<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DELUXE CORPORATION
(Exact name of registrant as specified in its charter)
--------------------------
<TABLE>
<S> <C>
MINNESOTA 41-0216800
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or No.)
organization)
</TABLE>
1080 WEST COUNTY ROAD F, SHOREVIEW, MINNESOTA 55126-8201
(612) 483-7111
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JOHN H. LEFEVRE, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
DELUXE CORPORATION
1080 WEST COUNTY ROAD F
SHOREVIEW, MINNESOTA 55126-8201
(612) 483-7008
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
Robert A. Rosenbaum, Esq. Robert E. Buckholz, Jr., Esq.
Dorsey & Whitney P.L.L.P. Sullivan & Cromwell
220 South Sixth Street 125 Broad Street
Minneapolis, Minnesota 55402 New York, New York 10004
(612) 340-5681 (212) 558-4000
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
---------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the 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. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT (1) OFFERING PRICE (1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities................................ $300,000,000(2) 100%(3) $300,000,000(3) $103,449
<FN>
(1) Estimated in accordance with Rule 457 solely for the purpose of calculating
the registration fee.
(2) Or, in the case of Debt Securities denominated in a currency other than
U.S. dollars or in a composite currency, such U.S. dollar amount as shall
result from converting the aggregate public offering price of such Debt
Securities into U.S. dollars at the exchange rate in effect on the date
such Debt Securities are initially offered to the public.
(3) Plus accrued interest, if any.
</TABLE>
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
-------------
SUBJECT TO COMPLETION, DATED AUGUST 23, 1995
$300,000,000
DELUXE CORPORATION
DEBT SECURITIES
------------------
Deluxe Corporation (the "Company") may offer from time to time its debt
securities (the "Debt Securities") in one or more series in an aggregate
principal amount not to exceed $300,000,000, or its equivalent in such foreign
currency or composite currencies as may be designated by the Company at the time
of the offering, on terms to be determined at the time of sale. The specific
designation, aggregate principal amount, purchase price, maturity, denominations
(which may be in United States dollars, in any other currency or in a composite
currency), any interest rate or rates (which may be fixed or variable) and time
of payment of any interest, any redemption or repayment or extension terms, any
terms for sinking fund payments and other specific terms of the Debt Securities
will be set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement"). As used herein, the term "Debt Securities" shall
include securities denominated in United States dollars or, if so specified in
the applicable Prospectus Supplement, in any other currency or composite
currency.
The Debt Securities may be sold to or through underwriters, dealers or
agents for public offering or directly to other purchasers pursuant to the terms
of the offering fixed at the time of sale. See "Plan of Distribution." Any
underwriters, dealers or agents participating in an offering of Debt Securities
will be named in the accompanying Prospectus Supplement or Prospectus
Supplements. Such underwriters, dealers or agents may be deemed "underwriters"
within the meaning of the Securities Act of 1933, as amended.
------------------------
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 DATE OF THIS PROSPECTUS IS AUGUST , 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
2400, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices located at Seven World Trade Center, 13th
Floor, New York, New York 10048, and Northwestern Atrium Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. 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, proxy
statements and other information concerning the Company can also be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
under the Securities Act of 1933, as amended. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement. Statements contained in this Prospectus as to the
contents of any document are not necessarily complete, and in each instance
reference is made to the document itself, each such statement being qualified in
all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company which have been filed with the
Commission are hereby incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31, 1994;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, as
amended by Form 10-Q/A-1 filed August 10, 1995; and
(c) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document all or any portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than certain exhibits to such documents). Requests for such copies should be
directed to John H. LeFevre, Secretary, Deluxe Corporation, 1080 West County
Road F, Shoreview, Minnesota 55126-8201, telephone number (612) 483-7008.
Unless otherwise indicated, currency amounts in this Prospectus and in any
Prospectus Supplement are stated in United States dollars ("$" or "dollars").
2
<PAGE>
THE COMPANY
Deluxe Corporation provides products and services primarily to the financial
payment systems industry and also markets specialty products to consumers. The
Company began business in 1915 in St. Paul, Minnesota, printing checks for banks
and their customers. The Company today is headquartered in Shoreview, Minnesota,
and has facilities in the United States, Puerto Rico, Canada and the United
Kingdom. The Company's products and services are sold primarily in the United
States through the following four business divisions: Payment Systems, Business
Systems, Consumer Specialty Products and Ink.
PAYMENT SYSTEMS DIVISION
The Company's largest division, Payment Systems, is composed of the
paper-based payments unit and the electronic payments unit. The Payment Systems
Division had net sales of approximately $1.083 billion in 1994, accounting for
approximately 62 percent of the Company's total sales.
PAPER-BASED PAYMENTS UNIT
The paper-based payments unit prints and sells to financial institutions and
depositors a variety of checks and related banking forms. The Company is the
nation's leading printer of checks for financial institutions and has an
approximately 50 percent share of the estimated $1.6 billion U.S. financial
institution check market. The approximate number of financial institutions (not
including branches as separate entities) to which the Company made gross sales
of checks and related banking forms in excess of $100,000 during 1994 was 1,922.
Depositors commonly submit initial check orders and reorders to their
financial institutions, which forward them to one of the Company's printing
plants. Printed checks are sent directly by the Company to the depositors,
typically on the business day after receipt of the order. The Company's charges
are paid by the financial institutions, which in turn usually deduct the charges
from the depositors' accounts. In 1994, the Company delivered 99.76 percent of
financial institution check orders error-free to customers and provided two-day
turnaround on 95.6 percent of all orders.
Payment systems and methods have been changing in the U.S. in recent years
as banking and other industries have introduced alternatives to the traditional
check, including charge cards, credit cards, debit cards and electronic payment,
among others. Sales of checks to financial institutions have been subject to
increased competition and consequent pressure on prices. Additionally, the
direct mail segment of the check industry is growing rapidly as a lower-priced
alternative to financial institution check sales and is estimated to have
represented approximately 14 percent of the personal check market in the U.S. in
1994. These developments have produced a mature market for checks and have
accelerated pricing pressure on check sales. As a result, check printing
revenues have declined in recent years and the Company believes that while check
unit orders may grow modestly, revenues from traditional check sales to
financial institutions will not experience growth in the future. In order to
stabilize check printing operations and improve profitability, the Company has
focused on controlling expenses and increasing efficiency and on higher margin
products and services, such as specially designed checks and licensed check
designs. At the same time, the growing direct mail check segment has been an
opportunity for the Company's Current, Inc. subsidiary, the nation's largest
supplier of direct mail personal checks. See "-- Consumer Specialty Products
Division."
The paper-based payments unit also includes the Company's financial forms
and card services businesses. The financial forms business provides financial
institutions with a variety of forms used for internal operations and
administrative purposes. The card services business provides personalized,
plastic automated teller machine ("ATM") cards and credit and debit cards to
financial institutions and retailers and driver's licenses to government
agencies.
The Company's direct communications product line is also part of the
paper-based payments unit. This emerging product line consists of letter checks
and other personalized direct communication printed pieces used by financial
institutions in marketing to consumers. The Company continues to focus on
developing products and services to be sold to its traditional financial
institution customers.
3
<PAGE>
ELECTRONIC PAYMENTS UNIT
The electronic payments unit supplies processing and other services and
electronic funds transfer software and consists of the following businesses:
Deluxe Data Systems, Inc. ("Deluxe Data"); Chex Systems, Inc. ("Chex Systems");
Electronic Transaction Corporation ("ETC"); National Revenue Corporation and its
affiliates ("NRC"); and Financial Alliance Processing Services, Inc. ("Financial
Alliance").
Deluxe Data provides electronic funds transfer processing and software and
is the nation's largest third-party processor for regional ATM networks.
Overall, Deluxe Data processed approximately 1.3 billion transactions in 1994.
Deluxe Data also competes in emerging debit markets, including electronic
benefit transfer ("EBT") and retail/point-of-sale ("POS") transaction
processing. EBT uses ATM and POS terminals to deliver food stamps and welfare
assistance to recipients. Deluxe Data currently supports EBT programs for the
state governments of Maryland and New Jersey.
Chex Systems provides account verification services for financial
institutions and served more than 60,000 bank locations in 1994. Chex Systems
uses its large database to identify checking account applicants who previously
have had accounts closed for cause. Chex Systems also offers collection services
to financial institutions.
ETC is a database management business and is the nation's largest check
authorization service for retailers. Through its Shared Check Authorization
Network ("SCAN-TM-"), ETC identifies individuals who have outstanding dishonored
checks or who have had checking accounts closed for cause. Using SCAN, member
retailers served by ETC authorized more than 1.6 billion checks in 1994.
NRC provides collection and accounts receivable management services to
retail, financial, medical and commercial credit grantors. NRC has 37 sales
offices nationwide and serves approximately 27,000 customers.
Financial Alliance, acquired by the Company in January 1995, is a
full-service credit card processor enabling retailers to accept payment by
credit card. In 1994, Financial Alliance processed 18 million credit card
transactions and provided services to more than 150 financial institutions and
40,000 retailers using 30 independent sales organizations as well as its own
internal sales organization.
BUSINESS SYSTEMS DIVISION
The second largest of the Company's divisions, Business Systems, had net
sales of approximately $335 million in 1994, accounting for approximately 19
percent of the Company's total sales. Business Systems produces and markets
short-run computer and business forms and record-keeping systems for small
businesses and professional practices, including medical and dental offices.
Business Systems' products are sold primarily through direct mail and telephone
marketing. This Division includes the Company's general business and health care
forms printing unit; PaperDirect, Inc., a direct mail marketer of specialty
papers, presentation products and pre-designed forms for laser printing and
desktop publishing; Nelco, Inc., a supplier of tax forms, tax forms software,
and electronic tax filing services; and T/Maker Company, a publisher of image
content software, including clip art. Many of these products are also sold
internationally by Deluxe United Kingdom Ltd., Deluxe Canada Inc. and
PaperDirect Pacific Pty Limited, an Australia-based joint venture that markets
PaperDirect products in Australia, New Zealand and Asia.
CONSUMER SPECIALTY PRODUCTS DIVISION
The Consumer Specialty Products Division consists of Current, Inc.
("Current"), the nation's leading direct mail supplier of checks and social
expression products, including greeting cards, gift wrap, small gifts and
related products. Current had sales of approximately $330 million in 1994,
accounting for approximately 19 percent of the Company's total sales. Current is
the largest supplier among the approximately 30 companies competing in the
growing direct mail check segment, which includes the Company's primary
competitors in the financial institution check market. Current delivered
approximately 99 percent of its check orders error-free in 1994. Current's
social expression business is seasonal, based on holidays, and historically more
than one-third of Current's total sales have occurred in the fourth quarter.
4
<PAGE>
INK DIVISION
In June 1994, the Company formed the Ink Division to produce and market
Printwise-TM-, a water-washable lithographic ink and solvent-free press wash
system. The Company believes that Printwise meets or exceeds the performance
standards of conventional lithographic inks. Printwise requires no costly
capital expenditures or press modifications to implement and eliminates the need
to use environmentally harmful, petroleum-based cleaning solvents in the
printing process. As a start-up business, the Ink Division had sales of
approximately $0.9 million and an operating loss in 1994. Such sales were made
primarily to the Company for use in its check printing plants, all of which have
been converted to Printwise. Because the ink business is new to the Company and
unrelated to its other core businesses, the Company is examining alternatives in
order to realize the full value to the Company of the Ink Division. See "--
Recent Developments."
RECENT DEVELOPMENTS
On May 1, 1995, J. A. (Gus) Blanchard III succeeded Harold V. Haverty as
President and Chief Executive Officer of the Company. Since January 1994, Mr.
Blanchard, age 52, had been Executive Vice President of General Instrument
Corporation, a supplier of systems and equipment to the cable and satellite
television industry located in Chicago, Illinois. From 1991 to 1993, Mr.
Blanchard was Chairman and Chief Executive Officer of Harbridge Merchant
Services, a national credit card processing company based in Chicago.
Previously, Mr. Blanchard worked at American Telephone & Telegraph Company
("AT&T") for 25 years, most recently as Senior Vice President in charge of
AT&T's national business sales force.
In connection with the recent management change, the Company is undertaking
a comprehensive evaluation of its businesses and strategy and may, in the
future, determine to adjust its business strategy and to pursue acquisitions of
complementary businesses or products or dispositions of certain businesses or
products of the Company and its subsidiaries. The Company currently has no
commitments to make any such acquisitions or dispositions. See "Use of
Proceeds."
The Company was incorporated under the laws of the State of Minnesota in
1920. From 1920 until 1988, the Company was named Deluxe Check Printers
Incorporated. The Company's principal executive offices are located at 1080 West
County Road F, Shoreview, Minnesota 55126-8201 (telephone (612) 483-7111).
Unless the context otherwise requires, the term the "Company" refers to Deluxe
Corporation and its subsidiaries.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general corporate
purposes, including working capital, repayment or repurchase of outstanding
indebtedness and other securities of the Company, capital expenditures and
possible acquisitions of complementary businesses or products. The Company
currently has no commitments to make any such acquisitions. See "The Company --
Recent Developments". Specific allocations of the proceeds to such purposes may
not have been made at the date of the applicable Prospectus Supplement, although
management of the Company will have determined that funds should be borrowed at
that time in anticipation of future funding requirements. The precise amount and
timing of the application of such proceeds will depend upon the funding
requirements of the Company and the availability and cost of other funds.
Pending such application, such net proceeds may be temporarily invested in
short-term, interest-bearing securities.
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1990 1991 1992 1993 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges..................... 23.2 15.1 12.2 10.9 10.9
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995
-----------------------
<S> <C>
Ratio of Earnings to Fixed Charges..................... 9.0
</TABLE>
5
<PAGE>
For the purpose of computing the ratios of earnings to fixed charges,
earnings consist of income from continuing operations before income taxes, plus
fixed charges, plus a proportional share of earnings of 50 percent owned
companies, less equity in undistributed earnings of companies owned less than 50
percent. Fixed charges consist of interest on all indebtedness, amortization of
debt discount and expense and that portion of rental expense deemed to be
representative of interest.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the "Indenture")
between the Company and Norwest Bank Minnesota, National Association, as Trustee
(the "Trustee"). A copy of the form of Indenture has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The following
brief summary of certain provisions of the Indenture does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all of the provisions of the Indenture, and is further qualified by any
description contained in the applicable Prospectus Supplement or Prospectus
Supplements. Certain terms capitalized and not otherwise defined herein are
defined in the Indenture. Wherever particular sections or defined terms of the
Indenture are referred to, such sections or defined terms are incorporated
herein by reference.
The Debt Securities may be issued from time to time in one or more series.
The terms of each series of Debt Securities will be established by or pursuant
to a resolution of the Board of Directors of the Company and set forth or
determined in the manner provided in an Officers' Certificate or by a
supplemental indenture. The particular terms of the Debt Securities offered
pursuant to any Prospectus Supplement or Prospectus Supplements will be
described in such Prospectus Supplement or Prospectus Supplements. As used under
this caption, the term "Company" means Deluxe Corporation.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder nor the amount of other debt which may
be issued by the Company. The Debt Securities will be unsecured obligations of
the Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company
Unless otherwise indicated in the applicable Prospectus Supplement or
Prospectus Supplements, the Debt Securities of any series will be issued only in
fully registered form in denominations of $1,000 or any amount in excess thereof
which is an integral multiple of $1,000. (Section 302) Debt Securities may be
issuable in the form of one or more Global Securities, as described below under
"-- Global Securities." The Debt Securities (other than those issued in the form
of a Global Security) are exchangeable or transferable without charge therefor,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith and require the
holders to furnish appropriate endorsements and transfer documents. (Section
305)
Debt Securities may be issued as Original Issue Discount Debt Securities to
be sold at a substantial discount below their principal amount. Special federal
income tax and other considerations applicable thereto and special federal tax
and other considerations applicable to any Debt Securities which are denominated
in a currency or currency unit other than United States dollars will be
described in the Prospectus Supplement or Prospectus Supplements relating
thereto.
Unless otherwise indicated in the applicable Prospectus Supplement or
Prospectus Supplements, principal of and any premium and interest on the Debt
Securities will be payable, and the transfer of the Debt Securities will be
registrable, at the principal corporate trust office of the Trustee. In
addition, unless otherwise provided in the applicable Prospectus Supplement or
Prospectus Supplements and in the case of Global Securities, payment of interest
may be made at the option of the Company by check mailed to the address of the
person entitled thereto as it appears on the Security Register. (Sections 301,
305, 1001 and 1002)
The applicable Prospectus Supplement or Prospectus Supplements will describe
the terms of the Debt Securities offered thereby, including the following: (1)
the title of the offered Debt Securities; (2) any
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<PAGE>
limit on the aggregate principal amount of the offered Debt Securities; (3) the
Person to whom any interest on the offered Debt Securities will be payable, if
other than the Person in whose name it is registered on the regular record date
for such interest; (4) the date or dates on which the offered Debt Securities
will mature and any rights of extension; (5) the rate or rates at which the
offered Debt Securities will bear interest, if any, or the formula pursuant to
which such rate or rates shall be determined, the date from which any such
interest will accrue and the dates on which any such interest on the offered
Debt Securities will be payable and the regular record dates therefor; (6) the
place or places where the principal of and any premium and interest on the
offered Debt Securities will be payable; (7) the period or periods within which,
the price or prices at which and the terms and conditions upon which the offered
Debt Securities may be redeemed, if applicable, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities of
the series pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof and the period or periods within which, the price or prices
at which and the terms and conditions upon which Securities of the series shall
be redeemed or purchased, in whole or in part, pursuant to such obligation; (9)
the denominations in which any offered Debt Securities will be issuable, if
other than denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000; (10) the currency, currencies or currency units for
the payment of principal of and any premium and interest payable on the offered
Debt Securities, if other than United States dollars; (11) any other event or
events of default applicable with respect to the offered Debt Securities in
addition to or in lieu of those described below under "-- Events of Default";
(12) any other restrictive covenants applicable with respect to the offered Debt
Securities in addition to or in lieu of those described below under "--
Restrictive Covenants"; (13) if less than the principal amount thereof, the
portion of the principal payable upon acceleration of such Debt Securities
following an Event of Default; (14) any index used to determine the amount of
payment of principal of and any premium and interest on the offered Debt
Securities; (15) whether such Debt Securities are to be issued in whole or in
part in the form of one or more Global Securities and, if so, the identity of
the Depositary for such Global Security or Securities and the circumstances
under which any such Global Security may be exchanged for Securities registered
in the name of, and any transfer of such Global Security may be registered to, a
Person other than such Depositary or its nominee; (16) if principal of or
interest on the offered Debt Securities is denominated or payable in a currency
or currencies other than United States dollars, whether and under what terms and
conditions the Company may defease the offered Debt Securities; and (17) any
other terms of the offered Debt Securities not inconsistent with the provisions
of the Indenture. (Section 301)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary identified in the applicable Prospectus Supplement or
Prospectus Supplements. A Global Security will be issued in a denomination equal
to the aggregate principal amount of outstanding Debt Securities of the series
represented by such Global Security. The specific terms of the depositary
arrangement with respect to a series of Debt Securities will be described in the
applicable Prospectus Supplement or Prospectus Supplements.
