<PAGE> 1
As filed with the Securities and Exchange Commission on January 29, 1998
Registration Number 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EVI, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
04-2515019
(I.R.S. Employer Identification No.)
5 POST OAK PARK, SUITE 1760
HOUSTON, TEXAS 77027-3415
(713) 297-8400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
BERNARD J. DUROC-DANNER
EVI, INC.
5 POST OAK PARK, SUITE 1760
HOUSTON, TEXAS 77027-3415
(713) 297-8400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
CURTIS W. HUFF
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be offering price per aggregate registration
securities to be registered Registered(1) unit(2) offering price (2) fee(2)
- - - - - - - - - - - - - - - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5% Convertible Subordinated Preferred $402,500,000
Equivalent Debentures due 2027 . . . (8,050,000 units) 100% $402,500,000 $118,738
- - - - - - - - - - - - - - - ---------------------------------------------------------------------------------------------------------------------------------
Common Stock, $1.00 par value . . . . 5,031,250(3) N/A N/A N/A
==================================================================================================================================
</TABLE>
(1) The Debentures consist of 8,050,000 units with a principal amount of
$50 each.
(2) Pursuant to Rule 457(i), there is no filing fee with respect to the
shares of Common Stock issuable upon conversion of the Debentures
because no additional consideration will be received in connection
with the exercise of the conversion privilege.
(3) Includes an additional indeterminate number of shares of Common Stock
as may become issuable upon conversion of the Debentures being
registered hereunder by means of adjustment of the conversion price.
---------------
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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 29, 1998
PROSPECTUS
EVI, INC.
8,050,000 5% CONVERTIBLE SUBORDINATED PREFERRED EQUIVALENT DEBENTURES DUE 2027
($50 PRINCIPAL AMOUNT PER DEBENTURE)
(INTEREST PAYABLE FEBRUARY 1, MAY 1, AUGUST 1 AND NOVEMBER 1)
5,031,250 SHARES OF COMMON STOCK
---------------------
This Prospectus relates to (i) the offering of 8,050,000 5% Convertible
Subordinated Preferred Equivalent Debentures due 2027 (the "Debentures"), having
a $50 principal amount per Debenture, of EVI, Inc., a Delaware corporation (the
"Company"), and (ii) 5,031,250 shares of the Company's common stock, $1.00 par
value (the "Common Stock"), which are initially issuable upon conversion of the
Debentures plus such additional indeterminate number of shares of Common Stock
as may become issuable upon conversion of the Debentures as a result of
adjustments to the conversion price (the "Shares"). The Debentures and the
Shares that are being registered hereby are to be offered for the account of the
holders thereof (the "Selling Securityholders"). The Debentures were initially
acquired from the Company by Morgan Stanley & Co. Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Prudential Securities Incorporated and
Schroder & Co. Inc. (the "Initial Purchasers") in November 1997 in connection
with a private offering. See "Description of the Debentures".
The Debentures are convertible into Common Stock of the Company at any time
after February 1, 1998, and prior to maturity, unless previously redeemed, at a
conversion price of $80 per share, subject to adjustment in certain events. The
Common Stock is traded on the New York Stock Exchange (the "NYSE") under the
symbol "EVI". On January 26, 1998, the last reported sales price for the Common
Stock as reported on the NYSE was $40 3/4 per share.
So long as the Company is not in default in the payment of interest on the
Debentures, the Company has the right to defer payments of interest on the
Debentures by extending the interest payment period on the Debentures at any
time for up to 20 consecutive quarters (each, an "Extension Period"). If
interest payments are so deferred, interest will continue to accumulate with
interest thereon (to the extent permitted by applicable law) at the interest
rate, compounded quarterly. During any Extension Period, holders of Debentures
will be required to include deferred interest income in their gross income for
United States federal income tax purposes in advance of receipt of the cash
payments with respect to such deferred interest payments. There could be
multiple Extension Periods of varying lengths throughout the term of the
Debentures. See "Risk Factors", "Description of Debentures -- Option to Extend
Interest Payment Period" and "Certain Federal Income Tax
Considerations -- Potential Extension of Interest Payment Period and Original
Issue Discount".
The Debentures are not redeemable by the Company prior to November 4, 2000.
Subject to the foregoing, the Debentures are redeemable on at least 30 days'
prior notice at the option of the Company, in whole or in part, at any time, at
the redemption prices set forth in this Prospectus, in each case together with
accrued interest. See "Description of Debentures -- Optional Redemption by the
Company".
The Debentures are unsecured obligations of the Company and are subordinated
to the extent provided in the Indenture (as defined herein) to the payment in
full of all existing and future Senior Indebtedness (as defined herein). See
"Risk Factors" and "Description of Debentures -- Subordination of Debentures".
The Debentures are eligible for trading in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") Market. The Debentures and the
Shares are being registered to permit public secondary trading of the Debentures
and, upon conversion, the underlying Common Stock, by the holders thereof from
time to time after the date of this Prospectus.
The Company will not receive any of the proceeds from sales of Debentures or
the Shares by the Selling Securityholders. The Debentures and the Shares may be
offered from time to time by the Selling Securityholders (and their donees and
pledgees) in negotiated transactions or otherwise, at market prices prevailing
at the time of sale or at negotiated prices. See "Plan of Distribution". The
Selling Securityholders may be deemed to be "underwriters" as defined in the
Securities Act of 1933, as amended (the "Securities Act"). If any broker-dealers
are used by the Selling Securityholders, any commissions paid to broker-dealers
and, if broker-dealers purchase any Debentures or Shares as principals, any
profits received by such broker-dealers on the resale of the Debentures or
Shares may be deemed to be underwriting discounts or commissions under the
Securities Act. In addition, any profits realized by the Selling Securityholders
may be deemed to be underwriting commissions.
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DESCRIPTION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
---------------------
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 February , 1998.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected at the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Regional Offices of the Commission at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York,
New York 10048. Copies of such material can also be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Such
reports, proxy and information statements and other information concerning the
Company can also be inspected and copied at the offices of the NYSE, 20 Broad
Street, New York, New York 10005, on which the Common Stock is listed.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Debentures and Shares offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain items of which are
contained in exhibits to the Registration Statement as permitted by the rules
and regulations of the Commission. For further information with respect to the
Company and the Debentures and the Shares offered hereby, reference is made to
the Registration Statement, including the exhibits thereto, which may be
inspected without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Regional
Offices of the Commission, and copies of which may be obtained from the
Commission at prescribed rates. Statements made in this Prospectus concerning
the contents of any document referred to herein are not necessarily complete.
With respect to each such document filed with the Commission as an exhibit to
the Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference and shall be deemed a part hereof:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by Amendment No. 1 to the Annual Report on
Form 10-K on Form 10-K/A;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997;
(d) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(e) The Company's Current Report on Form 8-K dated December 10, 1996,
as amended by Amendment No. 1 to the Current Report on Form 8-K on Form
8-K/A dated January 23, 1997;
(f) The Company's Current Report on Form 8-K dated March 17, 1997;
(g) The Company's Current Report on Form 8-K dated April 25, 1997;
(h) The Company's Current Report on Form 8-K dated May 1, 1997, as
amended by Amendment No. 1 to the Current Report on Form 8-K on Form 8-K/A
dated January 14, 1998;
(i) The Company's Current Report on Form 8-K dated August 25, 1997;
(j) The Company's Current Report on Form 8-K dated October 20, 1997,
as amended by Amendment No. 1 to the Current Report on Form 8-K on Form
8-K/A dated October 21, 1997;
2
<PAGE> 4
(k) The Company's Current Report on Form 8-K dated October 24, 1997;
(l) The Company's Current Report on Form 8-K dated November 5, 1997;
(m) The Company's Current Report on Form 8-K dated November 12, 1997;
(n) The Company's Current Report on Form 8-K dated November 18, 1997;
(o) The Company's Current Report on Form 8-K dated November 24, 1997;
(p) The Company's Current Report on Form 8-K dated December 2, 1997;
(q) The Company's Current Report on Form 8-K dated December 31, 1997;
(r) The Company's Current Report on Form 8-K dated January 28, 1998;
and
(s) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A (filed May 19, 1994) and as amended by
the Company's Registration Statement on Form S-3 (Registration No.
