<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WINDMERE-DURABLE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
FLORIDA 5980 MIAMI LAKES DRIVE 59-1028301
(STATE OR OTHER JURISDICTION OF MIAMI LAKES, FLORIDA 33014 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) (305) 362-2611 IDENTIFICATION NO.)
</TABLE>
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID M. FRIEDSON
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
WINDMERE-DURABLE HOLDINGS, INC.
5980 MIAMI LAKES DRIVE
MIAMI LAKES, FLORIDA 33014
(305) 362-2611
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
PAUL BERKOWITZ, ESQ.
ANDREW J. COSENTINO, ESQ.
GREENBERG TRAURIG HOFFMAN
LIPOFF ROSEN & QUENTEL, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
TEL: (305) 579-0500
FAX: (305) 579-0717
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
by the Registrant.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1)(2) REGISTRATION FEE
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<S> <C> <C>
Debt Securities......................................
- ---------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.10 per share...............
- ---------------------------------------------------------------------------------------------------------------------
Total................................................ $250,000,000 $73,750
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act").
(2) Not specified as to each class of securities to be registered hereunder
pursuant to General Instruction II(D) to Form S-3 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT 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 AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 4, 1998
PROSPECTUS
$250,000,000
[WINDMERE-DURABLE LOGO]
DEBT SECURITIES
COMMON STOCK
------------------------
Windmere-Durable Holdings, Inc. (the "Company"), directly or through
agents, dealers, or underwriters designated from time to time, may offer, issue
and sell, in one or more series or issuances, up to $250,000,000 in aggregate
principal amount of (a) secured or unsecured debt securities (the "Debt
Securities") of the Company, in one or more series, which may be either senior
debt securities (the "Senior Debt Securities"), senior subordinated debt
securities (the "Senior Subordinated Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities"), and (b) shares of common stock
of the Company, par value $.10 per share (the "Common Stock"), or any
combination of the foregoing, either individually or as units consisting of one
or more of the foregoing, each on terms to be determined at the time of sale.
The Debt Securities may be issued as exchangeable and/or convertible Debt
Securities exchangeable for or convertible into shares of Common Stock and may
be guaranteed by all or certain of the Company's subsidiaries. The Debt
Securities and the Common Stock are collectively referred to herein as the
"Securities." The Debt Securities and the Common Stock may be offered separately
or together, in one or more separate classes or series and in amounts, at prices
and on terms to be determined at the time of offering, and to be set forth in
one or more supplements to this Prospectus (each, a "Prospectus Supplement").
The Company's Common Stock is traded on The New York Stock Exchange (the
"NYSE") under the symbol "WND." Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on the NYSE. On June 3, 1998, the last reported sale
price of the Common Stock on the NYSE was $31 5/8 per share. The Company has not
yet determined whether any of the Debt Securities offered hereby will be listed
on any exchange or over-the-counter market. If the Company decides to seek
listing of any such Securities, the Prospectus Supplement relating thereto will
disclose such exchange or market.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Securities will be sold directly, through agents, underwriters or
dealers as designated from time to time, or through a combination of such
methods. The Company reserves the sole right to accept, and together with its
agents, from time to time, to reject in whole or in part any proposed purchase
of Securities to be made directly or through agents. If agents of the Company or
any dealers or underwriters are involved in the sale of the Securities in
respect of which this Prospectus is being delivered, the names of such agents,
dealers or underwriters and any applicable commissions or discounts will be set
forth in or may be calculated from the Prospectus Supplement with respect to
such Securities. See "Plan of Distribution" for possible indemnification
arrangements with agents, dealers and underwriters.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by the applicable Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND THEREIN, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, SECURITIES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE
SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
HEREIN OR IN ANY PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE HEREOF OR OF SUCH PROSPECTUS SUPPLEMENT.
------------------------
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement, part of which has been omitted in accordance with the
rules and regulations of the Commission. For further information about the
Company and the Securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof and otherwise
incorporated therein. Statements made in this Prospectus as to the contents of
any agreement or other document referred to herein are qualified by reference to
the copy of such agreement or other document filed as an exhibit to the
Registration Statement or such other document, each such statement being
qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Commission. The Registration Statement, as well as such reports and other
information filed by the Company with the Commission, can be inspected, without
charge, and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington D.C., 20549; 7 World
Trade Center, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Commission also maintains a site on the World Wide
Web at http://www.sec.gov, that contains reports, proxy and other information
regarding registrants that file electronically with the Commission, and certain
of the Company's filings are available at such Web site. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports and
other information concerning the Company can also be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York 10005.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated by reference in, and shall be deemed to be a part of, this
Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended December
31, 1997;
(2) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1998;
(3) the Company's Current Reports on Form 8-K filed with the Commission on
May 8, May 13 and May 20, 1998;
(4) the Company's Amended Current Report on Form 8-K/A filed with the
Commission on May 14, 1998;
2
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(5) the Company's Proxy Statement filed with the Commission on April 20,
1998 relating to the Company's 1998 Annual Meeting of Shareholders; and
(6) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on
February 1, 1989.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of all Securities to which this
Prospectus relates shall be deemed to be incorporated by reference into this
Prospectus or any Prospectus Supplement and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference in this
Prospectus or any Prospectus Supplement shall be deemed to be modified or
superseded for purposes of this Prospectus or any Prospectus Supplement to the
extent that a statement contained herein, therein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference in
this Prospectus or in such Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus or
any Prospectus Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any documents incorporated into this
Prospectus by reference (other than exhibits incorporated by reference into such
document). Requests for documents should be submitted to the Corporate
Secretary, Windmere-Durable Holdings, Inc., 5980 Miami Lakes Drive, Miami Lakes,
Florida 33014, telephone number (305) 362-2611. The information relating to the
Company contained in this Prospectus does not purport to be comprehensive and
should be read together with the information contained in the documents
incorporated or deemed to be incorporated by reference herein.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including any documents that are incorporated by reference
as set forth in "Information Incorporated by Reference," contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Such statements are indicated by words
or phrases such as "anticipate," "estimate," "projects," "management believes,"
"the Company believes," "intends," "expects" and similar words or phrases. Such
forward-looking statements are subject to certain risks, uncertainties or
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results, performance or
achievements of the Company may vary materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this paragraph. The
Company disclaims any obligation to publicly announce the results of any
revisions to any of the forward-looking statements contained herein (including
any documents incorporated herein by reference) to reflect future events or
developments.
3
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THE COMPANY
The Company, through its subsidiaries and investments, is a diversified
manufacturer and distributor of a broad range of personal care products, small
kitchen appliances, and seasonal products for major retailers and appliance
distributors in North America, Europe, and the Far East. Products are
manufactured under the Windmere(TM) and other Company-owned brands, under
private-label and licensed brand arrangements, and on an OEM basis for other
major consumer products companies. Additionally, the Company is one of the
largest suppliers of hair care appliances to the professional salon industry in
the United States. To expand its product line, the Company also entered into the
pet care market in 1996 with its Litter Maid(TM) computerized, infrared,
automatic self-cleaning cat litter box. Approximately 85% to 90% of the
Company's products are manufactured by Durable Electrical Metal Factory, Ltd.,
its wholly-owned Hong Kong subsidiary, in Bao An County, Guangdong Province of
the People's Republic of China, which is approximately 60 miles northwest of
central Hong Kong.
The Company also owns a 50-percent equity interest in both Salton/Maxim
Housewares, Inc. ("Salton"), a designer and marketer of small kitchen appliances
which distributes primarily to department stores and upscale mass merchandisers,
and Newtech Electronics Industries, Inc. ("Newtech"), which designs, sources,
manufactures and markets value-priced brand-name consumer electronic products.
Salton and Newtech have entered into contracts to supply to Kmart Corporation
certain small appliances, consumer electronics and telephone products for
distribution, marketing and sale under the White-Westinghouse(TM) brand name
licensed by White Consolidated Industries, Inc. to Salton and Newtech.
The Company and Salton have entered into a stock agreement, dated as of May
6, 1998 (the "Stock Agreement"), pursuant to which the Company granted Salton
the right to purchase the Company's approximate 50% equity interest in Salton
for $12 per share in cash and a six and one-half year, $15 million subordinated
promissory note bearing interest at 4% per annum. The principal amount of the
note will be reduced by 5% of the total amount paid by Salton for products
purchased from the Company and its affiliates during the term of the note. Under
the terms of the Stock Agreement, if Salton fails to exercise its right to
purchase the Company's equity interest in Salton on or prior to June 30, 1998,
or to close such purchase on or prior to October 30, 1998, the Company will have
the right to acquire all of the shares of Salton that it does not currently own
in a tender offer and/or merger for $14.27 per share in cash or in registered
shares of Company Common Stock. The Stock Agreement has been approved by the
Board of Directors of the Company and a Special Committee of the Board of
Directors of Salton.
On May 11, 1998, the Company announced a definitive purchase agreement to
acquire most of the assets, including the Cooking, Garment Care, Food
Preparation, and Beverage operations, of the Household Products Group of The
Black & Decker Corporation for $315 million in cash (the "HPG Acquisition") and
to assume certain liabilities of the Household Products Group. In connection
with the HPG Acquisition, the Company and The Black & Decker Corporation entered
into a long-term licensing arrangement to allow the Company to continue to
market products under the Black & Decker(TM) brand name in the cooking, garment
care, food preparation and beverage product categories in North America and
Latin America (excluding Brazil) for six and one-half years on a royalty-free
basis, with potential renewal periods, upon mutual agreement, at specified
royalties. As part of the HPG Acquisition, the Company also acquired certain
other sub-brand names related to such products, including the Toast'R Oven(TM)
and Spacemaker(TM) names.
The Company was incorporated under the laws of the State of Florida in
1963. The Company's executive offices are located at 5980 Miami Lakes Drive,
Miami Lakes, Florida 33014, and its telephone number at that address is (305)
362-2611.
4
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USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company anticipates that any net proceeds from the sale of the Securities will
be used for general corporate purposes, which may include, but are not limited
to, working capital, capital expenditures, future acquisitions, and the
repayment or refinancing of the Company's indebtedness, including indebtedness
to be incurred in connection with the HPG Acquisition. The factors which the
Company will consider in any refinancing will include the amount and
characteristics of any Securities issued and may include, among others, the
impact of such refinancing on the Company's liquidity, debt-to-capital ratio and
earnings per share. When a particular series of Securities is offered, the
Prospectus Supplement relating thereto will set forth the Company's intended use
for the net proceeds received from the sale of such Securities. Pending the
application of the net proceeds, the Company expects to invest such proceeds in
short-term, interest-bearing instruments or other investment-grade securities or
to reduce indebtedness under its bank credit agreement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company and its consolidated subsidiaries for the periods indicated.
<TABLE>
<CAPTION>
THREE-MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
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1998 1997 1997 1996 1995 1994 1993
---- ---- ----- ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (1)................... 2.14 1.78 7.03 3.71 (4.36)(2) 42.91 10.94
</TABLE>
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(1) The ratio of earnings to fixed charges is computed by dividing income from
continuing operations before income taxes and fixed charges by total fixed
charges. Fixed charges represent interest expense and the amortization of
debt issuance costs.
(2) Earnings were inadequate to cover fixed charges for the year ended December
31, 1995. The coverage deficiency was approximately $3.2 million in that
year.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement,
and the extent, if any, to which such general provisions do not apply to the
Debt Securities so offered, will be described in the Prospectus Supplement
relating to such Debt Securities.