RESTRICTIVE COVENANTS
LIMITATIONS ON SECURED DEBT. The Indenture provides that the Company will
not itself, and will not permit any Restricted Subsidiary (defined below) to,
incur, issue, assume or guarantee any notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed (herein called "debt"), secured by
pledge of, or mortgage or other lien on, any Principal Property (defined below),
now owned or hereafter owned by the Company or any Restricted Subsidiary, or any
shares of stock or debt of any Restricted Subsidiary held by or owed to the
Company (herein called "liens"), without effectively providing that the Debt
Securities of each series then Outstanding (together with, if the Company shall
so determine, any other debt of the Company or such Restricted Subsidiary then
existing or thereafter created which is not subordinate to the Debt Securities
of each series then Outstanding) shall be secured equally and ratably with such
secured debt. The foregoing restrictions do not apply, however, to (a) liens
existing on the date of the Indenture; (b) liens on any Principal Property
acquired, constructed or
7
<PAGE>
improved by the Company or any Restricted Subsidiary after the date of the
Indenture which are created or assumed contemporaneously with, or within 120
days of, such acquisition, construction or improvement, to secure or provide for
the payment of all or any part of the cost of such acquisition, construction or
improvement; (c) liens on property, shares of capital stock or debt existing at
the time of acquisition thereof, whether by merger, consolidation, purchase,
lease or otherwise (including liens on property, shares of capital stock or debt
of a corporation existing at the time such corporation becomes a Restricted
Subsidiary); (d) liens in favor of the Company or any Restricted Subsidiary; (e)
liens in favor of the United States of America or any State thereof, or any
department, agency or instrumentality or political subdivision thereof, or
political entity affiliated therewith, or in favor of any other country, or any
political subdivision thereof, to secure partial, progress, advance or other
payments; (f) certain liens imposed by law, such as mechanics', workmen's,
repairmen's, materialmen's, carriers', warehousemen's, vendors' or other similar
liens arising in the ordinary course of business; (g) certain pledges or
deposits under workmen's compensation or similar legislation or in certain other
circumstances; (h) certain liens in connection with legal proceedings, including
certain liens arising out of judgments or awards; (i) liens for certain taxes or
assessments; (j) certain liens consisting of restrictions on the use of real
property which, other than liens resulting from action of any governmental
authority, do not interfere materially with the property's use; or (k) any
extension, renewal or replacement, as a whole or in part, of any lien referred
to in the foregoing clauses (a) to (j), inclusive. (Section 1007)
Notwithstanding the restrictions described above, the Company or any
Restricted Subsidiary may incur, issue, assume or guarantee debt secured by
liens without equally and ratably securing the Debt Securities of each series
then Outstanding, provided, that at the time of such incurrence, issuance,
assumption or guarantee, after giving effect thereto and to the retirement of
any debt which is concurrently being retired, the aggregate amount of all
outstanding debt secured by liens so incurred (other than liens permitted as
described in clauses (a) through (k) above), together with the aggregate amount
of all Attributable Debt (defined below) incurred pursuant to the second
paragraph under the caption "-- Limitations on Sale and Leaseback Transactions"
below, does not at such time exceed 15% of total shareholders' equity of the
Company as shown on its most recent consolidated balance sheet and computed in
accordance with generally accepted accounting principles. (Section 1007)
LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS. Sale and leaseback
transactions by the Company or any Restricted Subsidiary involving a Principal
Property are prohibited unless either (a) the Company or such Restricted
Subsidiary would be entitled, without equally and ratably securing the Debt
Securities of each series then Outstanding, to incur debt secured by a lien on
such property, pursuant to the provisions described in clauses (a) through (k)
above under "Limitations on Secured Debt,"; or (b) the Company, within 120 days,
applies to the retirement of its Funded Debt (defined below) (subject to credits
for certain voluntary retirements of Funded Debt) an amount not less than the
greater of (i) the net proceeds of the sale of the Principal Property leased
pursuant to such arrangement or (ii) the fair market value of the Principal
Property so leased. This restriction will not apply to a sale and leaseback
transaction between the Company and any Subsidiary or between a Restricted
Subsidiary and any Subsidiary or involving the taking back of a lease for a
period of less than three years.
Notwithstanding the restrictions described above, the Company or any
Restricted Subsidiary may enter into a Sale and Leaseback Transaction, provided,
that at the time of such transaction, after giving effect thereto, the aggregate
amount of all Attributable Debt (defined below) in respect of sale and leaseback
transactions existing at such time (other than sale and leaseback transactions
permitted as described above), together with the aggregate amount of all
outstanding debt incurred pursuant to the second paragraph under the caption "--
Limitations on Secured Debt" above, does not at such time exceed 15% of total
shareholders' equity of the Company as shown on its most recent consolidated
balance sheet and computed in accordance with generally accepted accounting
principles. (Section 1008)
CERTAIN DEFINITIONS. The term "Attributable Debt" means the total net
amount of rent (discounted at the rate of interest implicit in the terms of the
lease) required to be paid during the remaining term of any lease. (Section 101)
8
<PAGE>
The term "Funded Debt" means debt which by its terms matures at or is
extendible or renewable at the option of the obligor to a date more than 12
months after the date of the creation of such debt. (Section 101)
The term "Principal Property" means any manufacturing plant (consisting of
real estate, buildings and fixtures) located within the United States of America
(other than its territories or possessions) and owned by the Company or any
Subsidiary, the gross book value (without deduction of any depreciation
reserves) of which on the date as of which the determination is being made
exceeds 1% of total shareholders' equity of the Company (as shown on its most
recent consolidated balance sheet and computed in accordance with generally
accepted accounting principles), except any such plant (i) to the extent
financed by obligations issued by a State or local governmental unit pursuant to
Section 142(a)(5), 142(a)(6), 142(a)(8) or 144(a) of the Internal Revenue Code
of 1986, as amended, or any successor provision thereof, or (ii) which is not of
material importance to the business conducted by the Company and its
Subsidiaries, taken as a whole. (Section 101) The Company and its subsidiaries
currently own eleven manufacturing plants that qualify as "Principal Properties"
as defined in the Indenture, which plants have an aggregate gross book value of
approximately $145 million.
The term "Restricted Subsidiary" means any subsidiary of the Company which
owns or leases a Principal Property. (Section 101)
Other than as described above and except as may be otherwise specified in
the applicable Prospectus Supplement, the Indenture does not contain covenants
specifically designed to protect Holders in the event of a highly leveraged
transaction involving the Company.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default"
with respect to the Debt Securities of any series issued pursuant to such
Indenture, unless otherwise provided with respect to such series: (1) failure to
pay any interest on any Debt Security of that series when due and payable,
continued for 30 days; (2) failure to pay principal of or any premium on any
Debt Security of that series when due and payable; (3) failure to deposit any
sinking fund payment, when and as due, in respect of any Debt Security of that
series; (4) failure to perform any other covenant of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Debt Securities other than that series), continued for 60
days after written notice as provided in the Indenture; (5) certain events in
bankruptcy, insolvency or reorganization involving the Company; and (6) any
other Event of Default provided with respect to Debt Securities of that series.
(Section 501)
If an Event of Default with respect to any series of Debt Securities
Outstanding under the Indenture occurs and is continuing, then either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series by notice as provided in the
Indenture may declare the principal amount (or, if any of the Debt Securities of
that series are Original Issue Discount Debt Securities, such lesser portion of
the principal amount of such Debt Securities as may be specified in the terms
thereof) of all of the Debt Securities of that series to be due and payable
immediately. 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 for
payment of money has been obtained by the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration. (Section
502)
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601, 603) Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of any series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Debt Securities of that series.
(Section 512)
9
<PAGE>
The Company is required to furnish to each Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 704)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; PROVIDED, HOWEVER, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security, reduce the principal amount of, or premium or interest on, any Debt
Security, reduce the amount of principal of an Original Issue Discount Debt
Security due and payable upon acceleration of the Maturity thereof, change the
place of payment where or coin or currency in which the principal of, or any
premium or interest on, any Debt Security is payable, impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security, reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of the Holders of which is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults, or modify
any of the above provisions or the provisions of the next paragraph below.
(Section 902)
The Holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of the Holders of all
Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1010) The Holders of not less than a majority in aggregate principal
amount of the Outstanding Debt Securities of each series may, on behalf of the
Holders of all Debt Securities of that series, waive any past default under the
Indenture with respect to Debt Securities of that series, except a default (1)
in the payment of principal of, or any premium or interest on, any Debt Security
of such series, or (2) in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of such series affected. (Section 513)
The Indenture provides that, in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities, (1)
the principal amount of an Original Issue Discount Debt Security that will be
deemed to be Outstanding will be the amount of the principal thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof to such date, and (2) the principal amount of a Debt Security
denominated in a foreign currency or currency unit that will be deemed to be
Outstanding will be the United States dollar equivalent, determined as of the
date of original issuance of such Debt Security, of the principal amount of such
Debt Security (or, in the case of an Original Issue Discount Debt Security, the
United States dollar equivalent, determined as of the date of original issuance
of such Debt Security, of the amount determined as provided in (1) above).
(Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate or merge with or into, or
convey, transfer or lease its properties and assets substantially as an entirety
to, any Person which is a corporation, partnership or trust organized and
validly existing under the laws of any domestic jurisdiction, provided that (1)
any successor Person assumes by supplemental indenture the Company's obligations
on the Debt Securities and under the Indenture; (2) immediately after giving
effect to such transaction and treating any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result of such transaction as
having been incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing; and (3) the Company has delivered to the Trustee an Officers'
Certificate
10
<PAGE>
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and supplemental indenture comply with the
Indenture and that all conditions precedent therein provided for relating to
such transaction have been complied with. (Section 801)
DEFEASANCE PROVISIONS
DEFEASANCE AND DISCHARGE. The Indenture provides that, if principal of and
any premium and interest on the Debt Securities are denominated and payable in
United States dollars, the Company will be discharged from any and all
obligations in respect of the Debt Securities (except for certain obligations to
register the transfer or exchange of Debt Securities, to replace stolen, lost or
mutilated Debt Securities, to maintain paying agencies and to hold moneys for
payment in trust) upon the deposit with the Trustee, in trust, of money, U.S.
Government Obligations (as defined) or a combination thereof, which through the
payment of interest and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay any installment of principal of
(and premium, if any) and interest on and any mandatory sinking fund payments in
respect of the Debt Securities on the Stated Maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities. Such
discharge may only occur if there has been a change in applicable Federal law or
the Company has received from, or there has been published by, the United States
Internal Revenue Service a ruling to the effect that such a discharge will not
be deemed, or result in, a taxable event with respect to holders of the Debt
Securities; and such discharge will not be applicable to any Debt Securities
then listed on the New York Stock Exchange if the provision would cause said
Debt Securities to be de-listed as a result thereof. (Section 403) The term
"U.S. Government Obligations" is defined to mean direct obligations of the
United States of America, backed by its full faith and credit. (Section 101)
DEFEASANCE OF CERTAIN COVENANTS. The Company may omit to comply with
certain restrictive covenants described in Sections 1005 (Maintenance of
Properties), 1006 (Payment of Taxes and Other Claims), 1007 (Restriction on
Secured Debt) and 1008 (Restriction on Sale and Leaseback Transactions) of the
Indenture. To exercise such option, the Company must deposit with the Trustee
money, U.S. Government Obligations or a combination thereof, which through the
payment of interest and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay any installment of principal of
(and premium, if any) and interest on and any mandatory sinking fund payments in
respect of the Debt Securities on the Stated Maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities. The Company
will also be required to deliver to the Trustee an opinion of counsel to the
effect that the deposit and related covenant defeasance will not cause the
holders of the Debt Securities to recognize income, gain or loss for Federal
income tax purposes. (Section 1009)
DEFEASANCE AND EVENTS OF DEFAULT. In the event the Company exercises its
option to omit compliance with certain covenants of the Indenture and the Debt
Securities are declared due and payable because of the occurrence of any Event
of Default, the amount of money and U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Debt Securities at the
time of their Stated Maturity but may not be sufficient to pay amounts due on
the Debt Securities at the time of the acceleration resulting from such Event of
Default. However, the Company shall remain liable for such payments.
REGARDING THE TRUSTEE
The Trustee participates in an uncommitted line of credit and a term loan
agreement with the Company, provides other banking and advisory services for the
Company in the ordinary course of business and is a customer of the Company and
purchases products and services from the Company in the ordinary course of
business.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
11
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby in any of four
ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters and (iv) through dealers. The applicable Prospectus Supplement or
Prospectus Supplements will set forth the terms of the offering of the Debt
Securities, including the name or names of any agents, underwriters or dealers,
the purchase price of the Debt Securities and the proceeds to be received by the
Company from such sale, any underwriting discounts and other items constituting
underwriters' compensation and any discounts and commissions allowed or
reallowed or paid to dealers or agents. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers or agents
may be changed from time to time.
In connection with the sale of Debt Securities, underwriters or agents may
be deemed to have received compensation from the Company in the form of
underwriting discounts or commissions. Underwriters may sell Debt Securities to
or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters. Underwriters,
dealers and agents participating in the distribution of Debt 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 Debt Securities may be deemed
to be underwriting discounts and commissions, under the Securities Act of 1933,
as amended. Such underwriters, dealers and agents may be entitled under
agreements which may be entered into by the Company to indemnification by the
Company against and contribution toward certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
The Debt Securities may be distributed in one or more transactions from time
to time at a fixed price or prices, which may be changed, or from time to time
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
If so indicated in the applicable Prospectus Supplement or Prospectus
Supplements, the Company will authorize dealers or other persons acting as the
Company's agent to solicit offers by certain institutions to purchase Debt
Securities from the Company at the public offering price set forth in the
applicable Prospectus Supplement or Prospectus Supplements pursuant to delayed
delivery contracts ("Contracts") providing for payment and delivery on the date
or dates stated in the applicable Prospectus Supplement or Prospectus
Supplements. There may be limitations on the minimum amount which may be
purchased pursuant to a Contract or on the aggregate amount of Securities which
may be sold pursuant to Contracts. Any such limitations will be set forth in the
applicable Prospectus Supplement or Prospectus Supplements. Institutions with
whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Company. The obligations of any purchaser under
any Contract will not be subject to any conditions except (1) the purchase by an
institution of the Debt Securities covered by its Contract shall not at the time
of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject and (2) if Debt Securities are being
sold to underwriters, the Company shall have sold to such underwriters the total
principal amount of such Debt Securities less the principal amount thereof
covered by Contracts.
The Debt Securities will be a new issue of securities with no established
trading market. Any underwriters or agents to or through whom Debt Securities
are sold by the Company for public offering and sale may make a market in such
Debt Securities, but such underwriters and agents will not be obligated to do so
and may discontinue any market-making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Debt Securities.
Certain of the underwriters, dealers and/or agents and their associates may
be customers of, engage in transactions with and perform services for the
Company, including its subsidiaries, in the ordinary course of business.
Goldman, Sachs & Co. ("Goldman Sachs") has acted as financial advisor to the
Company from time to time and Goldman Sachs Money Markets, L.P. ("Goldman Sachs
Money
12
<PAGE>
Markets"), an affiliate of Goldman Sachs, is currently a dealer in connection
with the Company's $150 million commercial paper program. Goldman Sachs has
received, and Goldman Sachs Money Markets will receive, customary fees for
services in such capacities.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended December 31, 1994
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
VALIDITY OF DEBT SECURITIES
The validity of the Debt Securities will be passed upon for the Company by
John H. LeFevre, Esq., Senior Vice President, General Counsel and Secretary of
the Company, and Dorsey & Whitney P.L.L.P., Minneapolis, Minnesota, and, unless
otherwise indicated in the applicable Prospectus Supplement or Prospectus
Supplements, for any underwriters or agents by Sullivan & Cromwell, New York,
New York.