333-12367), including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Debentures and Shares
pursuant hereto shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
herein, other than the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to the
Company at 5 Post Oak Park, Suite 1760, Houston, Texas 77027, Attention:
Secretary (Telephone number: (713) 297-8400).
FORWARD-LOOKING STATEMENTS
Certain statements made herein and in public filings and releases by the
Company contain "forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risk and uncertainty.
Forward-looking statements may be made by management orally or in writing. These
forward-looking statements may include, but are not limited to, future sales,
earnings, margins, production levels and costs, expected savings from
acquisitions, demand for products, product deliveries, market trends in the oil
and gas industry and the oilfield service sector thereof, research and
development, environmental and other expenditures, currency fluctuations and
various business trends. Actual results and trends in the future may differ
materially depending on a variety of factors including, but not limited to,
changes in the price of oil and gas, changes in the domestic and international
rig count, global trade policies, domestic and international drilling
activities, world-wide political stability and economic growth, including
currency fluctuations, government export and import policies, technological
advances involving the Company's products, the Company's successful execution of
internal operating plans and manufacturing consolidations and restructurings,
changes in the market for the Company's drilling tools and other products,
performance issues with key suppliers and subcontractors, the ability of the
Company to maintain price increases and market shares, raw material costs
changes, collective bargaining labor disputes, regulatory uncertainties and
legal proceedings. Future results will also be dependent upon the ability of the
Company to continue to identify and complete successful acquisitions at
acceptable prices, integrate those acquisitions with the Company's other
operations
3
<PAGE> 5
and penetrate existing and new markets. For additional information regarding
risks and uncertainties relating to the Company, see the Company's reports filed
with the Commission referred to under "Incorporation of Certain Documents by
Reference".
RISK FACTORS
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Actual results could differ materially from those projected or contemplated
in the forward-looking statements as a result of certain of the risk factors set
forth below and incorporated by reference in this Prospectus. In addition to the
other information contained and incorporated by reference in this Prospectus,
the following risk factors should be considered carefully in evaluating the
Company and its business before purchasing the Debentures or the Shares.
DEPENDENCE ON VOLATILE OIL AND GAS INDUSTRY
The demand for and pricing of the Company's products and services are
substantially dependent upon domestic and worldwide levels of exploration and
production, including the number of oil and gas wells being drilled, the depth
and drilling conditions of the wells, the number of well completions and the
level of workover activity. Exploration and development activity is largely
dependent on prevailing oil and natural gas prices. Prices for oil and natural
gas have historically been extremely volatile and have reacted to actual and
perceived changes in demand and supply of oil and natural gas, domestic and
worldwide economic conditions and political instabilities in oil producing
countries. In this regard, there have been recent declines in the prevailing
prices of oil and natural gas as well as uncertainties as to the effect of the
recent economic downturn in Asia on world demand for oil. There can be no
assurance as to the impact of these events on the future demand for the
Company's products and services.
The demand for the Company's drilling products are particularly affected by
the price of natural gas and the level of oil and gas exploration activity,
while the demand for the Company's artificial lift equipment is directly
dependent on oil production activity. Sales of the Company's artificial lift
products are currently primarily concentrated in North America and are affected
by the level of oil production from older wells in addition to oil prices.
Exploration and production activity is also affected by worldwide economic
conditions, supply and demand for oil and natural gas, seasonal trends and the
political stability of oil producing countries.
The Company's results have benefitted in recent periods from improved
market conditions for the Company's products, including a substantial increase
in the demand for the Company's drilling tools, in particular, drill pipe. This
increase in demand has been associated with an increase in domestic and
international drilling activity, a general reduction in the worldwide supply of
used drill pipe and a trend toward the drilling of deeper wells in harsher
environments. There can be no assurance as to future market conditions. Any
material decline in the current level of drilling activity or demand could have
a material adverse impact on the Company's future results. In addition,
conditions will continue to be influenced by numerous factors over which the
Company has no control.
RISKS OF FOREIGN OPERATIONS
During 1996, 1995 and 1994, approximately 51%, 46% and 46%, respectively,
of the Company's total revenues were earned outside the United States based upon
the ultimate destination in which products or services were sold, shipped or
provided to the customer by the Company. Operations and sales in foreign markets
are subject to substantial competition from large multi-national corporations
and government-owned entities and to a variety of local laws and regulations
requiring qualifications, use of local labor, the provision of financial
assurances or other restrictions and conditions on operations. Foreign
operations are also subject to risks associated with doing business outside the
United States, including risk of war, civil disturbances and governmental
activities that may limit or disrupt markets, restrict the movement of funds or
result in the deprivation of contract rights or the taking of property without
fair compensation. Foreign operations may also
4
<PAGE> 6
subject the Company to risks relating to fluctuations in currency exchange
rates. However, to date, currency fluctuations have not had a material adverse
impact on the Company.
In addition to the Company's manufacturing operations in the United States
and Canada, the Company has manufacturing operations in various locations
throughout the world, including Mexico, Brazil, Argentina, China, India and
Singapore. Operations in many of these countries are subject to various
political and economic conditions existing in them which could disrupt
operations. The Company generally seeks to obtain, where economical, insurance
against certain political risks and attempts to structure its contracts and
arrangements in the foreign countries in which it operates in a manner that
would minimize the exposure of its assets to losses in those countries. Such
efforts include structuring substantially all of its sales and service contracts
to be in United States dollars and utilizing lease arrangements and joint
ventures for manufacturing facilities, such as the Company's arrangement with
Oil Country Tubular Limited in India and a joint venture arrangement for sales
in the Far East, so as not to require substantial investment of funds in fixed
assets in foreign countries. Although the Company believes that its exposure to
foreign risks is not materially greater than that of its competitors, there can
be no assurance that disruptions will not occur in the Company's foreign
operations or that any losses that do occur will be covered by insurance.
OPERATING RISKS AND INSURANCE
The Company's products are used for the exploration and production of oil
and natural gas. Such operations are subject to hazards inherent in the oil and
gas industry, such as fires, explosions, craterings, blowouts and oil spills,
that can cause personal injury or loss of life, damage to or destruction of
property, equipment, the environment and marine life, and suspension of
operations. Litigation arising from an occurrence at a location where the
Company's products or services are used or provided may in the future result in
the Company being named as a defendant in lawsuits asserting potentially large
claims.
The Company maintains insurance coverage that it believes to be customary
in the industry against these hazards and, whenever possible, obtains agreements
from customers providing for indemnification against liability to others.