Debt Securities may be issued from time to time in series under an
indenture, and one or more indentures supplemental thereto (collectively, the
"Indenture"), between the Company and a trustee to be identified in the
applicable Prospectus Supplement (the "Trustee"). The terms of the Debt
Securities will include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"TIA"), as in effect on the date of the Indenture. The Debt Securities will be
subject to all such terms, and potential purchasers of the Debt Securities are
referred to the Indenture and the TIA for a statement thereof. The following
summary of certain provisions of the Indenture does not purport to be complete
and is qualified in its entirety by reference to the Indenture, including the
definitions therein of certain terms used below. A copy of the proposed form of
Indenture has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part. As used under this caption, unless the context
otherwise requires, "Offered Debt Securities" shall mean the Debt Securities
offered by this Prospectus and an accompanying Prospectus Supplement.
GENERAL
The Indenture will provide for the issuance of Debt Securities in series
and will not limit the principal amount of Debt Securities that may be issued
thereunder. The Debt Securities offered under the Indenture
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may be issued in one or more series with the same or various maturities, at par,
at a premium or at a discount. The applicable Prospectus Supplement or
Prospectus Supplements will describe the following terms of the series of
Offered Debt Securities in respect of which this Prospectus is being delivered:
(1) the title of the Offered Debt Securities; (2) whether the Offered Debt
Securities are senior debt securities ("Senior Debt Securities"), senior
subordinated debt securities, ("Senior Subordinated Debt Securities") or
subordinated debt securities ("Subordinated Debt Securities") or any combination
thereof; (3) the price or prices (expressed as a percentage of the aggregate
principal amount thereof) at which the Offered Debt Securities will be issued;
(4) any limit upon the aggregate principal amount of the Offered Debt
Securities; (5) the date or dates on which the principal of the Offered Debt
Securities is payable; (6) the rate or rates (which may be fixed or variable) at
which the Offered Debt Securities will bear interest and the manner in which
such rate or rates are determined; (7) the date or dates from which any such
interest will accrue, the interest payment dates on which any such interest on
the Offered Debt Securities will be payable and the record dates for the
determination of Holders to whom such interest is payable; (8) the place or
places where the principal of, and any interest on, the Offered Debt Securities
will be payable; (9) the obligation of the Company, if any, to redeem,
repurchase or repay the Offered Debt Securities in whole or in part pursuant to
any sinking fund or analogous provisions or at the option of the Holders and the
price or prices at which, the period or periods within which and the terms and
conditions upon which the Offered Debt Securities shall be redeemed, repurchased
or repaid pursuant to such obligation; (10) the denominations in which any
Offered Debt Securities will be issuable, if other than denominations of U.S.
$1,000 and any integral multiple thereof; (11) if other than the principal
amount thereof, the portion of the principal amount of the Offered Debt
Securities of the series that will be payable upon declaration of the
acceleration of the maturity thereof; (12) whether the Offered Debt Securities
will be guaranteed by any of the Company's subsidiaries; (13) any addition to or
change in the covenants that apply to the Offered Debt Securities; (14) any
Events of Default with respect to the Offered Debt Securities, if not otherwise
set forth under "Events of Default;" (15) whether the Offered Debt Securities
will be issued in whole or in part in global form, the terms and conditions, if
any, upon which such global Offered Debt Securities may be exchanged in whole or
in part for other individual securities, and the depositary for the Offered Debt
Securities; (16) the terms and conditions, if any, upon which the Offered Debt
Securities shall be exchanged for or converted into Common Stock or Preferred
Stock; (17) the nature and terms of the security for any secured Offered Debt
Securities; and (18) any other terms of the Offered Debt Securities, which other
terms shall not be inconsistent with the provisions of the Indenture.
Debt Securities may be issued at a discount from their principal amount
("Original Issue Discount Securities"). Federal income tax considerations and
other special considerations applicable to any such Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Debt Securities may be issued in bearer form, with or without coupons.
Federal income tax considerations and other special considerations applicable to
bearer securities will be described in the applicable Prospectus Supplement.
STATUS OF DEBT SECURITIES; TERMS OF SUBORDINATION
The Senior Debt Securities will rank pari passu with all other unsecured
and unsubordinated indebtedness of the Company.
The payment of principal of, premium, if any, and interest on the Senior
Subordinated Debt Securities and Subordinated Debt Securities will be
subordinated in right of payment, as set forth in the Indenture, to the prior
payment in full of all Senior Debt, whether outstanding on the date of the
Indenture or thereafter incurred.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities, the Holders of Senior Debt will be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the
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applicable Senior Debt, whether or not an allowable claim), and until all such
Obligations are paid in full, any distribution to which the Holders of Senior
Subordinated Debt Securities or Subordinated Debt Securities would be entitled
shall be made to the Holders of Senior Debt (except that Holders of Senior
Subordinated Debt Securities or Subordinated Securities may receive and retain
Permitted Junior Securities and payments made from the trust described under
"-- Defeasance of Debt Securities and Certain Covenants in Certain
Circumstances").
The Company also may not make any payment upon or in respect of the Senior
Subordinated Securities or Subordinated Debt Securities (except in Permitted
Junior Securities or from the trust described under "-- Defeasance of Debt
Securities and Certain Covenants in Certain Circumstances") if (i) a default in
the payment of the principal of, premium, if any, or interest on Designated
Senior Debt occurs and is continuing beyond any applicable period of grace or
(ii) any other default occurs and is continuing with respect to Designated
Senior Debt that permits holders of the Designated Senior Debt as to which such
default relates to accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice") from the Company or the holders of
any Designated Senior Debt. Payments on the Senior Subordinated Debt Securities
or Subordinated Debt Securities, as applicable, may and shall be resumed (a) in
the case of a payment default, upon the date on which such default is cured or
waived and (b) in case of a nonpayment default, the earlier of the date on which
such nonpayment default is cured or waived or 179 days after the date on which
the applicable Payment Blockage Notice is received, unless the maturity of any
Designated Senior Debt has been accelerated. No new period of payment blockage
may be commenced unless and until (i) 360 days have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice and (ii) all
scheduled payments of principal, premium, if any, and interest on the Senior
Subordinated Debt Securities or Subordinated Debt Securities, as applicable,
that have come due have been paid in full in cash. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default shall have been waived for a period of not less than
90 days.
The Indenture will further require that the Company promptly notify the
holders of Senior Debt if payment of the Senior Subordinated Debt Securities or
Subordinated Debt Securities, as applicable, is accelerated because of an Event
of Default.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, Holders of Senior Subordinated Debt Securities
or Subordinated Debt Securities, as applicable, may recover less ratably than
creditors of the Company who are holders of Senior Debt.
The terms "Designated Senior Debt," "Permitted Junior Securities" and
"Senior Debt" will be defined in the Prospectus Supplement relating to each
series of Offered Debt Securities that are Senior Subordinated Debt Securities
or Subordinated Debt Securities.
If the Company offers Debt Securities, the applicable Prospectus Supplement
will set forth the aggregate amount of outstanding indebtedness, if any, as of
the most recent practicable date that by the terms of such Debt Securities would
be senior to such Debt Securities. The applicable Prospectus Supplement will
also set forth any limitation on the issuance by the Company of any additional
indebtedness.
CONVERSION RIGHTS
The terms, if any, on which Convertible Debt Securities of a series may be
exchanged for or converted into shares of Common Stock or Preferred Stock will
be set forth in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, payment
of principal, premium, if any, and any interest on the Debt Securities will be
payable, and the exchange of and the transfer of Debt Securities will be
registrable, at the office of the Trustee or at any other office or agency
maintained by the Company for such purpose subject to the limitations of the
Indenture. Unless otherwise indicated in the
7
<PAGE> 9
applicable Prospectus Supplement, the Debt Securities will be issued in
denominations of U.S. $1,000 or integral multiples thereof. No service charge
will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection therewith.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities (each a "Global Security" and collectively, the "Global
Securities") that will be deposited with a Depositary or its nominee identified
in the applicable Prospectus Supplement. In such a case, one or more Global
Securities will be issued in a denomination or aggregate denominations equal to
the portion of the aggregate principal amount of outstanding Debt Securities of
the series to be represented by such Global Security or Securities. Each Global
Security will be deposited with such Depositary or nominee or a custodian
therefor and will bear a legend regarding the restrictions on exchanges and
registration of transfer thereof referred to below and any such other matters as
may be provided for pursuant to the applicable Indenture.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Security may be transferred to, or registered or
exchanged for Debt Securities registered in the name of, any person or entity
other than the Depositary for such Global Security or any nominee of such
Depositary, and no such transfer may be registered, unless (i) the Depositary
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or has ceased to be qualified to act as such
as required by the applicable Indenture, (ii) the Company executes and delivers
to the Trustee an order that such Global Security shall be so transferable,
registrable and exchangeable, and such transfers shall be registrable or (iii)
there shall exist such circumstances, if any, as may be described in the
applicable Prospectus Supplement. All Debt Securities issued in exchange for a
Global Security or any portion thereof will be registered in such names as the
Depositary may direct.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities that are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of such Global
Security, and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Security will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by the
Depositary or its nominee for such Global Security. Ownership of beneficial
interests in such Global Security by persons that hold through participants will
be shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificate form. The foregoing
limitations and such laws may impair the ability to transfer beneficial
interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such
8
<PAGE> 10
series in certified form and will not be considered the Holders thereof for any
purposes under the Indenture. Accordingly, each person owning a beneficial
interest in such Global Security must rely on the procedures of the Depositary
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a Holder
under the Indenture. If the Company requests any action of Holders or if an
owner of a beneficial interest in such Global Security desires to give any
notice or take any action a holder is entitled to give or take under the
Indenture, the Depositary will authorize the participants to give such notice or
take such action, and participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Principal of, and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture will provide that the Company may not, directly or
indirectly, consolidate or merge with or into (whether or not the Company is the
surviving corporation), or sell, assign, transfer, convey or otherwise dispose
of all or substantially all of its properties or assets, in one or more related
transactions, to another Person unless (i) the Company is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a corporation organized
or existing under the laws of the United States, any state thereof or the
District of Columbia; (ii) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to which such
sale, assignment, transfer, conveyance or other disposition shall have been made
assumes all the obligations of the Company under the Debt Securities and the
Indenture pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; and (iv) except in the case of a merger of the Company with or
into a wholly owned subsidiary of the Company, the Company or the Person formed
by or surviving any such consolidation or merger (if other than the Company), or
to which such sale, assignment, transfer, conveyance or other disposition shall
have been made will satisfy certain financial requirements set forth in the
Indenture. The Indenture will also provide that the Company may not, directly or
indirectly, lease all or substantially all of its properties or assets, in one
or more related transactions, to any other Person. The provisions of this
covenant will not be applicable to a sale, assignment, transfer, conveyance or
other disposition of assets between or among the Company and its wholly owned
subsidiaries.
