at
the time of entering into such Sale and Lease-Back Transaction, be
entitled to incur Debt secured by a Mortgage on the Principal Property
to be leased in an amount at least equal to the Attributable Debt in
respect of such Sale and Lease-Back Transaction without equally and
ratably securing the Securities then Outstanding pursuant to Section
1006;
(2) the direct or indirect proceeds of the sale of the
Principal Property to be leased are at least equal to the fair value of
such Principal Property (as determined by the Board of Directors of the
Guarantor) and an amount at least equal to the net proceeds from the
sale of the Principal Property so leased is applied, within 180 days of
the effective date of any such Sale and Lease-Back Transaction:
(a) to the purchase or acquisition of (or, in the
case of real property, the commencement of construction on or
improvement of) property or assets, or
(b) to the retirement or repayment (other than at
maturity or pursuant to a mandatory sinking fund or mandatory
redemption provision) of (1) Securities or Funded Debt of the
Company or the Guarantor ranking on a parity with or senior to
the Securities, or Funded Debt of a Subsidiary or (2) Debt
incurred by the Company, the Guarantor or a Subsidiary within
180 days prior to the effective date of any such Sale and
Lease-Back Transaction that (A) was used solely to finance the
acquisition of the Principal Property that is the subject of
such Sale and Lease-Back Transaction and (B) is secured by a
Mortgage on the Principal Property that is the subject of such
Sale and Lease-Back Transaction; provided, however, that the
amount to be so applied will be reduced by (x) the principal
amount of Securities delivered to the Trustee for retirement
and cancellation (other than at maturity or pursuant to a
mandatory sinking fund or mandatory redemption provision)
within 180 days before or after such sale or transfer and (y)
the principal amount of any such Debt of the Company, the
Guarantor or a Subsidiary (other than Securities) voluntarily
retired (other than at maturity or pursuant to a mandatory
sinking fund or mandatory redemption provision) by the
Company, the Guarantor or such Subsidiary within 180 days
before or after such sale or transfer; or
(3) the lease in such Sale and Lease-Back Transaction secures
or relates to Debt or other obligations issued by the United States of
America or any State thereof or any department, agency or
instrumentality or political subdivision thereof, or by any other
country or any political subdivision thereof, for the purpose of
financing all or any part of the purchase price of (or, in the case of
real property, the cost of construction on or improvement of) any
property or assets subject to such leases
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(including, but not limited to, leases incurred in connection with
pollution control, industrial revenue or similar financings).
The Trustee shall have no duty or liability in monitoring or enforcing the
provisions of this Section, except as otherwise expressly provided in this
Indenture.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 801 and in Sections 1006 to
1007, inclusive, with respect to the Securities if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the Guarantor
and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
The Securities shall be redeemable, in whole or in part, at the
Company's option, under the circumstances and at the Redemption Price specified
in the form of Securities set forth in Sections 202 and 203.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of less than all the Securities, the Company shall, at least 40 but not more
than 60 days prior to the Redemption Date fixed by the Company (unless shorter
notice shall be satisfactory to the Trustee), notify the Trustee in writing of
such Redemption Date and of the principal amount of Securities to be redeemed.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected by the Trustee within three Business
Days after it receives the notice described in Section 1102, from the
Outstanding Securities not previously called for redemption, by such method as
the Trustee shall deem fair and appropriate. If the Company shall so specify,
Securities owned of record and beneficially by the Guarantor, the Company or any
Subsidiary shall not be included in the Securities selected for redemption.
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The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
in accordance with Section 106.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to
be redeemed,
(4) that, on the Redemption Date, the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, which shall be the
office or agency of the Company in each Place of Payment, and
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 in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
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SECTION 1106. 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, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will 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 Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security, without service
charge, a new Security or Securities of any authorized denomination as requested
by such Holder, having endorsed thereon a Guarantee or Guarantees duly executed
by the Guarantor, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered. If a Global
Security is so surrendered, such new Security so issued shall be a new Global
Security.
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option, evidenced by a Board Resolution, at any
time, elect to have either Section 1202 or 1203 hereof be applied to all
Outstanding Securities upon compliance with the conditions set forth in this
Article Twelve.
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SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise of the above option applicable to this
Section with respect to the Outstanding Securities, the Company shall be deemed
to have been discharged from its obligations with respect to the Outstanding
Securities on and after the date the conditions precedent set forth below are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities and to have satisfied all
its other obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (1) the
rights of Holders of Outstanding Securities to receive, solely from the trust
fund described in Section 1204 as more fully set forth in such Section, payments
of the principal of (and premium, if any) and interest on such Securities when
such payments are due, (2) the Company's obligations with respect to such
Securities under Section 304, 305, 306, 607, 1002 and 1003 and such obligations
as shall be ancillary thereto, (3) the rights, powers, trusts, duties,
immunities and other provisions in respect of the Trustee hereunder and (4) this
Article Twelve. Subject to compliance with this Article Twelve, the Company may
exercise its option under this Section 1202 notwithstanding the prior exercise
of its option under Section 1203.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this
Section with respect to the Outstanding Securities, the Company shall be
released from its obligations under Sections 801, 1006 and 1007, and the
occurrence of an event specified in Clause (3) of Section 501 with respect to
any of Sections 801, 1006 or 1007 shall not be deemed to be an Event of Default
with respect to the Outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "covenant defeasance"). For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
Clause whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or Clause or by reason of any reference to any such
Section or Clause to any other provision herein or in any other document, but
the remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions precedent to application of
either Section 1202 or Section 1203 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) money in an amount, or (B) U.S. Government
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Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, sufficient, without
reinvestment, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereto delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (i) the principal of (and premium, if any) and interest on
the Outstanding Securities on the maturity (including a Redemption Date
or Dates established pursuant to this paragraph) of such principal,
premium or interest and (ii) any analogous payments applicable to the
Outstanding Securities on the day on which such payments are due
(including a Redemption Date or Dates established pursuant to this
paragraph) in accordance with the terms of this Indenture and of such
Securities. Before such a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a
future date or dates in accordance with Article Eleven, which shall be
given effect in applying the foregoing.
(2) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the
Securities shall have occurred and be continuing (A) on the date of
such deposit or (B) insofar as subsections 501(5) and (6) are
concerned, at any time during the period ending on the 91st day after
the date of such deposit or, if longer, ending on the day following the
expiration of the longest preference period applicable to the Company
in respect of such deposit (it being understood that the condition in
this condition shall not be deemed satisfied until the expiration of
such period).
(3) Such defeasance or covenant defeasance shall not (A) cause
the Trustee for the Securities to have a conflicting interest as
defined in Section 608 or for purposes of the Trust Indenture Act with
respect to any securities of the Company or (B) result in the trust
arising from such deposit to constitute, unless it is qualified as, a
regulated investment company under the Investment Company Act of 1940,
as amended.
(4) Such defeasance or covenant defeasance shall 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.
(5) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (B) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such defeasance had not occurred.
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(6) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred.
(7) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1202 or the covenant defeasance under Section 1203 (as
the case may be) have been complied with.
SECTION 1205. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee; collectively, for purposes for
this Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
Outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (but not including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in respect
of principal, premium and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 1204 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
SECTION 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1202 or 1203 with respect to the Securities by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article Twelve
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 1202 or 1203; provided, however, that if the
Company makes any payment of the
66
<PAGE> 75
principal of (or premium, if any) or interest on any such Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held by
the Trustee or the Paying Agent.
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS
AND DIRECTORS
SECTION 1301. Immunity of Incorporators, Shareholders, Officers and
Directors.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company, the Guarantor or of
any successor corporation, either directly or through the Company or the
Guarantor, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no personal liability whatever shall attach to,
or is or shall be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company, the Guarantor or any successor corporation,
or any of them, because of the creation of the indebtedness hereby authorized,
or under or by this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, shareholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom are
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of such Securities.
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.
67
<PAGE> 76
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.
BLOUNT, INC.
By: ______________________________
Name: John M. Panettiere
Title: President and Chief
Executive Officer
Attest:
By: ______________________________
Name:
Title:
BLOUNT INTERNATIONAL, INC.
By: ______________________________
Name: John M. Panettiere
Title: President and Chief
Executive Officer
Attest:
By: ______________________________
Name:
Title:
LA SALLE NATIONAL BANK,
as Trustee
By: ______________________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
68
<PAGE> 77
STATE OF :
: ss:
COUNTY OF __________________________:
On the _______ day of _________, 1998, before me personally came John
M. Panettiere, to me known, who, being by me duly sworn, did depose and say that
he is the President and Chief Executive Officer of Blount, Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
__________________________________
STATE OF :
: ss:
COUNTY OF __________________________:
On the _______ day of _________, 1998, before me personally came John
M. Panettiere, to me known, who, being by me duly sworn, did depose and say that
he is the President and Chief Executive Officer of Blount International, Inc.,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
__________________________________
69
<PAGE> 78
STATE OF :
: ss:
COUNTY OF __________________________:
On the _____ day of February, 1998, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he is ______________ of LaSalle National Bank, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
__________________________________
70
<PAGE> 1
EXHIBIT 5
June 2, 1998
Writer's Direct Dial:
(212) 225-2632
Blount International, Inc.
Blount, Inc.
4520 Executive Park Drive
Montgomery, AL 36116-1602
Ladies and Gentlemen
We have acted as counsel to Blount International, Inc., a Delaware
corporation ("Blount"), and to Blount, Inc., also a Delaware corporation (the
"Company"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission"), under the Securities Act of 1933, as
amended (the "Act"), of a Registration Statement on Form S-3 (the "Registration
Statement") relating to the offering of an aggregate principal amount of
$150,000,000 of the Company's Senior Notes due 2008 (the "Notes"). Each Note
will have endorsed thereon an unconditional guarantee of Blount (such
guarantees, the "Guarantees" and, together with the Notes, the "Securities").