13
<PAGE>
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-------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE APPLICABLE PROSPECTUS SUPPLEMENT OR PROSPECTUS SUPPLEMENTS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS AND THE APPLICABLE PROSPECTUS SUPPLEMENT OR
PROSPECTUS SUPPLEMENTS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. THE
DELIVERY OF THIS PROSPECTUS OR THE APPLICABLE PROSPECTUS SUPPLEMENT OR
PROSPECTUS SUPPLEMENTS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
The Company.................................... 3
Use of Proceeds................................ 5
Ratios of Earnings to Fixed Charges............ 5
Description of Debt Securities................. 6
Plan of Distribution........................... 12
Experts........................................ 13
Validity of Debt Securities.................... 13
</TABLE>
$300,000,000
DELUXE CORPORATION
DEBT SECURITIES
------------------
PROSPECTUS
------------------
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
AUGUST , 1995
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee............................................ $ 103,449
Accountants' fees and expenses.................................. 15,000
Attorneys' fees and expenses.................................... 125,000
Printing and engraving expenses................................. 10,500
Trustee's fees and expenses..................................... 7,500
Blue Sky fees and expenses...................................... 7,500
Rating agencies' fees........................................... 100,000
Miscellaneous expenses.......................................... 10,000
----------
Total......................................................... 378,949*
----------
----------
<FN>
------------------------
* All fees and expenses, other than the SEC registration fee, are estimated.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Minnesota Statutes Section 302A.521 provides that a Minnesota business
corporation shall indemnify any director, officer or employee of the corporation
made or threatened to be made a party to a proceeding, by reason of the former
or present official capacity (as defined) of the person, against judgments,
penalties, fines, settlements and reasonable expenses (including attorneys' fees
and disbursements) incurred by the person in connection with the proceeding if
certain statutory standards are met. "Proceeding" means a threatened, pending or
completed civil, criminal, administrative, arbitration or investigative
proceeding, including one by or in the right of the corporation. Section
302A.521 contains detailed terms regarding such right of indemnification and
reference is made thereto for a complete statement of such indemnification
rights.
The Amended By-laws of the Company provide that the officers and directors
of the Company and certain others shall be indemnified to the extent permitted
by Minnesota law.
The Company maintains a standard policy of officers' and directors'
liability insurance.
In the Distribution Agreement, a form of which is filed as Exhibit 1.1
hereto, the Agents will agree to indemnify, under certain conditions, the
Company, its directors, its officers and persons who control the Company within
the meaning of the Securities Act of 1933, as amended (the "Act"), against
certain liabilities.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1.1 Proposed form of Distribution Agreement
4.1 Proposed form of Indenture between the Company and Norwest Bank Minnesota, National
Association, as Trustee
4.2 Proposed form of Debt Securities (included as part of Exhibit 4.1)
5.1 Opinion and consent of John H. LeFevre, Esq.
12.1 Statement re Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of John H. LeFevre, Esq. (included as part of Exhibit 5.1)
24.1 Power of Attorney
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of
1939, as amended, of Norwest Bank Minnesota, National Association
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) 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
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the 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 the time shall be deemed to be the initial bona fide
offering thereof.
(c) 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.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 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 an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE>
4. The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Shoreview, State of Minnesota, on August 23, 1995.
DELUXE CORPORATION
By /s/ JOHN A. BLANCHARD III
------------------------------------
John A. Blanchard III
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on August 23, 1995:
------------------------------ President, Chief Executive Officer and
John A. Blanchard III* Director (principal executive officer)
Senior Vice President and Chief
Financial Officer (principal financial
------------------------------ officer and principal accounting
Charles M. Osborne* officer)
------------------------------ Director
Barbara B. Grogan*
------------------------------ Chairman and Director
Harold V. Haverty*
------------------------------ Director
Allen F. Jacobson*
------------------------------ Director
Whitney MacMillan*
------------------------------ Director
Eugene R. Olson*
II-4
<PAGE>
------------------------------ Director
James J. Renier*
------------------------------ Director
Jerry K. Twogood*
*By /s/ JOHN A. BLANCHARD III
--------------------------------
John A. Blanchard III
PRO SE AND AS ATTORNEY-IN-FACT
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
----------- --------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Proposed form of Distribution Agreement
4.1 Proposed form of Indenture between the Company and Norwest Bank Minnesota, National Association, as
Trustee
4.2 Proposed form of Debt Securities (included as part of Exhibit 4.1)
5.1 Opinion and consent of John H. LeFevre, Esq.
12.1 Statement re Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of John H. LeFevre, Esq. (included as part of Exhibit 5.1)
24.1 Power of Attorney
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended,
of Norwest Bank Minnesota, National Association
</TABLE>
<PAGE>
Exhibit 1.1
DELUXE CORPORATION
US $300,000,000
MEDIUM-TERM NOTES, SERIES A
DISTRIBUTION AGREEMENT
________, 1995
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Morgan Stanley & Co. Incorporated,
1221 Avenue of the Americas,
New York, New York 10020.
Ladies and Gentlemen:
Deluxe Corporation, a Minnesota corporation (the "Company"), proposes to
issue and sell from time to time its Medium-Term Notes, Series A (the
"Securities"), in an aggregate amount up to $300,000,000 and agrees with each of
you (individually, an Agent, and collectively, the "Agents") as set forth in
this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each, a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of any of the Agents to
purchase Securities as principal.
The Company may accept offers to purchase Securities through an agent other
than an Agent, provided that (i) the Company and such agent shall have executed
an agreement with respect to such purchases having terms and conditions with
respect to such purchases that are substantially similar to the terms and
conditions that would apply to such purchases under this Agreement if such agent
were an Agent (which may be accomplished by incorporating by reference in such
agreement the terms and conditions of this Agreement), and (ii) the Company
shall notify
1
<PAGE>
the Agents prior to the execution of any such agreement and shall provide the
Agents with a copy of such agreement promptly following the execution thereof.
The Securities will be issued under an indenture, dated as of _________,
1995 (the "Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"). The Securities shall have the maturity
ranges, interest rates, if any, redemption provisions and other terms set forth
in the Prospectus referred to below as it may be amended or supplemented from
time to time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) A registration statement on Form S-3 (File No. 33-......) under
the Securities Act of 1933 (the "Act") in respect of the Securities has
been filed with the Securities and Exchange Commission (the "Commission");
such registration statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to such Agent,
excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus included therein,
have been declared effective by the Commission in such form; no other
document with respect to such registration statement or document
incorporated by reference therein has heretofore been filed or transmitted
for filing with the Commission (other than the prospectuses filed pursuant
to Rule 424(b) of the rules and regulations of the Commission under the
Act, each in the form heretofore delivered to the Agents); and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or to the
knowledge of the Company threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, are hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the registration statement became effective but excluding Form T-1, each as
amended at the time such part of the registration statement became
effective, is hereinafter collectively called the "Registration Statement";
the prospectus (including, if applicable, any prospectus supplement)
relating to the Securities, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to the
date of this Agreement, is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus, including any supplement to the Prospectus that sets forth
only the terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated therein by reference; any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement;
and any reference to the Prospectus as amended or supplemented shall be
deemed to refer to and include the Prospectus as amended or supplemented
(including by the applicable Pricing Supplement filed in accordance with
Section 4(a) hereof)
2
<PAGE>
in relation to Securities to be sold pursuant to this Agreement, in the
form filed or transmitted for filing with the Commission pursuant to
Rule 424(b) under the Act and in accordance with Section 4(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by any Agent expressly for use in the Prospectus as amended or supplemented
to relate to a particular issuance of Securities;
(d) Neither the Company nor any of its subsidiaries that is a
significant subsidiary as defined in Rule 1-02(v) of Regulation S-X under
the Act (each, a "Significant Subsidiary") has sustained since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any material adverse change in the capital stock or consolidated long-term
debt of the Company (exclusive of the issue of debt contemplated by this
Agreement) or any material adverse change, or any development which the
Company has reasonable cause to believe will involve a prospective material
adverse change, in or affecting the financial position, shareholders'
equity or results of operations of the Company and its subsidiaries, taken
as a whole, otherwise than as set forth or contemplated in the Prospectus;
3
<PAGE>
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Minnesota,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(g) The Securities have been duly authorized, and, when executed,
authenticated and issued in accordance with the provisions of the Indenture
and delivered and paid for by the purchasers thereof, will be entitled to
the benefits provided by the Indenture and will be valid and binding
obligations of the Company enforceable in accordance with their respective
terms except to the extent that enforcement thereof may be limited by (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity); the Indenture has been duly authorized and duly qualified
under the Trust Indenture Act and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture conforms and the Securities of
any particular issuance of Securities will conform in all material respects
to the descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument pursuant to which the Company has
indebtedness outstanding and which is material to the Company and its
subsidiaries taken as a whole (except for any such conflict, breach,
violation or default which has been consented to or waived), nor will such
action result in any violation of the provisions of the Articles of
Incorporation, as amended, or the Amended By-laws ("By-laws") of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties; and no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body is required for the solicitation of offers to purchase Securities,
the issue and sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any Terms Agreement
or the Indenture, except such as have been, or will have been prior to the
Commencement Date (as defined in Section 3 hereof), obtained under the Act
or the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the solicitation by such Agent of
offers to purchase Securities from the Company and with purchases of
Securities by such Agent as principal, as the case may be, in each case in
the manner contemplated hereby;
(i) Neither the Company nor any of its subsidiaries is in violation
of its Articles of Incorporation or By-laws or in default in the
performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is
a party or by which it or
4
<PAGE>
any of its properties may be bound, which violation or default would have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(j) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
Significant Subsidiaries is a party or to which any property of the Company
or any of its Significant Subsidiaries is subject, which, individually or
in the aggregate, would reasonably be expected to have a material adverse
effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, and, to the best of the Company's knowledge,
no such proceedings are threatened by governmental authorities or others;
(k) The Company is not, and after giving effect to each offering and
sale of the Securities will not be, an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(l) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which
shall have been issued and sold by the Company hereunder or under any Terms
Agreement and of any debt securities of the Company (other than such
Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement; and
(m) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each
of the Agents hereby severally and not jointly agrees, as agent of the
Company, to use its reasonable efforts to solicit and receive offers to
purchase the Securities from the Company upon the terms and conditions set
forth in the Prospectus as amended or supplemented from time to time. So
long as this Agreement shall remain in effect with respect to any Agent,
the Company shall not, without the consent of such Agent, solicit or accept
offers to purchase, or sell, any debt securities with a maturity at the
time of original issuance of 9 months to 30 years except pursuant to or as
contemplated by this Agreement, including, without limitation, the third
paragraph of this Agreement, any Terms Agreement, or except pursuant to an
offering of commercial paper pursuant to Section 3(a)(3) of the Act or a
private placement not constituting a public offering under the Act or
except in connection with a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, the Company reserves the right to
sell, and may solicit and accept offers to purchase, Securities directly on
its own behalf in transactions with persons other than broker-dealers, and,
in the case of any such sale not resulting from a solicitation made by any
Agent, no commission will be payable with respect to such sale. These
provisions shall not limit Section 4(f) hereof or any similar provision
included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each
case therefor shall be as set forth in
5
<PAGE>
the Administrative Procedure attached hereto as Annex II as it may be
amended from time to time by written agreement between the Agents and the
Company (the "Administrative Procedure"). The provisions of the
Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each Agent
and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them in the Administrative
Procedure. The Company will furnish to the Trustee a copy of the
Administrative Procedure as from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New York
City, after receipt of notice from the Company, the Agents will suspend
solicitation of offers to purchase Securities from the Company until such
time as the Company has advised the Agents that such solicitation may be
resumed. During such period, the Company shall not be required to comply
with the provisions of Sections 4(h), 4(i), 4(j) and 4(k). Upon advising
the Agents that such solicitation may be resumed, however, the Company
shall simultaneously provide the documents required to be delivered by
Sections 4(h), 4(i), 4(j) and 4(k), and the Agents shall have no obligation
to solicit offers to purchase the Securities until such documents have been
received by the Agents. In addition, any failure by the Company to comply
with its obligations hereunder, including without limitation its
obligations to deliver the documents required by Sections 4(h), 4(i), 4(j)
and 4(k), shall automatically terminate the Agents obligations hereunder,
including without limitation its obligations to solicit offers to purchase
the Securities hereunder as agent or to purchase Securities hereunder as
principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent (except a sale to an Agent pursuant to a
Terms Agreement), in an amount equal to the following applicable percentage
of the principal amount of such Security sold:
<TABLE>
<CAPTION>
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
<S> <C>
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
6
<PAGE>
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to 30 years .750%
</TABLE>
(b) Each sale of Securities to any Agent as principal shall be made
in accordance with the terms of this Agreement and (unless the Company and
such Agent shall otherwise agree) a Terms Agreement which will provide for
the sale of such Securities to, and the purchase thereof by, such Agent; a
Terms Agreement may also specify certain provisions relating to the
reoffering of such Securities by such Agent; the commitment of any Agent to
purchase Securities as principal, whether pursuant to any Terms Agreement
or otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth; each Terms Agreement
shall specify the principal amount of Securities to be purchased by any
Agent pursuant thereto, the price to be paid to the Company for such
Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the
Securities and the time and date and place of delivery of and payment for
such Securities; and such Terms Agreement shall also specify any
requirements for opinions of counsel, accountants' letters and officers'
certificates pursuant to Section 4 hereof. Each Agent proposes to offer
Securities purchased by it as principal for sale at prevailing market
prices or prices related thereto at the time of sale, which may be equal
to, greater than or less than the price at which such Securities are
purchased by such Agent from the Company.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue
and delivery of such Securities and payment therefor shall be as set forth
in the Administrative Procedure. For each such sale of Securities to an
Agent as principal that is not made pursuant to a Terms Agreement, the
Company agrees to pay such Agent a commission (or grant an equivalent
discount) as provided in Section 2(a) hereof and in accordance with the
schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement
or in accordance with the Administrative Procedure, is referred to herein
as a "Time of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell
7
<PAGE>
or deliver, such Security in, or to residents of, the country issuing such
currency, except as permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Sullivan & Cromwell, 125 Broad Street, New York, New York, at
11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agents and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus after the date of any Terms Agreement or other
agreement by an Agent to purchase Securities as principal and prior to the
related Time of Delivery which shall be reasonably disapproved by any Agent
party to such Terms Agreement or so purchasing as principal promptly after
reasonable notice thereof; (ii) to prepare, with respect to any Securities
to be sold through or to such Agent pursuant to this Agreement, a Pricing
Supplement with respect to such Securities in a form previously approved by
such Agent, to deliver to such Agent copies of such Pricing Supplement as
and when required by the Administrative Procedure and to file such Pricing
Supplement pursuant to Rule 424(b)(3) under the Act not later than the
close of business of the Commission on the fifth business day after the
date on which such Pricing Supplement is first used; (iii) to make no
amendment or supplement to the Registration Statement or Prospectus (other
than any Pricing Supplement, or any periodic report filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus) at any time
prior to having afforded each Agent a reasonable opportunity to review and
comment thereon; (iv) to file promptly with the Commission (with copies
sent to the Agents) all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities, and during such same period to advise such Agent,
promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become
effective or any supplement to the Prospectus or any amended Prospectus
(other than any Pricing Supplement that relates to Securities not purchased
through or by such Agent) has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amendment or
supplement of the Registration Statement or Prospectus or for additional
information relating thereto; and (v) in the event of the issuance of any
such stop order or of any such order preventing or suspending the use of
any such prospectus or suspending any such qualification, to use promptly
its reasonable efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as such Agent may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein for as long as may be necessary to complete the
8
<PAGE>
distribution or sale of the Securities; PROVIDED, HOWEVER, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is filed
with the Commission pursuant to Rule 424 under the Act, and with copies of
the documents incorporated by reference therein, all in such quantities as
such Agent may reasonably request from time to time; and, if the delivery
of a prospectus is required at any time in connection with the offering or
sale of the Securities (including Securities purchased from the Company by
such Agent as principal) and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such Agent shall
cease such solicitations as soon as practicable, but in any event not later
than one business day later); and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with
confirmation in writing) and to prepare and cause to be filed promptly with
the Commission an amendment or supplement to the Registration Statement or
the Prospectus as then amended or supplemented that will correct such
statement or omission or effect such compliance; PROVIDED, HOWEVER, that if
during such same period such Agent continues to own Securities purchased
from the Company by such Agent as principal or such Agent is otherwise
required to deliver a prospectus in respect of transactions in the
Securities, the Company shall promptly prepare and file with the Commission
such an amendment or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or other)
furnished to shareholders, and deliver to such Agent (i) as soon as they
are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company
as such Agent may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission);
9
<PAGE>
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and
continuing to and including the later of (i) the termination of the trading
restrictions for the Securities purchased thereunder, as notified to the
Company by such Agent and (ii) the related Time of Delivery, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company which both mature more than 9 months after such Time of Delivery
and are substantially similar to the Securities, without the prior written
consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the
Company of a Terms Agreement with such Agent, shall be deemed to be an
affirmation to such Agent that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and
correct as of the date of such acceptance or of such Terms Agreement, as
the case may be, as though made at and as of such date, and an undertaking
that such representations and warranties will be true and correct as of the
settlement date for the Securities relating to such acceptance or as of the
Time of Delivery relating to such sale, as the case may be, as though made
at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than by
a Pricing Supplement) and for this purpose not to include an amendment or
supplement deemed to occur hereunder upon the filing of any document by the
Company under the Exchange Act and each time the Company sells Securities
to such Agent as principal pursuant to a Terms Agreement and such Terms
Agreement specifies the delivery of an opinion or opinions by Sullivan &
Cromwell, counsel to the Agents, as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish to
such counsel such papers and information as they may reasonably request to
enable them to furnish to such Agent the opinion or opinions referred to in
Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities to
such Agent as principal pursuant to a Terms Agreement and such Terms
Agreement specifies the delivery of an opinion under this Section 4(i) as a
condition to the purchase of Securities pursuant to such Terms Agreement,
the Company shall furnish or cause to be furnished forthwith to such Agent
a written opinion of John H. LeFevre, Senior Vice President, General
Counsel and Secretary of the Company or other counsel for the Company
satisfactory to such Agent, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the case may
be, in form satisfactory to such Agent, to the effect that such Agent may
rely on the opinion of John H. LeFevre referred to in Section 6(c) hereof
which was last furnished to such Agent to the same extent as though it were
dated the date of such letter authorizing reliance (except that the
statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of such opinion, an opinion of the same tenor as the
opinion of such counsel referred to in Section 6(c) hereof but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date;
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(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the
Act or the Exchange Act is incorporated by reference into the Prospectus,
in either case to set forth financial information included in or derived
from the Company's consolidated financial statements or accounting records,
and each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of a letter under this Section 4(j) as a condition to the purchase
of Securities pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement forthwith to furnish such Agent a
letter, dated the date of such amendment, supplement, incorporation or Time
of Delivery relating to such sale, as the case may be, in form satisfactory
to such Agent, of the same tenor as the letter referred to in Section 6(d)
hereof but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date of such letter, with such
changes as may be necessary to reflect changes in the financial statements
and other information derived from the accounting records of the Company,
to the extent such financial statements and other information are available
as of a date not more than five business days prior to the date of such
letter; PROVIDED, HOWEVER, that, with respect to any financial information
or other matter, such letter may reconfirm as true and correct at such date
as though made at and as of such date, rather than repeat, statements with
respect to such financial information or other matter made in the letter
referred to in Section 6(d) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities to
such Agent as principal and the applicable Terms Agreement specifies the
delivery of a certificate under this Section 4(k) as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company shall
furnish or cause to be furnished forthwith to such Agent a certificate,
dated the date of such supplement, amendment, incorporation or Time of
Delivery relating to such sale, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such
Agent, to the effect that the statements contained in the certificates
referred to in Section 6(i) hereof which were last furnished to such Agent
are true and correct at such date as though made at and as of such date
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or,
in lieu of such certificate, certificates of the same tenor as the
certificates referred to in said Section 6(i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date; and
(l) To offer to any person who has agreed to purchase Securities from
the Company as the result of an offer to purchase solicited by such Agent
the right to refuse to purchase and pay for such Securities if, on the
related settlement date fixed pursuant to the Administrative Procedure, any
condition set forth in Section 6(a), 6(e), 6(f) or 6(g) hereof shall not
have been satisfied (it being understood that the judgment of such person
with respect to the impracticability or inadvisability of such purchase of
Securities shall be substituted, for purposes of this Section 4(l), for the
respective judgments of an Agent with respect to certain matters referred
to in such Sections 6(e) and 6(g), and that such Agent shall have no duty
or obligation whatsoever to exercise the judgment permitted under such
Sections 6(e) and 6(g) on behalf of any such person).