CERTAIN OTHER COVENANTS
The supplemental indenture creating a particular series of Debt Securities
will contain additional covenants, and such covenants will be described in the
Prospectus Supplement pursuant to which such Debt Securities are offered. Other
than the covenants of the Company included in the Indenture as described above
or as described in the applicable Prospectus Supplement, there are no covenants
or other provisions in the Indenture providing for a put or increased interest
or otherwise that would afford Holders of Debt Securities additional protection
in the event of a recapitalization transaction, a change of control of the
Company or a highly leveraged transaction.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, the
following will constitute Events of Default under the Indenture with respect to
Debt Securities of any series: (i) default for 30 days in the payment when due
of interest on the Debt Securities of a particular Series (whether or not
prohibited by any subordination provisions of the Indenture); (ii) default in
payment when due of the principal of or premium, if any, on the Debt Securities
of a particular Series (whether or not prohibited by any subordination
provisions of the Indenture); (iii) failure by the Company or any of its
subsidiaries party to the Indenture for 30 days after notice by the Trustee or
the Holders of at least 25% of the outstanding Debt Securities of a particular
Series (which notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default") to comply with any of its other
agreements in the Debt Securities of that series or in the Indenture
9
<PAGE> 11
with respect to that series; (iv) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any of its
subsidiaries (or the payment of which is guaranteed by the Company or any of its
subsidiaries) whether such indebtedness or guarantee now exists, or is created
after the date of the Indenture, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such indebtedness on the date of such
default (a "Payment Default") or (b) results in the acceleration of such
indebtedness prior to its express maturity and, in each case, the principal
amount of any such indebtedness, together with the principal amount of any other
such indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $10.0 million or more; and (v)
certain events of bankruptcy or insolvency with respect to the Company or any of
its subsidiaries.
If an Event of Default with respect to outstanding Debt Securities of any
series (other than an Event of Default relating to certain events of bankruptcy
or insolvency) shall occur and be continuing, either the Trustee or the Holders
of at least 25% in principal amount of the outstanding Debt Securities of that
series by notice, as provided in the Indenture, may declare the unpaid principal
amount (or, if the Debt Securities of that series are Original Issue Discount
Securities, such lesser amount as may be specified in the terms of that series)
of, and any accrued and unpaid interest on, all Debt Securities of that series
to be due and payable immediately. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of the outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration. For information as to waiver of defaults, see "Modification and
Waiver" below.
The Company will be required to furnish to the Trustee under the Indenture
annually a statement as to the performance by the Company of its obligations
under that Indenture and as to any default in such performance.
MODIFICATION AND WAIVER
Subject to certain exceptions, the Company and the Trustee may amend the
Indenture, the Debt Securities with the written consent of the Holders of a
majority in principal amount of the then outstanding Debt Securities of each
series affected by the amendment with each series voting as a separate class.
The Holders of a majority in principal amount of the then outstanding Debt
Securities of any series may also waive compliance in a particular instance by
the Company with any provision of the Indenture with respect to the Debt
Securities of that series; provided, however, that without the consent of each
holder of Debt Securities affected, an amendment, supplement or waiver may not
(i) reduce the percentage of the principal amount of Debt Securities whose
Holders must consent to an amendment or waiver; (ii) reduce the rate or change
the time for payment of interest on any Debt Security (including default
interest); (iii) reduce the principal of, premium, if any, or change the fixed
maturity of any Debt Security, or reduce the amount of, or postpone the date
fixed for, redemption or the payment of any sinking fund or analogous obligation
with respect thereto; (iv) make any Debt Security payable in currency other than
that stated in the Debt Security; (v) make any change in the provisions
concerning waivers of Default or Events of Default by Holders or the rights of
Holders to recover the principal of, premium, if any, or interest on, any Debt
Security; (vi) waive a default in the payment of the principal of, or interest
on, any Debt Security, except as otherwise provided in the Indenture or (vii)
reduce the amount due and owing upon the acceleration of any Original Issue
Discount Securities. Notwithstanding the foregoing, the Company and the Trustee
may amend the Indenture or the Debt Securities without notice to or the consent
of any Holder of a Debt Security: (i) to cure any ambiguity, defect or
inconsistency; (ii) to comply with the Indenture's provisions with respect to
successor corporations; (iii) to comply with any requirements of the Commission
in connection with the qualification of the Indenture under the TIA; (iv) to
provide for uncertificated Debt Securities in addition to or in place of
certificated Debt Securities; (v) to add to, change or eliminate any of the
provisions of the Indenture in respect of one of more series of Debt Securities,
provided, however, that any such addition, change or elimination (A) shall
neither (1) apply to any Debt Security of any series created prior to the
execution of such amendment and entitled to
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<PAGE> 12
the benefit of such provision, nor (2) modify the rights of a holder of any such
Debt Security with respect to such provision, or (B) shall become effective only
when there is no outstanding Debt Security of any series created prior to such
amendment and entitled to the benefit of such provision; (vi) to make any change
that does not adversely affect in any material respect the interest of any
holder; or (vii) to establish additional series of Debt Securities as permitted
by the Indenture.
The Holders of a majority in principal amount of the then outstanding Debt
Securities of any series, by notice to the Trustee, may waive an existing
Default or Event of Default and its consequences except a Default or Event of
Default in the payment of the principal of, or any interest on, any Debt
Security with respect to the Debt Securities of that series; provided, however,
that the Holders of a majority in principal amount of the outstanding Debt
Securities of any series may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration.
DEFEASANCE OF DEBT SECURITIES AND CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
The following provisions of the Indenture will be applicable to each series
of Debt Securities unless otherwise specified in the Prospectus Supplement
pursuant to which such Debt Securities are offered.
Legal Defeasance. The Indenture will provide that the Company may be
discharged from any and all obligations in respect of the Debt Securities of any
series (except for certain obligations to register the transfer or exchange of
Debt Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, and to maintain paying agencies) upon the deposit
with the Trustee, in trust, of money and/or U.S. government obligations, that,
through the payment of interest and principal in respect thereof in accordance
with their terms, will provide money in an amount sufficient in the opinion of a
nationally recognized firm of independent public accountants to pay and
discharge each installment of principal and premium and interest, if any, on and
any mandatory sinking fund payments in respect of the Debt Securities of such
series on the stated maturity of such payments or on the applicable redemption
date, as the case may be, in accordance with the terms of the Indenture and such
Debt Securities. Such discharge may occur only if, among other things, the
Company has received from, or there has been published by, the United States
Internal Revenue Service a ruling, or, since the date of execution of the
Indenture, there has been a change in the applicable United States federal
income tax law, in either case to the effect that Holders of the outstanding
Debt Securities of such series will not recognize income, gain or loss for
United States federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to United States federal income tax
on the same amount and in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge had not occurred.
Defeasance of Certain Covenants. The Indenture will provide that, upon
compliance with certain conditions, the Company may elect to have the
obligations of the Company released with respect to certain covenants contained
in the Indenture, as well as any additional covenants or Events of Default
contained in a supplement to the Indenture, a Board Resolution or an Officers'
Certificate delivered pursuant thereto and thereafter any omission to comply
with such obligations shall not constitute a Default or Event of Default with
respect to any series of Debt Securities. The conditions include: (i) the
deposit with the Trustee of money and/or U.S. government obligations, that,
through the payment of interest and principal in respect thereof in accordance
with their terms, will provide money in an amount sufficient in the opinion of a
nationally recognized firm of independent public accountants to pay principal
and premium and interest, if any, on and any mandatory sinking fund payments in
respect of the Debt Securities of such series on the stated maturity or on the
applicable redemption date, as the case may be, of such payments in accordance
with the terms of the Indenture and such Debt Securities; (ii) the delivery to
the Trustee of an opinion of counsel in the United States reasonably acceptable
to the Trustee to the effect that the Holders of the Debt Securities of such
series will not recognize income, gain or loss for United States federal income
tax purposes as a result of such deposit and related covenant defeasance and
will be subject to United States federal income tax in the same amount and in
the same manner and at the same times as would have been the case if such
deposit and related covenant defeasance had not occurred; (iii) the delivery to
the Trustee of an opinion of counsel to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and (iv) the
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<PAGE> 13
delivery to the Trustee of an Officers' Certificate stating that the deposit was
not made by the Company with the intent of defeating, hindering, delaying, or
defrauding creditors of the Company or others.
Defeasance and Events of Default. In the event that the Company exercises
its option to omit compliance with certain covenants of the Indenture with
respect to any series of Debt Securities and the Debt Securities of such series
are declared due and payable because of the occurrence of any Event of Default,
the amount of money and/or U.S. government obligations on deposit with the
Trustee will be sufficient to pay amounts due on the Debt Securities of such
series at the time of their stated maturity but may not be sufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable for such payments.
REGARDING THE TRUSTEE
The Trustee for the Debt Securities will be identified in the Prospectus
Supplement relating to such Debt Securities. The Indenture and provisions of the
TIA incorporated by reference therein contain certain limitations on the rights
of the Trustee, should it become a creditor of the Company, to obtain payment of
claims in certain cases, or to realize on certain property received in respect
of any such claim, as security or otherwise. The Trustee and its affiliates may
engage in, and will be permitted to continue to engage in, other transactions
with the Company and its affiliates; provided, however, that if it acquires any
conflicting interest (as defined in the TIA), it must eliminate such conflict or
resign.
The Holders of a majority in principal amount of the then outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee. The TIA and the Indenture provide that in case an Event of Default
shall occur (and be continuing), the Trustee will be required, in the exercise
of its rights and powers, to use the degree of care and skill of a prudent
person in the conduct of such person's affairs. Subject to such provision, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any of the Holders of the Debt Securities
issued thereunder, unless they have offered to the Trustee indemnity
satisfactory to it against any loss, liability, or expense.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them and may also sell the Securities to investors directly
or through agents. Any such underwriter or agent involved in the offer and sale
of Securities will be named in the applicable Prospectus Supplement. The Company
has reserved the right to sell or exchange Securities directly to investors on
its own behalf in those jurisdictions where and in such manner as it is
authorized to do so.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. Sales of Common Stock offered
hereby may be effected from time to time in one or more transactions on the NYSE
or in negotiated transactions or a combination of such methods. The Company may
also, from time to time, authorize dealers, acting as the Company's agents, to
offer and sell Securities upon such terms and conditions as are set forth in the
applicable Prospectus Supplement. In connection with the sale of Securities,
underwriters may receive compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent. Any such
underwriter, dealer or agent will be identified, and any such compensation
received from the Company will be described, in the Prospectus Supplement.
Unless otherwise indicated in a Prospectus Supplement, an agent will be acting
on a best efforts basis and a dealer will purchase Securities as a principal,
and may than resell such Securities at varying prices to be determined by the
dealer.
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<PAGE> 14
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Dealers and agents participating in the
distribution of Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them on resale of
the Securities may be deemed to be underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
To facilitate an offering of Securities, certain persons participating in
the offering may engage in transactions that stabilize, maintain, or otherwise
affect the price of the Securities. This may include over-allotments or short
sales of the Securities, which involves the sale by persons participating in the
offering of more Securities than have been sold to them by the Company. In such
circumstances, such persons would cover such over-allotments or short positions
by purchasing in the open market or by exercising the over-allotment option
granted to such persons. In addition, such persons may stabilize or maintain the
price of the Securities by bidding for or purchasing Securities in the open
market or by imposing penalty bids, whereby selling concessions allowed to
dealers participating in any such offering may be reclaimed if Securities sold
by them are repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the market price of
the Securities at a level above that which might otherwise prevail in the open
market. Such transactions, if commenced, may be discontinued at any time.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for the Company in the ordinary
course of business, including providing interim financing for the HPG
Acquisition. See "Use of Proceeds."