The Securities will be issued under an Indenture (the "Indenture") to be entered
into between Blount, the Company and LaSalle National Bank, as trustee (the
"Trustee").
We have examined and relied on originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records of Blount
and the Company and such other instruments and certificates of public officials,
officers and representatives of Blount and the Company and such other persons,
and we have made such investigations of law, as we have deemed appropriate as a
basis for the opinions set forth below. In rendering these opinions we have
assumed the authenticity of all documents submitted to us as originals and the
conformity to the originals of all documents submitted to us as copies. In
addition, we have assumed and not verified the accuracy as to factual matters of
each document we have reviewed and that the Notes and the Guarantees will
conform to the forms thereof set forth in the Indenture. In addition, we are
familiar with the proceedings taken and proposed to be taken by the Company and
Blount in connection with the authorization, issuance and sale of the Notes and
the Guarantees.
Based upon the foregoing, and subject to (i) the proposed additional
proceedings being taken as now contemplated prior to the issuance of the
Securities, (ii) the due execution and delivery of the Indenture by Blount, the
Company and the Trustee and (iii) the due
<PAGE> 2
Blount International, Inc.
Blount, Inc., p.2
execution, authentication and delivery of the Notes by the Company and the
Trustee and of the Guarantees by Blount, we are of the opinion that:
1. Each of Blount and the Company is a corporation validly existing
in good standing under the laws of the State of Delaware.
2. The execution and delivery by Blount and the Company of the
Indenture and the issuance of the Notes and the Guarantees in the manner and on
the terms set forth in the Registration Statement will be duly authorized by all
necessary corporate action of Blount and the Company, respectively.
3. The Indenture will constitute a legal, valid binding and
enforceable obligation of Blount and the Company.
4. The Notes, when delivered and paid for as contemplated in the
Registration Statement, will constitute legal, valid, binding and enforceable
obligations of the Company, entitled to the benefits of the Indenture.
5. The Guarantees, when duly endorsed on Notes delivered and paid
for as contemplated in the Registration Statement, will constitute the legal,
valid, binding and enforceable obligations of Blount entitled to the benefits of
the Indenture.
Insofar as the foregoing opinions relate to the validity, binding
effect or enforceability of any agreement or obligation of Blount or the
Company, (a) we have assumed that each party to such agreement or obligation
other than Blount or the Company has satisfied those legal requirements that are
applicable to it to the extent necessary to make such agreement or obligation
enforceable against it; (b) such opinions are subject to applicable bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors' rights
generally and to general principles of equity; and (c) we express no opinion as
to sections of the Indenture which pertain to the defense of forum non
conveniens, submission to jurisdiction, severability of illegal provisions,
waiver of protection under stay, extension or usury laws or the conclusiveness
of calculations or certifications.
We express no opinion as to the laws of any jurisdiction other than
the laws of the United States of America and the State of New York and the
corporation laws of the State of Delaware.
<PAGE> 3
Blount International, Inc.
Blount, Inc., p.3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus included in the Registration Statement. By
giving such consent, we do not admit that we are "experts" within the meaning of
the Act or the rules and regulations of the Commission issued thereunder with
respect to any part of the Registration Statement, including this exhibit.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By
------------------------------------
David Lopez, a Partner
<PAGE> 1
EXHIBIT 12
BLOUNT INTERNATIONAL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS)
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED THE LAST FOR THE FOR THE FOR THE FOR THE FOR THE
DAY OF FEBRUARY 10 MONTHS 12 MONTHS 12 MONTHS 3 MONTHS 3 MONTHS
--------------------- ENDED ENDED ENDED ENDED ENDED
1994 1995 1996 12/31/96(1) 12/31/96 12/31/97 3/31/97 3/31/98
----- ----- ----- ----------- ----------- --------- -------- --------
(Unaudited) (Unaudited)
(Dollar amounts in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes.................. $33.9 $67.4 $83.7 $69.6 $85.4 $ 93.7 $21.5 $22.3
Amortization of capitalized interest... 0.1 0.1 0.1 0.1 0.1 0.1 -- --
Amortization of debt expense........... 0.4 0.5 0.3 0.2 0.3 0.3 0.1 0.1
Interest expense....................... 10.9 10.6 10.5 7.7 9.6 9.2 2.1 3.0
Interest portion of rentals............ 1.9 1.7 2.1 1.7 2.0 1.6 0.5 0.4
----- ----- ----- ----- ----- ------ ----- -----
Earnings available for fixed
charges............................ $47.2 $80.3 $96.7 $79.3 $97.4 $104.9 $24.2 $25.8
===== ===== ===== ===== ===== ====== ===== =====
Interest expense....................... $10.9 $10.6 $10.5 $ 7.7 $ 9.6 $ 9.2 2.1 $ 3.0
Amortization of capitalized interest... 0.1 0.1 0.1 0.1 0.1 0.1 -- --
Amortization of debt expense........... 0.4 0.5 0.3 0.2 0.3 0.3 0.1 0.1
Capitalized interest................... 0.1 -- -- -- -- 0.2 -- --
Interest portion of rentals............ 1.9 1.7 2.1 1.7 2.0 1.6 0.5 0.4
----- ----- ----- ----- ----- ------ ----- -----
Fixed charges........................ $13.4 $12.9 $13.0 $ 9.7 $12.0 $ 11.4 $ 2.7 $ 3.5
===== ===== ===== ===== ===== ====== ===== =====
Ratio of earnings to fixed charges... 3.5x 6.2x 7.4x 8.2x 8.1x 9.2x 8.9x 7.4x
</TABLE>
Pro Forma ratio of earnings to fixed charges
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
10 MONTHS 12 MONTHS 3 MONTHS
ENDED ENDED ENDED
12/31/96(1) 12/31/97 3/31/98
----------- --------- -----------
(Unaudited)
<S> <C> <C> <C>
Income from continuing operations before income taxes.... $70.7 $ 95.0 $22.5
Amortization of capitalized interest..................... 0.1 0.1 --
Amortization of debt expense............................. 0.2 0.2 0.1
Interest expense......................................... 6.6 8.0 2.8
Interest portion of rentals.............................. 1.7 1.6 0.4
----- ------ -----
Earnings available for fixed charges................ $79.3 $104.9 $25.8
===== ====== =====
Interest expense......................................... $ 6.6 $ 8.0 $ 2.8
Amortization of capitalized interest..................... 0.1 0.1 --
Amortization of debt expense............................. 0.2 0.2 0.1
Capitalized interest..................................... -- 0.1 --
Interest portion of rentals.............................. 1.7 1.6 0.4
----- ------ -----
Fixed charges....................................... $ 8.6 $ 10.0 $ 3.3
===== ====== =====
Ratio of earnings to fixed charges....................... 9.2x 10.5x 7.8x
</TABLE>
- ---------------
(1) In April 1996, Blount changed its fiscal year from one ending on the last
day of February to one ending on December 31.
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 (No. 333-42481) of our reports dated January 26, 1998, on our audits
of the consolidated financial statements and financial statement schedules of
Blount International, Inc. and Blount, Inc. as of the last day of December, 1997
and December, 1996 and for the years ended December 31, 1997 and February 29,
1996, and for the ten months ended December 31, 1996. We also consent to the
reference to our Firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
------------------------------------
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
June 2, 1998
<PAGE> 1
EXHIBIT 23(B)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-42481 of Blount Inc. and Blount International,
Inc. on Form S-3 of our reports dated January 15, 1998 on the financial
statements of Federal as of and for the year ended December 31, 1996, appearing
in the Reports on Form 8-K/A of Blount Inc. and Blount International, Inc. and
to the reference to us under the heading "Experts" in this Prospectus, which is
part of this Registration Statement.
/s/ Deloitte & Touche LLP
- ----------------------------------------------------
DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
June 1, 1998
<PAGE> 1
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------
LASALLE NATIONAL BANK
(Exact name of trustee as specified in its charter)
36-1521370
(I.R.S. Employer
Identification No.)
135 South LaSalle Street, Chicago, Illinois
60603 (Address of principal executive offices)
(Zip Code)
-----------------------
M. ROBERT K. QUINN
Senior Vice President and General Counsel
Telephone: (312) 904-2010
135 South LaSalle Street
Chicago, Illinois 60603
(Name, address and telephone number of agent for service)
-----------------------
BLOUNT, INC.
(Exact name of obligor as specified in its charter)
Delaware 63-0593908
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
4520 Executive Park Drive
Montgomery, AL
(334) 244-4254 36116-1602
(Address of Principal Executive Offices) (Zip Code)
-----------------------
Senior Notes
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
1. Comptroller of the Currency, Washington D.C.
2. Federal Deposit Insurance Corporation, Washington, D.C.
3. The Board of Governors of the Federal Reserve Systems,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
Neither the obligor nor any underwriter for the obligor is an
affiliate of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
Furnish the following information as to each class of voting securities of the
trustee:
Not applicable
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each other indenture.
Not applicable
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1)
of the Act arises as a result of the trusteeship under such other
indenture, including a statement as to how the indenture securities
will rank as compared with the securities issued under such other
indenture.
Not applicable
<PAGE> 3
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS.
If the trustee or any of the directors or executive officers of the trustee is a
director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not applicable
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner and executive
officer of the obligor.
Not applicable
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter.
Not applicable
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
Not applicable
ITEM 9. SECURITIES OF THE UNDERWRITER OWNED OR HELD BY THE TRUSTEE.
If the trustee owns beneficially or holds as collateral security for obligations
in default any securities of an underwriter for the obligor, furnish the
following information as to each class of securities of such underwriter any of
which are so owned or held by the trustee.
Not applicable
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for obligations
in default voting securities of a person who, to the knowledge of the trustee
(1) owns 10 percent or more of the voting securities of the obligor or (2) is an
affiliate, other than a subsidiary, of the obligor, furnish the following
information as to the voting securities of such person.