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5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the reasonable fees, disbursements and expenses of counsel for the
Agents in connection with the establishment of the program contemplated hereby,
any opinions to be rendered by such counsel hereunder and under any Terms
Agreement and the transactions contemplated hereunder and under any Terms
Agreement; (iii) the cost of printing, producing or reproducing this Agreement,
any Terms Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iv) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 4(b)
hereof, including the fees and disbursements of counsel for the Company in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (v) any fees charged by securities rating services for
rating the Securities; (vi) any filing fees incident to, and the reasonable fees
and disbursements of counsel for the Agents in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vii) the cost of preparing the Securities; (viii)
the fees and expenses of any Trustee and any agent of any Trustee and any
transfer or paying agent of the Company and the fees and disbursements of
counsel for any Trustee or such agent in connection with any Indenture and the
Securities; (ix) any advertising expenses connected with the solicitation of
offers to purchase and the sale of Securities so long as such advertising
expenses have been approved by the Company; and (x) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. Except as provided in Sections 7 and
8 hereof, each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with respect
to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; (ii) no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
(iii) all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such Agent;
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(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished
to such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to the incorporation of the Company, the validity of the
Indenture, the Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as such Agent may
reasonably request, and (ii) if and to the extent requested by such Agent,
with respect to each applicable date referred to in Section 4(h) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, an opinion or opinions, dated such applicable date, to the
effect that such Agent may rely on the opinion or opinions which were last
furnished to such Agent pursuant to this Section 6(b) to the same extent as
though it or they were dated the date of such letter authorizing reliance
(except that the statements in such last opinion or opinions shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in any case, in lieu of such an
opinion or opinions, an opinion or opinions of the same tenor as the
opinion or opinions referred to in clause (i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date; and in each case such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(c) Dorsey & Whitney, counsel for the Company, or other counsel for
the Company reasonably satisfactory to such Agent, shall have furnished to
such Agent their written opinion, dated the Commencement Date, in form and
substance satisfactory to such Agent, to the effect that:
(i) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company and paid
for, will constitute valid and binding obligations of the Company
entitled to the benefits provided by the Indenture; except to the
extent that enforcement thereof may be limited by (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity); and the Indenture conforms and the Securities will
conform to the descriptions thereof in the Prospectus as amended or
supplemented;
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding
instrument of the Company, enforceable in accordance with its terms,
except to the extent that enforcement thereof may be limited by (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (b) general principles
of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); and the Indenture has been duly
qualified under the Trust Indenture Act;
(iii) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any applicable Terms Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel pursuant to which the Company has
indebtedness outstanding and which is
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<PAGE>
material to the Company and its subsidiaries taken as a whole, nor
will such action result in any violation of the provisions of the
Articles of Incorporation, as amended, of the Company or the By-laws
of the Company or any law of the United States or the State of
Minnesota, any rule or regulation of any governmental authority or
regulatory body of the United States or the State of Minnesota, or any
judgment, order or decree known to such counsel and applicable to the
Company of any court, governmental authority or arbitrator;
(iv) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required to be obtained or made by the Company for the solicitation of
offers to purchase Securities, the issue and sale of the Securities or
the consummation by the Company of the other transactions contemplated
by this Agreement, any applicable Terms Agreement, or the Indenture,
except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the solicitation by the
Agents of offers to purchase Securities from the Company and with
purchases of Securities by an Agent as principal, as the case may be,
in each case in the manner contemplated hereby;
(v) The statements set forth in the Prospectus under the
captions ["DESCRIPTION OF DEBT SECURITIES"] and ["DESCRIPTION OF
NOTES"], insofar as they purport to constitute a summary of the terms
of the Securities, under the caption ["UNITED STATES TAXATION"], and
under the captions ["PLAN OF DISTRIBUTION" AND "SUPPLEMENTAL PLAN OF
DISTRIBUTION"], insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate in all
material respects;
John H. LeFevre, Senior Vice President, General Counsel and
Secretary of the Company, or other counsel for the Company reasonably
satisfactory to such Agent, shall have furnished to such Agent their written
opinions, dated the Commencement Date and each applicable date referred to in
Section 4(i) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, in form and substance satisfactory to such Agent,
to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented;
(ii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its Significant
Subsidiaries is a party or to which any property of the Company or any
of its Significant Subsidiaries is subject which would individually or
in the aggregate reasonably be expected to have a material adverse
effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and to the best of such counsel's
knowledge, no such proceedings are threatened by governmental
authorities or others;
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<PAGE>
(iii) This Agreement and any applicable Terms Agreement have
been duly authorized by all requisite corporate action, executed and
delivered by the Company;
(iv) The documents incorporated by reference in the Prospectus
(other than the financial statements, related schedules and other
financial data therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and although such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in any of such documents, nothing has come to
such counsel's attention that causes such counsel to believe that any
of such documents (other than the financial statements, related
schedules and other financial data therein, as to which such counsel
need make no statement), when they became effective or were so filed,
as the case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading; and
(v) The Registration Statement and the Prospectus as amended and
supplemented and any further amendments and supplements thereto made
by the Company prior to the date of such opinion (other than the
financial statements, related schedules and other financial data
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Act and
the Trust Indenture Act and the rules and regulations thereunder;
although such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to such
counsel's attention that causes such counsel to believe that, as of
its effective date, the Registration Statement or any further
amendment or supplement thereto made by the Company prior to the date
of such opinion (other than the financial statements, related
schedules and other financial data therein, as to which such counsel
need make no statement) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that, as
of the date of such opinion, the Prospectus as amended or supplemented
or any further amendment or supplement thereto made by the Company
prior to the date of such opinion (other than the financial
statements, related schedules and other financial data therein, as to
which such counsel need make no statement) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required to be
filed or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement
or the Prospectus as amended
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<PAGE>
or supplemented which are not filed or incorporated by reference or
described as required;
(d) Not later than 11:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section 4(j)
hereof that is on or prior to such Solicitation Time or Time of Delivery,
as the case may be, the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to such Agent a letter, dated the Commencement Date or such
applicable date, as the case may be, in form and substance satisfactory to
such Agent, to the effect set forth in Annex III hereto;
(e) (i) Neither the Company nor any of its Significant Subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended or supplemented prior to the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of Delivery
any loss or interference with its business taken as a whole from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery and (ii) since
the respective dates as of which information is given in the Prospectus as
amended or supplemented prior to the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of Delivery
there shall not have been any change in the capital stock or long-term debt
of the Company or any of its Significant Subsidiaries or any change, or any
development involving a prospective change, in or affecting the financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the date
of the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery, the effect of which, in any such case described
in Clause (i) or (ii), is in the judgment of such Agent so material and
adverse as to make it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities from the
Company or the purchase by such Agent of Securities from the Company as
principal, as the case may be, on the terms and in the manner contemplated
in the Prospectus as amended or supplemented prior to the date of the
Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery;
(f) (i) With respect to the obligation of any Agent, as agent of the
Company, at any time to solicit offers to purchase the Securities, on or
after the date hereof no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act, the effect of which is in the
judgment of such Agent so material and adverse as to make it impracticable
or inadvisable to proceed with the solicitation by such Agent of offers to
purchase Securities from the Company on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
(ii) With respect to any obligation to purchase Securities on the
related settlement date fixed pursuant to the Administrative Procedure,
pursuant to any Terms Agreement or otherwise, on or after the date of the
acceptance of an offer by the Company
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(y) no downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act, and (z) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
in New York declared by either Federal or New York State authorities; or
(iv) the outbreak or escalation of hostilities involving the United States
or the declaration by the United States of a national emergency or war, if
the effect of any such event specified in this Clause (iv) in the judgment
of such Agent makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Securities or the purchase of the
Securities from the Company as principal pursuant to the applicable Terms
Agreement or otherwise, as the case may be, on the terms and in the manner
contemplated in the Prospectus;
(h) With respect to any Security denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any
Security the principal or interest of which is indexed to such currency,
currencies or composite currency, but not with respect to any Security or
Securities not so denominated, there shall not have occurred a suspension
or material limitation in foreign exchange trading in such currency,
currencies or composite currency by a major international bank, a general
moratorium on commercial banking activities in the country or countries
issuing such currency, currencies or composite currency, the outbreak or
escalation of hostilities involving, the occurrence of any material adverse
change in the existing financial, political or economic conditions of, or
the declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the imposition
or proposal of exchange controls by any governmental authority in the
country or countries issuing such currency, currencies or composite
currency; and
(i) The Company shall have furnished or caused to be furnished to
such Agent certificates of officers of the Company dated the Commencement
Date and each applicable date referred to in Section 4(k) hereof that is on
or prior to such Solicitation Time or Time of Delivery, as the case may be,
in such form and executed by such officers of the Company as shall be
satisfactory to such Agent, as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement Date or such
applicable date, as the case may be, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to the
Commencement Date or such applicable date, as the case may be, as to the
matters set forth in subsections (a) and (e) of this Section 6, and as to
such other matters as such Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out
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<PAGE>
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such Agent for any
legal or other out-of-pocket expenses reasonably incurred by it in
connection with investigating or defending any such action or claim as such
expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus as
amended or supplemented or any other prospectus relating to the Securities,
or any such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by such Agent expressly
for use therein.
(b) Each Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement,
the Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus as
amended or supplemented or any other prospectus relating to the Securities,
or any such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by such Agent expressly
for use therein; and will reimburse the Company for any legal or other out-
of-pocket expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, promptly notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall so notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other out-of-
pocket expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs
of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or
threatened action or claim against an indemnified party in respect of which
indemnification or contribution may be sought hereunder (whether
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<PAGE>
or not the indemnified party is an actual or potential party to such action
or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to, or
an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party; PROVIDED that for purposes of this sentence a
written consent given by any indemnified party shall be deemed to have been
given on behalf of, and shall bind, itself and any controlling person of
such indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and each Agent on the other from the offering of the Securities to
which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party
failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and each Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities (before
deducting expenses) received by the Company bear to the total commissions
or discounts received by such Agent in respect thereof. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or by any Agent on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and whether
the indemnifying party was harmed by any failure of the indemnified party
to give a notice required hereunder. The Company and each Agent agree that
it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by PER CAPITA allocation (even if all Agents
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (d)
shall be deemed to include any legal or other out-of-pocket expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), an Agent shall not be required to
contribute any amount in excess of the amount by which the total public
offering price at which the Securities purchased by or through it were sold
exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of each of the Agents under
this subsection (d) to contribute are several in
19
<PAGE>
proportion to the respective purchases made by or through it to which such
losses, claim, damage or liability (or action in respect thereof) relates
and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Agent within the meaning of the Act; and the obligations of
each Agent under this Section 7 shall be in addition to any liability which
such Agent may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent and the Company set forth in or made pursuant
to this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9
hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advice hereunder
shall be in writing, or by telephone if promptly confirmed in writing, and if to
Goldman, Sachs & Co. shall be sufficient in all respects when delivered or sent
by facsimile transmission or registered mail to 85 Broad Street, New York, New
York 10004, Facsimile Transmission No. (212) 357-8680, Attention: Credit
Department, Credit Control--Medium-Term Notes and if to Morgan Stanley & Co.
Incorporated shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to 1221 Avenue
20
<PAGE>
of the Americas, New York, New York 10020, Facsimile Transmission No.
_________, Attention: ___________, and if to the Company shall be sufficient in
all respects when delivered or sent by facsimile transmission or registered mail
to 1080 West County Road F, Shoreview, Minnesota 55126, Facsimile Transmission
No. (612) [481-4292], Attention: Treasurer.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Sections 7, 8 and 9 hereof, the officers and directors of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any
Agent hereunder shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
21
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us 5 counterparts hereof, whereupon this letter and the acceptance by
each of you thereof shall constitute a binding agreement between the Company and
each of you in accordance with its terms.
Very truly yours,
Deluxe Corporation
By:
. . . . . . . . . . . . . . .
Name: Donna G. Stephens
Title: Vice President and Treasurer
Accepted in New York, New York,
as of the date hereof:
. . . . . . . . . . . . . . . . .
(Goldman, Sachs & Co.)
Morgan Stanley & Co. Incorporated
By:
. . . . . . . . . . . . . . .
Name:
Title:
22
<PAGE>
ANNEX I
DELUXE CORPORATION
MEDIUM-TERM NOTES, SERIES [A]
TERMS AGREEMENT
. . . . . . . . . . . . . . , 19..
[GOLDMAN, SACHS & CO.,
85 BROAD STREET,
NEW YORK, NEW YORK 10004.]
[MORGAN STANLEY & CO. INCORPORATED
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020.]
Ladies and Gentlemen:
Deluxe Corporation (the "Company") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated _______, 1995
(the "Distribution Agreement"), between the Company on the one hand and Goldman,
Sachs & Co. and Morgan Stanley & Co. Incorporated (the "Agents") on the other,
to issue and sell to [NAME(S) OF AGENT(S)] the securities specified in the
Schedule hereto (the "Purchased Securities"). Each of the provisions of the
Distribution Agreement not specifically related to the solicitation by the
Agents, as agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be part
of this Terms Agreement to the same extent as if such provisions had been set
forth in full herein. Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make such party subject
to the provisions therein relating to the solicitation of offers to purchase
Securities from the Company, solely by virtue of its execution of this Terms
Agreement. Each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Terms Agreement,
except that each representation and warranty in Section 1 of the Distribution
Agreement which makes reference to the Prospectus shall be deemed to be a
representation and warranty as of the date of the Distribution Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Terms Agreement in relation to the Prospectus as
amended and supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
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<PAGE>
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [NAME(S) OF AGENT(S)] and [NAME(S) OF AGENT(S)] agree[S] to
purchase from the Company the Purchased Securities, at the time and place, in
the principal amount and at the purchase price set forth in the Schedule hereto.
I-2
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us ...... counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
Deluxe Corporation
By:
. . . . . . . . . . . . . . . . . . .
Name:
Title:
Accepted:
[
. . . . . . . . . . . . . . .
(GOLDMAN, SACHS & CO.)]
[MORGAN STANLEY & CO. INCORPORATED
BY:
. . . . . . . . . . . . . .
NAME:
TITLE:]
I-3
<PAGE>
SCHEDULE TO ANNEX I
TITLE OF PURCHASED SECURITIES:
[ %] MEDIUM-TERM NOTES, SERIES [A]
AGGREGATE PRINCIPAL AMOUNT:
[$.................... OR UNITS OF OTHER SPECIFIED CURRENCY]
[PRICE TO PUBLIC:]
PURCHASE PRICE BY [NAME(S) OF AGENT(S)]:
% of the principal amount of the Purchased Securities[, PLUS ACCRUED
INTEREST FROM ............... TO ...............] [AND ACCRUED AMORTIZATION, IF
ANY, FROM ................. TO ................]
METHOD OF AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[BY CERTIFIED OR OFFICIAL BANK CHECK OR CHECKS, PAYABLE TO THE ORDER OF THE
COMPANY, IN [[NEW YORK] CLEARING HOUSE] [IMMEDIATELY AVAILABLE] FUNDS]
[BY WIRE TRANSFER TO A BANK ACCOUNT SPECIFIED BY THE COMPANY IN [NEXT DAY]
[IMMEDIATELY AVAILABLE] FUNDS]
INDENTURE:
Indenture, dated as of __________, 199_, between the Company and [NORWEST
BANK MINNESOTA, NATIONAL ASSOCIATION], as Trustee
TIME OF DELIVERY:
CLOSING LOCATION FOR DELIVERY OF SECURITIES:
MATURITY:
INTEREST RATE:
[ %]
INTEREST PAYMENT DATES:
[MONTHS AND DATES]
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<PAGE>
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) THE OPINION OR OPINIONS OF COUNSEL TO THE AGENTS REFERRED TO IN
SECTION 4(h).]