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby will be
passed upon for the Company by Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
P.A., Miami, Florida. If the Securities are distributed in an underwritten
offering or through agents, certain legal matters may be passed upon for any
agents or underwriters by counsel for such agents or underwriters identified in
the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements and related schedule of the Company
at December 31, 1997 and 1996, and for each of the three years in the period
ended December 31, 1997, appearing in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, have been audited by Grant Thornton LLP,
independent certified public accountants, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
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<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses (subject to future
contingencies) incurred or expected to be incurred by the Registrant in
connection with the issuance and distribution of the securities being registered
pursuant to this Registration Statement (items marked with an asterisk (*)
represent estimated expenses). The Registrant has agreed to pay all the costs
and expenses of this offering.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 73,750
Rating Agency Fees.......................................... 150,000*
Legal Fees and Expenses..................................... 150,000*
Accounting Fees and Expenses................................ 120,000*
Printing Expenses........................................... 100,000*
Blue Sky Fees............................................... 7,500*
Trustee/Issuing & Paying Agent Fees and Expenses............ 15,000*
Transfer Agent Fees and Expenses............................ 15,000*
Miscellaneous............................................... 15,000*
--------
Total............................................. $646,250*
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 607.0850 of the Florida Business
Corporation Act to indemnify its directors and officers to the extent provided
for in such statute. The Registrant's Amended and Restated Articles of
Incorporation provide that the Registrant shall indemnify and may insure its
officers and directors to the fullest extent permitted by law.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Florida law. In addition,
each director will continue to be subject to liability for (a) violations of
criminal laws, unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his or her conduct was
unlawful, (b) deriving an improper personal benefit from a transaction, (c)
voting for or assenting to an unlawful distribution and (d) willful misconduct
or conscious disregard for the best interests of the Registrant in a proceeding
by or in the right of the Registrant to procure a judgment in its favor or in a
proceeding by or in the right of a shareholder. The statute does not affect a
director's responsibilities under any other law, such as the federal securities
laws. The effect of the foregoing is to require the Registrant to indemnify the
officers and directors of the Registrant for any claim arising against such
persons in their official capacities if such person acted in good faith and in a
manner that he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been informed that in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered
hereunder, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
II-1
<PAGE> 16
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
*1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Articles of Incorporation of
Windmere-Durable Holdings, Inc.(1)
3.2 By-laws of Windmere-Durable Holdings, Inc.(2)
4.1 Form of Indenture.
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
P.A.
12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges.
23.1 Consent of Grant Thornton LLP.
23.2 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
P.A. (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature page hereof).
*25.1 Statement of Eligibility and Qualification on Form T-1 under
the Trust Indenture Act of 1939.
</TABLE>
- ---------------
* To be filed subsequent to the effectiveness of this Registration Statement
by an amendment to the Registration Statement or incorporated by reference
pursuant to a Current Report on Form 8-K in connection with the offering of
securities registered hereby.
(1) Incorporated by reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-3 filed with the Commission on June 25, 1996 (Commission
File No. 333-06759).
(2) Incorporated by reference to Exhibit 3.2 of the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1989 (Commission
File No. 1-10177).
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) shall not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic report filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
II-2
<PAGE> 17
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of the annual report of the
employee benefit plans pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under
Subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Securities and Exchange
Commission under Section 305(b)(2) of the Trust Indenture Act.
II-3
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami Lakes, State of Florida on this 4th day of
June, 1998.
WINDMERE-DURABLE HOLDINGS, INC.
By /s/ DAVID M. FRIEDSON
------------------------------------
David M. Friedson
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints David M. Friedson and Burton A. Honig, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, including any
registration statement pursuant to Rule 462 under the Securities Act, with the
Securities and Exchange Commission, and any other regulatory authority, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ DAVID M. FRIEDSON Chairman of the Board, President and June 4, 1998
- ------------------------------------------------ Chief Executive Officer (Principal
David M. Friedson Executive Officer)
/s/ HARRY D. SCHULMAN Senior Vice President and Chief June 4, 1998
- ------------------------------------------------ Financial Officer (Principal
Harry D. Schulman Financial Officer)
/s/ BURTON A. HONIG Vice President -- Finance (Principal June 4, 1998
- ------------------------------------------------ Accounting Officer)
Burton A. Honig
/s/ ARNOLD THALER Director June 4, 1998
- ------------------------------------------------
Arnold Thaler
/s/ JERALD I. ROSEN Director June 4, 1998
- ------------------------------------------------
Jerald I. Rosen
</TABLE>
II-4
<PAGE> 19
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ HAROLD STRAUSS Director June 4, 1998
- ------------------------------------------------
Harold Strauss
/s/ LAI KIN Director June 4, 1998
- ------------------------------------------------
Lai Kin
/s/ RAYMOND SO Director June 4, 1998
- ------------------------------------------------
Raymond So
/s/ LEONARD GLAZER Director June 4, 1998
- ------------------------------------------------
Leonard Glazer
/s/ BARBARA FRIEDSON GARRETT Director June 4, 1998
- ------------------------------------------------
Barbara Friedson Garrett
/s/ FELIX S. SABATES Director June 4, 1998
- ------------------------------------------------
Felix S. Sabates
</TABLE>
II-5
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
*1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Articles of Incorporation of
Windmere-Durable Holdings, Inc.(1)
3.2 By-laws of Windmere-Durable Holdings, Inc.(2)
4.1 Form of Indenture.
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
P.A.
12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges.
23.1 Consent of Grant Thornton LLP.
23.2 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
P.A. (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature page hereof).
*25.1 Statement of Eligibility and Qualification on Form T-1 under
the Trust Indenture Act of 1939.
</TABLE>
- ---------------
* To be filed subsequent to the effectiveness of this Registration Statement
by an amendment to the Registration Statement or incorporated by reference
pursuant to a Current Report on Form 8-K in connection with the offering of
securities registered hereby.
(1) Incorporated by reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-3 filed with the Commission on June 25, 1996 (Commission
File No. 333-06759).
(2) Incorporated by reference to Exhibit 3.2 of the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1989 (Commission
File No. 1-10177).
<PAGE> 1
Exhibit 4.1
- --------------------------------------------------------------------------------
Windmere-Durable Holdings, Inc.
--------------------------------
INDENTURE
Dated as of _________, 1998
--------------------------------
[Name of Trustee]
Trustee
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.......................1
Section 1.1. Definitions...............................................1
Section 1.2. Other Definitions.........................................6
Section 1.3. Incorporation by Reference of Trust Indenture Act.........6
Section 1.4. Rules of Construction.....................................7
ARTICLE II. THE SECURITIES..................................................7
Section 2.1. Issuable in Series........................................7
Section 2.2. Establishment of Terms of Series of Securities............8
Section 2.3. Execution and Authentication.............................10
Section 2.4. Registrar and Paying Agent...............................11
Section 2.5. Paying Agent to Hold Money in Trust......................12
Section 2.6. Securityholder Lists.....................................12
Section 2.7. Transfer and Exchange....................................12
Section 2.8. Replacement Securities...................................13
Section 2.9. Outstanding Securities...................................13
Section 2.10. Treasury Securities.....................................14
Section 2.11. Temporary Securities....................................14
Section 2.12. Cancellation............................................15
Section 2.13. Defaulted Interest......................................15
Section 2.14. Global Securities.......................................15
Section 2.15. CUSIP Numbers...........................................17
<PAGE> 3
TABLE OF CONTENTS
Page
----
ARTICLE III. REDEMPTION....................................................17
Section 3.1. Notice to Trustee........................................17
Section 3.2. Selection of Securities to be Redeemed...................17
Section 3.3. Notice of Redemption.....................................18
Section 3.4. Effect of Notice of Redemption...........................19
Section 3.5. Deposit of Redemption Price..............................19
Section 3.6. Securities Redeemed in Part..............................19
ARTICLE IV. COVENANTS......................................................20
Section 4.1. Payment of Principal and Interest........................20
Section 4.2. SEC Reports..............................................20
Section 4.3. Compliance Certificate...................................20
Section 4.4. Stay, Extension and Usury Laws...........................21
Section 4.5. Taxes....................................................21
Section 4.6. Corporate Existence......................................21
ARTICLE V. SUCCESSORS......................................................22
Section 5.1. Merger, Consolidation, or Sale of Assets.................22
Section 5.2. Successor Corporation Substituted........................22
ARTICLE VI. DEFAULTS AND REMEDIES..........................................23
Section 6.1. Events of Default........................................23
Section 6.2. Acceleration of Maturity; Rescission and Annulment.......25
<PAGE> 4
TABLE OF CONTENTS
Page
----
Section 6.3. Other Remedies...........................................25
Section 6.4. Collection Suit By Trustee...............................26
Section 6.5. Trustee May File Proofs of Claim.........................26
Section 6.6. Application of Money Collected...........................27
Section 6.7. Limitation on Suits......................................27
Section 6.8. Unconditional Right of Holders to Receive Principal
and Interest.............................................28
Section 6.9. Restoration of Rights and Remedies.......................28
Section 6.10. Rights and Remedies Cumulative..........................28
Section 6.11. Delay or Omission Not Waiver............................29
Section 6.12. Control by Holders......................................29
Section 6.13. Waiver of Past Defaults.................................29
Section 6.14. Undertaking for Costs...................................30
ARTICLE VII. TRUSTEE.......................................................30
Section 7.1. Duties of Trustee........................................30
Section 7.2. Rights of Trustee........................................32
Section 7.3. Individual Rights of Trustee.............................32
Section 7.4. Trustee's Disclaimer.....................................33
Section 7.5. Notice of Defaults.......................................33
Section 7.6. Reports by Trustee to Holders............................33
Section 7.7. Compensation and Indemnity...............................34
Section 7.8. Replacement of Trustee...................................35
<PAGE> 5
TABLE OF CONTENTS
Page
----
Section 7.9. Successor Trustee by Merger, etc.........................36
Section 7.10. Eligibility; Disqualification...........................36
Section 7.11. Preferential Collection of Claims Against Company.......36
ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE.......................36
Section 8.1. Option to Effect Legal Defeasance or Covenant
Defeasance...............................................36
Section 8.2. Legal Defeasance and Discharge...........................37
Section 8.3. Covenant Defeasance......................................37
Section 8.4. Conditions to Legal or Covenant Defeasance...............38
Section 8.5. Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions......39
Section 8.6. Repayment to Company.....................................40
Section 8.7. Reinstatement............................................40
ARTICLE IX. AMENDMENTS AND WAIVERS.........................................41
Section 9.1. Without Consent of Holders...............................41
Section 9.2. With Consent of Holders..................................42
Section 9.3. Limitations..............................................42
Section 9.4. Compliance with Trust Indenture Act......................43
Section 9.5. Revocation and Effect of Consents........................43
Section 9.6. Notation on or Exchange of Securities....................44
Section 9.7. Trustee Protected to Sign Amendments, Etc................44
<PAGE> 6
TABLE OF CONTENTS
Page
----
ARTICLE X. MISCELLANEOUS...................................................44
Section 10.1. Trust Indenture Act Controls............................44
Section 10.2. Notices.................................................44
Section 10.3. Communication by Holders with Other Holders.............45
Section 10.4. Certificate and Opinion as to Conditions Precedent......46
Section 10.5. Statements Required in Certificate or Opinion...........46
Section 10.6. Rules by Trustee and Agents.............................47
Section 10.7. No Recourse Against Others..............................47
Section 10.8. Counterparts............................................47
Section 10.9. Governing Laws..........................................47
Section 10.10. No Adverse Interpretation of Other Agreements..........47
Section 10.11. Successors.............................................47
Section 10.12. Severability...........................................48
Section 10.13. Table of Contents, Headings, Etc.......................48
ARTICLE XI. SINKING FUNDS..................................................48
Section 11.1. Applicability of Article................................48
Section 11.2. Satisfaction of Sinking Fund Payments with Securities...48
Section 11.3. Redemption of Securities for Sinking Fund...............49
<PAGE> 7
Windmere-Durable Holdings, Inc.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of __________, 1998
ss.310(a)(1) .............................................. 7.10
(a)(2) .............................................. 7.10
(a)(3) .............................................. Not Applicable
(a)(4) .............................................. Not Applicable
(a)(5) .............................................. 7.10
(b) .............................................. 7.10
ss.311(a) .............................................. 7.11
(b) .............................................. 7.11
(c) .............................................. Not Applicable
ss.312(a) .............................................. 2.6
(b) .............................................. 10.3
(c) .............................................. 10.3
ss.313(a) .............................................. 7.6
(b)(1) .............................................. 7.6
(b)(2) .............................................. 7.6, 7.7
(c) .............................................. 7.6
(d) .............................................. 7.6
ss.314(a) .............................................. 10.5
(b) .............................................. Not Applicable
(c)(1) .............................................. 10.4
(c)(2) .............................................. 10.4
(c)(3) .............................................. Not Applicable
(d) .............................................. Not Applicable
(e) .............................................. 10.5
(f) .............................................. Not Applicable
ss.315(a) .............................................. 7.1
(b) .............................................. 7.5
(c) .............................................. 7.1
(d) .............................................. 7.1
(e) .............................................. 6.14
ss.316(a) .............................................. 6.14
(a)(1)(A) .............................................. 6.12
(a)(1)(B) .............................................. 6.13
(b) .............................................. 6.8
ss.317(a)(1) .............................................. 6.3
(a)(2) .............................................. 6.4
(b) .............................................. 2.5
ss.318(a) .............................................. 10.1
<PAGE> 8
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be part of the Indenture.