Not applicable
<PAGE> 4
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for obligations
in default any securities of a person who, to the knowledge of the trustee, owns
50 percent or more of the voting securities of the obligor, furnish the
following information as to each class of securities of such person any of which
are so owned or held by the trustee.
Not applicable
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
If the obligor is indebted to the trustee, furnish the following information.
Not applicable
ITEM 13. DEFAULTS BY THE OBLIGOR.
a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such
default.
Not applicable
b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in
any other securities, of the obligor are outstanding, or is trustee
for more than one outstanding series of securities under the
indenture, state whether there has been a default under any such
indenture or series, identify the indenture or series affected, and
explain the nature of any such default.
Not applicable
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not applicable
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is authorized
to act as sole trustee under indentures qualified or to be qualified.
Not applicable
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility and
qualification.
1. A copy of the Articles of Association of LaSalle National Bank
now in effect.
2. A copy of the certificate of authority to commence business.
3. A copy of the authorization to exercise corporate trust
powers.
<PAGE> 5
4. A copy of the existing By-Laws of LaSalle National Bank.
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,the trustee,
LaSalle National Bank, a corporation organized and existing under the laws of
the United States of America, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Chicago, State of Illinois, on the ____ day of
March 1998.
LASALLE NATIONAL BANK
By: /s/ Sarah H. Webb
---------------------
Sarah H. Webb
First Vice President
<PAGE> 7
EXHIBIT 1
ARTICLES OF ASSOCIATION
<PAGE> 8
ARTICLES
OF
ASSOCIATION
LA SALLE NATIONAL BANK (LOGO)
LA SALLE NATIONAL BANK
CHICAGO, ILLINOIS
<PAGE> 9
(LOGO)
LaSalle National Bank
ARTICLES OF ASSOCIATION
FIRST. The title of this association, which shall carry on the business of
banking under the laws of the United States shall be "LaSalle National Bank."
SECOND. The place where the main banking house or office of this
association shall be located, its operations of discount and deposit carried on,
and its general business conducted, shall be Chicago, County of Cook, State of
Illinois.
THIRD. The Board of Directors of this association shall consist of such
number of its shareholders, not less than five nor more than twenty-five, as
from time to time shall be determined by a majority of the votes to which all of
its shareholders are at the time entitled. A majority of the Board of Directors
shall be necessary to constitute a quorum for the transaction of business. The
Board of Directors, by vote of a majority of the full board, may, between annual
meetings of shareholders increase the membership of the Board where the number
of directors last elected by shareholders was 15 or less, by not more than two
members, and where the number of directors last elected by shareholders was 16
or more, by not more than four members and by a like vote appoint qualified
persons to fill the vacancies created thereby; provided that the number of
Directors shall at no time exceed twenty-five.
FOURTH. The regular annual meeting of the shareholders of this association
shall be held at its main banking house, or other convenient place duly
authorized by the board of directors on such day of each year as is specified
therefor in the bylaws.
FIFTH. The amount of capital stock which this association is authorized to
issue shall be Twenty Million Dollars ($20,000,000.00) divided into 2,000,000
shares of common capital stock of the par value of $10.00 each; but said capital
stock may be increased or decreased from time to time, in accordance with the
provisions of the laws of the United States.
If the capital stock is increased by the sale of additional shares
thereof, other than to key officers and employees of the association upon the
exercise of options granted pursuant to the terms of a stock option plan then in
effect, as to which sales all pre-emptive rights are waived, each shareholder
shall be entitled to subscribe for such additional shares in proportion to the
number of shares of said capital stock owned by him at the time the increase is
authorized by the shareholders, unless another time subsequent to the date of
the shareholders' meeting is specified in a resolution adopted by the
shareholders at the time the increase is authorized. The board of directors
shall have the power to prescribe a reasonable period of time within which the
pre-emptive rights to subscribe to the new shares of capital stock may be
exercised.
The association, at any time and from time to time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders.
SIXTH. The board of directors shall appoint one of its members president
of this association, who shall be chairman of the board, but the board of
directors may appoint a director in lieu of the president to be chairman of the
board, who shall perform such duties as may be designated by the board of
directors. The board of directors shall have the power to appoint one or more
vice presidents, a cashier and such other officers as may be required to
transact the business of this association; to fix the salaries to be paid to all
officers of this association; and to dismiss such officers, or any of them.
<PAGE> 10
The board of directors shall have the power to define the duties of
officers and employees of this association, to require bonds from them, and to
fix the penalty thereof; to regulate the manner in which directors shall be
elected or appointed, and to appoint judges of the election; to make all bylaws
that it may be lawful for them to make for the general regulation of the
business of this association and the management of its affairs; and generally to
do and perform all acts that it may be lawful for a board of directors to do and
perform.
SEVENTH. This association shall have succession from the date of its
organization certificate until such time as it be dissolved by act of its
shareholders in accordance with the provisions of the banking laws of the United
States, or until its franchise becomes forfeited by reason of violation of law,
or until terminated by either a general or a special act of Congress, or until
its affairs be placed in the hands of a receiver and finally wound up by him.
EIGHTH. The board of directors of this association, or any three or more
shareholders owning, in the aggregate, not less than ten per centum of the stock
of this association, may call a special meeting of shareholders at any time:
Provided, however, that, unless otherwise provided by law, not less than ten
days prior to the date fixed for any such meeting, a notice of the time, place,
and purpose of the meeting shall be given by first-class mail, postage prepaid,
to all shareholders of record of this association at their respective addresses
as shown upon the books of the association. These articles of association may be
amended at any regular or special meeting of the shareholders by the affirmative
vote of the shareholders owning at least a majority of the stock of this
association, subject to the provisions of the banking laws of the United States.
The notice of any shareholders' meeting, at which an amendment to the articles
of association of this association is to be considered, shall be given as
herein-above set forth.
NINTH. Any person, his heirs, executors, or administrators, may be
indemnified or reimbursed by the association for reasonable expenses actually
incurred in connection with any action, suit, or proceeding, civil or criminal,
to which he or they shall be made a party by reason of his being or having been
a director, officer, or employee of the association or of any firm, corporation,
or organization which he served in any such capacity at the request of the
association: Provided, however, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding as to
which he shall finally be adjudged to have been guilty of or liable for
negligence or wilful misconduct in the performance of his duties to the
association: And, provided further, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding which
has been made the subject of a compromise settlement except with the approval of
a court of competent jurisdiction, or the holders of record of a majority of the
outstanding shares of the association, or the board of directors, acting by vote
of directors not parties to the same or substantially the same action, suit, or
proceeding, constituting a majority of the whole number of the directors. The
foregoing right of indemnification or reimbursement shall not be exclusive of
other rights to which such person, his heirs, executors, or administrators, may
be entitled as a matter of law.
********
May 17, 1982
Form No. 181, Rev 5/17/82 GW
<PAGE> 11
EXHIBIT 2
CERTIFICATE OF AUTHORITY
TO COMMENCE BUSINESS
<PAGE> 12
STATE OF ILLINOIS
AUDITOR'S OFFICE
NO. 333 (LOGO)
NATIONAL BANK TRUST CERTIFICATE
Springfield, FEBRUARY 15th 1928
I, OSCAR NELSON, Auditor of Public Accounts of the State of Illinois, do
hereby certify that the NATIONAL BUILDERS BANK OF CHICAGO located at CHICAGO,
County of COOK and State of Illinois, a corporation organized under and by
authority of the statutes of the United States governing National Banks and
authority granted by the Federal Reserve Act for the purpose of accepting and
executing trusts, has this day deposited in this office, securities in the sum
of TWO HUNDRED THOUSAND Dollars, $200,000.00 of the character designated by
Section 6 of the Act of the Legislature of the State of Illinois entitled "An
Act to provide for and regulate the administration of trusts by trust
companies,"
The said deposit is made for the benefit of the creditors of said NATIONAL
BUILDERS BANK OF CHICAGO under and by virtue of the provisions of the Act above
referred to and the said securities are now held by me in this office in my
official capacity as such Auditor of Public Accounts, for the uses and purposes
aforesaid.
I further certify that by virtue of the Acts aforesaid, the NATIONAL
BUILDERS BANK OF CHICAGO is hereby authorized to accept and execute trusts and
receive deposits of trust funds under the provisions and limitations of "An Act
to provide for and regulate the administration of trusts in Illinois.
(SEAL) IN TESTIMONY WHEREOF, I hereunto subscribe my name and affix
the seal of my office, the day and year first above written.
/s/ Oscar Nelson
----------------
AUDITOR OF PUBLIC ACCOUNTS.
STATE OF ILLINOIS.
<PAGE> 13
NO. 13146.
TREASURY DEPARTMENT (LOGO)
OFFICE OF COMPTROLLER OF THE CURRENCY
Washington, D.C., NOVEMBER 29, 1927.
WHEREAS, by satisfactory evidence presented to the undersigned, it has
been made to appear that "NATIONAL BUILDERS BANK OF CHICAGO" in the CITY of
CHICAGO in the County of COOK and State of ILLINOIS has complied with all the
provisions of the Statutes of the United States, required to be complied with
before an association shall be authorized to commence the business of Banking;
NOW THEREFORE I, J.W. MCINTOSH, Comptroller of the Currency, do hereby
certify that "NATIONAL BUILDERS BANK OF CHICAGO" in the CITY of CHICAGO in the
County of COOK and State of ILLINOIS is authorized to commence the business of
Banking as provided in Section Fifty one hundred and sixty nine of the Revised
Statutes of the United States.
(SEAL) IN TESTIMONY WHEREOF witness my hand and Seal of (SEAL)
office this TWENTY-NINTH day of NOVEMBER, 1927.
/s/ J.W. McIntosh
-----------------
Comptroller of the Currency
<PAGE> 14
CERTIFICATE OF CHANGE OF CORPORATE TITLE
(LOGO)
NO. 13146.
TREASURY DEPARTMENT
OFFICE OF THE COMPTROLLER OF THE CURRENCY
WASHINGTON, D.C., MAY 1, 1940.