However, insurance and indemnification agreements may not provide complete
protection against casualty losses. There can be no assurance that the Company
will be able to maintain adequate insurance in the future at rates it considers
reasonable. Further, there can be no assurance that insurance will continue to
be available on terms as favorable as those for its existing arrangements. The
occurrence of an adverse claim in excess of the coverage limits maintained by
the Company could have a material adverse effect on the Company's financial
condition and results of operations.
RISKS OF ENVIRONMENTAL COSTS AND LIABILITIES
The Company's operations are subject to governmental laws and regulations
relating to the protection of the environment and to public health and safety.
The regulations applicable to the Company's operations include certain
regulations controlling the discharge of materials into the environment,
requiring removal or remediation of pollutants and imposing civil and criminal
penalties for violations. Some of the statutory and regulatory programs that
apply to the Company's operations also authorize private suits, the recovery of
natural resource damages by the government, injunctive relief and cease and
desist orders.
Laws and regulations protecting the environment have generally become more
stringent in recent years and could become more stringent in the future. Some
environmental statutes impose strict liability, rendering a person or entity
liable for environmental damage without regard to negligence or fault on the
part of such person or entity. As a result, the Company could be liable, under
certain circumstances, for environmental damage caused by others or for acts of
the Company that were in compliance with all applicable laws at the time such
acts were performed.
SUBSTANTIAL COMPETITION
Competition in the oilfield service and equipment segments of the oil and
gas industry is intense and, in certain markets, is dominated by a small number
of large competitors, many of which have greater financial and other resources
than the Company.
5
<PAGE> 7
SUBORDINATION
The Debentures are unsecured and subordinated in right of payment to all
present and future Senior Indebtedness of the Company. As a result, in the event
of bankruptcy, liquidation or reorganization of the Company or upon acceleration
of the Debentures due to an event of default, the assets of the Company would be
available to pay obligations on the Debentures only after all Senior
Indebtedness has been paid in full, and there might not be sufficient assets
remaining to pay amounts due on any or all of the Debentures then outstanding.
The Debentures are also structurally subordinated to the liabilities, excluding
trade payables, of the Company's subsidiaries. The Indenture does not prohibit
or limit the incurrence of Senior Indebtedness or the incurrence of other
indebtedness and other liabilities by the Company or its subsidiaries, and the
incurrence of additional indebtedness and other liabilities by the Company or
its subsidiaries could adversely affect the Company's ability to pay its
obligations on the Debentures. At December 31, 1997, the Company had
approximately $9.2 million of outstanding Senior Indebtedness consisting of
various debt and contingent reimbursement obligations under outstanding letters
of credit. The Company's subsidiaries also had approximately $85.0 million in
outstanding debt and $5.7 million in contingent letter of credit obligations
outstanding at December 31, 1997. The Company anticipates that from time to time
it will incur additional indebtedness, including Senior Indebtedness, and that
it and its subsidiaries will from time to time incur other additional
indebtedness and liabilities. See "Description of Debentures -- Subordination of
Debentures".
Under the Debentures, no payment of principal (including redemption
payments, if any), premium, if any, or interest on the Debentures may be made if
(i) any Senior Indebtedness is not paid when due and any applicable grace period
with respect to such default has ended with such default not having been cured
or waived or ceasing to exist or (ii) the maturity of any Senior Indebtedness
has been accelerated because of a default. The Company also may not make any
payment upon or in respect of the Debentures if any non-payment default occurs
and is continuing with respect to the Company's Designated Senior Indebtedness
(as defined below) that permits the lenders to accelerate the maturity of the
loans made thereunder and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the Company or other person permitted to give
such notice under the Indenture. Payments on the Debentures may and shall be
resumed (a) in case of a payment default, upon the date on which such default is
cured or waived and (b) in case of a nonpayment default, upon the earlier of the
date on which such nonpayment default is cured or waived or ceases to exist or
179 days after the date on which the applicable Payment Blockage Notice is
received if the maturity of the Designated Senior Indebtedness has not been
accelerated. No new period of payment blockage may be commenced pursuant to a
Payment Blockage Notice unless and until (i) 365 days have elapsed since the
initial effectiveness of the immediately prior Payment Blockage Notice and (ii)
all scheduled payments of principal, premium, if any, and interest on the
Debentures that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice.
OPTION TO EXTEND INTEREST PAYMENTS; TAX CONSEQUENCES
So long as the Company is not in default in the payment of interest on the
Debentures, the Company has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period at any time,
and from time to time, on the Debentures. Prior to the termination of any such
Extension Period, the Company may further extend such Extension Period;
provided, that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the maturity of the Debentures or any date of redemption of the
Debentures declared by the Company. Upon the termination of any Extension Period
and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. See "Description of
Debentures -- Option to Extend Interest Payment Period".
If the Company exercises its right to defer payments of interest by
extending the interest payment period, each holder of Debentures will continue
to accrue income (as original issue discount ("OID")) in respect of the deferred
and compounded interest allocable to its Debentures for United States federal
income tax purposes. As a result, each such holder of Debentures will recognize
income for United States federal income tax purposes in advance of the receipt
of cash and will not receive the cash from the Company related to such
6
<PAGE> 8
income if such holder converts or otherwise disposes of its Debentures prior to
the record date for such interest payment. The Company has no current intention
of exercising its right to defer payments of interest by extending the interest
payment period of the Debentures. However, if the Company determines to exercise
such right in the future, the market price of the Debentures is likely to be
materially adversely affected. A holder that disposes of its Debentures during
an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Debentures. In addition, as a
result of the existence of the Company's right to defer interest payments, the
market price of the Debentures may be more volatile than other OID securities
that do not have such interest deferral rights. See "Certain Federal Income Tax
Considerations -- Potential Extension of Interest Payment Period and Original
Issue Discount".
ABSENCE OF MARKET FOR THE DEBENTURES AND RESTRICTIONS ON RESALE
The Debentures are eligible for trading through the PORTAL market. Although
certain of the Initial Purchasers have advised the Company that are currently
making a market in the Debentures, they are not obligated to do so and may
discontinue such market making at any time without notice. In addition, such
market making activity will be subject to the limits imposed by the Securities
Act and the Exchange Act. Accordingly, there can be no assurance that any market
for the Debentures will be maintained. If an active market for the Debentures
fails to be sustained, the trading price of such Debentures could be materially
adversely affected. The Company currently does not intend to apply for listing
of the Debentures on any national securities exchange.
VOLATILITY OF COMMON STOCK PRICE
Volatility in the price of the Common Stock, changes in prevailing interest
rates and changes in the perception of the Company's creditworthiness may in the
future adversely affect the price of the Debentures. Additionally, the market
price of the Common Stock has varied significantly and may be volatile depending
on news announcements and changes in the oil and gas market conditions.
DIVIDEND POLICY
The Company has not paid any dividends on the Common Stock since 1984 and
currently anticipates that, for the foreseeable future, any earnings will be
retained for the development of the Company's business. The Company is currently
subject to certain prohibitions on the declaration and payment of cash dividends
on the Common Stock under the terms of the Company's existing credit facilities.
Under the most restrictive of these credit facilities, the Company is limited in
the amount of dividends, distributions and other restricted payments that it may
make to $352.6 million as of December 31, 1997. Accordingly, no dividends are
contemplated to be declared or paid on the Common Stock.