<PAGE> 9
Indenture dated as of ___________, 1998 between Windmere-Durable
Holdings, Inc., a Florida corporation ("Company"), and [Name of Trustee], a
________________ ("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.
"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" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities or by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.
"Bearer" means anyone in possession from time to time of a Bearer
Security.
"Bearer Security" means any Security, including any interest coupon
appertaining thereto, that does not provide for the identification of the Holder
thereof.
<PAGE> 10
"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate and delivered to the
Trustee.
"Business Day" means any day other than a Legal Holiday.
"Company" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the
Company by its Chairman of the Board, a President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered.
"Debt" of any person as of any date means, without duplication, all
indebtedness of such person in respect of borrowed money, including all
interest, fees and expenses owed in respect thereto (whether or not the recourse
of the lender is to the whole of the assets of such person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments.
"Default" means any event which is, or after notice or passage of
time would be, an Event of Default.
"Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such Person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.
2
<PAGE> 11
"Discount Security" means any Security that provides for an amount
less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2
hereof.
"Dollars" means the currency of The United States of America.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.2
hereof evidencing all or part of a Series of Securities, issued to the
Depository for such Series or its nominee, and registered in the name of such
Depository or nominee.
"Holder" or "Securityholder" means a person in whose name a Security
is registered or the holder of a Bearer Security.
"Indenture" means this Indenture as amended or supplemented from
time to time and shall include the form and terms of particular Series of
Securities established as contemplated hereunder.
"Interest" with respect to any Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.
3
<PAGE> 12
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
10.5 hereof. The counsel may be an employee or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business.
"Responsible Officer," when used with respect to the Trustee, means
any Officer within the Corporate Trust Office of the Trustee (or any successor
group of the Trustee) 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 or her knowledge of and
familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt instruments
of the Company of any Series authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2 hereof.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such regulation is in effect on
the date hereof.
4
<PAGE> 13
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Debt, the date on which such payment of interest
or principal was scheduled to be paid in the original documentation governing
such Debt, and shall not include any contingent obligations to repay, redeem or
repurchase any such interest or principal prior to the date originally scheduled
for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of the Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act as so amended.
"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 or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of The United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America, and which in the case of (i)
and (ii) are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such
5
<PAGE> 14
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation evidenced by such depository receipt.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding capital stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
Section 1.2. Other Definitions.
<TABLE>
<CAPTION>
TERM DEFINED IN
- ---- SECTION
-------
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Event of Default" 6.1
"Journal" 10.15
"Judgment Currency" 10.16
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Market Exchange Rate" 10.15
"New York Banking Day" 10.16
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Registrar" 2.4
"Required Currency" 10.16
"Service Agent" 2.4
"successor person" 5.1
</TABLE>
Section 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
6
<PAGE> 15
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company
and any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.
Section 1.4. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
ARTICLE II.
THE SECURITIES
Section 2.1. Issuable in Series.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be set forth in a Board Resolution, a supplemental
indenture or an Officers' Certificate detailing the adoption of the terms
thereof pursuant to the authority granted under a Board Resolution. In the case
of Securities of a Series to be issued from time to time, the Board Resolution,
supplemental indenture or Officers' Certificate may provide for the method by
which specified terms (such as interest rate, maturity date, record date or date
from which interest shall accrue) are to be determined. Securities may
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differ between Series in respect of any matters, provided that all Series of
Securities shall be equally and ratably entitled to the benefits of the
Indenture.
Section 2.2. Establishment of Terms of Series of Securities.
At or prior to the issuance of any Securities within a Series, the
following shall be established (as to the Series generally, in the case of
Subsection 2.2.1 and either as to such Securities within the Series or as to the
Series generally in the case of Subsections 2.2.2 through 2.2.19) by a Board
Resolution, a supplemental indenture or an Officers' Certificate pursuant to
authority granted under a Board Resolution:
2.2.1. the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);
2.2.2. the price or prices (expressed as a percentage of the
principal amount thereof) at which the Securities of the Series will be issued;
2.2.3. any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6 hereof);
2.2.4. the date or dates on which the principal of the Securities of
the Series is payable;
2.2.5. the rate or rates (which may be fixed or variable) per annum
or, if applicable, the method used to determine such rate or rates (including,
but not limited to, any commodity, commodity index, stock exchange index or
financial index) at which the Securities of the Series shall bear interest, if
any, the date or dates from which such interest, if any, shall accrue, the date
or dates on which such interest, if any, shall commence and be payable and any
regular record date for the interest payable on any interest payment date;
2.2.6. the place or places where the principal of and interest, if
any, on the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;
2.2.7. if applicable, the period or periods within which, the price
or prices at which and the terms and conditions upon which the Securities of the
Series may be redeemed, in whole or in part, at the option of the Company;
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2.2.8. the obligation of the Company, if any, to redeem, repurchase
or repay the Securities of the Series in whole or in part pursuant to any
sinking fund or analogous provisions or at the option of a Holder thereof and
the price or prices at which, the period or periods within which and the terms
and conditions upon which Securities of the Series shall be redeemed,
repurchased or repaid pursuant to such obligation;
2.2.9. the dates, if any, on which and the price or prices at which
the Securities of the Series will be repurchased by the Company at the option of
the Holders thereof and other detailed terms and provisions of such repurchase
obligations;
2.2.10. the denominations in which the Securities of the Series
shall be issuable, if other than denominations of $1,000 and any integral
multiple thereof;
2.2.11. the forms of the Securities of the Series in bearer or fully
registered form (and, if in fully registered form, whether the Securities will
be issuable as Global Securities);
2.2.12. if other than the principal amount thereof, the portion of
the principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2
hereof;
2.2.13. the manner in which the amounts of payment of principal of
or interest, if any, on the Securities of the Series will be determined, if such
amounts may be determined by reference to an index based on a currency or
currencies or by reference to a commodity, commodity index, stock exchange index
or financial index;
2.2.14. the provisions, if any, relating to any security provided
for the Securities of the Series;
2.2.15. any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2 hereof;
2.2.16. any addition to or change in the covenants set forth in
Articles IV or V which applies to Securities of the Series;
2.2.17. any other terms of the Securities of the Series (which terms
shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1 hereof, but which may modify or delete any provision of
this Indenture insofar as it applies to such Series);
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2.2.18. the provisions, if any relating to any guarantees of the
Company's obligations with respect to the Securities of the Series; and
2.2.19. any depositories, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to Securities of such
Series if other than those appointed herein.
All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board
Resolution, supplemental indenture or Officers' Certificate.
Section 2.3. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities
and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt
by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the Board Resolution, supplemental indenture
hereto or Officers' Certificate delivered pursuant to Section 2.2 hereof, except
as provided in Section 2.8 hereof.
Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2 hereof) shall be fully protected in
relying on: (a) the Board
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Resolution, supplemental indenture hereto or Officers' Certificate establishing
the form of the Securities of that Series or of Securities within that Series
and the terms of the Securities of that Series or of Securities within that
Series, (b) an Officers' Certificate complying with Section 10.4 hereof, and (c)
an Opinion of Counsel complying with Section 10.4 hereof.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with
Securityholders or an Affiliate of the Company.
Section 2.4. Registrar and Paying Agent.
The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2 hereof, an office or agency where Securities of such
Series may be presented or surrendered for payment ("Paying Agent"), where
Securities of such Series may be surrendered for registration of transfer or
exchange ("Registrar") and where notices and demands to or upon the Company in
respect of the Securities of such Series and this Indenture may be served
("Service Agent"). The Registrar shall keep a register with respect to each
Series of Securities and to their transfer and exchange. The Company may also
from time to time appoint one or more co-registrars, additional paying agents or
additional service agents 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 obligations to maintain a Registrar, Paying Agent and
Service Agent in each place so specified pursuant to Section 2.2 for Securities
of any Series for such purposes. The Company shall notify the Trustee in writing
of any such designation or rescission and of any change in the name or address
of any such co-registrar, additional paying agent or additional service agent.
The term "Registrar" includes any co-registrar; the term "Paying Agent" includes
any additional paying agent; and the term "Service Agent" includes any
additional service agent. The Company may change any Registrar, Paying Agent or
Service Agent without notice to any Holder. The Company shall notify the Trustee
in writing of the name and address, and any change in the name or address, of
each Registrar, Paying Agent or Service Agent. If at any time the Company shall
fail to maintain any such required Registrar, Paying Agent or Service Agent or
shall fail to furnish the Trustee with the name and address thereof, such
presentations, surrenders, notices and
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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 initially appoints the Trustee to act as the Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.
Section 2.5. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of Securityholders of any Series of Securities all money
held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings
relating to the Company, the Trustee shall serve as Paying Agent for the
Securities.
Section 2.6. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
ss. 312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least seven Business Days before each interest payment date and
at such other times as the Trustee may request in writing a list, in such form
and as of such date as the Trustee may reasonably require, of the names and
addresses of Securityholders of each Series of Securities and the Company shall
otherwise comply with TIA ss.312(a).
Section 2.7. Transfer and Exchange.
Where Securities of a Series are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the
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Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.11, 3.6 or 9.6 hereof).
Neither the Company nor the Registrar shall be required (a) to
issue, register the transfer of, or exchange Securities of any Series for a
period beginning at the opening of business fifteen days immediately preceding
the mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, (b)
to register the transfer of or exchange Securities of any Series so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Securities being redeemed in part or (c) to register the transfer of or exchange
Securities of any Series between a record date and the next succeeding interest
payment date.
Section 2.8. Replacement Securities.
If any mutilated Security is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, shall authenticate a replacement Security of the same Series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding if the Trustee's requirements are met. If required by the Trustee or
the Company, an indemnity bond must be supplied by the Holder that is sufficient
in the judgment of the Trustee and the Company to protect the Company, the
Trustee, any Agent and any authenticating agent from any loss that any of them
may suffer if a Security is replaced. The Company may charge for its expenses in
replacing a Security.
Every replacement Security is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Securities of that Series duly issued
hereunder.
The provisions of this Section 2.8 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 2.9. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section 2.9 as not outstanding. Except as set forth in Section
2.10 hereof, a Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security.