WHEREAS, by satisfactory evidence presented to me, it appears that under
authority of sections 2, 3, and 4, of the Act of Congress approved May 1, 1886,
entitled "An Act to enable national banking associations to increase their
capital stock and to change their names or location," shareholders owning
two-thirds of the stock of the national banking association heretofore known
as-- "NATIONAL BUILDERS BANK OF CHICAGO," located in CHICAGO, County of COOK,
State of ILLINOIS, have voted to change the name of said association to--
"LASALLE NATIONAL BANK," and have complied with all the provisions of the said
Act relative to national banking associations changing their name.
NOW, THEREFORE, IT IS HEREBY CERTIFIED, that the name of the said
association has been changed to-- "LASALLE NATIONAL BANK," and that such change
of name is hereby approved under authority conferred by said Act.
(SEAL) IN TESTIMONY WHEREOF, witness my hand and seal of office
this FIRST day of MAY, 1940.
/s/
-----------------------------------
ACTING Comptroller of the Currency.
<PAGE> 15
EXHIBIT 3
AUTHORIZATION TO EXERCISE
CORPORATE TRUST POWERS
<PAGE> 16
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM [LETTERHEAD]
WASHINGTON
May 9, 1940
LaSalle National Bank,
Chicago, Illinois.
Gentlemen:
The Board of Governors of the Federal Reserve System has been officially
advised by the Comptroller of the Currency that on May 1, 1940, National
Builders Bank of Chicago, Chicago, Illinois, changed its title to LaSalle
National Bank, and accordingly there is enclosed herewith a certificate showing
that LaSalle National Bank has authority to exercise the fiduciary powers
enumerated therein.
Kindly acknowledge receipt of this certificate.
Very truly yours,
S. R. Carpenter
---------------
S. R. Carpenter,
Assistant Secretary.
Enclosure
<PAGE> 17
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
I, S. R. Carpenter, Assistant Secretary of the Board of Governors of the
Federal Reserve System (formerly known as the Federal Reserve Board), do hereby
certify that it appears from the records of the Board of Governors of the
Federal Reserve System that:
(1) Pursuant to the authority vested in the Federal Reserve Board by an
Act of Congress approved December 23, 1913, known as the Federal Reserve Act, as
amended, the Federal Reserve Board on December 8, 1927, granted to National
Builders Bank of Chicago, Chicago, Illinois, the right to act, when not in
contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee, receiver,
committee of estates of lunatics, or in any other fiduciary capacity in which
State banks, trust companies or other corporations which come into competition
with national banks are permitted to act under the laws of the State of
Illinois;
(2) Under the provisions of an Act of Congress approved May 1, 1886,
National Builders Bank of Chicago, Chicago, Illinois, on May 1, 1940, changed
its title to LaSalle National Bank; and
(3) By virtue of the foregoing, LaSalle National Bank, Chicago, Illinois,
has authority to act, when not in contravention of State or local law, as
trustee, executor, administrator, registrar of stocks and bonds, guardian of
estates, assignee, receiver, committee of estates of lunatics, or in any other
fiduciary capacity in which State banks, trust companies or other corporations
which come into competition with national banks are permitted to act under the
laws of the State of Illinois, subject to regulations prescribed by the Board of
Governors of the Federal Reserve System.
IN WITNESS WHEREOF, I have hereunto subscribed my name and caused the seal
of the Board of Governors of the Federal Reserve System to be affixed at the
City of Washington in the District of Columbia.
/s/ S. R. Carpenter
-------------------
Assistant Secretary.
Dated May 9, 1940
<PAGE> 18
EXHIBIT 4
BY-LAWS OF LA SALLE NATIONAL BANK
<PAGE> 19
BYLAWS
OF
LA SALLE NATIONAL BANK
CHICAGO, ILLINOIS
LA SALLE NATIONAL BANK (LOGO)
Organized Under the National Banking Laws
of the United States
<PAGE> 20
BYLAWS
of the
LA SALLE NATIONAL BANK
(a National Banking Association which association
is herein referred to as the "bank")
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1.1. ANNUAL MEETING. The regular annual meeting of the
shareholders for the election of directors and the transaction of whatever other
business may properly come before the meeting, shall be held at the main office
of the Bank, 135 South LaSalle Street, Chicago, Illinois, or such other place as
the Board of Directors may designate, at 9:00 A.M., on the third Wednesday of
March of each year. Notice of such meeting shall be mailed, postage prepaid, at
least ten days prior to the date thereof, addressed to each shareholder at his
address appearing on the books of the Bank. If for any cause, an election of
directors is not made on the said day, the Board of Directors shall order the
election to be held on some subsequent day as soon thereafter as practicable,
according to the provisions of law; and notice thereof shall be given in the
manner herein provided for the annual meeting.
SECTION 1.2. SPECIAL MEETINGS. Except as otherwise specifically provided
by statute, special meetings of the shareholders may be called for any purpose
at anytime by the board of directors or by any three or more shareholders
owning, in the aggregate, not less than ten percent of the stock of the bank.
Every such special meeting, unless otherwise provided by law, shall be called by
mailing, postage pre-paid, not less than ten days prior to the date fixed for
such meeting, to each shareholder at his address appearing on the books of the
bank, a notice stating the purpose of the meeting.
SECTION 1.3. NOMINATIONS FOR DIRECTOR. Nominations for election to the
board of directors may be made by the board of directors or by any shareholder
of any outstanding class of capital stock of the bank entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the bank, shall be made in writing and shall be delivered
or mailed to the president of the bank and to the Comptroller of the Currency,
Washington, D.C., not less than 14 days nor more than 50 days prior to any
meeting of shareholders called for the election of directors, provided, however,
that if less than 21 days' notice of the meeting is given to the shareholders,
such nomination shall be mailed or delivered to the president of the bank and to
the Comptroller of the Currency not later than the close of business on the
seventh day following the day on which the notice of meeting was mailed. Such
notification shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of each proposed nominee; (d) the name and address of
the notifying shareholder; and (e) the number of shares of capital stock of the
bank owned by the notifying shareholder. Nominations not made in accordance
herewith, may, in his discretion, be disregarded by the chairman of the meeting,
and upon his instructions, the vote tellers may disregard all votes cast for
each such nominee.
SECTION 1.4. JUDGES OF ELECTION. Every election of directors shall be
managed by three judges, who shall be appointed by the board of directors prior
lo the time of said election. The judges of election shall hold and conduct the
election at which they are appointed to serve; and after the election, they
shall file with the cashier a certificate under their hands, certifying the
result thereof and the names of the directors elected. The judges of
1
<PAGE> 21
election. at the request of the chairman of the meeting, shall act as tellers of
any other vote by ballot taken at such meeting, and shall certify the result
thereof.
SECTION 1.5. PROXIES. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this bank shall act as proxy. Proxies shall be valid only for one meeting, to
be specified therein, and any adjournments of such meeting. Proxies shall be
dated and shall be filed with the records of the meeting.
SECTION 1.6. QUORUM. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the articles of association.
ARTICLE II
DIRECTORS
SECTION 2.1. BOARD OF DIRECTORS. The board of directors (hereinafter
referred to as the "board"), shall have power to manage and administer the
business affairs of the bank. Except as expressly limited by law, all corporate
powers of the bank shall be vested in and may be exercised by said board.
SECTION 2.2. NUMBER. The board shall consist of not less than five or more
than twenty-five shareholders, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full board or by resolution of the shareholders at any meeting thereof;
provided, however, that a majority of the full board may not increase the number
of directors by more than two if the number of directors last elected by
shareholders was fifteen or less and by not more than four where the number of
directors last elected by shareholders was sixteen or more, provided that in no
event shall the number of directors exceed twenty-five.
SECTION 2.3. ORGANIZATION MEETING. The cashier, upon receiving the
certificate of the judges, of the result of any election, shall notify the
directors-elect of their election and of the time at which they are required to
meet at the main office of the bank for the purpose of organizing the new board
and electing and appointing officers of the bank for the succeeding year. Such
meeting shall be appointed to be held on the day of election or as soon
thereafter as practicable, and, in any event, within thirty days thereof. If, at
the time fixed for such meeting, there shall not be a quorum present the
directors present may adjourn the meeting, from time to time, until a quorum is
obtained.
SECTlON 2.4 REGULAR MEETINGS. The regular meetings of the board shall be
held, without notice, on the third Wednesday of each month at the main office.
When any regular meeting of the board falls upon a holiday, the meeting shall be
held on the next banking business day unless the board shall designate some
other day.
SECTION 2.5 SPECIAL MEETINGS. Special meetings of the board may be called
by the chairman of the board, the president, or at the request of three or more
directors. Each member of the board shall be given notice stating the time and
place, by telegram, letter or in person, of each such special meeting.
SECTION 2.6. QUORUM. A majority of the directors shall constitute a quorum
at any meeting, except when otherwise provided by law; but a less number may
adjourn any meeting from time to time, and the meeting may be held, as
adjourned, without further notice.
2
<PAGE> 22
SECTION 2.7. VACANCIES. When any vacancy occurs among the directors, the
remaining members of the board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the board, or at a special meeting called for that purpose.
SECTION 2.8. RETIREMENT POLICY. A retirement policy adopted by the board
of directors shall be applicable to directors who are not active officers of the
bank.
ARTICLE III
COMMITTEES OF THE BOARD
SECTION 3.1. EXECUTIVE COMMITTEE. There shall be an executive committee of
the board. The members of the executive committee shall be chosen by the board
from time to time, shall hold office during its pleasure, and shall consist of
the chairman of the board, the chairman of the executive committee selected by
the board, who may but need not be the same person designated to be president,
and the president, ex officio, and not less than seven additional members of the
board who shall not be active officers of the bank. It shall be the duty of this
committee to exercise such powers and perform such duties in respect to the
making of loans and discounts as shall from time to time be specified by
resolution of the board. During such periods as the board shall not be in
session, the executive committee shall have and may exercise all the powers of
the board except such as are by law or by these bylaws required to be exercised
only by the board. The executive committee may make rules for holding and
conducting its meetings and keep in the minute book of the bank a report of all
action taken which shall be submitted for approval at each regular meeting of
the board and the action of the board shall be recorded in the minutes of that
meeting. A quorum of the executive committee shall consist of not less than five
of its members, at least three of whom shall not be active officers of the bank.