[(2) THE OPINION OF COUNSEL TO THE COMPANY REFERRED TO IN SECTION 4(i).]
[(3) THE ACCOUNTANTS' LETTER REFERRED TO IN SECTION 4(j).]
[(4) THE OFFICERS' CERTIFICATE REFERRED TO IN SECTION 4(k).]
OTHER PROVISIONS (INCLUDING SYNDICATE PROVISIONS, IF APPLICABLE):
I-5
<PAGE>
ANNEX II
DELUXE CORPORATION
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated _______, 1995 (the "Distribution Agreement"),
between Deluxe Corporation (the "Company") and Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated (together, the "Agents"), to which this
Administrative Procedure is attached as Annex II. Defined terms used herein and
not defined herein shall have the meanings given such terms in the Distribution
Agreement, the Prospectus as amended or supplemented or the Indenture. To the
extent any procedure set forth below conflicts with the provisions of the
Securities, the Indenture or the Distribution Agreement, the relevant provisions
of the Securities, the Indenture or the Distribution Agreement, as the case may
be, shall control.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations
II-1
<PAGE>
under a Letter of Representation from the Company and the Trustee to the
Depositary, dated the date hereof, and a Medium-Term Note Certificate Agreement
between the Trustee and the Depositary, dated as of .................., 19..
(the "Certificate Agreement"), and its obligations as a participant in the
Depositary, including the Depositary's Same-Day Funds Settlement System
("SDFS").
POSTING RATES BY THE COMPANY:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
ACCEPTANCE OF OFFERS BY THE COMPANY:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the case
may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
INTEREST:
Interest on Book-Entry Securities will accrue and will be paid at the times
and in the manner consistent with the descriptions thereof in the Company's
Prospectus Supplement dated __________, 1995 to the Prospectus dated
_____________, 1995 (the "Prospectus") and the applicable Pricing Supplement
thereto.
EXCHANGES:
The Trustee, at the Company's request, may deliver to DTC and the CUSIP
Service Bureau at any time a written notice of consolidation specifying (a) the
CUSIP numbers of two or more Global Securities outstanding on such date that
represent (i) Fixed-Rate Book-Entry Notes having the same terms (other than
Settlement Dates) or (ii) Floating Rate Book-Entry Securities having the same
terms (other than Settlement Dates); (b) a date, at least 30 days after such
written notice is delivered and at least 30 days before the next Interest
Payment Date for the related Book-Entry Notes, on which such Global Security
shall be exchanged for a single replacement Global Security; and (c) a new CUSIP
number to be assigned to such replacement Global Security. Upon receipt of such
a notice, DTC will send to its participants (including the Trustee) a written
reorganization
II-2
<PAGE>
notice to the effect that such exchange will occur on such date. Prior to the
specified exchange date,the Trustee will deliver to the CUSIP Service Bureau
written notice setting forth such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be valid. On the specified exchange
date, the Trustee will exchange such Global Securities and the old CUSIP numbers
for a single Global Security bearing the new CUSIP number. The CUSIP numbers of
the exchanged Global Securities will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be exchanged exceed $150,000,000 in
aggregate principal amount, one replacement Security will be authenticated and
issued to represent each $150,000,000 of principal amount of the exchanged
Global Securities and an additional Global Note will be authenticated and issued
to represent any remaining principal amount of such Global Securities.
MANNER OF PAYMENT:
The total amount of principal, premium if any, and interest due on a Global
Security on any Interest Payment Date or at maturity or upon redemption or
repayment shall be paid by the Company to the Trustee in funds available for use
by the Trustee on such date. The Company will make payment on such Global
Security by depositing funds sufficient to make such payment with the Trustee.
The Company will confirm such instructions in writing to the Trustee. For
payments of principal and any premium at maturity or upon redemption or
repayment prior to 10 a.m. (New York City time) on such date or as soon as
possible thereafter, the Trustee will pay the Depositary by separate wire
transfer (using Fedwire message entry instructions in a form previously
specified by the Depositary) to an account at the Federal Reserve Bank of New
York previously specified by the Depositary, in funds available for immediate
use by the Depositary, each payment of interest, premium, if any, or principal
(together with interest thereon) due on a Global Security on such date. For
payments of interest, the Trustee will pay the Depositary such payments in same-
day funds on each Interest Payment Date in accordance with existing arrangements
between the Trustee and the Depositary. Thereafter for all payments on such
date, the Depositary will pay, in accordance with SDFS operating procedures then
in effect, such amounts in funds available for immediate use to the respective
participants with payments in amounts proportionate to their respective holdings
in principal amount of beneficial interest in such Global Security as are
recorded in the book-entry system maintained by the Depositary. Neither the
Company nor the Trustee shall have any direct responsibility or liability for
the payment by the Depositary of any principal, premium or interest on Book-
Entry Securities to such participants.
COMMUNICATION OF SALE INFORMATION TO THE COMPANY BY AGENT AND SETTLEMENT
PROCEDURES:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and initial
interest payment date;
II-3
<PAGE>
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified Currency
(it being understood that currently the Depositary accepts deposits of
Global Securities denominated in U.S. dollars only);
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(12) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
II-4
<PAGE>
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Company will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously obtained by the Company representing such
Book-Entry Security and then advise the Trustee and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security, number of
days by which such date succeeds the record date for the Depositary's
purposes (or, in the case of Floating Rate Securities which reset
daily or weekly, the date five calendar days immediately preceding the
applicable Interest Payment Date and, in the case of all other
Book-Entry Securities, the Regular Record Date, as defined in the
Security) and, if calculable at that time, the amount of interest
payable on such Interest Payment Date.
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<PAGE>
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such
Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at [NAME OF BANK], New York, New York, or
such other account as the Company may have previously specified to the Trustee,
in funds available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
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PREPARATION OF PRICING SUPPLEMENT:
If the Company accepts an offer to purchase a Book-Entry Security, it will
prepare a Pricing Supplement reflecting the terms of such Book-Entry Security
and arrange to have delivered to the Selling Agent or Purchasing Agent, as the
case may be, at least ten copies of such Pricing Supplement, not later than 5:00
p.m., New York City time, on the Business Day following the Trade Date (as
defined below), or if the Company and the purchaser agree to settlement on the
Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such Pricing Supplement is first used.
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Book-Entry Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Book-Entry Security.
DATE OF SETTLEMENT:
The receipt by the Company of immediately available funds in payment for a
Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is the third Business Day after the Trade Date pursuant to the
"Settlement Procedure Timetable" set forth below, unless the Company and the
purchaser agree to settlement on another Business Day which shall be no earlier
than the next Business Day after the Trade Date.
SETTLEMENT PROCEDURE TIMETABLE:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the fifth Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE
---------
TIME
----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00 a.m.
on the Business Day prior to the Settlement Date, whichever
is earlier
B 12:00 noon on the second Business Day immediately preceding the
Settlement Date
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C 2:00 p.m. on the second Business Day immediately preceding the
Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
FAILURE TO SETTLE:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry
II-8
<PAGE>
Security to such Agent's participant account and crediting such Book-Entry
Security to the Trustee's participant account and shall notify the Company
and the Trustee thereof. Thereafter, the Trustee will (i) immediately notify
the Company of such order and the Company shall transfer to such Agent funds
available for immediate use in an amount equal to the price of such
Book-Entry Security which was credited to the account of the Company
maintained at the Trustee in accordance with Settlement Procedure I, and (ii)
deliver the withdrawal message and take the related actions described in the
preceding paragraph. If such failure shall have occurred for any reason
other than default by the applicable Agent to perform its obligations
hereunder or under the Distribution Agreement, the Company will reimburse
such Agent on an equitable basis for the loss of its use of funds during the
period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Security, the Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Securities to have
been represented by a Global Security, the Trustee will provide, in accordance
with Settlement Procedure "D", for the authentication and issuance of a Global
Security representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its records. The
Company will, from time to time, furnish the Trustee with a sufficient quantity
of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
POSTING RATES BY COMPANY:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
ACCEPTANCE OF OFFERS BY COMPANY:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent, as
the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
II-9
<PAGE>
COMMUNICATION OF SALE INFORMATION TO COMPANY BY AGENT:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and initial
interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption Commencement
Date;
(12) If a Floating Rate Certificated Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
II-10
<PAGE>
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
PREPARATION OF PRICING SUPPLEMENT BY COMPANY:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Certificated Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Certificated Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Certificated Security.
II-11
<PAGE>
DATE OF SETTLEMENT:
All offers of Certificated Securities solicited by a Selling Agent or made
by a Purchasing Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which is the third Business Day after the date of acceptance
of such offer, unless the Company and the purchaser agree to settlement (a) on
another Business Day after the acceptance of such offer or (b) with respect to
an offer accepted by the Company prior to 10:00 a.m., New York City time, on the
date of such acceptance.
INSTRUCTION FROM COMPANY TO TRUSTEE FOR PREPARATION OF CERTIFICATED SECURITIES:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 9:00 a.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
PREPARATION AND DELIVERY OF CERTIFICATED SECURITIES BY TRUSTEE AND RECEIPT OF
PAYMENT THEREFOR:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission; provided that the
Selling Agent reserves the right to withhold payment for which it has not
received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
II-12
<PAGE>
FAILURE OF PURCHASER TO PAY SELLING AGENT:
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
II-13
<PAGE>
ANNEX III
ACCOUNTANTS' LETTER
Pursuant to Sections 4(j) and 6(d), as the case may be, of the Distribution
Agreement, the Company's independent certified public accountants shall furnish
letters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the Agents and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated
III-1
<PAGE>
financial statements for five such fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially
III-2
<PAGE>
consistent with the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified by the
Agents, or any increases in any items specified by the Agents, in each case
as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as compared
with the comparable period of the preceding year and with any other period
of corresponding length specified by the Agents, except in each case for
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Agents which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Agents or in documents
incorporated by reference in the Prospectus specified by the Agents, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
III-3
<PAGE>
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(d) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as of the date of the
amendment, supplement, incorporation or the Time of Delivery relating to the
Terms Agreement requiring the delivery of such letter under Section 4(j)
thereof.
III-4
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DELUXE CORPORATION
TO
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
---------------------
INDENTURE
DATED AS OF AUGUST , 1995
---------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
DELUXE CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of _________, 1995
Trust Indenture
Act Section Indenture Section
---------------- -----------------
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . 609
(a)(2). . . . . . . . . . . . . . . . . . . . . . 609
(a)(3). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5). . . . . . . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311. . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . 701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313. . . . . . . . . . . . . . . . . . . . . . . . . 703
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . 102
(c)(2). . . . . . . . . . . . . . . . . . . . . . 102
(c)(3). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . 513
(a)(2). . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1). . . . . . . . . . . . . . . . . . . . . . 503
(a)(2). . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . 107
___________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Attributable Debt. . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request. . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 3
Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Funded Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security. . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date. . . . . . . . . . . . . . . . . . . . . . 4
Lien or Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . 5
Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Periodic Offering. . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
<PAGE>
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . 6
Principal Property . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Date. . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date. . . . . . . . . . . . . . . . . . . . . . . 7
Required Currency. . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer. . . . . . . . . . . . . . . . . . . . . . . 7
Restricted Subsidiary. . . . . . . . . . . . . . . . . . . . . . 7
Sale and Leaseback Transaction . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Register and Security Registrar . . . . . . . . . . . . 8
Special Record Date. . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity. . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . . . . 8
US Government Obligations. . . . . . . . . . . . . . . . . . . . 8
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . 8
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . 9
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . 9
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . . . . 10
SECTION 105. Notices, Etc, to Trustee and Company . . . . . . . . . . 11
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . . 12
SECTION 107. Compliance with Trust Indenture Act. . . . . . . . . . . 12
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . 12
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . 12
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . 13
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . . . 13
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . 13
SECTION 202. Form of Face of Security . . . . . . . . . . . . . . . . 14
SECTION 203. Form of Reverse of Security. . . . . . . . . . . . . . . 17
SECTION 204. Form of Trustee's Certificate of Authentication. . . . . 21
SECTION 205. Form of Legend for Global Securities . . . . . . . . . . 21
<PAGE>
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . 22
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . . . 24
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . 25
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . 27
SECTION 305. Registration, Registration of Transfer and Exchange. . . 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . 29
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . 30
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . . 31
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 310. Computation of Interest. . . . . . . . . . . . . . . . . 32
SECTION 311. Payment to be in Proper Currency . . . . . . . . . . . . 32
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . 33
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . 34
SECTION 403. Defeasance and Discharge of Indenture. . . . . . . . . . 34
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . 36
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . 38
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . 39
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . 39
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . . . . . 40
SECTION 506. Application of Money Collected . . . . . . . . . . . . . 41
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . 41
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest. . . . . . 42
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . 42
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . 42
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . 43
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . 43
<PAGE>
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . 43
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . 44
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . 44
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . 45
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . 45
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . 45
SECTION 604. Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . . . . . . . . 47
SECTION 605. May Hold Securities. . . . . . . . . . . . . . . . . . . 47
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . 47
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . 47
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . 48
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . 48
SECTION 610. Resignation and Removal; Appointment of Successor. . . . 48
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . 50
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . 51
SECTION 613. Preferential Collection of Claims Against Company. . . . 52
SECTION 614. Appointment of Authenticating Agent. . . . . . . . . . . 52
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders . . . . . . . . . . . . . 54
SECTION 702. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . . . . 54
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . 55
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . . 55
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc, Only on Certain Terms. . . 56
SECTION 802. Successor Substituted. . . . . . . . . . . . . . . . . . 56
<PAGE>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders . . . 57
SECTION 902. Supplemental Indentures With Consent of Holders. . . . . 58
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . 59
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . . . 60
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . . . 60
SECTION 906. Reference in Securities to Supplemental Indentures . . . 60
SECTION 907. Notice of Supplemental Indentures. . . . . . . . . . . . 60
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . . 60
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . . . 61
SECTION 1003. Money for Securities Payments to Be Held in Trust. . . . 61
SECTION 1004. Existence. . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1005. Maintenance of Properties. . . . . . . . . . . . . . . . 63
SECTION 1006. Payment of Taxes and Other Claims. . . . . . . . . . . . 63
SECTION 1007. Restriction on Secured Debt. . . . . . . . . . . . . . . 63
SECTION 1008. Restriction on Sale and Leaseback Transactions . . . . . 66
SECTION 1009. Defeasance of Certain Obligations. . . . . . . . . . . . 67
SECTION 1010. Waiver of Certain Covenants. . . . . . . . . . . . . . . 68
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . 69
SECTION 1102. Election to Redeem; Notice to Trustee. . . . . . . . . . 69
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. . . . 70
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . 70
SECTION 1105. Deposit of Redemption Price. . . . . . . . . . . . . . . 71
SECTION 1106. Securities Payable on Redemption Date. . . . . . . . . . 71
SECTION 1107 Securities Redeemed in Part. . . . . . . . . . . . . . . 71
<PAGE>
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . 72
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities. . 72
SECTION 1203. Redemption of Securities for Sinking Fund. . . . . . . . 73
<PAGE>
INDENTURE, dated as of ____________, 1995 between Deluxe Corporation, a
corporation duly organized and existing under the laws of the State of Minnesota
(herein called the "Company"), having its principal office at 1080 West County
Road F, Shoreview, Minnesota 55126-8201, and Norwest Bank Minnesota, National
Association, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) any gender used in this Indenture shall be deemed and construed
to include correlative words of the masculine, feminine or neuter gender;
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(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" in respect of any Sale and Leaseback Transaction means,
at the date of determination, the present value (discounted at the rate of
interest implicit in the terms of the lease) of the obligation of the lessee for
net rental payments during the remaining term of the lease (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended). "Net rental payments" under any lease for any period means the sum
of the rental and other payments required to be paid in such period by the
lessee thereunder, excluding any amounts required to be paid by such lessee
(whether or not designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges required to be paid by such lessee thereunder or any amounts required to
be paid by such lessee thereunder contingent upon the amount of sales,
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee appointed by that board.
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"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification. Where any provision of this Indenture refers to action to be
taken pursuant to a Board Resolution (including establishment of any series of
the Securities and the forms and terms thereof), such action may be taken by any
committee, officer or employee of the Company authorized to take such action by
a Board Resolution.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions generally in that Place of Payment are obligated by law or
executive order to close, unless otherwise specified in a form of Security.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its 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.
"Corporation" includes corporations, associations, companies, joint stock
companies and business trusts.
"Debt" has the meaning specified in Section 1007.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" 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
clearing agency registered under the Exchange Act, specified for that purpose as
contemplated by Section 301 or any successor clearing agency registered under
the Exchange Act as contemplated by Section 305, and if at any time there is
more than one such Person,
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"Depositary" as used with respect to the Securities of any series shall mean the
Depositary with respect to the Securities of such series.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Funded Debt" means Debt which by its terms matures at or is extendible or
renewable at the option of the obligor to a date more than 12 months after the
date of the creation of such Debt.
"Global Security" means a Security bearing the legend specified in Section
205 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument due to the appointment of one or more
separate Trustees for any one or more separate series of Securities pursuant to
Section 610(e), "Indenture" shall mean, with respect to such series of
Securities for which any such Person is Trustee, this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
for which such Person is Trustee established as contemplated by Section 301,
exclusive, however, of any provisions or terms which relate solely to other
series of Securities for which such Person is not Trustee, regardless of when
such terms or provisions were adopted, and exclusive of any provisions or terms
adopted by means of one or more indentures supplemental hereto executed and
delivered after such Person had become such Trustee but to which such Person, as
such Trustee, was not a party.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Lien" or "Liens" has the meaning specified in Section 1007.