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If a Security is replaced pursuant to Section 2.8 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on a redemption date or the Maturity of
Securities of a Series money sufficient to pay such Securities payable on that
date, then on and after that date such Securities of the Series cease to be
outstanding and interest on them ceases to accrue.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2 hereof.
Section 2.10. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities of a Series have concurred in any direction, waiver or consent,
Securities of a Series owned by the Company or an Affiliate shall be considered
as though not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Securities of a Series that the Trustee knows are so owned shall
be so disregarded.
Section 2.11. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee, upon receipt of a Company Order, shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities and as shall be reasonably acceptable to
the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee upon request shall authenticate definitive Securities of the same Series
and date of maturity in exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture.
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Section 2.12. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
transfer, exchange, payment, replacement or cancellation and shall destroy such
canceled Securities (subject to the record retention requirement of the Exchange
Act). Certification of the destruction shall be delivered to the Company. The
Company may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation.
Section 2.13. Defaulted Interest.
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are
Securityholders of the Series on a subsequent special record date. 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. The Company
shall fix or cause to be fixed each such special record date and payment date,
provided that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
Section 2.14. Global Securities.
2.14.1. Terms of Securities. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and the Depository for such Global Security or
Securities.
2.14.2. Transfer and Exchange. Notwithstanding any provisions to the
contrary contained in Section 2.7 hereof and in addition thereto, any Global
Security shall be exchangeable pursuant to Section 2.7 hereof for Securities
registered in the names of Holders other than the Depository for such Security
or its nominee only if (i) such Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Global Security or if at
any time such Depository ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Company fails to appoint a successor
Depository within 90 days of such event, (ii) the Company executes and delivers
to the Trustee an Officers' Certificate to the effect that such Global Security
shall
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be so exchangeable or (iii) an Event of Default with respect to the Securities
represented by such Global Security shall have happened and be continuing. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names as the Depository shall
direct in writing in an aggregate principal amount equal to the principal amount
of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such Global
Security to a nominee of such Depository, by a nominee of such Depository to
such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.
2.14.3. Legend. Any Global Security issued hereunder shall bear a
legend in substantially the following form:
"THIS A GLOBAL SECURITY IS HELD BY THE DEPOSITORY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS EXCHANGEABLE FOR SECURITIES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, BY A NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH A SUCCESSOR DEPOSITORY."
2.14.4. Acts of Holders. The Depository, as a Holder, may appoint
agents and otherwise authorize participants to give or take any direction,
consent, waiver or other action which a Holder is entitled to give or take under
this Indenture.
2.14.5. Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2 hereof,
payment of the principal of and interest, if any, on any Global Security shall
be made to the Holder thereof.
2.14.6. Consents, Declaration and Directions. Except as provided in
Section 2.14.5 hereof, the Company, the Trustee and any Agent shall treat a
person as the Holder of such principal amount of outstanding Securities of such
Series represented by a
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Global Security as shall be specified in a written statement of the Depository
with respect to such Global Security, for purposes of obtaining any directions,
consents or waivers required to be given by the Holders pursuant to this
Indenture.
Section 2.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE III.
REDEMPTION
Section 3.1. Notice to Trustee.
The Company may, with respect to any Series of Securities, reserve
the right to redeem and pay the Series of Securities or may covenant to redeem
and pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is
obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall furnish
to the Trustee, at least 30 days but not more than 60 days before a redemption
date, an Officers' Certificate setting forth (i) the redemption date (ii) the
principal amount of Series of Securities to be redeemed and (iii) the redemption
price.
Section 3.2. Selection of Securities to be Redeemed.
Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture or an Officers' Certificate, if less than
all the Securities of a Series are to be redeemed or purchased in an offer to
purchase at any time, the Trustee shall select the Securities of the Series to
be redeemed or purchased in any manner that the Trustee deems fair and
appropriate. The Trustee shall make the selection from Securities of the Series
outstanding not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities of the Series that have
denominations larger than $1,000. Securities of the Series and portions of them
it selects shall be in amounts of $1,000 or whole multiples of $1,000 or, with
respect to Securities of any Series issuable in other denominations pursuant to
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Section 2.2.10 hereof, the minimum principal denomination for each Series and
integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
Section 3.3. Notice of Redemption.
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail or cause to be mailed, by first-class mail, a notice of redemption to
each Holder whose Securities are to be redeemed at its registered address and if
any Bearer Securities are outstanding, publish on one occasion a notice in an
Authorized Newspaper.
The notice shall identify the Securities of the Series to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(e) that, unless the Company defaults in making such redemption
payment, interest on Securities of the Series called for redemption ceases
to accrue on and after the redemption date; and
(f) any other information as may be required by the terms of the
particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
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Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed or published as provided in
Section 3.3 hereof, Securities of a Series called for redemption become
irrevocably due and payable on the redemption date at the redemption price. A
notice of redemption may not be conditional.
Section 3.5. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest, if any, on all Securities to be
redeemed on that date. The Trustee or the Paying Agent shall promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Securities to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Securities of the Series or the portions of the Securities of the Series
called for redemption. If a Security is redeemed on or after an interest record
date but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Security was
registered at the close of business on such record date. If any Security called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case as the rate provided in the Securities of the Series and
in Section 4.1 hereof.
Section 3.6. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Security of the
same Series and the same maturity equal in principal amount to the unredeemed
portion of the Security surrendered.
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ARTICLE IV.
COVENANTS
Section 4.1. Payment of Principal and Interest.
The Company covenants and agrees for the benefit of the Holders of
each Series of Securities that it will duly and punctually pay the principal of
and interest, if any, on the Securities of that Series in accordance with the
terms of such Securities and this Indenture.
Section 4.2. SEC Reports.
Whether or not required by the rules and regulations of the SEC, so
long as any Securities are outstanding, the Company shall furnish to the
Security Holders (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the SEC on Form 8-K if the Company were required to
file such reports, in each case, within the time periods specified in the SEC's
rules and regulations.
Section 4.3. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Securities is prohibited or if such event has occurred,
a description of the event and what action the Company is taking or proposes to
take with respect thereto.
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(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.2(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or any other covenants set forth
for a particular Series in a Board Resolution, a supplemental indenture hereto
or an Officers' Certificate, or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.4. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture or the Securities; and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not, by resort
to any such law, 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 has been enacted.
Section 4.5. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders.
Section 4.6. Corporate Existence.
Subject to Article V, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each of its
Subsidiaries in accordance with the respective organizational documents of each
Subsidiary and the rights (charter and statutory), licenses and franchises of
the
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Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any Subsidiary, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries taken as a whole and
that the loss thereof is not adverse in any material respect to the Holders.
ARTICLE V.
SUCCESSORS
Section 5.1. Merger, Consolidation, or Sale of Assets
The Company shall not, directly or indirectly, consolidate or merge
with or into (whether or not the Company is the surviving corporation) or sell,
assign, transfer, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another Person
unless (i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (ii) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer, conveyance or
other disposition shall have been made assumes all the obligations of the
Company pursuant to a supplemental indenture under the Securities and this
Indenture in a form reasonably satisfactory to the Trustee, (iii) immediately
after such transaction, no Default or Event of Default exists and (iv) except in
the case of a merger of the Company with or into a Wholly Owned Subsidiary of
the Company, the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made shall
satisfy certain financial requirements set forth in this Indenture or in a Board
Resolution, supplemental indenture hereto or an Officer's Certificate pursuant
to Section 2.2 hereof. The Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.1 shall not
be applicable to a sale, assignment, transfer, conveyance or other disposition
or assets between or among the Company and its Wholly Owned Subsidiaries.
Section 5.2. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.1 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, conveyance or other
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disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), 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;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Securities except in the
case of a sale of all of the Company's assets that meets the requirements of
Section 5.1 hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
"Event of Default," wherever used herein with respect to Securities
of any Series, means any one of the following events, unless in the establishing
Board Resolution, supplemental indenture or Officers' Certificate, it is
provided that such Series shall not have the benefit of said Event of Default:
(a) default for 30 days in the payment of any interest on any
Security of that Series when it becomes due and payable (whether or not
prohibited by any subordination provisions with respect to such Series)
payment is deposited by the Company; or
(b) default in the payment when due of the principal of or premium,
if any, on any Security of that Series (whether or not prohibited by any
subordination provisions with respect to such Series); or
(c) default in the deposit of any sinking fund payment, when and as
due in respect of any Security of that Series; or
(d) failure by the Company or any of its Subsidiaries (to the extent
that such Subsidiary is an obligor of the Securities or is made a party to
this Indenture) for 30 days after notice by the Trustee or the Holders of
at least 25% in principal amount of the outstanding Securities of that
Series (which notice must specify such default, demand that it be remedied
and state that such notice is a "Notice of Default") to comply with any of
its other agreements in the Securities of that Series or in this Indenture
(other than a covenant or warranty that has been included in this
Indenture solely for the benefit of Series of Securities other than that
Series); or
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(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any Debt
for money borrowed by the Company or any of its Subsidiaries (or the
payment of which is guaranteed by the Company or any of its subsidiaries)
whether such Debt or guarantee now exists, or is created after the date of
this Indenture, which default (a) is caused by a failure to pay principal
of or premium, if any, or interest on such Debt prior to the expiration of
the grace period provided in such Debt on the date of such default (a
"Payment Default") or (b) results in the acceleration of such Debt prior
to its express maturity and, in each case, the principal amount of any
such Debt, together with the principal amount of any other such Debt under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $10.0 million or more; or
(f) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is unable to pay its debts as the same become
due; or
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary in an involuntary
case,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary or for all or
substantially all of its property, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary,
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and the order or decree remains unstayed and in effect for 60 days; or
(i) any other Event of Default provided with respect to Securities
of that Series, which is specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate, in accordance with Section
2.2.18 hereof.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 6.2. Acceleration of Maturity; Rescission and Annulment.
If any Event of Default with respect to Securities of a particular
Series (other than an Event of Default specified in clause (f) or (g) of Section
6.1 hereof with respect to the Company, any Significant Subsidiary or any group
of Significant Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the outstanding Securities of that Series
may declare all the Securities of that Series to be due and payable immediately.
Upon any such declaration, the Securities of that Series shall become due and
payable immediately. Notwithstanding the foregoing, if an Event of Default
specified in clause (f) or (g) of Section 6.1 hereof occurs with respect to the
Company, any of its Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, all outstanding
Securities of that Series shall be due and payable immediately without further
action or notice. The Holders of a majority in aggregate principal amount of the
then outstanding Securities of that Series by written notice to the Trustee may
on behalf of all of the Holders of that Series rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
Section 6.3. Other Remedies.
If an Event of Default occurs and is continuing with respect to any
Securities of any Series, the Trustee may pursue any available remedy to collect
the payment of principal, premium, if any, and interest on the Securities of
that Series or to enforce the performance of any provision of the Securities, or
this Indenture or the Board Resolution, supplemental indenture hereto or
Officers' Certificate pursuant to Section 2.2 hereof with respect to a
particular Series of Securities.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of
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Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
Section 6.4. Collection Suit By Trustee.
If an Event of Default with respect to any Securities of any Series
specified in Section 6.1(a), (b) or (c) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium, if any,
and interest remaining unpaid on the Securities of that Series and interest on
overdue principal and, to the extent lawful, interest and 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.
Section 6.5. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and
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 the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any 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 7.7 hereof.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the 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 6.6. 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 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 Trustee, it agents and attorneys for payment of all
amounts due under Section 7.7 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection; and
Second: To Securityholders for the payment of the amounts then due
and unpaid for principal of 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 interest, respectively; and
Third: To the Company or to such party as a court of competent
jurisdiction shall direct.