The chairman of the board, or in his absence in the order named if present, the
chairman of the executive committee or the president, may designate any director
who is not an active officer of the bank, or a designated member, to serve as a
member of the executive committee at any specified meeting. Vacancies in the
executive committee at any time existing may be filled by appointment by the
board. The board may at anytime revise or change the membership and chairmanship
of the executive committee and make new or additional appointments thereto. The
chairman of the executive committee shall be ex officio a member of all
committees except the examining committee and the trust audit committee, and
shall have such other duties as may from time to time be assigned him by the
board.
SECTION 3.2. OFFICERS' COMPENSATION COMMITTEE. There shall be an officers'
compensation committee of the board. The members of the officers' compensation
committee shall consist of the members ex officio provided for in other sections
of these bylaws and not less than three additional non-officer members of the
board who shall be appointed by the board each year at its first meeting after
the directors have been elected and qualified. It shall be the duty of this
committee to study the compensation of all officers of the bank and from time to
time report their recommendations to the board; and such other duties, if any,
as may from time to time be assigned to it by the board. A majority of the
committee, including at least two non-officer members, shall be necessary for
the committee to keep records of its action.
SECTION 3.3. EXAMINING COMMITTEE. There shall be an examining committee of
the board. The members of the examining committee shall consist of the members
ex officio provided for in other sections of these bylaws, but exclusive of any
active officer of the bank and not less than three additional non-officer
members of the board who shall be appointed by the board each year at its first
meeting after the directors have been elected and qualified. It shall be the
duty of this committee to make an examination at least twice each year into the
affairs of the bank or to cause the examinations to be made by accountants (who
may be the bank's own accountants) responsible only to the board in such
examinations, and to report the result of such examinations in writing to the
board at the next regular meeting thereafter, or it may, at its sole discretion,
submit the reports of the national bank examiner or of the Chicago Clearing
House Association examination, with or without additional comments by the
committee itself, for, and in lieu of its personal examinations. Such reports
shall state whether the bank is in sound
3
<PAGE> 23
condition, whether adequate internal audit controls and procedures are being
maintained and shall recommend to the board such changes in the manner of doing
business or conducting the affairs of the bank as shall be deemed advisable.
SECTION 3.4. OTHER COMMITTEES. The board may appoint, from time to time,
from its own members, other committees of one or more persons, for such purposes
and with such powers as the board may determine.
ARTICLE IV
OFFICERS AND EMPLOYEES
SECTION 4.1. CHAIRMAN OF THE BOARD. The board shall appoint one of its
members to be chairman of the board. The chairman of the board shall supervise
the carrying out of the policies adopted or approved by the board. He shall have
general executive powers, as well as the specific powers conferred by these
bylaws. He shall be ex officio a member of all committees, except the examining
committee and the trust audit committee. He shall have general supervision and
direction of the business, affairs and personnel of the bank. He shall also have
and may exercise such further powers and duties as from time to time may be
conferred upon, or assigned to him by the board.
SECTION 4. 2. VICE CHAIRMAN OF THE BOARD. The board may appoint one of its
members to be vice chairman of the board. He shall perform such duties as may
from time to time be assigned to him by the board.
SECTION 4.3. PRESIDENT. The board shall appoint one of its members to be
president of the bank. He shall be the chief executive officer and the chief
administrative officer of the bank and in the absence of the chairman of the
board, he shall preside at any meeting of the board at which he is present. The
president shall have general executive powers, and shall have and may exercise
any and all other powers and duties pertaining by law, regulation, or practice
to the office of president, or imposed by these bylaws. He shall be ex officio a
member of all committees, except the examining committee and trust audit
committee. He shall have general supervision of the business, affairs and
personnel of the bank and in the absence of the chairman of the board, shall
exercise the powers and perform the duties of the chairman of the board. He
shall also have and may exercise such further powers and duties as from time to
time may be conferred upon or assigned to him by the board.
SECTION 4.4. SENIOR OFFICERS. The board may appoint one or more executive
vice presidents and one or more senior vice presidents. Each such senior officer
shall have such powers and duties as may be assigned to him by the board, the
chairman of the board, or the president.
SECTION 4.5. VICE PRESIDENT. The board may appoint one or more vice
presidents. Each vice president shall have such powers and duties as may be
assigned to him by the board, the chairman of the board, or the president.
SECTION 4.6. CASHIER. The board shall appoint a cashier who shall have
such powers and duties as may be assigned to him by the board, the chairman of
the board, or the president. The cashier shall be custodian of the corporate
seal, records, documents and papers of the bank. He shall provide for keeping of
proper records of all transactions of the bank.
SECTION 4.7. SECRETARY. The board shall appoint a secretary who shall be
secretary of the bank. He shall also perform such duties as may be assigned to
him from time to time by the board. The board may appoint a secretary of the
board who shall keep accurate minutes of all meetings. He shall attend to the
giving of all notices; he shall also perform such other duties as may be
assigned to him from time to time by the board.
4
<PAGE> 24
SECTION 4.8. OTHER OFFICERS. The board may appoint one or more assistant
vice presidents, one or more trust officers, one or more assistant secretaries,
one or more assistant cashiers, and such other officers and attorneys-in-fact as
from time to time may appear to the board to be required or desirable to
transact the business of the bank. Such officers, respectively, shall exercise
such powers and perform such duties as pertain to their several offices or as
may be conferred upon or assigned to them by the board the chairman of the board
or the president.
SECTION 4.9. CLERKS AND AGENTS. The chairman of the board, the president,
or any other active officer of the bank authorized by the chairman of the board,
or the president, may appoint and dismiss all or any paying tellers receiving
tellers note tellers, vault custodians, bookkeepers and other clerks, agents and
employees as they may deem advisable for the prompt and orderly transaction of
the business of the bank, define their duties, fix the salaries to be paid them
and the conditions of their employment.
SECTION 4.10. RESPONSIBILITY FOR MONEYS, ETC. Each of the active officers
and clerks of this bank shall be responsible for all moneys, funds valuables and
property of every kind and description that may from time to time be entrusted
to his care or placed in his hands by the board or others, or that otherwise may
come into his possession as an active officer or clerk of this bank.
SECTION 4.11. SURETY BONDS. All the active officers and clerks of this
bank may be covered by one of the blanket form bonds customarily written by the
surety companies, drawn for such an amount, and executed by such surety company,
as the board may from time to time require, and duly approve; or at the
discretion of the board, all such active officers and clerks shall, each for
himself, give such bond, with such security, and in such denominations as the
board may from time to time require and direct. All bonds approved by the board
shall assure the faithful and honest discharge of the respective duties of such
active officer or clerk and shall provide that such active officer or clerk
shall faithfully apply and account for all moneys, funds, valuables and property
of every kind and description that may from time to time come into his hands or
be entrusted to his care, and pay over and deliver the same to the order of the
board or to such other person or persons as may be authorized to demand and
receive the same.
SECTION 4.12. TERM OF OFFICE - OFFICER DIRECTOR. The chairman of the
board, the vice chairman of the board and the president, together with any other
active officers who may be duly elected members of the board, shall hold their
respective offices for the current year for which the board (of which they shall
be members) was elected and until their successors are appointed, unless they
shall resign, be disqualified, or be removed; and any vacancy occurring in the
office of the chairman of the board, the vice chairman of the board, the
president, or in the board, shall, if required by these bylaws, be filled by the
remaining members.
SECTION 4.13. TERM OF OFFICE - OFFICER. The executive vice presidents, the
senior vice presidents, the vice presidents, the assistant vice presidents, the
cashier, the secretary, the trust officers and all other officers and
attorneys-in-fact who are not duly elected members of the board, shall be
appointed to hold their offices, respectively, during the pleasure of the board.
ARTICLE V
TRUST DEPARTMENT
SECTION 5.1. TRUST DEPARTMENT. There shall be a department of the bank
known as the trust department which shall perform the fiduciary responsibilities
of the bank.
SECTION 5.2. TRUST OFFICER. There shall be a senior vice president and
trust officer, or vice president and trust officer of this bank, who shall be
designated as the managing officer of the trust department and whose duties
shall be to manage, supervise and direct all the activities of the trust
department. He shall do, or cause
5
<PAGE> 25
to be done, all things necessary or proper in carrying on the business of the
trust department in accordance with provisions of law and regulations. He shall
act pursuant to opinion of counsel where such opinion is deemed necessary.
Opinions of counsel shall be retained on file in connection with all important
matters pertaining to fiduciary activities. The trust officer shall be
responsible for all assets and documents held by the bank in connection with
fiduciary matters.
The board may appoint such other officers of the trust department as it may deem
necessary, with such duties as may be assigned to them by the board, the
chairman of the board, or the president.
SECTION 5.3. TRUST INVESTMENT COMMITTEE. There shall be appointed by the
board a trust investment committee of this bank composed of not less than four
members, including members ex officio provided for in other sections of these
bylaws, who shall be capable and experienced officers or directors of the bank.
All investments of funds held in a fiduciary capacity shall be made, retained or
disposed of only with the approval of the trust investment committee; and the
committee shall keep minutes of all its meetings, showing the disposition of all
matters considered and passed upon by it. The committee shall, promptly after
the acceptance of an account for which the bank has investment responsibilities,
review the assets thereof, to determine the advisability of retaining or
disposing of such assets. The committee shall conduct a similar review at least
once during each calendar year thereafter and within fifteen months of the last
such review. A report of all such reviews, together with the action taken as a
result thereof, shall be noted in the minutes of the committee. Three members of
the trust investment committee shall constitute a quorum, and any action
approved by a majority of those present shall constitute the action of the
committee.