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"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an 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 or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President, a Vice President or an Assistant Vice President of the
Company, and by the Treasurer or an Assistant Treasurer of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company and, in the case of counsel for the Company, may be either
inside or outside counsel, which opinion may be subject to standard
qualifications and exceptions.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable at maturity
or upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon
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<PAGE>
acceleration of the Maturity thereof pursuant to Section 502, (ii) the principal
amount of a Security denominated in one or more foreign currencies or currency
units that shall be deemed to be Outstanding shall be the U.S. dollar
equivalent, determined in the manner provided as contemplated by Section 301 as
of the date of original issuance of such Security, of the principal amount (or,
in the case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined as of the date of original issuance of such Security, of the amount
determined as provided in (i) above) of such Security as determined by the
Company pursuant to Section 301, and (iii) Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) and/or interest on any Securities on behalf
of the Company.
"Periodic Offering" means an offering of Securities of a series from time
to time the specific terms of which Securities, including without limitation the
rate or rates of interest (or formula for determining the rate or rates of
interest), if any, thereon, the Stated Maturity or Maturities thereof and the
redemption provisions, if any, with respect thereto, are to be determined by the
Company or its agents upon the issuance of such Securities.
"Person" means any individual, Corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and/or
interest on the Securities of that series are payable, where Securities of that
series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or
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<PAGE>
stolen Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Principal Property" means any manufacturing plant (consisting of real
estate buildings and fixtures) located within the United States of America
(other than its territories or possessions) and owned by the Company or any
Subsidiary, the gross book value (without deduction of any depreciation
reserves) of which on the date as of which the determination is being made
exceeds 1% of total shareholders' equity of the Company (as shown on the
Company's most recent consolidated balance sheet and computed in accordance with
generally accepted accounting principles), except any such plant (i) to the
extent financed by obligations issued by a State or local governmental unit
pursuant to Section 142(a)(5), 142(a)(6), 142(a)(8) or 144(a) of the Internal
Revenue Code of 1986, or any successor provision thereof, or (ii) which is not
of material importance to the business conducted by the Company and its
Subsidiaries, taken as a whole (as determined by any two of the following: the
Chairman or a Vice Chairman of the Board of the Company, its President, its
Chief Financial Officer, its Vice President of Finance, its Treasurer or its
Controller).
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Required Currency" has the meaning specified in Section 311.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned by it to administer its corporate trust matters.
"Restricted Subsidiary" means any Subsidiary which owns or leases a
Principal Property.
"Sale and Leaseback Transaction" has the meaning specified in Section 1008.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture; provided, however, that if at any time there is more than one
Person acting as Trustee under this Indenture, "Securities" with respect to the
Indenture as to which such Person is Trustee shall have the meaning stated in
the first recital of this Indenture and shall more particularly mean Securities
authenticated and delivered under this Indenture, exclusive, however, of
Securities of any series as to which such Person is not Trustee.
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"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any Corporation of which securities (excluding
securities entitled to vote for directors only by reason of the happening of a
contingency) entitled to elect at least a majority of the corporation's
directors shall at the time be owned, directly or indirectly, by the Company, or
one or more Subsidiaries, or by the Company and one or more Subsidiaries.
"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.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 905.
"U.S. Government Obligations" means direct obligations of the United States
of America, backed by its full faith and credit.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
"Voting Stock", when used with respect to a Corporation, means stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of
such Corporation (irrespective of whether at the time stock or securities of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).
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SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion whether such covenant or condition has been
complied with; and
(4) a statement whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Every such certificate or opinion provided under this Indenture shall be without
personal recourse to the individual executing the same and may include an
express statement to such effect.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of any officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument. All applications, requests, consents, certificates,
statements, opinions or other instruments given under this Indenture shall be
without personal recourse to any individual giving the same and may include an
express statement to such effect.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing,
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
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(c) The ownership of Securities shall be proved by the Security Register.
The Company may fix any day as the record date for the purpose of determining
the Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with a Responsible Officer of the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument (Attention: Treasurer) or at any other
address previously furnished in writing to the Trustee by the Company.
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SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notice shall be given by such other method as the Company shall reasonably
determine and the same shall constitute a sufficient notification for every
purpose hereunder.
SECTION 107. Compliance with Trust Indenture Act.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of this Indenture. If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company or the
Trustee shall bind its successors and assigns, whether so expressed or not.
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SECTION 110. Separability Clause.
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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Authenticating Agent, any
Paying Agent, any Securities Registrar, and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, without regard for principles
of conflicts of law thereof.
SECTION 113. Legal Holidays.
Except as may be otherwise specified with respect to any particular
Securities, in any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue on such unpaid interest or
principal (and premium, if any) for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution and set forth in an Officers' Certificate or established by
one or more
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<PAGE>
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. When the form of Securities
of any series is established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture.
The definitive Securities may be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS
THEREUNDER.]
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<PAGE>
DELUXE CORPORATION
--------------------------
No. _________________ [$]_____________________
Deluxe Corporation, a corporation duly organized and existing under the
laws of Minnesota (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _________________________________________,
or registered assigns, the principal sum of ______________________________
[Dollars] on ________________________________ [IF THE SECURITY IS TO BEAR
INTEREST PRIOR TO MATURITY, INSERT --, and to pay interest thereon from
________________ or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, [semiannually in arrears on
___________________ and __________________________ in each year] [annually in
arrears on _________________________], commencing ________________________, at
the rate of _________% per annum, until the principal hereof is paid or made
available for payment [IF APPLICABLE INSERT --, and (to the extent that the
payment of such interest shall be legally enforceable) at the rate of ______%
per annum on any overdue principal and premium and on any overdue installment of
interest]. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the ________________________________ [or _____________
___________________] (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture]. [IF THE SECURITY IS NOT TO BEAR
INTEREST PRIOR TO MATURITY, INSERT --. The principal of this Security shall not
bear interest except in the case of a default in payment of principal upon
acceleration, upon redemption or at Stated Maturity and in such case the overdue
principal of this Security shall bear interest at the rate of ______% per annum
(to the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such default in payment to the date payment
of such principal has been made or duly provided for. Interest on any overdue
principal shall be payable on demand. Any such interest on any overdue
principal that is not so paid on demand shall bear interest at the rate of
_________% per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided for,
and such interest shall also be payable on demand.]
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<PAGE>
Payment of the principal of (and premium, if any) and [If applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ______________________, in
such coin or currency [of the United States of America] as at the time of
payment is legal tender for payment of public and private debts [IF APPLICABLE,
INSERT --; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register].
[IF APPLICABLE, INSERT -- [The Securities of this series are/This Security
is] subject to redemption prior to the Stated Maturity as described on the
reverse hereof.]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
DELUXE CORPORATION
By
------------------------------
Attest:
-------------------------
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<PAGE>
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of [DATE], 1995 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be authenticated and delivered. This Security is one
of the series designated on the face hereof [, limited in aggregate principal
amount to [$] ________________________]. By the terms of the Indenture,
additional Securities [IF APPLICABLE, INSERT -- of this series and] of other
separate series, which may vary as to date, amount, Stated Maturity, interest
rate or method of calculating the interest rate and in other respects as therein
provided, may be issued in an unlimited principal amount.
[IF APPLICABLE, INSERT -- [The Securities of this series are/This Security
is] subject to redemption prior to the Stated Maturity hereof upon not less than
30 days' notice by mail to the Person[s] in whose name[s] [the Securities to be
redeemed are/this Security is] registered at the address specified in the
Security Register, [IF APPLICABLE, INSERT -- (1) on ____________ in any year
commencing with the year ______________ and ending with the year _____________
through operation of the sinking fund for this series at a Redemption Price
equal to 100% of the principal amount, and (2)] at any time [on or after
_____________], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
if redeemed [on or before ________________, ________%, and if redeemed] during
the 12--month period beginning _____________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to _______% of the principal amount,
[If APPLICABLE, INSERT -- together in the case of any such redemption [IF
APPLICABLE, INSERT -- (whether through operation of the sinking fund or
otherwise)] with accrued interest to the Redemption Date, provided, however,
that installments of interest whose Stated Maturity is on or prior to (but not
after) such Redemption Date will be payable to the [Holders of such
Securities/Holder of this Security] (or one or more Predecessor Securities) of
record at the close of business on the relevant Record Dates referred to on the
face hereof, all as provided in the Indenture]. [IF THERE IS NO SINKING FUND,
INSERT -- [The Securities of this series are/This Security is] not subject to
any sinking fund.]
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<PAGE>
[IF APPLICABLE, INSERT -- [The Securities of this series are/This Security
is] subject to redemption prior to the Stated Maturity hereof upon not less than
30 days' notice by mail to the Person[s] in whose name[s] [the Securities to be
redeemed are/this Security is] registered at the address specified in the
Security Register, (1) on ______________ in any year commencing with the year
_______ and ending with the year ______________ through operation of the sinking
fund for this series at the Redemption Prices (expressed as percentages of the
principal amount) set forth in the table below, and (2) at any time [on or after
______________________], as a whole or in part, at the election of the Company,
at the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below:
Redemption Price
for Redemption Redemption Price for
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ----------------- ----------------------
If redeemed during the 12--month period beginning _________________ of the years
indicated, and thereafter at a Redemption Price equal to _____% of the principal
amount [IF APPLICABLE, INSERT --, together in the case of any such redemption
(whether through operation of the sinking fund or otherwise) with accrued
interest to the Redemption Date, provided, however, that installments of
interest whose Stated Maturity is on or prior to (but not after) such Redemption
Date will be payable to the [Holders of such Securities/Holder of this Security]
(or one or more Predecessor Securities) of record at the close of business on
the relevant Record Dates referred to on the face hereof, all as provided in the
Indenture].]
[Notwithstanding the foregoing, the Company may not, prior to _____, redeem
any Securities of this series as contemplated by [Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than _____% per annum.]
[The sinking fund for this series provides for the redemption on
___________________ in each year beginning with the year _____ and ending with
the year _____ of [not less than] [$] _____________________ [("mandatory sinking
fund") and not more than [$] ____________] aggregate principal amount of
Securities of this series. [Securities of this series acquired or redeemed by
the Company otherwise than through [mandatory] sinking fund payments may be
credited against subsequent [mandatory] sinking fund payments otherwise required
to be made -- in the inverse order in which they become due.]]
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[In the event of redemption of this Security in part only, a new Security
or Securities of this series and of like tenor or an authorized denomination for
the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof, and, in the event of transfer or exchange, a new
Security or Securities of this series and of like tenor and for a like aggregate
principal amount will be issued to the Holder, in the case of exchange, or the
designated transferee or transferees, in the case of transfer.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, -- If an Event
of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may (subject to the
conditions set forth in the Indenture) be declared due and payable in the manner
and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, -- If an Event of
Default with respect to Securities of this series shall occur and be continuing,
a lesser amount than the principal amount due at the Stated Maturity of the
Securities of this series may (subject to the conditions set forth in the
Indenture) be declared due and payable in the manner and with the effect
provided in the Indenture. The amount due and payable on this Security in the
event that this Security is declared due and payable prior to the Stated
Maturity hereof shall be -- INSERT FORMULA FOR DETERMINING THE AMOUNT. Upon
payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and
interest, if any, on the Securities of this series shall terminate.]
[IF APPLICABLE, INSERT -- The Indenture contains provisions for
defeasance at any time of the Company's obligations in respect of (i) the entire
indebtedness of this Note or (ii) certain restrictive covenants with respect to
this Note, in each case upon compliance with certain conditions set forth
therein.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Securities at the time Outstanding of each series to be affected and, for
certain purposes, without the consent of the Holders of any Securities at the
time Outstanding. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any
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Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, -- In determining
whether the Holders of the requisite principal amount of the Outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or whether a quorum is present at a
meeting of Holders of Securities, the principal amount of any Original Issue
Discount Security that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon the acceleration of the Maturity thereof.]
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of (and premium, if any)
and interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new Securities of this
series, of like tenor and of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of [$1,000] and any amount in excess thereof which is
an integral multiple of [$1,000]. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered in the Security Register as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
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The Securities shall be governed by and construed in accordance with the
laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein and issued
pursuant to the within--mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By
-------------------------------
Authorized Officer
SECTION 205. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder shall, in
addition to the provisions contained in Sections 202 and 203, bear a legend in
substantially the following form or such other form as may be required by the
Depositary:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York) to the issuer or to its agent for registration of
transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein."
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established by or pursuant to a Board Resolution and, subject to Section 303,
set forth or determined in the manner provided in an Officers' Certificate or
established in one or more indentures supplemental hereto, prior to the initial
issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906, 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal or installments of
principal of the Securities of the series is or are payable and any rights
to extend such date or dates;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, or the formula pursuant to which such rate or rates
shall be determined, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable
and the Regular Record Date for the interest payable on any Interest
Payment Date;
(6) the place or places where the principal of (and premium, if any)
and interest on Securities of the series shall be payable, any Securities
of the series may be surrendered for registration of transfer or exchange
and notices and demands to or upon the Company with respect to the
Securities of the series and this Indenture may be served;
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(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000, the denominations in which
Securities of the series shall be issuable;
(10) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of
America, the manner of determining the U.S. dollar equivalent of the
principal amount thereof for purposes of the definition of "Outstanding" in
Section 101, and, if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company
or a Holder thereof, in one or more currencies or currency units other than
that or those in which the Securities are stated to be payable, the
currency, currencies or currency units in which payment of the principal of
and any premium and interest on Securities of such series as to which such
election is made shall be payable, and the periods within which and the
terms and conditions upon which such election is to be made;
(11) any other event or events of default applicable with respect to
Securities of the series in addition to or in lieu of those provided in
Section 501(1) through (7);
(12) any other restrictive covenants applicable with respect to the
Debt Securities of the series in addition to or in lieu of those provided
in Sections 1007 and 1008;
(13) if less than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(14) any index used to determine the amount of payment of principal of
and any premium and interest on the Securities of the series;
(15) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, if so, (a) the
Depositary
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with respect to such Global Security or Securities and (b) the
circumstances under which any such Global Security may be exchanged for
Securities registered in the name of, and any transfer of such Global
Security may be registered to, a Person other than such Depositary or its
nominee, if other than as set forth in Section 305;
(16) if principal of or any premium or interest on the Securities of a
series is denominated or payable in a currency or currencies other than the
currency of the United States of America, whether and under what terms and
conditions the Company may be discharged from obligations pursuant to
Sections 403 and 1107 with respect to Securities of such series; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series (other than Securities offered in a
Periodic Offering) shall be substantially identical except as to denomination
and except as may otherwise be provided by or pursuant to the Board Resolution
referred to above and, subject to Section 303, set forth, or determined in the
manner provided, in the Officers' Certificate referred to above or in any such
indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
With respect to Securities of a series offered in a Periodic Offering, such
Board Resolution and Officers' Certificate or supplemental indenture may provide
general terms or parameters for Securities of such series and provide either
that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with other procedures specified in a Company
Order as contemplated by the third paragraph of Section 303.
SECTION 302. Denominations.
Unless otherwise provided in the applicable Officers' Certificate or
supplemental indenture, the Securities of each series shall be issued in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000.
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SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its President or one of its Vice Presidents. The signature of any
of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, or, in the case of Securities
offered in a Periodic Offering, from time to time in accordance with such other
procedures (including, without limitation, the receipt by the Trustee of
electronic instructions from the Company or its duly authorized agents, promptly
confirmed in writing by the Company) acceptable to the Trustee as may be
specified from time to time by a Company Order for establishing the specific
terms of particular Securities being so offered, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or forms or terms of the Securities of the series have been established by
or pursuant to one or more Board Resolutions as permitted by Sections 201 and
301, in authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) that the form or forms of such Securities have been established
in conformity with the provisions of this Indenture;
(b) that the terms of such Securities have been established in
conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by the
Trustee, issued by the Company and paid for by the purchasers thereof in
the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting the enforcement of creditors' rights and to general equity
principles;
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(d) that authentication and delivery of such Securities and the
execution and delivery of the supplemental indenture, if any, by the
Trustee will not violate the terms of the Indenture;
(e) that the Company has the corporate power to issue such
Securities, and has duly taken all necessary corporate action with respect
to such issuance; and
(f) that the issuance of such Securities will not contravene the
articles of incorporation or bylaws of the Company or result in any
violation of any of the terms or provisions of any law or regulation or of
any indenture, mortgage or other agreement known to such Counsel by which
the Company is bound, which contravention or violation would reasonably be
expected to materially adversely affect the Company's performance of its
obligations with respect to the Securities;
provided, however, that, with respect to Securities of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of each form of
Securities of such series and that the opinions described in Clauses (b) and (c)
above may state, respectively, that
(b) if the terms of such Securities are to be established pursuant to
a Company Order or pursuant to such procedures as may be specified from
time to time by a Company Order, all as contemplated by a Board Resolution
or action taken pursuant thereto, such terms will have been duly authorized
by the Company and established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when executed by the Company, completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and issued and delivered by the Company and paid for, all in
accordance with any agreement of the Company relating to the offering,
issuance and sale of such Securities, will be duly issued under this
Indenture and will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting generally the enforcement of creditors' rights and to general
principles of equity.