7
<PAGE> 9
THE COMPANY
The Company is an international manufacturer and supplier of engineered
oilfield tools and equipment. The Company's products are used both for the
drilling and production phases of oil and natural gas wells. The Company has
achieved significant growth in recent years through a consistent strategy of
synergistic acquisitions and internal development. The Company's acquisitions
have focused on consolidation and vertical integration, development of complete
product lines and technology. The Company's internal growth has focused on
technology, product development, manufacturing efficiencies and productivity
enhancements.
The Company's principal products consist of drill pipe and other drilling
tools, premium connectors and associated high grade tubulars, marine connectors,
artificial lift systems, packers and completion tools. The Company's growth
strategy has resulted in the Company becoming the largest manufacturer of drill
pipe, drill collars and heavyweight drill pipe in the world, the largest
provider of premium tubular connectors in North America and one of the largest
providers of artificial lift equipment in the world. The Company's revenues and
income from continuing operations increased to $478.0 million and $24.5 million,
respectively, for 1996 from $271.7 million and $2.6 million, respectively, for
1995.
The Company's product lines are divided into the drilling products segment
consisting of drill pipe, premium tubulars and marine connectors, and the
production equipment segment consisting of artificial lift and completion
equipment.
DRILLING PRODUCTS
The Company's drilling products are comprised of drill pipe and other
drilling tools, premium connectors and associated high grade tubulars and marine
connectors.
Drill pipe as well as drill collars, heavy weights and kellys serve as the
principal drilling tools used to drill an oil or natural gas well. Drilling
tools must be designed and manufactured to provide a reliable connection from
the drilling rig to the drill bit thousands of feet below the surface. The
demand for the Company's drilling tools is dependent on the level of domestic
and international drilling activity. In recent years, demand for these products
has substantially increased as a result of a reduction in worldwide inventory of
drill pipe and related drilling tools. Demand has also grown due to the increase
in directional, deep and horizontal drilling activity. Such methods of drilling
increase the wear on drill pipe and related tools. This trend has resulted in
increasing the demand for products with greater performance and technological
specifications.
Premium connectors and associated high grade tubulars consist of the
tubing, liner, casing and accessories that are used for the production of oil
and natural gas in harsh downhole environments, typically offshore and deep
natural gas wells, where pressure, temperature and corrosive elements are
extreme. The need for premium products particularly applies to deep water oil
and natural gas wells. The term "premium" refers to seamless tubulars with high
alloy chemistry, specific molecular structure and highly engineered connections.
The engineered connections have the most critical technological criteria.
Marine connectors principally consist of downhole conductors for offshore
applications. Conductors are used to define the original architecture of an
offshore well and support subsea wellhead equipment. The Company believes that
its XLS(R) and XL(R) technologies have unique technological capabilities for
reliability and cost effectiveness. The market for marine connectors, like the
market for the Company's premium tubular product lines, has benefited from the
improvement in offshore drilling activity, in particular, deep water drilling.
PRODUCTION EQUIPMENT
The Company designs, manufactures and services artificial lift and
completion tools. The Company's artificial lift product line consists of rod
lift, progressing cavity lift and gas lift. This product line utilizes patented
and proprietary technology and is fully integrated from the downhole tools to
the above ground equipment. To the Company's knowledge, none of its competitors
has as broad a product line of rod lift and progressing cavity pumps.
8
<PAGE> 10
Demand for the Company's artificial lift products is dependent on worldwide
demand for oil and the production requirements of the world's producing oil
reservoirs. The Company's artificial lift products are designed to maximize
production of oil wells of different depths and production levels. The need for
artificial lift products typically increases with the maturation of the
producing reservoirs. The need for artificial lift also is substantially greater
with heavier grades of crude oil. The Company believes its breadth of artificial
lift products and technology provides it with the ability to maximize reservoir
production for its customers.
The Company's completion products are used in the completion phase and
throughout the production life of oil and gas wells. The Company's completion
line includes packers, completion systems, flow control equipment, inflatable
packers and service tools. The scope of the Company's product line allows it to
cover a large range of complex completion and production needs.
The Company was incorporated in 1972 as a Massachusetts corporation and was
reincorporated in Delaware in 1980. The Company's corporate office is located at
5 Post Oak Park, Suite 1760, Houston, Texas 77027-3415, and its telephone number
is (713) 297-8400.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the unaudited ratio of earnings to fixed
charges of the Company for the periods indicated. The unaudited pro forma ratio
of earnings to fixed charges of the Company give effect to (i) the acquisition
by the Company of Tubular Corporation of America on August 5, 1996, (ii) the
acquisition by the Company of GulfMark International, Inc. and its assets as of
the date of acquisition on May 1, 1997, (iii) the issuance and sale of the
Company's 5% Convertible Subordinated Preferred Equivalent Debentures due 2027
and (iv) the acceptance and payment by the Company on December 15, 1997, for
$119,980,000 principal amount of the Company's outstanding 10 1/4% Senior Notes
due 2004 and 10 1/4% Senior Notes due 2004, Series B (collectively, the "Notes")
validly tendered by the holders of the Notes pursuant to a cash tender offer and
consent solicitation of the Company, as if these transactions had occurred on
January 1, 1996. The pro forma information set forth below is not necessarily
indicative of the results that actually would have been achieved had such
transactions been consummated as of January 1, 1996, or that may be achieved in
the future. The pro forma information does not give effect to the Company's
proposed acquisitions of Trico Industries, Inc., BMW Monarch (Lloydminster) Ltd.
and BMW Pump, Inc. or various smaller acquisitions effected by the Company
during 1997. This information should be read in conjunction with the Company's
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in its Annual Report on Form 10-K for the year ended
December 31, 1996, as amended, and Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997, and the Company's, TCA's, and GulfMark Retained
Assets' consolidated financial statements and related notes thereto, all of
which are incorporated herein by reference.
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
-------------------------------------- ------------ -------------- -------------
NINE MONTHS NINE MONTHS
YEAR ENDED YEAR ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
-------------------------------------- ------------ -------------- -------------
1992 1993 1994 1995 1996 1996 1996 1997 1997
---- ---- ---- ---- ---- ------------ ----- ----- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges....... 0.24x(a) 1.08x 0.36x(a) 1.14x 2.74x 2.04x 2.55x 6.85x 4.90x
</TABLE>
- - - - - - - - - - - - - - - ---------------
(a) Income (loss) before income taxes, extraordinary items, and fixed charges as
computed above were inadequate to cover fixed charges. In 1992 and 1994,
earnings, as defined, were inadequate to cover fixed charges. Such
deficiencies were $4.7 million and $9.5 million, respectively.
For purposes of calculating the ratio of earnings to fixed charges, (i)
earnings consist of income (loss) from continuing operations before income taxes
and extraordinary items plus fixed charges and (ii) fixed charges consist of
interest expense incurred from continuing operations, amortization of debt
expense relating to any indebtedness and one third of rental expense estimated
to be attributable to interest.
9
<PAGE> 11
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the
Debentures or the Shares by the Selling Securityholders.
SELLING SECURITYHOLDERS
The Debentures were originally acquired from the Company by the Initial
Purchasers on November 3, 1997. The Initial Purchasers have advised the Company
that the Initial Purchasers resold the Debentures in transactions exempt from
the registration requirements of the Securities Act (a) within the United States
to "qualified institutional buyers" (as defined in Rule 144A under the
Securities Act) in reliance on Rule 144A under the Securities Act and
institutional "accredited investors" within the meaning of Rule 501(a)(l), (2),
(3) or (7) under the Securities Act, that agreed in writing to comply with the
transfer restrictions and other conditions, and (b) outside the United States to
certain persons in reliance on Regulation S under the Securities Act. These
subsequent purchasers, or their transferees, pledgees, donees or successors, may
from time to time offer and sell any or all of the Debentures and/or Shares
pursuant to this Prospectus.