SECTION 5.4. TRUST AUDIT COMMITTEE. The board shall appoint a committee of
not less than three directors, including members ex officio provided for in
other sections of these bylaws, exclusive of any active officers of the bank,
which shall at least once during each calendar year and within fifteen months of
the last such audit make suitable audits of the trust department, or cause
suitable audits to be made, by auditors responsible only to the board, and at
such time shall ascertain whether the department has been administered in
accordance with law, Regulation 9, and sound fiduciary principles.
Notwithstanding the provisions of this Section, the board at any time may assign
to the Examining Committee, in addition to the duties of the Examining Committee
set forth in Section 3.3 of these bylaws, all of the duties of the Trust Audit
Committee and during such time as the Examining Committee is performing the
duties of both committees, the Trust Audit Committee shall cease to function as
a committee of this board. The board at any time may reassign the duties
provided for in this Section to the Trust Audit Committee.
SECTION 5.5. TRUST DEPARTMENT FILES. There shall be maintained in the
trust department, files containing all fiduciary records necessary to assure
that its fiduciary responsibilities have been properly undertaken and
discharged.
SECTION 5.6. TRUST INVESTMENTS. Funds held in a fiduciary capacity shall
be invested in accordance with the instrument establishing the fiduciary
relationship and local law. Where such instrument does not specify the character
and class of investments to be made and does not vest in the bank a discretion
in the matter, fund shield pursuant to such instrument shall be invested in
investments in which corporate fiduciaries may invest under local law.
ARTICLE VI
STOCK AND STOCK CERTIFICATES
SECTION 6.1. TRANSFERS. Shares of capital stock shall be transferable on
the books of the bank and a transfer book shall be kept in which all transfers
of stock shall be recorded. Every person becoming a shareholder
6
<PAGE> 26
be such transfer shall in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares.
SECTION 6.2. STOCK CERTIFICATES. Certificates of capital stock shall bear
the signature of any one of, the chairman of the board, or the president (which
may be engraved, printed or impressed) and shall be signed manually or by
facsimile process by the secretary, assistant secretary, cashier, assistant
cashier, or any other officer appointed by the board for that purpose, to be
known as an authorized officer and the seal of the bank shall be engraven
thereon. Each certificate shall recite on its face that the stock represented
thereby is transferable, properly endorsed, only on the books of the bank.
ARTICLE VII
CORPORATE SEAL
SECTION 7.1. CORPORATE SEAL. The chairman of the board, the president, the
cashier, the secretary or any assistant cashier or assistant secretary, or other
officer thereunto designated by the board, shall have authority to affix the
corporate seal to any document requiring such seal, and to attest the same. Such
seal shall be substantially in the form set forth herein.
ARTICLE VIII
INDEMNIFYING OFFICERS AND DIRECTORS
SECTION 8.1. INDEMNIFYING OFFICERS AND DIRECTORS. Any person, his heirs,
executors or administrators, may be indemnified or reimbursed by the bank for
reasonable expenses actually incurred in connection with any action, suit or
proceeding, civil or criminal, to which he or they shall be made a party by
reason of his being or having been a director, officer or employee of the bank
or of any firm, corporation or organization which he served in any such capacity
at the request of the bank; provided, however, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit or
proceeding as to which he shall finally be adjudged to have been guilty of or
liable for negligence or willful misconduct in the performance of his duties to
the bank; and, provided further, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit or proceeding which
has been made the subject of a compromise settlement except with the approval of
a court of competent jurisdiction, or the holders of record of a majority of the
outstanding shares of the bank, or the board, acting by vote of directors not
parties to the same or substantially the same action suit or proceeding,
constituting a majority of the whole number of the directors. The foregoing
right of indemnification or reimbursement shall not be exclusive of other rights
to which such person, his heirs, executors or administrators, may be entitled as
a matter of law.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. FISCAL YEAR. The fiscal year of the bank shall be the
calendar year.
SECTION 9.2. EXECUTION OF INSTRUMENTS. All agreements, indentures
mortgages, deeds, conveyances transfers certificates declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, schedules,
accounts, affidavits, bonds, undertakings, proxies and other instruments or
documents may be signed, executed, acknowledged, verified, delivered or accepted
for the bank by the chairman of the board, or the vice chairman of the board, or
the president, or any executive vice president, or any senior vice president, or
any vice
7
<PAGE> 27
president, or the secretary or the cashier, or, if in connection with the
exercise of fiduciary powers of the bank by any of said officers or by any
officer in the trust department. Any such instruments may also be signed,
executed, acknowledged, verified, delivered or accepted for the bank in such
other manner and by such other officers as the board may from time to time
direct. The provisions of this Section 9.2 are supplementary to any other
provisions of these bylaws.
SECTION 9.3. RECORDS. The articles of association, the bylaws, and the
proceedings of all meetings of the shareholders and of the board shall be
recorded in appropriate minute books provided for the purpose; where these
bylaws so provide, the proceedings of standing committees of the board shall be
recorded in appropriate minute books provided for the purpose.
ARTICLE X
EMERGENCIES
SECTION 10.1. CONTINUATION OF BUSINESS. In the event of a state of
emergency of sufficient severity to interfere with the conduct and management of
the affairs of this bank, the officers and employees will continue to conduct
the affairs of the bank under such guidance from the directors as may be
available except as to matters which by statute require specific approval of the
board of directors and subject to conformance with any governmental directives
during the emergency.
SECTION 10.2. DESIGNATION OF PLACE OF BUSINESS. The offices of the bank at
which its business shall be conducted shall be the main office thereof located
at 135 South LaSalle Street, Chicago, Illinois, and any other legally authorized
location which may be leased or acquired by this bank to carry on its business.
During an emergency resulting in any authorized place of business of this bank
being unable to function, the business ordinarily conducted at such location
shall be relocated elsewhere in suitable quarters, in addition to or in lieu of
the locations heretofore mentioned, as may be designated by the board of
directors or by the executive committee or by such persons as are then, in
accordance with resolutions adopted from time to time by the board of directors
dealing with the exercise of authority in the time of such emergency, conducting
the affairs of this bank. Any temporarily relocated place of business of this
bank shall be returned to its legally authorized location as soon as practicable
and such temporary place of business shall then be discontinued.
ARTICLE XI
BYLAWS
SECTION 11.1 INSPECTION. A copy of the bylaws with all amendments thereto,
shall at all times be kept in a convenient place at the main office of the bank
and shall be open for inspection to all shareholders, during banking hours.
SECTION 11.2 AMENDMENTS. The bylaws may be amended, altered or repealed,
at any regular meeting of the board, by a vote of a majority of the whole number
of the directors.
***
I______________________________________hereby certify that I am
the________________________Cashier/Secretary of LaSalle National Bank, Chicago,
Illinois and that the foregoing is a true and correct copy of the bylaws of this
bank as amended and that the same are in full force and effect ____________ day
of__________________ 19________
8
<PAGE> 28
______________________
Cashier/Secretary.
December 15, 1982
(SEAL)
9
<PAGE> 29
EXHIBIT 5
NOT APPLICABLE
<PAGE> 30
EXHIBIT 6
LaSalle National Bank hereby consents in accordance with the provisions of
Section 321(b) of the Trust Indenture Act of 1939, that reports of examinations
by Federal, State, Territorial and District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
LA SALLE NATIONAL BANK
By: /s/ Sarah H. Webb
-------------------
Sarah H. Webb
First Vice President
<PAGE> 31
EXHIBIT 7
Latest Report of Condition of
Trustee published pursuant to
law or the requirement of its
surviving or examining authority.
<PAGE> 32
EXHIBIT 8
NOT APPLICABLE
<PAGE> 33
EXHIBIT 9
NOT APPLICABLE
<PAGE> 34
LaSalle National Bank Call Date: 9/30/97 ST-BK 17-1620 FFIEC 031
135 South LaSalle Street Page RC-1
Chicago, IL 60603 Vendor ID: D CERT: 15407 11
Transit Number: 71000505
Consolidated Report of Condition for Insured Commercial and
State-Chartered Savings Banks for December 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dollar Amounts
in thousands
ASSETS
1 Cash and balances due from depository
institutions (from Schedule RC - A) RCFD
a. Noninterest bearing balances and currency and ----
coin (1) 0081 804,023 1.a
b. Interest bearing balances (2) 0071 634 1.b
2. Securities:
a. Held to maturity securities (from Schedule RC-B
column A) 1754 962,382 2.a
b. Available for sale securities (from schedule RC-B
column D) 1773 3,453,261 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 86,026 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
----
(from Schedule RC-C) 2122 10,093,581 4.a
b. LESS: Allowances for loan and lease losses 3123 191,670 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and leases. net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125 9,901,911 4.d
5. Trading assets (from Schedule RC-D) 3545 153,060 5.
6. Premises and fixed assets (including capitalized
leases) 2145 50,587 6.
7. Other real estate owned (from Schedules RC-M ) 2150 3,148 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC - M) 2130 0 8.
9. Customers liability to this bank on acceptance
outstanding 2155 10,581 9.
10. Intangible assets (from Schedule RC - M) 2143 20,508 10.
11. Other assets (from Schedule RC -F) 2160 265,509 11.
12. Total assets (sum of items 1 through 11) 2170 15,721,630 12. 15,721,630
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 35
LaSalle National Bank Call Date: 9/30/97 ST-BK 17-1620 FFIEC 031
135 South LaSalle Street Page RC-2
Chicago, IL 60603 Vendor ID: D CERT: 15407 12
Transit Number: 71000505
Schedule RC - Continued
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dollar Amounts
in Thousands
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A ----
and C from Schedule RC-E. part I) 2200 7,963,782 13.a.