With respect to Securities of a series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Company of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel, Company
Order and other documents delivered pursuant to Sections 201 and 301 and this
Section, as applicable, in connection with the first authentication of a form of
Securities of such series and it shall not be necessary for the Company to
deliver such Opinion of Counsel and other documents (except as may
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be required by the specified other procedures, if any, referred to above) at or
prior to the time of authentication of each Security of such series unless and
until the Trustee receives notice that such Opinion of Counsel or other
documents have been superseded or revoked, and may assume compliance with any
conditions specified in such Opinion of Counsel (other than any conditions to be
performed by the Trustee). If such form or forms or terms have been so
established, the Trustee shall not be required to authenticate such Securities
if the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any Series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
like tenor of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall
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execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series and of like
tenor and of any authorized denominations. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency of the Company in any Place of Payment for such series,
the Company shall execute and the Trustee shall authenticate and deliver (in the
name of the designated transferee or transferees) one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at the office or agency of the Company in any Place of Payment for
such series. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
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The Company may but shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any Global Security shall be exchangeable pursuant
to this Section 305 for Securities registered in the name of Persons other than
the Depositary for such Security or its nominee only if (i) such Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time such Depositary ceases to be a
clearing agency registered under the Exchange Act, (ii) the Company executes and
delivers to the Trustee a Company Order that such Global Security shall be so
exchangeable or (iii) there shall have occurred and be continuing an Event of
Default with respect to the Securities of such series. Upon the occurrence in
respect of any Global Security of any series of any one or more of the
conditions specified in Clauses (i), (ii) or (iii) of the preceding sentence or
such other conditions as may be specified as contemplated by Section 301 for
such series, such Global Security may be exchanged for Securities not bearing
the legend specified in Section 205 and registered in the names of such Persons
as may be specified by the Depositary (including Persons other than the
Depositary).
Notwithstanding any other provision of this Indenture (except the
provisions of the preceding paragraph), a Global Security may not be transferred
except as a whole by the Depositary for such Global Security to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered in the Security Register at the close of business on
the Regular Record Date for such Interest Payment Date.
Any interest on any Security of any series which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate
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amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in
this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at such Holder's address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered in the Security Register as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 307) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary (or its nominee) shall have any rights under this
Indenture with respect to
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such Global Security or any Security represented thereby, and such Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the owner of such Global Security or any Security represented thereby
for all purposes whatsoever. Notwithstanding the foregoing, with respect to any
Global Security, nothing herein shall prevent the Company, the Trustee, or any
agent of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by a Depositary or impair,
as between a Depositary and such holders of beneficial interest, the operation
of customary practices governing the exercise of the rights of the Depositary
(or its nominees) as Holder of any Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be destroyed unless otherwise directed by a Company Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
SECTION 311. Payment to be in Proper Currency.
In the case of any Securities denominated in any currency (the "Required
Currency") other than United States of America dollars, except as otherwise
provided therein, the obligation of the Company to make any payment of
principal, premium or interest thereon shall not be discharged or satisfied by
any tender by the Company, or recovery by the Trustee, in any currency other
than the Required Currency, except to the extent that such tender or recovery
shall result in the Trustee timely holding the full amount of the Required
Currency then due and payable. If any such tender or recovery is in a currency
other than the Required Currency, the Trustee may take such actions as it
considers appropriate to exchange such currency for the Required Currency. The
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costs and risks of any such exchange, including without limitation the risks of
delay and exchange rate fluctuation, shall be borne by the Company, the Company
shall remain fully liable for any shortfall or delinquency in the full amount of
Required Currency then due and payable, and in no circumstances shall the
Trustee be liable therefor except in the case of its negligence or willful
misconduct.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount, in the currency in which such
Securities are payable, sufficient to pay and discharge the entire
indebtedness on such Securities
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not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such
deposit (in the case of Securities which have become due and payable)
or to the respective Stated Maturity or Redemption Date, as the case
may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company, and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614, and, if money shall
have been deposited with the Trustee pursuant to Subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee but such money need not be segregated from other funds except to the
extent required by law.
SECTION 403. Defeasance and Discharge of Indenture.
If principal of and any premium and interest on Securities of any series
are denominated and payable in United States of America dollars, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
Outstanding Securities of such series on the 123rd day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such Outstanding Securities, shall no longer be in
effect (and the Trustee, at the expense of the Company, shall at Company
Request, execute proper instruments acknowledging the same), except as to:
(a) the rights of Holders of Securities to receive, from the trust
funds described in subparagraph (d) hereof, (i) payment of the principal of
(and
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premium, if any) or interest on the Outstanding Securities on the Stated
Maturity of such principal or installment of principal or interest and (ii)
the benefit of any mandatory sinking fund payments applicable to the
Securities on the day on which such payments are due and payable in
accordance with the terms of this Indenture and the Securities;
(b) the Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003; and
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder;
provided that, the following conditions shall have been satisfied:
(d) The Company has deposited or caused to be irrevocably deposited
with the Trustee (or another trustee satisfying the requirements of Section
609) as trust funds in the trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities, (i)
money in an amount, or (ii) U.S. Government Obligations which through the
payment of interest and principal in respect thereof in accordance with
their terms will provide not later than one day before the due date of any
payment referred to in clause (A) or (B) of this subparagraph (d) money in
an amount or (iii) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge (A) the principal of (and premium, if any) and each
installment of principal of (and premium, if any) and interest on the
Outstanding Securities on the Stated Maturity of such principal or
installment of principal and interest and (B) any mandatory sinking fund
payments applicable to the Securities on the day on which such payments are
due and payable in accordance with the terms of this Indenture and of the
Securities;
(e) such deposit shall not cause the Trustee with respect to the
Securities to have a conflicting interest as defined in Section 608 and for
purposes of the Trust Indenture Act with respect to the Securities;
(f) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(g) such provision would not cause any Outstanding Securities then
listed on the New York Stock Exchange or other securities exchange to be
de-listed as a result thereof;
(h) no Event of Default or event which with notice or lapse of time
would become an Event of Default with respect to the Securities shall have
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occurred and be continuing on the date of such deposit or during the period
ending on the 123rd day after such date;
(i) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel to the effect that there has been a change in
applicable Federal law such that, or the Company has received from, or
there has been published by, the Internal Revenue Service a ruling to the
effect that, Holders of the Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposits,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred;
and
(j) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the defeasance contemplated by this Section have been complied
with.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, and unless otherwise provided with respect to Securities of any series
pursuant to Section 301(11), means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section
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specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of a series of one or more Securities
other than that series), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed by any
party other than the Company a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of all or substantially all of its property, or
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order for relief specified in clause (A) or (B) or
any such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State bankruptcy or insolvency law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of all or
substantially all of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities of
that series as provided in Section 301(11).
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Outstanding Securities of any series
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if any of the Securities of
that series are Original Issue Discount Securities, such lesser portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified portion thereof)
shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Outstanding Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Security, the whole amount then due and payable on such Security
for principal (and premium, if any) and interest and, to the extent that payment
of such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any) and on any overdue interest at the rate or rates
prescribed therefor in such Security, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Security and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Security, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of 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 all or substantially all of the property of the Company or of such
other obligor, 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
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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,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) or such portion of the principal amount of any series of
Original Issue Discount Securities as may be specified in the terms of such
series 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 any other amounts due the Trustee
under Section 607) and of the Holders allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
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 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and for any other amounts due
the Trustee under Section 607, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
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SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 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;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
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it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Security on the Stated Maturity or 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 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate 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
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series may, on behalf of the Holders of all
the Securities of such series, waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected;
PROVIDED that, a majority in aggregate principal amount of Outstanding
Securities may rescind and annul a declaration of payment due as provided in
Section 502.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any past default hereunder.
If a record date is fixed, the Holders on such record date, or their duly
designated proxies,
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and only such Persons, shall be entitled to waive any default hereunder, whether
or not such Holders remain Holders after such record date; provided, that unless
such majority in principal amount shall have waived such default prior to the
date which is 90 days after such record date, any such waiver of such default
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
such Holder's 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; provided,
however, that the provisions of this Section 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 premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The provisions of TIA Section 315 shall apply to the Trustee.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series, as their names and addresses appear in the
Security Register, notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided however, that, except in
the case of a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
provided, further, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of TIA Section 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order or as
otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such fact or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture; and
(i) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
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SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
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(3) to indemnify the Trustee and its agents for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The obligations of the Company under this Section 607 to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be a senior claim to that of the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (and premium, if any) or interest
on particular Securities, and the Securities are hereby subordinated to such
senior claim.
SECTION 608. Disqualification; Conflicting Interests.
The provisions of TIA Section 310(b) shall apply to the Trustee.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act under TIA Section 310(a)(1) and shall have a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by Federal, State
or District of Columbia authority. If such Corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Company, nor any Person directly or indirectly controlling, controlled by or
under common control with the Company, shall act as Trustee hereunder.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
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(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with TIA Section 310(b) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
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delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of
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that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates. Whenever
there is a successor Trustee with respect to one or more (but less than all)
series of securities issued pursuant to this Indenture, the terms "Indenture"
and "Securities" shall have the meanings specified in the provisos to the
respective definitions of those terms in Section 101 which contemplate such
situation.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) and (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any Corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
Corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities; in case
any of the Securities shall not have been authenticated by the Trustee then in
office, any successor by merger, conversion or consolidation to such Trustee may
authenticate such Securities either in
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the name of such predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the certificate of
the Trustee shall have; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a). A Trustee which has
resigned or been removed is subject to TIA Section 311(a) to the extent
indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee, with
the concurrence of the Company, may appoint an Authenticating Agent or Agents
with respect to one or more series of Securities which shall be authorized to
act on behalf of the Trustee to authenticate Securities of such series, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a Corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal, State or District of Columbia
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a
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party, or any Corporation succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be an Authenticating
Agent, provided such Corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated herein and issued
pursuant to the within-mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By
-------------------------------
As Authenticating Agent
By
-------------------------------
Authorized Officer
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
If the Trustee is not acting as Security Registrar for the Securities of
any series, the Company will furnish or cause to be furnished to the Trustee.
(a) at intervals of no more than six months commencing after the
first issue of such series, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of a date
not more than 15 days prior to the time such information is furnished, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by TIA
Section 312(b).
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
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SECTION 703. Reports by Trustee.
Within 60 days after May 1 of each year commencing with the later of May 1,
1996 or the first May 1 after the first issuance of Securities pursuant to this
Indenture, the Trustee shall transmit by mail to all Holders of Securities as
provided in TIA Section 313(c) a brief report dated as of such May 1 if required
by TIA Section 313(a). A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15 (d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it shall file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission; and
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(4) furnish to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, a brief
certificate of the Company's principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this paragraph, such compliance shall
be determined without regard to any period of grace or requirement of
notice provided under this Indenture.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person unless: (1) the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a Corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of (and premium,
if any) and interest on all the Securities and the performance or observance of
every covenant of this Indenture on the part of the Company to be performed or
observed; (2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any Subsidiary as
a result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and (3) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger by the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which
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such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of one or
more specified series) or to surrender any right or power herein conferred
upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are being included solely for the
benefit of one or more specified series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided 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 supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any
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such Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided such action shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any such Security, or reduce
the principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment where, or the coin or currency in
which, any such Security or any premium or the interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption or repayment, on or after the Redemption Date or any repayment
date), or
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(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture, or
(3) modify any of the provisions of this Section 902, Section 513 or
Section 1010, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided however, that this Clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section 902 and Section 1010, or
the deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed for such purpose, the Holders on
such record date or their duly designated proxies, and only such Persons, shall
be entitled to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; provided, that unless such
consent shall have become effective by virtue of the requisite percentage having
been obtained prior to the date which is 90 days after such record date, any
such consent previously given shall automatically and without further action by
any Holder be canceled and of no further effect.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby to the extent provided therein.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in a form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security so
affected, pursuant to Section 106, setting forth in general terms the substance
of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities and this
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Indenture. In the absence of contrary provisions with respect to the Securities
of any series, interest on the Securities of any series may, at the option of
the Company, be paid by check mailed to the address of the Person entitled
thereto as it appears on the Security Register.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location and any change in the location of such office or agency. If at any time
the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the currency in which such series of Securities is payable
sufficient to pay the principal (and premium, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided or will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of (and premium, if
any) or interest on any Securities of that series, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, or
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(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
that series; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent, and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company on Company
Request.
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SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
corporate rights (charter and statutory) and corporate franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise 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
that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all Principal Properties used or useful in the
conduct of its business to be maintained and kept in good condition, repair and
working order and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance or selling or disposing of any of such Principal
Properties if such discontinuance, sale or disposition is, in the judgment of
the Company, desirable in the conduct of its business and not disadvantageous in
any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent and a lien upon its property: (1) all taxes,
assessments and governmental charges levied or imposed upon it or upon its
income, profits or property, and (2) all lawful claims for labor, materials and
supplies upon its property; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith.
SECTION 1007. Restriction on Secured Debt.
(a) The Company will not itself, and will not permit any Restricted
Subsidiary to, incur, issue, assume or guarantee any notes, bonds, debentures or
other similar evidences of indebtedness for money borrowed (notes, bonds,
debentures or other similar evidences of indebtedness for money borrowed being
hereinafter in this Article called "Debt"), secured by pledge of, or mortgage or
other lien on, any Principal Property, now owned or hereafter owned by the
Company or any Restricted Subsidiary, or any shares of stock or Debt of any
Restricted Subsidiary held by or owed to the
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Company (any such pledges, mortgages and other liens being hereinafter in this
Article called "Lien" or "Liens"), without effectively providing that the
Securities of each series then Outstanding (together with, if the Company shall
so determine, any other Debt of the Company or such Restricted Subsidiary then
existing or thereafter created which is not subordinate to the Securities of
each series then Outstanding) shall be secured equally and ratably with (or
prior to) such secured Debt, so long as such secured Debt shall be so secured;
PROVIDED, HOWEVER, that this Section shall not apply to, and there shall be
excluded from secured Debt in any computation under this Section, Debt secured
by:
(1) Liens existing on the date of this Indenture;
(2) Liens on any Principal Property acquired, constructed or improved
by the Company or any Restricted Subsidiary after the date of this
Indenture which are created or assumed contemporaneously with such
acquisition, construction or improvement, or within 120 days before or
after the completion thereof, to secure or provide for the payment of all
or any part of the cost of such acquisition, construction or improvement
(including related expenditures capitalized for Federal income tax purposes
in connection therewith) incurred after the date of this Indenture;
(3) Liens of or upon any property, shares of capital stock or Debt
existing at the time of acquisition thereof, whether by merger,
consolidation, purchase, lease or otherwise (including Liens of or upon
property, shares of capital stock or indebtedness of a corporation existing
at the time such corporation becomes a Restricted Subsidiary);
(4) Liens in favor of the Company or any Restricted Subsidiary;
(5) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof or
political entity affiliated therewith, or in favor of any other country, or
any political subdivision thereof, to secure partial, progress, advance or
other payments, or other obligations, pursuant to any contract or statute
or to secure any Debt incurred for the purpose of financing all or any part
of the cost of acquiring, constructing or improving the property subject to
such Liens (including Liens incurred in connection with pollution control,
industrial revenue or similar financings);
(6) Liens imposed by law, such as mechanics', workmen's, repairmen's,
materialmen's, carriers', warehousemen's, vendors' or other similar liens
arising in the ordinary course of business, or governmental (federal, state
or municipal) liens arising out of contracts for the sale of products or
services by the Company or any Restricted Subsidiary, or deposits or
pledges to obtain the release of any of the foregoing;
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(7) pledges or deposits under workmen's compensation laws or similar
legislation and Liens of judgments thereunder which are not currently
dischargeable, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of money) or leases to which the
Company or any Restricted Subsidiary is a party, or deposits to secure
public or statutory obligations of the Company or any Restricted
Subsidiary, or deposits in connection with obtaining or maintaining self-
insurance or to obtain the benefits of any law, regulation or arrangement
pertaining to unemployment insurance, old age pensions, social security or
similar matters, or deposits of cash or obligations of the United States of
America to secure surety, appeal or customs bonds to which the Company or
any Restricted Subsidiary is a party, or deposits in litigation or other
proceedings such as, but not limited to, interpleader proceedings;
(8) Liens created by or resulting from any litigation or other
proceeding which is being contested in good faith by appropriate
proceedings, including Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or
such Restricted Subsidiary is in good faith prosecuting an appeal or
proceedings for review; or Liens incurred by the Company or any Restricted
Subsidiary for the purpose of obtaining a stay or discharge in the course
of any litigation or other proceeding to which the Company or such
Restricted Subsidiary is a party;
(9) Liens for taxes or assessments or governmental charges or levies
not yet due or delinquent, or which can thereafter be paid without penalty,
or which are being contested in good faith by appropriate proceedings;
(10) Liens consisting of easements, rights-of-way, zoning
restrictions, restrictions on the use of real property, and defects and
irregularities in the title thereto, landlords' liens and other similar
liens and encumbrances which, other than liens resulting from action of any
governmental authority, do not interfere materially with the use of the
property covered thereby in the ordinary course of the business of the
Company or such Restricted Subsidiary and do not, in the opinion of the
Company, materially detract from the value of such properties; or
(11) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any Lien referred to
in the foregoing clauses (1) to (10), inclusive; provided, that (i) such
extension, renewal or replacement Lien shall be limited to all or a part of
the same property, shares of stock or Debt that secured the Lien extended,
renewed or replaced (plus improvements on such property) and (ii) the Debt
secured by such Lien at such time is not increased.
(b) Notwithstanding the restrictions contained in subdivision (a) of this
Section, the Company and its Restricted Subsidiaries, or any of them, may incur,
issue, assume or
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guarantee Debt secured by Liens without equally and ratably securing the
Securities of each series then Outstanding, provided, that at the time of such
incurrence, issuance, assumption or guarantee, after giving effect thereto and
to the retirement of any Debt which is concurrently being retired, the aggregate
amount of all outstanding Debt secured by Liens which could not have been
incurred, issued, assumed or guaranteed by the Company or a Restricted
Subsidiary without equally and ratably securing the Securities of each series
then Outstanding except for the provisions of this subdivision (b), together
with the aggregate amount of all Attributable Debt incurred pursuant to Section
1008(b), does not at such time exceed 15% of total shareholders' equity of the
Company as shown on its most recent consolidated balance sheet and computed in
accordance with generally accepted accounting principles.
SECTION 1008. Restriction on Sale and Leaseback Transactions.