The Debentures and the Shares are being registered pursuant to the
Registration Rights Agreement dated as of November 3, 1997, between the Company
and the Initial Purchasers (the "Registration Rights Agreement"), pursuant to
which the Company filed the Registration Statement with regard to the Debentures
and the Shares and which requires that the Company keep the Registration
Statement effective until the earlier of (i) the sale pursuant to the
Registration Statement or Rule 144 under the Securities Act of all the
Debentures and the Shares and (b) the expiration of the holding period
applicable to sales of such securities under Rule 144(k) under the Securities
Act, or any successor provision.
The Selling Securityholders named herein have advised the Company that they
currently intend to sell the Debentures and Shares set forth below pursuant to
this Prospectus. Additional Selling Securityholders may choose to sell the
Debentures and Shares from time to time upon notice to the Company. See "Plan of
Distribution".
Prior to any use of this Prospectus in connection with an offering of the
Debentures and Shares, this Prospectus will be supplemented to set forth the
name and number of shares beneficially owned by the Selling Securityholder
intending to sell such Debentures and Shares and the number of Debentures and
Shares to be offered. The Prospectus Supplement will also disclose whether any
Selling Securityholder selling in connection with such Prospectus Supplement has
held any position, office or other material relationship with the Company or any
of its predecessors or affiliates during the three years prior to the date of
the Prospectus Supplement.
Based solely on information provided by the Selling Securityholders, the
following table sets forth certain information with respect to the Debentures
and the Shares beneficially owned by each Selling Securityholder and the number
of such securities that may be sold pursuant to this Prospectus:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
DEBENTURES SHARES DEBENTURES SHARES
NAME OF BENEFICIALLY BENEFICIALLY TO BE TO BE
SELLING SECURITYHOLDER OWNED(1) OWNED(2) SOLD(3) SOLD(3)
---------------------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C>
AIM Charter Fund...................................... 300,000 187,500 300,000 --
AIM V.I. Growth & Income.............................. 50,000 31,250 50,000 --
Allstate Insurance Company............................ 40,000 25,000 40,000 --
Argent Classic Convertible Arbitrage Fund L.P......... 25,000 15,625 25,000 --
Argent Classic Convertible Arbitrage Fund
(Bermuda)L.P........................................ 130,000 81,250 130,000 --
Arkansas PERS......................................... 30,000 18,750 30,000 --
Bank of America Convertible Securities Fund........... 5,600 3,500 5,600 --
Chrysler Corporation Master Retirement Trust.......... 34,400 21,500 34,400 --
Combined Insurance Company of America................. 8,500 5,312 8,500 --
Delaware PERS......................................... 25,000 15,625 25,000 --
Delta Air Lines Master Trust.......................... 28,000 17,500 28,000 --
Donaldson, Lufkin & Jenrette Securities Corporation... 205,100 128,187 205,100 --
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF NUMBER OF
DEBENTURES SHARES DEBENTURES SHARES
NAME OF BENEFICIALLY BENEFICIALLY TO BE TO BE
SELLING SECURITYHOLDER OWNED(1) OWNED(2) SOLD(3) SOLD(3)
---------------------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C>
Employee Benefit Convertible Fund..................... 3,200 2,000 3,200 --
General Motors Employees Domestic Group Pension
Trust............................................... 2,367 1,479 2,367 --
General Motors Foundation, Inc........................ 87 54 87 --
Hawaiian Airlines Pension Plan for Salaried
Employees........................................... 400 250 400 --
Hawaiian Airlines Employees Pension Plan-IAM.......... 1,500 937 1,500 --
HSBC Securities Inc................................... 73,000 45,625 73,000 --
Hughes Aircraft Company Master Retirement Trust....... 15,900 9,937 15,900 --
ICI American Holdings Trust........................... 11,000 6,875 11,000 --
J.P. Morgan & Co. Incorporated........................ 265,000 170,227 265,000 --
Kapiolani Medical Systems............................. 4,000 2,500 4,000 --
Lakeside Capital L.L.C................................ 3,200 2,000 3,200 --
Lincoln National Convertible Securities Fund.......... 47,875 29,921 47,875 --
MainStay Convertible Fund............................. 171,000 106,875 171,000 --
MainStay Strategic Value Fund......................... 4,000 2,500 4,000 --
MainStay VP Convertible Portfolio..................... 30,000 18,750 30,000 --
Motors Insurance Corporation.......................... 546 341 546 --
Nalco Chemical Retirement Trust....................... 5,000 3,125 5,000 --
New York Life Separate Account #7..................... 10,000 6,250 10,000 --
OCM Convertible Limited Partnership................... 2,900 1,812 2,900 --
OCM Convertible Trust................................. 48,200 30,125 48,200 --
Pacific Horizon Capital Income Fund................... 97,000 60,625 97,000 --
Pacific Innovation Trust Capital Income Fund.......... 4,000 2,500 4,000 --
Paloma Securities L.L.C............................... 70,000 71,650 70,000 --
Partner Reinsurance Company, Ltd...................... 3,200 2,000 3,200 --
Phoenix Convertible Fund.............................. 42,000 26,250 42,000 --
PRIM Board............................................ 46,000 28,750 46,000 --
Public Employees' Retirement Association of
Colorado............................................ 70,000 114,250 70,000 --
Retirement Plan for Pilots of Hawaiian Airlines....... 2,500 1,562 2,500 --
Saudi International Bank.............................. 60,000 37,500 60,000 --
Shepard Investments International Ltd................. 12,695 7,934 12,695 --
Stark International................................... 3,040 1,900 3,040 --
Starvest Discretionary................................ 10,000 6,250 10,000 --
State Employees' Retirement Fund of the State of
Delaware............................................ 12,000 7,500 12,000 --
State of Connecticut Combined Investment Funds........ 43,900 27,437 43,900 --
State of Oregon/SAIF Corporation...................... 100,000 62,500 100,000 --
State of Oregon Equity................................ 75,000 46,875 75,000 --
The Gabelli Global Convertible Securities Fund........ 4,000 2,500 4,000 --
The Lutheran Church-Missouri Synod.................... 45,000 28,125 45,000 --
The TCW Group, Inc.................................... 188,200 117,625 188,200 --
TQA Vantage Plus, Ltd................................. 12,500 7,812 12,500 --
TQA Vantage Fund, Ltd................................. 25,000 15,625 25,000 --
TQA Leverage Fund, L.P................................ 12,500 7,812 12,500 --
TQA Arbitrage Fund, L.P............................... 50,000 31,250 50,000 --
United National Insurance............................. 2,275 1,421 2,275 --
Vanguard Convertible Securities Fund, Inc............. 28,000 17,500 28,000 --
Walker Art Center..................................... 5,515 3,446 5,515 --
Weirton Trust......................................... 14,335 8,959 14,335 --
ZENECA Holdings Trust................................. 11,000 6,875 11,000 --
</TABLE>
- - - - - - - - - - - - - - - ---------------
(1) None of the Selling Securityholders beneficially own one percent or more of
the outstanding Debentures or Shares, except for AIM Charter Fund, Argent
Classic Convertible Arbitrage Fund (Bermuda) L.P., Donaldson, Lufkin &
Jenrette Securities Corporation, J.P. Morgan & Co. Incorporated, MainStay
Convertible Fund, Pacific Horizon Capital Income Fund, State of Oregon/SAIF
Corporation and The TCW Group, Inc., which own 3.7%, 1.6%, 2.5%, 3.3%, 2.1%,
1.2%, 1.2%, and 2.3% of the Debentures, respectively.