RCON
----
(1) Noninterest-bearing (1) 6631 1,938,868 13.a.1
(2) Interest bearing 6636 6,024,916 13.a.2 7,963,782
RCFN
b. In foreign offices, Edge and Agreement ----
subsidiaries, and IBFs (from Schedule
RC-E, part II) 2200 2,064,214 13.b
RCFN
----
(1) Noninterest bearing 6631 0 13.b.1
(2) Interest bearing 6636 2,064,214 13.b.2
RCFD
14. Federal funds purchased and securities sold under ----
agreements to repurchase 2800 1,629,735 14
RCON
----
15.a. Demand notes issued to the U.S. Treasury 2640 639,397 15.a.
RCFD
----
b. Trading liabilities (from Schedule RC-D) 3548 58,051 15.b.
16. Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
a. With a remaining maturity of one year or less 2332 1,562,441 16.a.
b. With a remaining maturity of more than one year
through three years A547 12,481 16.b.
c. With a remaining maturity of more than three years A548 15,687 16.c.
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920 10,561 18.
19. Subordinated notes and debentures (2) 3200 396,250 19.
20. Other liabilities (from Schedule RC-G) 2930 333,248 20.
21. Total liabilities (sum of items 13 through 20) 2948 14,685,347 21. 14,685,347
22. Not applicable
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock and related surplus 3838 0 23.
24. Common stock 3230 18,417 24.
25. Surplus (exclude all surplus related to preferred
stock) 3839 275,636 25.
26.a. Undivided profits and capital reserves 3632 705,611 26.a.
b. Net unrealized holding gains (losses) on available
for sale securities 8434 36,119 26.b.
27. Cumulative foreign currency translation adjustments 3264 0 27.
28. Total equity capital (sum of items 23 through 27) 3210 1,035,783 28. 1,035,783
29. Total liabilities and equity capital (sum of items
21 and 28) 3300 15,721,630 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at right the number of the
statement below that best describes the most
comprehensive level of auditing work performed RCFD Number
for the bank by independent external auditors ---- ------
as of any date during 1996 6724 N/A M 1
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 36
LaSalle National Bank Call Date: 12/31/97 ST-BK 17-1620 FFIEC 031
135 South LaSalle Street Page RC-1
Chicago, IL 60603 Vendor ID: D CERT: 15407 11
Transit Number: 71000505
Consolidated Report of Condition for Insured Commercial and
State-Chartered Savings Banks for December 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dollar Amounts
in thousands
ASSETS
1 Cash and balances due from depository
institutions (from Schedule RC - A) RCFD
a. Noninterest bearing balances and currency and ----
coin (1) 0061 951,473 1.a
b. Interest bearing balances (2) 0071 607 1.b
2. Securities:
a. Held to maturity securities (from Schedule RC-B
column A) 1754 925,051 2.a
b. Available for sale securities (from schedule RC-B
column D) 1773 3,845,262 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 49,683 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
----
(from Schedule RC-C) 2122 10,899,748 4.a
b. LESS: Allowances for loan and lease losses 3123 200,986 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and leases. net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125 10,698,760 4.d
5. Trading assets (from Schedule RC-D) 3545 59,618 5.
6. Premises and fixed assets (including capitalized
leases) 2145 55,032 6.
7. Other real estate owned (from Schedules RC-M ) 2150 2,273 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC - M) 2130 0 8.
9. Customers liability to this bank on acceptance
outstanding 2155 13,630 9.
10. Intangible assets (from Schedule RC - M) 2143 20,083 10.
11. Other assets (from Schedule RC -F) 2160 218,814 11.
12. Total assets (sum of items 1 through 11) 2170 16,841,266 12. 16,841,266
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 37
LaSalle National Bank Call Date: 12/31/97 ST-BK 17-1620 FFIEC 031
135 South LaSalle Street Page RC-2
Chicago, IL 60603 Vendor ID: D CERT: 15407 12
Transit Number: 71000505
Schedule RC - Continued
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dollar Amounts
in Thousands
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A ----
and C from Schedule RC-E. part I) 2200 8,623,777 13.a.
RCON
----
(1) Noninterest-bearing (1) 6631 2,317,951 13.a.1
(2) Interest bearing 6636 6,305,825 13.a.2 8,623,777
RCFN
b. In foreign offices, Edge and Agreement ----
subsidiaries, and IBFs (from Schedule
RC-E, part II) 2200 2,149,327 13.b
RCFN
----
(1) Noninterest bearing 6631 0 13.b.1
(2) Interest bearing 6636 2,149,237 13.b.2
RCFD
14. Federal funds purchased and securities sold under ----
agreements to repurchase 2800 1,913,845 14
RCON
----
15.a. Demand notes issued to the U.S. Treasury 2640 380,144 15.a.
RCFD
----
b. Trading liabilities (from Schedule RC-D) 3548 30,006 15.b.
16. Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
a. With a remaining maturity of one year or less 2332 1,936,739 16.a.
b. With a remaining maturity of more than one year
through three years A547 28,833 16.b.
c. With a remaining maturity of more than three years A548 28,143 16.c.
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920 13,630 18
19. Subordinated notes and debentures (2) 3200 396,250 19
20. Other liabilities (from Schedule RC-G) 2930 257,013 20.
21. Total liabilities (sum of items 13 through 20) 2948 15,757,617 21 15,757,617
22. Not applicable
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock and related surplus 3838 0 23.
24. Common stock 3230 18,417 24
25. Surplus (exclude all surplus related to preferred
stock) 3839 284,111 25
26.a. Undivided profits and capital reserves 3632 737,758 26.a.
b. Net unrealized holding gains (losses) on available
for sale securities 8434 39,363 26.b.
27. Cumulative foreign currency translation adjustments 3264 0 27
28. Total equity capital (sum of items 23 through 27) 3210 1,083,649 28. 1,083,649
29. Total liabilities and equity capital (sum of items
21 and 28) 3300 16,841,269 29
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at right the number of the
statement below that best describes the most
comprehensive level of auditing work performed RCFD Number
for the bank by independent external auditors ---- ------
as of any date during 1996 6724 N/A M 1
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 38
LaSalle National Bank Call Date: 1 6/30/97 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC-1
Chicago, IL 60603 Vendor ID: D CERT: 15407 11
Transit Number: 7 1000505 Consolidated Report of Condition for Insured
Commercial and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dollar Amount
ASSETS in Thousands
1. Cash and balances due
from depository
institutions (from
Schedule RC-A): RCFD
----
a. Noninterest-bearing
balances and currency and
coin (1) 0081 744,692 1.a
b. Interest-bearing
balances (2) 0071 513 1.b
2. Securities:
a. Held-to-maturity
securities (from Schedule
RC-B, column A) 1754 996,943 2.a
b. Available-for-sale
securities (from Schedule
RC-B, column D) 1773 3,495,646 2.b
3. Federal funds sold and
securities purchased under
agreements to resell 1350 232,387 3.
4. Loans and lease financing
receivables:
a. Loans and leases, net
of unearned income RCFD
----
(from Schedule RC-C) 2122 9,602,698 4.a
b. LESS: Allowance for
loan and lease losses 3123 189,763 4.b
c. LESS: Allocated
transfer risk reserve 3128 0 4.c
d. Loans and leases, net
of unearned income,
allowance, and reserve
(Item 4.a minus 4.b and
4.c) 2125 9,412,935 4.d
5. Trading assets (from
Schedule RC-D) 3545 112,347 5.
6. Premises and fixed assets
(including capitalized
leases) 2145 44,456 6.
7. Other real estate owned
(from Schedule RC-M) 2150 3,141 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M) 2130 0 8.
9. Customers' liability to
this bank on acceptances
outstanding 2155 11,097 9.
10. Intangible assets (from
Schedule RC-M) 2143 20,933 10.
11. Other assets (from
Schedule RC-F) 2160 308,830 11.
12. Total assets (sum of
items 1 through 11) 2170 15,383,920 12. 15,383,920
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 39
LaSalle National Bank Call Date: 1 6/30/97 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC-2
Chicago, IL 60603 Vendor ID: D CERT: 15407 12
Transit Number: 7 1000505
Schedule RC-Continued
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Dollar Amount
LIABILITIES in Thousands
13. Deposits:
a. In domestic offices
(sum of totals of RCON
----
columns A and C from
Schedule RC-E, part I) 2200 8,057,102 13.a
RCON
----
(1) Noninterest-bearing 6631 2,057,727 13.a.1
(2) Interest-bearing 6636 5,999,375 13.a.2 8,057,102
RCFN
----
b. In foreign offices.
Edge and Agreement
subsidiaries, and IBF's
(from Schedule RC-E, part
II) 2200 2,006,523 13.b
RCFN
----
(1) Noninterest-bearing 6631 0 13.b.1
(2) Interest-bearing 6636 2,006,523 13.b.2
RCFD
----
14. Federal funds purchased
and securities sold under
agreements to repurchase 2800 1,556,756 14.
RCON
----
15a. Demand notes issued to
the U.S. Treasury 2840 692,219 15a
RCFD
----
b. Trading liabilities
(from Schedule RC-D) 3548 58,221 15.b
16. Other borrowed money
(includes mortgage
indebtedness and
obligations under
capitalized leases):
a. With a remaining
maturity of one year or
less 2332 1,379,144 16.a
b. With a remaining
maturity of more than one
year through three years A547 15,762 16.b
c. With a remaining
maturity of more than
three years A548 16,512 16.c
17. Not applicable
18. Bank's liability on
acceptances executed and
outstanding 2920 11,097 18.
19. Subordinated notes and
debentures (2) 3200 396,250 19.
20. Other liabilities (from
Schedule RC-G) 2930 212,679 20.
21. Total liabilities (sum of
Items 13 through 20) 2948 14,402,265 21. 14,402,265
22. Not applicable
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock
and related surplus 3838 0 23.
24. Common stock 3230 18,417 24.
25. Surplus (exclude all
surplus related to
preferred stock) 3839 275,636 25.