Section 6.7. Limitation on Suits.
No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
Series;
(b) the Holders of at least 25% in principal amount of the
outstanding Securities of that Series 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;
(c) such Holder or Holders have offered, and, if requested, have
provided to the Trustee reasonable indemnity against the costs, expenses
and liabilities to be incurred in compliance with such request;
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(d) the Trustee for 60 days after its receipt of such notice,
request and the offer and, if requested, the provision of indemnity has
failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Securities of that Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture 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 such
Holders.
Section 6.8. Unconditional Right of Holders to Receive Principal 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 interest, if any, on such Security on
the Stated Maturity or Stated Maturities 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.
Section 6.9. 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 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 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8
hereof, 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
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hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.11. 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 6.12. Control by Holders.
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1 hereof, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer of the Trustee,
determine that the proceeding so directed would involve the Trustee in
personal liability or may be unduly prejudicial to the rights of other
Holders of Securities.
Section 6.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive an existing Default or Event of Default and its
consequences hereunder with respect to such Series, except a continuing Default
or Event or Default in the payment of the principal of or interest on any
Security of such Series (provided, however, that the Holders of a majority in
principal amount of the outstanding Securities of any Series may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom
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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 6.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 6.14 shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).
ARTICLE VII.
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) The duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations
shall be read into this Indenture against the Trustee.
(ii) 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 Officers'
Certificates or Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture;
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however, in the case of any such Officers' Certificates or Opinions
of Counsel which by any provisions hereof are specifically required
to be furnished to the Trustee, the Trustee shall examine such
Officers' Certificates and Opinions of Counsel to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b)
of this Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it with respect to
Securities of any Series in good faith in accordance with a
direction received by it pursuant to Section 6.12 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity reasonably satisfactory to it
against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk
its own funds or otherwise incur any financial liability in the
performance of any of its duties, 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 is not
reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent
shall be entitled to the protections, immunities and standard of care as
are set forth in paragraphs (a), (b) and (c) of this Section 7.1 with
respect to the Trustee.
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Section 7.2. Rights of Trustee.
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on such Officers' Certificate or Opinion of Counsel. 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 from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care. No Depository shall be deemed an agent of the Trustee and
the Trustee shall not be responsible for any act or omission by any
Depository.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for
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permission to continue as trustee or resign. Any Agent may do the same with like
rights. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.4. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Securities other than its certificate of authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing with
respect to the Securities of any Series and if it is known to a Responsible
Officer of the Trustee, the Trustee shall mail to each Securityholder of the
Securities of that Series and, if any Bearer Securities are outstanding, publish
on one occasion in an Authorized Newspaper, notice of a Default or Event of
Default within 90 days after it occurs or, if later, after a Responsible Officer
of the Trustee has knowledge of such Default or Event of Default. Except in the
case of a Default or Event of Default in payment of principal of or interest on
any Security of any Series, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Securityholders of that Series.
Section 7.6. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as any Securities remain
outstanding, the Trustee shall mail to all Securityholders, as their names and
addresses appear on the register kept by the Registrar and, if any Bearer
Securities are outstanding, publish in an Authorized Newspaper, a brief report
dated as of such May 15 that complies with ss. 313(a) (but if no event described
in TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss.313(c).
A copy of each report at the time of its mailing to Securityholders
of any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock exchange.
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Section 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or the administration of its duties under this Indenture, including
the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.7) and defending itself against any claim (whether
asserted by the Company or any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder, except to the extent that the Company is prejudiced
thereby. The Company shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 7.7 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series. Such lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(f) or (g) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
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Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.8.
The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any one or
more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder of any
Securities of any one or more Series who has been a Holder for at least six
months, fails to comply with Section 7.10 hereof, any Security holder of the
applicable Series may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7 hereof, the
resignation or removal of the retiring Trustee shall become effective, and
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the successor Trustee shall have all the rights, powers and duties of the
Trustee with respect to each Series of Securities for which it is acting as
Trustee under this Indenture. A successor Trustee shall mail a notice of its
succession to each Securityholder of each such Series and, if any Bearer
Securities are outstanding, publish such notice on one occasion in an Authorized
Newspaper. Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee with respect to expenses and liabilities
incurred by it prior to such replacement.
Section 7.9. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee shall comply with
TIA ss. 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VIII.
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance.
Unless otherwise specified pursuant to Section 2.2.17 hereof to be
inapplicable to Securities of a particular Series, the Company may, at the
option of its Board of Directors evidenced by a resolution set forth in an
Officers' Certificate, at any time, elect to have either Section 8.2 or 8.3
hereof be applied to all outstanding Securities of a particular Series upon
compliance with the conditions set forth below in this Article Eight.
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<PAGE> 45
Section 8.2. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2 with respect to the Securities of a particular
Series, the Company shall, subject to the satisfaction of the conditions set
forth in Section 8.4 hereof, be deemed to have been discharged from its
obligations with respect to all outstanding Securities of that Series for which
such option has been exercised on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Debt represented by the outstanding Securities of that Series, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.5
hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Securities of
that Series, this Indenture and any other obligations with respect to such
Securities set forth in a Board Resolution, supplemental indenture hereto or an
Officers' Certificate pursuant to Section 2.2 hereof (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Securities of that Series to receive solely from the trust fund
described in Section 8.4 hereof, and as more fully set forth in such Section,
payments in respect of the principal of and interest on such Securities of that
Series when such payments are due, (b) the Company's obligations with respect to
such Securities of that Series under Article 2 and Section 4.2 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article Eight.
Subject to compliance with this Article Eight, the Company may exercise its
option under this Section 8.2 notwithstanding the prior exercise of its option
under Section 8.3 hereof.
Section 8.3. Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3 with respect to the Securities of a particular
Series, the Company shall, subject to the satisfaction of the conditions set
forth in Section 8.4 hereof, be released from its obligations under the
covenants contained in Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 hereof as well
as any additional covenants contained in a supplemental indenture hereto for a
particular Series of Securities or a Board Resolution or an Officers'
Certificate delivered pursuant to Section 2.2.17 hereof with respect to the
outstanding Securities on and after the date the conditions set forth in Section
8.4 hereof are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities of that Series shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Securities shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding
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Securities for a particular Series, 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 covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.1 hereof, but, except as specified above, the remainder of this
Indenture and such Securities of that Series shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3 hereof, subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, Sections 6.1(d) and (e) hereof shall
not constitute Events of Default.
Section 8.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Securities for a particular Series:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in Dollars, U.S. Government Obligations, or
a combination thereof, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of and interest, if any, on and any mandatory sinking fund payments in
respect of the Securities of such Series on the stated maturity or on the
applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming 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 of Counsel shall confirm that, the Holders of the
outstanding Securities of such Series will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal 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 Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Securities of such Series 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
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and at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Debt all or a portion of the proceeds of which
will be used to defease the Securities of a particular Series pursuant to this
Article Eight concurrently with such incurrence) or insofar as Sections 6.1(f)
or 6.1(g) hereof is concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that on the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.5. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding
Securities of any Series shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities of such Series and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Securities of such Series of all sums due and to become due
thereon in respect of principal and interest, if any, on and any
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mandatory sinking fund payments, 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 cash or U.S. Government
Obligations deposited pursuant to Section 8.4 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities of such Series.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Obligations held by it as provided
in Section 8.4 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.6. Repayment to Company.
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, premium, if
any, or interest or any mandatory sinking fund payments on any Security of a
Series and remaining unclaimed for two years after such principal, and premium,
if any, or interest or sinking fund payment has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
a secured 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 the New York Times and The Wall Street Journal (national
edition), 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
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any Dollars or
U.S. Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the
case may be, with respect to the Securities of a particular Series 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 of such Series shall be
revived and reinstated
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as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest or sinking fund payment on any Security of such Series
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 Paying Agent.
ARTICLE IX.
AMENDMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
Notwithstanding Section 9.2 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Securities of one or more
Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change that does not adversely affect in any
material respect the rights of any Securityholder;
(e) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as permitted by this Indenture;
(f) to add to, change or eliminate any of the provisions of this
Indenture in respect to one of more Series of Securities, provided,
however, that any such addition, change or elimination (i) shall neither
(A) apply to any Security of any Series created prior to the execution of
such amendment and entitled to the benefit of such provision, nor (B)
modify the rights of a Holder of any such Security with respect to such
provision, or (ii) shall become effective only when there is no
outstanding Security of any Series created prior to such amendment and
entitled to the benefit of such provision.
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(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to, change or eliminate any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; or
(h) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Section 9.2. With Consent of Holders.
Except as provided below in Section 9.3 hereof, the Company and the
Trustee may enter into a supplemental indenture with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
of each Series affected by such supplemental indenture (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Securities of such Series), for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner the rights of the
Securityholders of each such Series. Except as provided in Section 6.13 hereof,
the Holders of at least a majority in principal amount of the outstanding
Securities of each Series affected by such waiver by notice to the Trustee
(including consents obtained in connection with a tender offer or exchange offer
for the Securities of such Series) may waive compliance by the Company with any
provision of this Indenture or the Securities with respect to such Series.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this Section 9.2 becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
Section 9.3. Limitations.
Without the consent of each Securityholder affected, an amendment or
waiver may not:
(a) reduce the percentage of the principal amount of Securities
whose Holders must consent to an amendment, supplement or waiver;
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(b) reduce the rate or change the time for payment of interest
(including default interest) on any Security;
(c) reduce the principal of, or premium, if any, or change the
Stated Maturity of any Security or reduce the amount of, or postpone the
date fixed for, the payment of any sinking fund or analogous obligation
with respect thereto;
(d) make the principal of or interest, if any, on any Security
payable in any currency other than that stated in the Security;
(e) make any change in Sections 6.8, 6.13, or 9.3 (this sentence);
(f) waive a Default or Event of Default in the payment of the
principal of or interest on, any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at least a
majority in principal amount of the outstanding Securities of such Series
and a waiver of the payment default that resulted from such acceleration);
(g) reduce the amount due and owing upon the acceleration of any
Discount Securities.
Section 9.4. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.
Section 9.5. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Security is a continuing consent by the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
Any amendment, supplement or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (g) of Section 9.3 hereof.
In that case, the amendment, supplement or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security.
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Section 9.6. Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Security of any Series thereafter authenticated. The
Company in exchange for Securities of that Series may issue and the Trustee
shall authenticate upon request new Securities of that Series that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment or waiver.
Section 9.7. Trustee Protected to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affects the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental indenture until the Board
of Directors approves it. In executing, any amended or supplemental indenture
the Trustee shall be entitled to receive, and (subject to Section 7.1 hereof)
shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture.
ARTICLE X.
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
Section 10.2. Notices.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in Person or mailed by
first-class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
if to the Company:
Windmere-Durable Holdings, Inc.
5980 Miami Lakes Drive
Miami Lakes, FL 33014-2467
Attention: Chief Financial Officer
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with a copy to: Greenberg Traurig Hoffman
Lipoff Rosen & Quentel, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attention: Paul Berkowitz, Esq.
if to the Trustee:
[Name of Trustee]
[Address]
______________________________
______________________________
Attention: ___________________
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Securityholder shall be mailed by
first-class mail, certified or registered, return receipt requested or by
overnight air courier guaranteeing next day delivery to his address shown on the
register kept by the Registrar and, if any Bearer Securities are outstanding,
published in an Authorized Newspaper. Any notice or communication shall also be
mailed to any person described in TIA ss.313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Securityholder of any Series
or any defect in it shall not affect its sufficiency with respect to other
Securityholders of that or any other Series.