(2) Includes shares of Common Stock issuable upon conversion of the Debentures.
11
<PAGE> 13
(3) Because a Selling Securityholder may sell all or a portion of the Debentures
and the Shares pursuant to this Prospectus, no estimate can be given as to
the number and percentages of Debentures or Shares that will be held by the
Selling Securityholder upon termination of any such sales.
None of the Selling Securityholders named above have, within the past three
years, held any position, office or other material relationship with the Company
or any of its predecessors or affiliates, except as noted above.
PLAN OF DISTRIBUTION
The Debentures and the Shares are being registered to permit public
secondary trading of such securities by the holders thereof from time to time
after the date of this Prospectus. The Company has agreed, among other things,
to bear all expenses in connection with the registration and sale of the
Debentures and the Shares covered by this Prospectus. The Company will not
receive any of the proceeds from the offering of Debentures and the Shares by
the Selling Securityholders.
The Debentures are eligible for trading through the PORTAL Market. The
Selling Securityholders (and their donees and pledgees) may sell all or a
portion of the Debentures and Shares beneficially owned by them and offered
hereby from time to time on any exchange on which the securities are listed on
terms to be determined at the times of such sales. The Selling Securityholders
may also make private sales directly or through a broker or brokers.
Alternatively, any of the Selling Securityholders may from time to time offer
the Debentures or the Shares beneficially owned by them through dealers or
agents, who may receive compensation in the form of commissions or concessions
from the Selling Securityholders and the purchasers of the Debentures or the
Shares for whom they may act as agent. The aggregate proceeds to the Selling
Securityholders from the sale of the Debentures or the Shares offered by them
hereby will be the purchase price of such Debentures or the Shares less
discounts and commissions, if any.
The Debentures and the Shares may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the holders of such securities or by agreement between such
holders and dealers who may receive fees or commissions in connection therewith.
The outstanding Common Stock is publicly traded on the NYSE and the Shares
have been approved for listing upon official notice of issuance. The Initial
Purchasers, other than Lehman Brothers Inc. ("Lehman Brothers"), are making a
market in the Debentures; however, they are not obligated to do so and any such
market-making may be discontinued at any time without notice, in the sole
discretion of the Initial Purchasers. The Company does not intend to apply for
listing of the Debentures on any securities exchange. Accordingly, no assurance
can be given as to the development or liquidity of any trading market that may
develop for the Debentures.
The Selling Securityholders and any broker-dealers or agents that
participate with the Selling Securityholders in the distribution of the
Debentures or the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act, in which event any commissions received by such
broker-dealer or agents and any profits realized by the Selling Securityholders
on the resales of the Debentures or the shares purchased by them may be deemed
to be underwriting commissions or discount under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
such other available exemption rather than pursuant to this Prospectus. There is
no assurance that any Selling Securityholder will sell any or all of the
Debentures or Shares described herein, and any Selling Securityholder may
transfer, devise or gift such securities by other means not described herein.
The Debentures were originally sold by the Company to the Initial
Purchasers in November 1997 in a private placement. The Company agreed to
indemnify and hold the Initial Purchasers harmless against certain liabilities
under the Securities Act that could arise in connection with the sale of the
Debentures by the Initial
12
<PAGE> 14
Purchasers. The Registration Rights Agreement provides for the Company and the
Selling Securityholders to indemnify each other against certain liabilities
arising under the Securities Act.
The Company has agreed to use reasonable efforts to keep the Registration
Statement to which this Prospectus relates effective until the earlier of (i)
the sale pursuant to the Registration Statement or Rule 144 under the Securities
Act of all the Debentures and Shares and (ii) the expiration of the holding
period applicable to sales of such securities under Rule 144(k) under the
Securities Act, or any successor provision. The Registration Rights Agreement
provides that, under certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events, the Company
is permitted to suspend the use of this Prospectus in connection with the sales
of Debentures and Shares by Selling Securityholders for a period not to exceed
30 days in any three month period (or an additional 30 days if it gives a second
notice during such 30 day period) and not to exceed an aggregate of 60 days in
any 12-month period. The Company has agreed to pay predetermined liquidated
damages to Selling Securityholders of Debentures and Shares who have requested
to sell such securities pursuant to the Registration Statement if the Commission
issues a stay order suspending the effectiveness of the Registration Statement
or if this Prospectus is unavailable for periods in excess of those permitted
above until such time as the stay order is removed or this Prospectus is again
made available, as the case may be. The Company has further agreed, if such
unavailability continues for an additional 30-day period, to pay such
predetermined liquidated damages to all holders of Debentures and Shares,
whether or not any such holder has requested to sell such securities pursuant to
the Registration Statement, until such time as this Prospectus is again made
available. Expenses of preparing and filing the Registration Statement and all
post-effective amendments will be borne by the Company.
Certain of the Initial Purchasers have engaged in transactions with and
performed various investment banking and other services for the Company in the
past, and may do so from time to time in the future.
At December 31, 1997, Lehman Brothers Holdings Inc., an affiliate of Lehman
Brothers, owned 3,598,830 shares of Common Stock (approximately 7.7% of the
shares of Common Stock outstanding as of December 31, 1997). Messrs. David J.
Butters, Eliot M. Fried and Robert B. Millard, who are employees of Lehman
Brothers, constitute three of the eight members of the Company's Board of
Directors, and Mr. Butters is Chairman of the Company's Board. Lehman Brothers
is not making a market in the Debentures or the Shares.
DESCRIPTION OF DEBENTURES
The Debentures were issued under an Indenture dated as of October 15, 1997,
as supplemented (the "Indenture"), between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"). A copy of the Indenture and the Registration
Rights Agreement (as defined below) have been filed as exhibits to the
Registration Statement. The following summaries of certain provisions of the
Debentures, the Indenture and the Registration Rights Agreement do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all of the provisions of the Debentures, the Indenture and the
Registration Rights Agreement, including the definitions therein of certain
terms which are not otherwise defined in this Prospectus. Wherever particular
provisions or defined terms of the Indenture (or of the Form of Debenture which
is a part thereof) or the Registration Rights Agreement are referred to, such
provisions or defined terms are incorporated herein by reference. The Indenture
is qualified under the Trust Indenture Act.
GENERAL
The Debentures represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "-- Subordination of Debentures" and convertible into shares of
Common Stock as described under "-- Conversion of Debentures". The Debentures
are limited to 8,050,000 Debentures having an aggregate principal amount of
$402,500,000. The Debentures are not subject to a sinking fund provision. The
entire principal amount of the Debentures will mature and become due and
payable, together with any accrued and unpaid interest thereon including
Compound Interest (as herein defined), if any, on November 1, 2027, unless
earlier redeemed at the option of the Company.
13
<PAGE> 15
The Indenture does not contain any financial covenants or restrictions on
the payment of dividends or the repurchase of Common Stock (except during
periods when interest on the Debentures is deferred), the incurrence of Senior
Indebtedness (as defined below under "Subordination of Debentures") or the
issuance or repurchase of securities of the Company. The Indenture contains no
covenants or other provisions to afford protection to holders of the Debentures
in the event of a highly leveraged transaction or a change in control of the
Company.