(a) The Company will not itself, and it will not permit any Restricted
Subsidiary to, enter into any arrangement with any bank, insurance company or
other lender or investor (not including the Company or any Subsidiary) or to
which any such lender or investor is a party, providing for the leasing by the
Company or a Restricted Subsidiary for a period, including renewals, in excess
of three years of any Principal Property which has been or is to be sold or
transferred by the Company or any Restricted Subsidiary to such lender or
investor or to any person to whom funds have been or are to be advanced by such
lender or investor on the security of such Principal Property (herein referred
to as a "Sale and Leaseback Transaction") unless either:
(1) The Company or such Restricted Subsidiary would, at the time of
entering into such arrangement, be entitled, without equally and ratably
securing the Securities of each series then Outstanding, to incur Debt
secured by a Lien on such property, pursuant to paragraphs (1) to (11),
inclusive, of Section 1007; or
(2) the Company within 120 days after the sale or transfer shall have
been made by the Company or by a Restricted Subsidiary, applies an amount
equal to the greater of (i) the net proceeds of the sale of the Principal
Property sold and leased back pursuant to such arrangement or (ii) the fair
market value of the Principal Property so sold and leased back at the time
of entering into such arrangement (as determined by any two of the
following: the Chairman or a Vice Chairman of the Board of the Company, its
President, its Chief Financial Officer, its Vice President of Finance, its
Treasurer or its Controller) to the retirement of Funded Debt of the
Company; provided, that the amount to be applied to the retirement of
Funded Debt of the Company shall be reduced by (A) the principal amount of
any Securities delivered within 120 days after such sale to the Trustee for
retirement and cancellation, and (B) the principal amount of Funded Debt,
other than Securities, voluntarily retired by the Company within 120 days
after such sale. Notwithstanding the foregoing, no retirement referred to
in this clause
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(a)(2) may be effected by payment at maturity or pursuant to any mandatory
sinking fund payment or mandatory prepayment provision.
(b) Notwithstanding the restrictions contained in subdivision (a) of this
Section, the Company and its Restricted Subsidiaries, or any of them, may enter
into a Sale and Leaseback Transaction, provided, that at the time of such
transaction, after giving effect thereto, the aggregate amount of all
Attributable Debt in respect of Sale and Leaseback Transactions existing at such
time which could not have been entered into except for the provisions of this
subdivision (b), together with the aggregate amount of all outstanding Debt
incurred pursuant to Section 1007(b), does not at such time exceed 15% of total
shareholders' equity of the Company as shown on its most recent consolidated
balance sheet and computed in accordance with generally accepted accounting
principles.
(c) A Sale and Leaseback Transaction shall not be deemed to result in the
creation of a Lien.
SECTION 1009. Defeasance of Certain Obligations.
The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 301.
The Company may omit to comply with any term, provision or condition set forth
in Sections 1005, 1006, 1007 and 1008, and any such omission with respect to
Sections 1005, 1006, 1007 and 1008 shall not be an Event of Default, in each
case with respect to the Securities of that series, provided that the following
conditions have been satisfied:
(1) with reference to this Section 1009, the Company has deposited or
caused to be irrevocably deposited with the Trustee (or another trustee
satisfying the requirements of Section 609) as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of the Securities of that series, (i) money in an amount, or
(ii) U.S. Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will provide
not later than one day before the due date of any payment referred to in
clause (A) or (B) of this subparagraph (1) money in an amount, or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge (A) the principal of
(and premium, if any) and each installment of principal of (and premium, if
any) and interest on the Outstanding Securities on the Stated Maturity of
such principal or installments of principal and interest and (B) any
mandatory sinking fund payments or analogous payments applicable to the
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities;
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(2) such deposit shall not cause the Trustee with respect to the
Securities of that series to have a conflicting interest as defined in
Section 608 and for purposes of the Trust Indenture Act with respect to the
Securities of any series;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any material agreement or
instrument to which the Company is a party or by which it is bound;
(4) such deposit will not cause any Outstanding Securities then
listed on the New York Stock Exchange or other securities exchange to be
de-listed as a result thereof;
(5) no Event of Default under Sections 501(6) or (7) or event which
with notice or lapse of time would become an Event of Default under
Sections 501(6) or (7) with respect to the Securities of that series shall
have occurred and be continuing on the date of such deposit;
(6) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that Holders of the Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred; and
(7) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the defeasance contemplated in this Section
have been complied with.
SECTION 1010. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1008, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
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The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any such term, provision or
condition. If a record date is fixed for such purpose, the Holders on such
record date or their duly designated proxies, and only such Persons, shall be
entitled to waive any such term, provision or condition hereunder, whether or
not such Holders remain Holders after such record date; provided that unless the
Holders of not less than a majority in principal amount of the Outstanding
Securities of such series shall have waived such term, provision or condition
prior to the date which is 90 days after such record date, any such waiver
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
an Officers' Certificate. The Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of
(1) such Redemption Date,
(2) if the Securities of such series have different terms and less
than all of the Securities of such series are to be redeemed, the terms of
the Securities to be redeemed, and
(3) if less than all the Securities of such series with identical
terms are to be redeemed, the principal amount of such Securities to be
redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
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SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of like tenor of any series are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of like tenor of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of like tenor of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at each such Holder's address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of like tenor of any
series are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
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(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in immediately available funds sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Dates according to their terms
and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed in part shall be surrendered at a
Place of Payment for such series (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new
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Security or Securities of the same series and of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered; provided, however, that if a Global Security is so surrendered,
such new Security so issued shall be a new Global Security in a denomination
equal to the unredeemed portion of the principal of the Global Security so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". 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 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of like tenor of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities of like tenor of a series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of like tenor of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been previously
so credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Securities of like tenor of a series, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for such Securities pursuant to the terms of such Securities, the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting
Securities of like tenor of that series pursuant to Section 1202 and, at the
time of delivery of such Officers' Certificate, will also deliver to the Trustee
any Securities to be so delivered. If no such notice shall be delivered by the
Company, such sinking fund payment shall be satisfied by payment of cash. Not
less than 45 days 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 1103 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 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and attested, and in the case of the Trustee its corporate seal to
be hereunto affixed, all as of the day and year first above written.
DELUXE CORPORATION
By
-------------------------------
Charles M. Osborne
Senior Vice President and
Chief Financial Officer
Attest:
----------------------------
John H. LeFevre
Secretary
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By
-------------------------------
[Name]
[Title]
Attest:
----------------------------
[Name]
[Title]
[SEAL]
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STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the _______ day of ________, 1995 before me personally came Charles M.
Osborne to me known, who, being by me duly sworn, did depose and say that he is
Senior Vice President and Chief Financial Officer of Deluxe Corporation, one of
the Corporations described in and which executed the foregoing instrument; and
that he signed his name thereto by authority of the Board of Directors of said
Corporation.
___________________________________________
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On the _______ day of ________, 1995 before me personally came
_________________ to me known, who, being by me duly sworn, did depose and say
that he is __________________ of Norwest Bank Minnesota, National Association,
one of the Corporations described in and which executed the foregoing
instrument; that he knows the seal of said Corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said Corporation, and that he signed his name thereto
by like authority.
[SEAL]
-------------------------------------------
Notary Public
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EXHIBIT 5.1
Deluxe Corporation
1080 W. County Road F
Shoreview, Minnesota 55126-8201
Re: Registration Statement on Form S-3
of Deluxe Corporation (the "Company")
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of the Company and
have acted as counsel to the Company in connection with a Registration
Statement on Form S-3 (the "Registration Statement") relating to the proposed
sale from time to time by the Company of $300,000,000 aggregate principal
amount of the Company's Debt Securities (the "Debt Securities") pursuant to
an Indenture (the "Indenture") to be entered into by and between the Company
and Norwest Bank Minnesota, National Association, as Trustee (the "Trustee").
I have examined such documents, including resolutions of the Board of Directors
of the Company adopted on November 11, 1994, as amended on August 11, 1995 (the
"Financing Resolution"), and have reviewed such questions of law as I have
considered necessary and appropriate for the purposes of my opinion set forth
below. In rendering such opinion, I have assumed the authenticity of all
documents submitted to me as originals, the genuineness of all signatures and
the conformity to authentic originals of all documents submitted to me as
copies. I have also assumed the legal capacity for all purposes relevant hereto
of all natural persons and, with respect to all parties to agreements or
instruments relevant hereto other than the Company, that such parties had the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform such agreements or instruments, that such agreements or instruments have
been duly authorized by all requisite action (corporate or otherwise), executed
and delivered by such parties and that such agreements or instruments are the
valid, binding and enforceable obligations of such parties. As to questions of
fact material to my opinion, I have relied upon certificates of officers of the
Company and of public officials. Capitalized terms used and not defined herein
shall have the meanings assigned to them in the proposed form of Indenture
included as Exhibit 4.1 to the Registration Statement.
Based on the foregoing, I am of the opinion that, when the specific terms of a
series of Debt Securities have been specified in a Supplemental Indenture or an
Officers' Certificate which has been executed and delivered to the Trustee by an
officer of the Company authorized to do so in the Financing Resolution, such
series of Debt Securities
<PAGE>
Deluxe Corporation
Page 2
will have been duly authorized by all requisite corporate action and, when
executed and authenticated as specified in the Indenture and delivered against
payment therefor in the manner described in the Registration Statement, will
constitute valid and binding obligations of the Company, enforceable in
accordance with the terms of such series.
The opinion set forth above is subject to the following qualifications and
exceptions:
(a) The opinion is subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar law of general
application affecting creditors' rights.
(b) The opinion is subject to the effect of general principles of equity,
including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether considered in
a proceeding in equity or at law).
(c) In rendering the opinion, I have assumed that, at the time of the
authentication and delivery of a series of Securities, the Financing
Resolution referred to above will not have been modified or rescinded,
there will not have occurred any change in the law affecting the
authorization, execution, delivery, validity or enforceability of the
Securities, the Registration Statement will have been declared effective by
the Commission and will continue to be effective, none of the particular
terms of a series of Securities will violate any applicable law and neither
the issuance and the sale thereof nor the compliance by the Company with
the terms thereof will result in a violation of any agreement or instrument
then binding upon the Company or any order of any court or governmental
body having jurisdiction over the Company.
(d) As of the date of this opinion, a judgment for money in an action
based on a Debt Security denominated in a foreign currency or currency unit
in a federal or State court in the United States ordinarily would be
enforced in the United States only in United States dollars. The date used
to determine the rate of conversion into United States dollars of the
foreign currency or currency unit in which a particular Debt Security is
denominated will depend upon various factors, including which court renders
the judgment.
(e) Minnesota Statutes Section 290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does
not have a cause of
<PAGE>
Deluxe Corporation
Page 3
action upon which it may bring suit under Minnesota law unless the
corporation has filed a Notice of Business Activities Report and provides
that the use of the courts of the State of Minnesota for all contracts
executed and all causes of action that arose before the end of any period
for which a corporation failed to file a required report is precluded.
Insofar as the opinion may relate to the valid, binding and enforceable
character of any agreement under Minnesota law or in a Minnesota court, I
have assumed that any party seeking to enforce such agreement has at all
times been, and will continue at all times to be, exempt from the
requirement of filing a Notice of Business Activities Report or, if not
exempt, has duly filed, and will continue to duly file, all Notice of
Business Activities Reports.
The opinion expressed above is limited to the laws of the State of Minnesota and
the federal laws of the United States of America. The Indenture states that it
is governed by New York law. I have not examined the question of what law would
govern the interpretation or enforcement of the Indenture and my opinion is
based on the assumption, for purposes hereof, that the internal laws of the
State of Minnesota and the federal laws of the United States of America would
govern the Indenture and the transactions contemplated thereby.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the caption "Validity of Debt
Securities" in the Prospectus constituting part of the Registration Statement.
Dated: August 23, 1995
Very truly yours,
/s/ John H. LeFevre
John H. LeFevre
Senior Vice President, General
Counsel and Secretary
/gs
<PAGE>
EXHIBIT 12.1
DELUXE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months
Ended Years Ended December 31,
----- ----------------------------------------------------------------
June 30, 1995 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
Earnings
--------
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes $110,181 $240,886 $235,913 $324,783 $295,493 $282,506
Interest expense
(excluding capitalized interest) 7,084 9,740 10,070 15,371 8,220 1,427
Portion of rent expense under
long-term operating leases
representative of an interest factor $6,570 13,554 13,259 12,923 11,807 10,849
Amortization of debt expense 42 84 84 84 71 0
-- -- -- -- -- -
TOTAL EARNINGS $123,877 $264,264 $259,326 $353,161 $315,591 $294,782
Fixed charges
-------------
Interest Expense
(including capitalized interest) 7,084 10,499 10,555 15,824 8,990 1,860
Portion of rent expense under
long-term operating leases
representative of an interest factor 6,570 13,554 13,259 12,923 11,807 10,849
Amortization of debt expense 42 84 84 84 71 0
-- -- -- -- -- -
TOTAL FIXED CHARGES $13,696 $24,137 $23,898 $28,831 $20,868 $12,709
RATIO OF EARNINGS
TO FIXED CHARGES: 9.0 10.9 10.9 12.2 15.1 23.2
</TABLE>
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Deluxe Corporation on Form S-3 of our report dated February 10, 1995,
incorporated by reference in the Annual Report on Form 10-K of Deluxe
Corporation for the year ended December 31, 1994, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
August 22, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each undersigned member of the Board of
Directors and each undersigned officer of Deluxe Corporation, a Minnesota
corporation, hereby constitutes and appoints John A. Blanchard III and Jerry
K. Twogood, and each of them, his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign a Registration Statement on Form S-3 with respect to the
registration of up to $300,000,000 of Debt Securities of Deluxe Corporation
under the Securities Act of 1933, as amended, and any and all amendments to
such Registration Statement, including post-effective amendments, and to file
the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and with such state
securities commissions and other agencies as necessary; hereby granting unto
such attorneys-in-fact and agents full power and authority, each acting alone,
to do and perform any and all acts and things requisite and necessary to be
done in connection with such registration as fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all
that such attorneys-in-fact and agents, or their respective substitutes, may
lawfully do or cause to be done by virtue hereof.
The undersigned hereunto set their hands as of this 8th day of May, 1995.
/s/ John A. Blanchard III /s/ James J. Renier
------------------------------- ---------------------------
John A. Blanchard III, Director James J. Renier, Director
and Principal Executive Officer
/s/ Harold V. Haverty /s/ Barbara B. Grogan
------------------------------- ---------------------------
Harold V. Haverty, Director Barbara B. Grogan, Director
/s/ Eugene R. Olson /s/ Allen F. Jacobson
------------------------------- ---------------------------
Eugene R. Olson, Director Allen F. Jacobson, Director
/s/ Jerry K. Twogood /s/ Charles M. Osborne
------------------------------- ---------------------------
Jerry K. Twogood, Director Charles M. Osborne, Principal
Financial and Accounting Officer
/s/ Whitney MacMillan
-------------------------------
Whitney MacMillan, Director
<PAGE>
-------------------------------------------------------------------------------
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
--- SECTION 305(b) (2)
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A NATIONAL BANKING ASSOCIATION 41-1592157
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
SIXTH STREET AND MARQUETTE AVENUE
Minneapolis, Minnesota 55479
(Address of principal executive offices) (Zip code)
-----------------------------
DELUXE CORPORATION
(Exact name of obligor as specified in its charter)
MINNESOTA 41-0216800
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1080 WEST COUNTY ROAD F
SHOREVIEW, MINNESOTA 55126-8201
(Address of principal executive offices) (Zip code)
-----------------------------
$300,000,000
DEBT SECURITIES
(Title of the indenture securities)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
Item 1. GENERAL INFORMATION. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
The Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
trustee, describe each such affiliation.
None with respect to the trustee.
No responses are included for Items 3-15 of this Form T-1 because the obligor is
not in default as provided under Item 13.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this
Statement of Eligibility. Norwest Bank
incorporates by reference into this Form T-1 the
exhibits attached hereto.
Exhibit 1. a. A copy of Articles of Association of the trustee
now in effect. *
Exhibit 2. a. A copy of the certificate of authority of the
trustee to commence business issued June 28, 1872,
by the Comptroller of the Currency to The
Northwestern National Bank of Minneapolis.*
b. A copy of the certificate of the
Comptroller of the Currency dated January
2, 1934, approving the consolidation of
the Northwestern National Bank of
Minneapolis and the Minnesota Loan and
Trust Company of Minneapolis.*
c. A copy of the certificate of the Acting Comptroller
of the Currency dated January 12, 1943, as to
change of corporate title of Northwestern National
Bank and Trust Company of Minneapolis to
Northwestern National Bank of Minneapolis.*
d. A copy of the certificate of the Comptroller of the
Currency dated May 1, 1983, authorizing Norwest
Bank Minneapolis, National Association, to act as
fiduciary.*
<PAGE>
Exhibit 3. A copy of the authorization of the trustee to exercise
corporate trust powers issued January 2, 1934, by the
Federal Reserve Board.*
Exhibit 4. Copy of By-laws of the trustee as now in effect.*
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required by Section 321(b) of
the Act.
Exhibit 7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.**
Exhibit 8. A copy of the certificate dated May 10, 1983 of name
change from Northwestern National Bank Minneapolis to
Norwest Bank Minneapolis, National Association.*
Exhibit 9. A copy of the certificate dated January 11, 1988, of name
change from Norwest Bank Minneapolis, National Association
to Norwest Bank Minnesota, National Association.*
* Incorporated by reference to the exhibit of the same number
filed with the registration statement number 33-66086.
** Incorporated by reference to the exhibit of the same number
filed with the registration statement number 33-93808.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Norwest Bank Minnesota, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 28th day of June, 1995.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Raymond S. Haverstock
-------------------------
Raymond S. Haverstock
Vice President
<PAGE>
EXHIBIT 6
June 28, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321 (b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal or State authorities authorized to make such
examination may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Very truly yours,
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Raymond S. Haverstock
Vice President