26a. Undivided profits and
capital reserves 3632 670,189 26.a
b. Net unrealized holding
gains (losses) on
available-for-sale
securities 8434 17,413 26.b
27. Cumulative foreign
currency translation
adjustments 3284 0 27.
28. Total equity capital (sum
of Items 23 through 27) 3210 981,655 28. 981,655
29. Total liabilities and
equity capital (sum of
items 21 and 28) 3300 15,383,920 29.
Memorandum
To be reported only with the
March Report of Condition.
1. Indicate in the box at
the right the number of
the statement below that
best describes RCFD Number
the most comprehensible ----
level of auditing work
performed for the bank by
independent external
auditors as of any date
during 1996 6724 N/A M-1
</TABLE>
1= Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2= Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3= Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4= Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5= Review of the bank's financial statements by external auditors
6= Compilation of the bank's financial statements by external auditors
7= Other audit procedures (excluding tax preparation work)
8= No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 40
LaSalle National Bank Call Date: 1 3/31/97 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC-1
Chicago, IL 60603 Vendor ID: D CERT: 15407 11
Transit Number: 7 1000505
Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for March 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dollar Amounts
ASSETS in Thousands
1. Cash and balances due
from depository
institutions (from
Schedule RC-A): RCFD
----
a. Noninterest-bearing
balances and currency and
coin (1) 0081 594,350 1.a
b. Interest-bearing
balances (2) 0071 392 1.b
2. Securities:
a. Held-to-maturity
securities (from Schedule
RC-B, column A) 1754 1,044,435 2.a
b. Available-for-sale
securities (from Schedule
RC-B, column D) 1773 3,505,040 2.b
3. Federal funds sold and
securities purchased under
agreements to resell 1350 144,843 3.
4. Loans and lease financing
receivables:
a. Loans and leases, net
of unearned income RCFD
----
(from Schedule RC-C) 2122 8,955,181 4.a
b. LESS: Allowance for
loan and lease losses 3123 175,944 4.b
c. LESS: Allocated
transfer risk reserve 3128 0 4.c
d. Loans and leases, net
of unearned income,
allowances, and reserve
(Item 4.a minus 4.b and
4.c) 2125 8,779,237 4.d
5. Trading assets (from
Schedule RC-D) 3545 190,980 5.
6. Premises and fixed assets
(including capitalized
leases) 2145 37,545 6.
7. Other real estate owned
(from Schedule RC-M) 2150 7123 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M) 2130 0 8.
9. Customers' liability to
this bank on acceptances
outstanding 2155 9,338 9.
10. Intangible assets (from
Schedule RC-M) 2143 21,357 10.
11. Other assets (from
Schedule RC-F) 2160 248,671 11.
12. Total assets (sum of
items 1 through 11) 2170 14,583,311 12. 14,583,311
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 41
LaSalle National Bank Call Date: 1 3/31/97 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC-1
Chicago, IL 60603 Vendor ID: D CERT: 15407 11
Transit Number: 7 1000505
Schedule RC-Continued
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dollar Amount
LIABILITIES in Thousands
13. Deposits:
a. In domestic offices
(sum of totals of RCON
columns A and C from ----
Schedule RC-E, part I) 2200 7,705,258 13.a
RCON
----
(1) Noninterest-bearing 6631 1,749,003 13.a.1
(2) Interest-bearing 6636 5,956,255 13.a.2 7,705,258
RCFN
----
b. In foreign offices,
Edge and Agreement
subsidiaries, and IBF's
(from Schedule RC-E, part
II) 2200 1,809,656 13.b
RCFN
----
(1) oninterest-bearing 6631 0 13.b.1
(2) Interest-bearing 6636 1,809,656 13.b.2
RCFD
----
14. Federal funds purchased
and securities sold under
agreements to repurchase 2800 1,605,695 14.
RCON
15. a. Demand notes issued to ----
the U.S. Treasury 2840 369,143 15a
RCFD
----
b. Trading liabilities
(from Schedule RC-D) 3548 102,955 15.b
16. Other borrowed money
(includes mortgage indebtedness
and obligations under
capitalized leases):
a. With a remaining maturity
of one year or less 2332 1,260,227 16.a
b. With a remaining
maturity of more than one
year 2333 37,663 16.b
17. Not applicable
18. Bank's liability on
acceptances executed and
outstanding 2920 9,338 18.
19. Subordinated notes and
debentures (2) 3200 396,250 19.
20. Other liabilities (from
Schedule RC-G) 2930 388,123 20.
21. Total liabilities (sum of
Items 13 through 20) 2948 13,685,308 21. 13,685,308
22. Not applicable
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock
and related surplus 3838 0 23.
24. Common stock 3230 18,417 24.
25. Surplus (exclude all
surplus related to
preferred stock) 3839 245,636 25.
26. a. Undivided profits and
capital reserves 3632 637,471 26.a
b. Net unrealized holding
gains (losses) on
available-for-sale
securities 8434 (3,521) 26.b
27. Cumulative foreign
currency translation
adjustments 3284 0 27.
28. Total equity capital (sum
of Items 23 through 27) 3210 898,003 28. 898,003
29. Total liabilities,
limited-life preferred
stock, and equity capital
(sum of items 21 and 28) 3300 14,583,311 29. 14,583,311
Memorandum
To be reported only with the
March Report of Condition.
1. Indicate in the box at
the right the number of
the statement below that
best describes the most RCFD Number
comprehensible level of ---- ------
auditing work performed for
the bank by independent
external auditors as of
any date during 1996 6724 N/A M-1
</TABLE>
1= Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2= Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3= Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4= Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5= Review of the bank's financial statements by external auditors
6= Compilation of the bank's financial statements by external auditors
7= Other audit procedures (excluding tax preparation work)
8= No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 42
LaSalle National Bank Call Date: 12/31/96 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC-1
Chicago, IL 60603 Vendor ID: D CERT: 15407 11
Transit Number: 71000505
Consolidated Report of Condition for Insured Commercial and
State-Chartered Savings Banks for December 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<S> <C> <C> <C> <C> <C>
Dollar Amount
ASSETS in Thousands
1. Cash and balances due from depository institutions
(from Schedule RC-A): RCFD
----
a. Noninterest-bearing balances and currency and
coin (1) 0081 730,888 1.a
b. Interest-bearing balances (2) 0071 80 1.b
a. Held-to-maturity securties (from Schedule RC-B,
column A) 1754 1,061,617 2.a
b. Available-for-sale securities (from Schedule RC-B,
column D) 1773 2,769,745 2.b
2. Securities:
3. Federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and
in IBFs:
a. Federal funds sold 0276 124,512 3.a
b. Securities purchased under agreements to resell 0277 0 3.b
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C) ----
2122 8,440,058 4.a
b. LESS: Allowance for loan and lease losses 3123 163,897 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (Item 4.a minus 4.b and 4.c) 2125 8,276,161 4.d
5. Trading assets (from Schedule RC-D) 3545 123,887 5.
6. Premises and fixed assets (including capitalized
leases) 2145 32,748 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,703 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances
outstanding 2155 19,642 9.
10. Intangible assets (from Schedule RC-M) 2143 21,782 10.
11. Other assets (from Schedule RC-F) 2160 218,191 11.
12. Total assets (sum of items 1 through 11) 2170 13,386,946 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 43
LaSalle National Bank Call Date: 12/31/96 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC-2
Chicago, IL 60603 Vendor ID: D CERT: 15407 12
Transit Number: 71000505
Schedule RC-Continued
<TABLE>
<S> <C> <C> <C> <C> <C>
Dollar Amount
LIABILITIES in Thousands
13. Deposits:
RCON
a. In domestic offices (sum of totals of ----
columns A and C from Schedule RC-E, part I) 2200 6,975,484 13.a
RCON
----
(1) Noninterest-bearing 6631 1,713,529 13.a.1
(2) Interest-bearing 6636 5,261,955 13.a.2
RCFN
b. In foreign offices, Edge and Agreement ----
subsidiaries, and IBF's (from Schedule RC-E, part II) 2200 2,000,073 13.b
RCFN
----
(1) Noninterest-bearing 6631 0 13.b.1
(2) Interest-bearing 6636 2,000,073 13.b.2
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries, and
in IBFs: RCFD
----
a. Federal funds purchased 0278 1,503,755 14.a
b. Securities sold under agreements to repurchase 0279 106,602 14.b
RCON
----
15 a. Demand notes issued to the U.S. Treasury 2840 257,425 15.a
RCFD
----
b. Trading liabilities (from Schedule RC-D) 3548 56,056 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less 2322 1,047,550 16.a
b. With a remaining maturity of more than one year 2333 42,370 16.b
17. Mortgage indebtedness and obligations under capitalized
leases 2910 0 17.
18. Bank's liability on acceptances executed and outstanding 2920 19,642 18.
19. Subordinated notes and debentures 3200 342,500 19.
20. Other liabilities (from Schedule RC-G) 2930 191,900 20.
21. Total liabilities (sum of Items 13 through 20) 2948 12,543,357 21.
22. Limited-life preferred stock and related surplus 3282 0 22.
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock and related surplus 3838 0 23.
24. Common stock 3230 18,417 24.
25. Surplus (exclude all surplus related to preferred
stock) 3839 197,636 25.
26 a. Undivided profits and capital reserves 3632 619,216 26.a
b. Net unrealized holding gains (losses) on
available-for-sale securities 8434 8,320 26.b
27. Cumulative foreign currency translation adjustments 3284 0 27.
28. Total equity capital (sum of Items 23 through 27) 3210 843,589 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22 and 28) 3300 13,386,946 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of
the statement below that best describes the most
comprehensive level of auditing work performed RCFD Number
for the bank by independent external auditors as ---- ------
of any date during 1995 6724 N/A M.1
</TABLE>
1= Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2= Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3= Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4= Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5= Review of the bank's financial statements by external auditors
6= Compilation of the bank's financial statements by external auditors
7= Other audit procedures (excluding tax preparation work)
8= No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