The Debentures bear interest at the annual rate of 5% from November 3,
1997, payable quarterly in arrears on February 1, May 1, August 1 and November 1
of each year (each an "Interest Payment Date"), commencing on February 1, 1998,
to the person in whose name such Debenture is registered, subject to certain
exceptions, 15 days prior to such Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any Interest Payment Date is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next succeeding
calendar year, then such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company is not in default in the payment of interest on the
Debentures, the Company has the right at any time, and from time to time, during
the term of the Debentures to defer payments of interest by extending the
interest payment period for a period not exceeding 20 consecutive quarters
(each, an "Extension Period"), at the end of which Extension Period, the Company
will be required to pay all interest then accrued and unpaid together with
interest thereon compounded quarterly at the rate specified for the Debentures
to the extent permitted by applicable law ("Compound Interest"); provided that
during any such Extension Period, (a) the Company may not declare or pay
dividends on, make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans; provided that no purchases of Common Stock may be made
by the Company with cash other than pursuant to trust arrangements entered into
in connection with such plans; (ii) as a result of a reclassification of the
Company capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such the
Company capital stock or the security being converted or exchanged for the
Company capital stock or (iv) acquisitions of capital stock pursuant to purchase
price adjustments and indemnification provisions under acquisition agreements),
(b) the Company may not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by the Company
that rank pari passu with or junior to the Debentures and (c) the Company may
not make any guarantee payments with respect to the foregoing. Prior to the
termination of any such Extension Period, the Company may further defer payments
of interest by extending the interest payment period; provided, however, that
such Extension Period, including all such previous and further extensions, may
not exceed 20 consecutive quarters or extend beyond the maturity of the
Debentures or any date of redemption of the Debentures declared by the Company.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Company may commence a new Extension Period, subject to the terms set
forth in this section. No interest during an Extension Period, except at the end
thereof, shall be due and payable. The Company has no present intention of
exercising its right to defer payments of interest by extending the interest
payment period on the Debentures. The Company must give the Trustee notice of
its election of any Extension Period at least 15 business days before the
regular record date.
14
<PAGE> 16
FORM, DENOMINATION AND REGISTRATION
The Debentures have been issued in fully registered form, without coupons,
in denominations of $50 principal amount and multiples thereof.
Global Debenture, Book-Entry Form. The Debentures offered hereby are
evidenced by Debentures in registered global form (the "Global Debentures"),
which have been deposited with, or on behalf of, The Depository Trust Company,
New York, New York ("DTC"), and registered in the name of Cede & Co. ("Cede") as
DTC's nominee, and, in the case of a Regulation S Global Debenture deposited
with the Euroclear System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel
Bank") (as indirect participants in DTC). Except as set forth below, the Global
Debenture may be transferred, in whole or in part, only to another nominee of
DTC or to a successor of DTC or its nominee.
Purchasers of the Debentures offered hereby may hold their interests in the
Global Debentures directly through DTC or indirectly through organizations
(including Euroclear and Cedel Bank) which are participants in DTC (the
"Participants"). Transfers between Participants will be effected in the ordinary
way in accordance with DTC rules and will be settled in clearing house funds.
Persons who are not Participants may beneficially own interests in the
Global Debentures held by DTC only through Participants or certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly. So long as the nominees of DTC are the registered owner of the
Global Debentures, such nominees for all purposes will be considered the sole
holder of the Global Debentures. Except as provided below, owners of beneficial
interests in the Global Debentures will not have certificates registered in
their names, will not receive physical delivery of certificates in definitive
form, and will not be considered the holders thereof.
Payment of interest on and the redemption price of the Global Debentures
will be made to the nominees for DTC, as the registered owners of the Global
Debentures by wire transfer of immediately available funds on each interest
payment date or the redemption date, as the case may be. Neither the Company,
the Trustee nor any paying agent will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Debentures or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company has been informed by DTC that, with respect to any payment of
interest on, or the redemption price of, the Global Debentures, DTC's practice
is to credit Participants' accounts on the payment date therefor with payments
in amounts proportionate to their respective beneficial interests in the
principal amount represented by the Global Debentures as shown on the records of
DTC, unless DTC has reason to believe that it will not receive payment on such
date. Payments by Participants to owners of beneficial interests in the
principal amount represented by the Global Debentures held through such
Participants will be the responsibility of such Participants, as is now the case
with securities held for the accounts of customers registered in "street name".
Because DTC can only act on behalf of Participants, who in turn act on
behalf of certain other banks, brokers, dealers, trust companies and other
parties that clear through or maintain a custodial relationship, either directly
or indirectly, with a Participant ("Indirect Participants"), the ability of a
person having a beneficial interest in the principal amount represented by the
Global Debentures to pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate evidencing such
interest.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants, the ability of a person having a beneficial
interest in the Debentures represented by the Global Debentures to pledge such
interest to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interest, may be affected by the lack
of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the
15
<PAGE> 17
Company that it will take any action permitted to be taken by a holder of
Debentures (including, without limitation, the presentation of Debentures for
exchange as described below), only at the direction of one or more Participants
to whose account with DTC interests in the Global Debenture are credited, and
only in respect of the principal amount of the Debentures represented by the
Global Debenture as to which such Participant or Participants has or have given
such direction.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes to the accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Initial Purchasers. Certain of such
Participants (or their representatives), together with other entities, own DTC.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through, or maintain a custodial
relationship with, a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Registered Global Debentures among Participants,
it is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. If DTC is at any time unwilling
or unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will cause Debentures to be issued in
definitive form in exchange for the Global Debentures.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the Global Debenture.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and Indirect Participants to beneficial
owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time. Redemption
notices shall be sent to Cede & Co. If less than all of the Debentures are being
redeemed, DTC will reduce the amount of the interest of each Participant in such
Debentures in accordance with its procedures.
Holders of Debentures evidenced by the Global Debentures may request that
any beneficial interest in the Debentures be exchanged for certificated
securities in definitive form pursuant to the requirements of DTC for such an
exchange.
Holders of Debentures may request that any certificated Debenture they hold
in definitive registered form be exchanged for interests in the applicable
Global Debenture. Certificated Debentures may be issued in exchange for
Debentures represented by a Global Debenture if a depositary is unwilling or
unable to continue as a depositary for the Global Debenture as set forth above.
CONVERSION OF DEBENTURES
General. The Debentures are convertible into shares of Common Stock at the
option of the holders of the Debentures at any time after February 1, 1998, and
prior to the close of business on the Business Day prior to the maturity date of
the Debentures (or, in the case of Debentures called for redemption, the close
of business on the Business Day prior to the Redemption Date) at an initial
conversion rate of .625 shares of the Common Stock for each $50 principal amount
of Debentures (equivalent to a conversion price of $80 per share of the Common
Stock), subject to adjustment as described below. The Company's delivery to the
holders of the Debentures (through the Conversion Agent) of the fixed number of
shares of the Common Stock into which the Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) will be deemed to
satisfy the Company's obligation to pay the principal amount of the Debentures
so converted, and the accrued and unpaid interest thereon, whether or not in
arrears, attributable to the period from the last date
16
<PAGE> 18
to which interest has been paid or duly provided for; provided, however, that if
any Debenture is converted on or after a record date for payment of interest,
the interest payable on the related interest payment date with respect to such
Debenture shall be paid to the holder of Debentures, despite such conversion;
provided further, that if a Redemption Date falls between such record date and
the related interest payment date, the amount of such payment shall include
interest accrued to, but excluding, such Redemption Date.