If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the Company mails a notice or communication to Securityholders,
it shall mail a copy to the Trustee and each Agent at the same time.
Section 10.3. Communication by Holders with Other Holders.
Securityholders of any Series may communicate pursuant to TIA ss.
312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this
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Indenture or the Securities of that Series or all Series. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 10.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
Section 10.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss.314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
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Section 10.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders of one or more Series. Any Agent may make reasonable rules
and set reasonable requirements for its functions.
Section 10.7. No Recourse Against Others.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
Section 10.8. Counterparts.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 10.9. Governing Laws.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE AND THE SECURITIES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 10.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or its Subsidiaries or any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 10.11. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successors.
47
<PAGE> 56
Section 10.12. Severability.
In case any provision in this Indenture or in the Securities 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 10.13. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table, and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE XI.
SINKING FUNDS
Section 11.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Securities of a Series, except as otherwise
permitted or required by any form of Security of such Series issued pursuant to
this Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2 hereof. Each sinking fund payment shall be applied to the
redemption of Securities of any Series as provided for by the terms of the
Securities of such Series.
Section 11.2. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of any Series to be made pursuant to
the terms of such Securities (1) deliver outstanding Securities of such Series
to which such sinking fund payment is applicable (other than any of such
Securities previously called for mandatory sinking fund redemption) and (2)
apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously
48
<PAGE> 57
so credited. Such Securities shall be received by the Trustee, together with an
Officers' Certificate with respect thereto, not later than 15 days prior to the
date on which the Trustee begins the process of selecting Securities for
redemption, and shall be credited for such purpose by the Trustee at the price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Securities in lieu of cash payments
pursuant to this Section 11.2, the principal amount of Securities of such Series
to be redeemed in order to exhaust the aforesaid cash payment shall be less than
$100,000, the Trustee need not call Securities of such Series for redemption,
except upon receipt of a Company Order that such action be taken, and such cash
payment shall be held by the Trustee or a Paying Agent and applied to the next
succeeding sinking fund payment, provided, however, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
Series purchased by the Company having an unpaid principal amount equal to the
cash payment required to be released to the Company.
Section 11.3. Redemption of Securities for Sinking Fund.
Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2 hereof, and the optional
amount, if any, to be added in cash to the next ensuing mandatory sinking fund
payment, and the Company shall thereupon be obligated to pay the amount therein
specified. Not less than 30 days (unless otherwise indicated in the Board
Resolution, Officers' Certificate or supplemental indenture in respect of a
particular Series of Securities) before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.2 hereof and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 3.3 hereof. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 3.4, 3.5 and 3.6 hereof.
49
<PAGE> 58
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
WINDMERE-DURABLE HOLDINGS, INC.
By:
---------------------------------
Name:
Its:
[Name of Trustee]
By:
---------------------------------
Name:
Its:
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF GREENBERG TRAURIG]
June 4, 1998
Windmere-Durable Holdings, Inc.
5980 Miami Lakes Drive
Miami Lakes, Florida 33014
Re: $250,000,000 Aggregate Offering Price of
Securities of Windmere-Durable Holdings, Inc.
Ladies and Gentlemen:
We have acted as counsel to Windmere-Durable Holdings, Inc., a Florida
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-3 (the "Registration Statement") being filed by
the Company with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
registration of $250,000,000 aggregate offering price of (i) one or more series
of senior, senior subordinated or subordinated debt securities (the "Debt
Securities"), and (ii) shares of common stock, par value $.10 per share (the
"Common Stock"), of the Company. The Debt Securities may be issued as
exchangeable and/or convertible Debt Securities exchangeable for or convertible
into shares of Common Stock and may be guaranteed by all or certain of the
Company's subsidiaries. The Debt Securities will be issued pursuant to one or
more indentures and one or more supplements thereto (collectively, the
"Indentures"), in each case between the Company and a trustee (each, a
"Trustee"). The Debt Securities and Common Stock are collectively referred to
herein as the "Securities." The Securities may be offered separately or
together, in one or more separate classes or series and in amounts, at prices
and on terms set forth or to be set forth in the Registration Statement and any
amendments thereto, in the prospectus contained in the Registration Statement
(the "Prospectus"), and in one or more supplements to the Prospectus (each, a
"Prospectus Supplement").
In our capacity as counsel to the Company in connection with the
Registration Statement, we are generally familiar with the proceedings taken and
proposed to be taken by the Company in connection with the authorization and
issuance of the Securities. For purposes of this opinion, we have assumed that
such proceedings will be timely and properly completed, in accordance with all
requirements of applicable federal and Florida laws, in the manner presently
proposed.
We have made such legal and factual examinations and inquiries,
including an examination of originals and copies certified or otherwise
identified to our satisfaction, of all such documents, corporate records and
instruments of the Company as we have deemed necessary or appropriate for
purposes of this opinion. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity to authentic original documents of all documents submitted to
us as copies.
We have obtained and relied upon such certificates and assurances from
public officials as we have deemed necessary. We are opining herein as to the
effect on the subject transaction only of the federal securities laws of the
United States and the laws of the State of Florida, and we express no
<PAGE> 2
Windmere-Durable Holdings, Inc.
June 4, 1998
Page 2
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction.
Subject to the foregoing and the other qualifications set forth herein,
it is our opinion that, as of the date hereof:
1. When (a) the Debt Securities have been duly established in
accordance with the terms of the applicable Indenture (including, without
limitation, the adoption by the Board of Directors of the Company of a
resolution duly authorizing the issuance and delivery of the Debt Securities),
duly authenticated by the Trustee and duly executed and delivered on behalf of
the Company against payment therefor in accordance with the terms and provisions
of the applicable Indenture and as contemplated by the Registration Statement,
the Prospectus and the related Prospectus Supplement(s), and (b) when the
Registration Statement and any required post-effective amendment thereto have
all become effective under the Securities Act, and (c) assuming that the terms
of the Debt Securities as executed and delivered are as described in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
and (d) assuming that the Debt Securities as executed and delivered do not
violate any law applicable to the Company or result in a default under or breach
of any agreement or instrument binding upon the Company, and (e) assuming that
the Debt Securities as executed and delivered comply with all requirements and
restrictions, if any, applicable to the Company, whether or not imposed by any
court or governmental or regulatory body having jurisdiction over the Company,
and (f) assuming that the Debt Securities are then issued and sold as
contemplated in the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), the Debt Securities will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with the terms of the Debt Securities.
2. The Company has the authority pursuant to its Amended and Restated
Articles of Incorporation to issue up to 40,000,000 shares of Common Stock. Upon
adoption by the Board of Directors of the Company of a resolution in form and
content as required by applicable law and upon issuance and delivery of and
payment for such shares in the manner contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and by such
resolution, such shares of Common Stock (including any Common Stock duly issued
upon the exchange or conversion of Debt Securities that are exchangeable or
convertible into Common Stock) will be validly issued, fully paid and
nonassessable.
The opinion set forth in paragraph 1 above is subject to the following
exceptions, limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
effect relating to or affecting the rights and remedies of creditors; (ii) the
effect of general principles of equity, including without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought;
(iii) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of, or contribution
to, a party with respect to a liability where such indemnification or
contribution is contrary to public policy; (iv) we express no opinion concerning
the enforceability of any waiver of rights or defenses with respect to stay,
extension or usury laws; and (v) we express no opinion with respect to
<PAGE> 3
Windmere-Durable Holdings, Inc.
June 4, 1998
Page 3
whether acceleration of Debt Securities may affect the collectibility of any
portion of the stated principal amount thereof which might be determined to
constitute unearned interest thereon.
We assume for purposes of this opinion that the applicable Indenture
has been duly authorized by all necessary corporate action by the Company, has
been duly executed and delivered by the Company and constitutes the legally
valid, binding and enforceable obligation of the Company, enforceable against
the Company in accordance with its terms; that the Trustee for each Indenture is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; that the Trustee is duly qualified to engage in
the activities contemplated by the applicable Indenture; that the applicable
Indenture has been duly authorized, executed and delivered by the Trustee and
constitutes the legally valid, binding and enforceable obligation of the
Trustee, enforceable against the Trustee in accordance with its terms; and that
the Trustee is in compliance, generally and with respect to acting as Trustee
under the applicable Indenture, with all applicable laws and regulations; and
that the Trustee has the requisite organizational and legal power and authority
to perform its obligations under the applicable Indenture.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement, to the reference to our firm under the caption "Legal
Matters" in the Prospectus included therein, and to the reference to our firm in
any Prospectus Supplement relating to the Registration Statement reviewed and
approved by us prior to the distribution of such Prospectus Supplement and the
filing thereof with the Commission. In giving such consent, we do not thereby
admit that we are within the category of persons whose consent is required by
Section 7 of the Securities Act or the related rules promulgated by the
Commission.
Very truly yours,
Greenberg Traurig Hoffman Lipoff Rosen &
Quentel, P.A.
By: /s/ Paul Berkowitz
-----------------------------
Paul Berkowitz
<PAGE> 1
EXHIBIT 12.1
WINDMERE-DURABLE HOLDINGS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
----------------- ------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------- ------- ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations before provision for
income taxes, extraordinary items and cumulative
effect of accounting change........................... $1,257 $ 485 $20,758 $3,671 $(3,165) $23,133 $11,103
Add
Interest expense...................................... 1,045 624 3,351 1,346 578 552 820
Amortization of debt expense ......................... 55 -- 92 7 12 -- 297
------ ------ ------- ------ ------- ------- -------
Income as adjusted.............................. $2,357 $1,109 $24,201 $5,024 $(2,575) $23,685 $12,220
====== ====== ======= ====== ======= ======= =======
Fixed charges(1)
Interest expense...................................... $1,045 $ 624 $ 3,351 $1,346 $ 578 $ 552 $ 820
Amortization of debt expense ......................... 55 -- 92 7 12 -- 297
------ ------ ------- ------ ------- ------- -------
Total fixed charges deducted from earnings and
total fixed charges........................... $1,100 $ 624 $ 3,443 $1,353 $ 590 $ 522 $ 1,117
====== ====== ======= ====== ======= ======= =======
Ratio of earnings to fixed charges...................... 2.14 1.78 7.03 3.71 (4.36)(2) 42.91 10.94
====== ====== ======= ====== ======= ======= =======
</TABLE>
- ---------------
(1) The Company has provided a $9.0 million corporate guarantee as support for a
credit facility obtained by one of its 50-percent owned joint ventures.
Interest expense for the guaranteed amount was $.6 million and $.2 million
for the year ended December 31, 1997 and the three months ended
March 31, 1998, respectively. Such amounts are not included in the ratio
computations.
(2) Earnings were inadequate to cover fixed charges for the year ended December
31, 1995. The coverage deficiency was approximately $3.2 million in that
year.
<PAGE> 1
EXHIBIT 23.1
AUDITOR'S CONSENT
We have issued our report dated February 10, 1998, accompanying the
consolidated financial statements and schedule of Windmere-Durable Holdings,
Inc. included in its Annual Report on Form 10-K for the year ended December 31,
1997. We hereby consent to the incorporation by reference of the aforementioned
report in the Registration Statement and Prospectus of Windmere-Durable
Holdings, Inc. on Form S-3, and to the use of our name as it appears under the
caption "Experts."
/s/ Grant Thornton LLP
Miami, Florida
June 3, 1998