The terms of the Debentures provide that a holder of Debentures wishing to
exercise its conversion right shall surrender such Debentures, together with an
irrevocable conversion notice, to the Trustee, as conversion agent (the
"Conversion Agent") which shall, on behalf of such holder, convert such
Debenture into Common Stock. Holders may obtain copies of the required form of
the conversion notice from the Conversion Agent. Beneficial holders of
Debentures who desire to convert them into Shares should contact their brokers
or other Participants or Indirect Participants to obtain information on
procedures, including proper forms and cut-off times, for submitting such
request.
No fractional shares of the Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by the
Company in cash based on the current market price of the Common Stock on the
date such Debentures are surrendered for conversion.
Conversion Price Adjustments -- General. The initial conversion price of
$80 per share of the Common Stock is subject to adjustment (under formulae set
forth in the Indenture) in certain events, including:
(i) the issuance of shares of the Common Stock as a dividend or a
distribution with respect to the Common Stock;
(ii) certain subdivisions, reclassifications and combinations of the
Common Stock;
(iii) the issuance to all holders of the Common Stock of certain
rights or warrants entitling them to subscribe for or purchase shares of
the Common Stock at a price less than the current market price per share of
Common Stock;
(iv) the distribution to all holders of the Common Stock of shares of
capital stock (other than the Common Stock) or evidences of indebtedness of
the Company or of assets (including securities, but excluding those rights,
warrants, dividends and distributions referred to above or paid in cash);
(v) dividends or distributions consisting of cash, excluding any
quarterly cash dividend on the Common Stock to the extent that the
aggregate cash dividend per share of the Common Stock in any quarter does
not exceed the greater of (x) the amount per share of the Common Stock of
the next preceding quarterly dividend on the Common Stock to the extent
that such preceding quarterly dividend did not require an adjustment of the
conversion rate pursuant to this clause (v) (as adjusted to reflect
subdivisions or combinations of the Common Stock), and (y) 3.75% of the
average of the daily Closing Prices (as defined below) of the Common Stock
during the ten consecutive Trading Days (as defined below) immediately
prior to the date of declaration of such dividend, and excluding any
dividend or distribution in connection with the liquidation, dissolution or
winding-up of the Company;
(vi) payment to holders of the Common Stock in respect of a tender or
exchange offer by the Company or any subsidiary for all or a portion of the
Common Stock to the extent that the cash and value of any other
consideration included in such payment per share of the Common Stock
exceeds the Closing Price per share of Common Stock on the Trading Day next
succeeding the last date on which tenders or exchanges may be made pursuant
to such tender or exchange offer; and
(vii) payment in respect of a tender offer or exchange offer by a
person other than the Company or any subsidiary of the Company in which, as
of the closing date of the offer, the Board of Directors is not
recommending rejection of the offer.
If an adjustment is required to be made as set forth in clause (v) above as
a result of a distribution that is a quarterly dividend, such adjustment would
be based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant to such clause (v). If
an adjustment is required to be made based upon the full amount of the
distribution that is not a quarterly dividend, such
17
<PAGE> 19
adjustment would be based upon the full amount of the distribution. The
adjustment referred to in clause (vii) above will only be made (A) if the tender
offer or exchange offer is for an amount that increases that person's ownership
of the Common Stock to more than 25% of the total shares of the Common Stock
outstanding and (B) if the cash and value of any other consideration included in
such payment per share of the Common Stock exceeds the Closing Price per share
of the Common Stock on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer. The
adjustment referred to in clause (vii) above will not be made, however, if, as
of the closing of the offer, the offering documents with respect to such offer
disclose a plan or an intention to cause the Company to engage in a
consolidation or merger of the Company or a sale of all or substantially all of
the Company's assets.
The Company may from time to time, to the extent permitted by law, reduce
the conversion price of the Debentures by any amount for any period of at least
20 days, in which case the Company shall give at least 15 days' notice of such
reduction, if the Company Board of Directors has made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. The Company may, at its option, make such reductions in the
conversion price, in addition to those set forth above, as the Company Board of
Directors deems advisable to avoid or diminish any income tax to holders of the
Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes. See
"Certain Federal Income Tax Considerations -- Adjustment of Conversion Price".
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided, however, that any adjustment that would not be required to be
made shall be carried forward and taken into account in any subsequent
adjustment. If any action would require adjustment of the conversion price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the holder of the Debentures. Except as stated above,
the conversion price will not be adjusted for the issuance of the Common Stock
or any securities convertible into or exchangeable for the Common Stock or
carrying the right to purchase any of the foregoing.
Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of
the Company. In the event the Company shall be party to any transaction
(including without limitation (i) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation or merger of the
Company with or into another person or any merger of another person into the
Company (other than a merger that does not result in a reclassification,
conversion, exchange or cancellation of the Common Stock), (iii) any sale or
transfer of all or substantially all of the assets of the Company, or (iv) any
compulsory share exchange) pursuant to which either shares of the Common Stock
shall be converted into the right to receive other securities, cash or other
property, or, in the case of a sale or transfer of all or substantially all of
the assets of the Company, the holders of the Common Stock shall be entitled to
receive other securities, cash or other property, then appropriate provision
shall be made as part of the terms of such transaction so that the holder of
each Debenture then outstanding shall have the right thereafter to convert such
Debenture only into:
(x) in the case of any such transaction that does not constitute a
Common Stock Fundamental Change (as defined below) and subject to funds
being legally available for such purpose under applicable law at the time
of such conversion, the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange
by a holder of the number of shares of the Common Stock issuable upon
conversion of such Debenture immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after giving effect, in the case of any Non-Stock Fundamental Change (as
defined below), to any adjustment in the conversion price in accordance
with clause (i) of the following paragraph, and
18
<PAGE> 20
(y) in the case of any such transaction that constitutes a Common
Stock Fundamental Change, common stock of the kind received by holders of
the Common Stock as a result of such Common Stock Fundamental Change in an
amount determined in accordance with clause (ii) of the following
paragraph.
The company formed by such consolidation or resulting from such merger or that
acquires assets or that acquires the Company's shares, as the case may be, shall
make provisions in its certificate or articles of incorporation or other
constituent document to establish such right. Such certificate or articles of
incorporation or other constituent document shall provide for adjustments that,
for events subsequent to the effective date of such certificate or articles of
incorporation or other constituent documents, shall be as nearly equivalent as
may be practicable to the relevant adjustments provided for in the preceding
paragraphs and in this paragraph.
Notwithstanding any other provision in the preceding paragraphs to the
contrary, if any Fundamental Change (as defined below) occurs, then the
conversion price in effect will be adjusted immediately after such Fundamental
Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the conversion
price of the Debentures immediately following such Non-Stock Fundamental
Change shall be the lower of (A) the conversion price in effect immediately
prior to such Non-Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to the preceding paragraphs, and
(B) the product of (1) the greater of the Applicable Price (as defined
below) and the then applicable Reference Market Price (as defined below)
and (2) a fraction, the numerator of which is $50 and the denominator of
which is (x) the amount of the redemption price for one Debenture if the
redemption date were the date of such Non-Stock Fundamental Change (or, for
the twelve-month periods commencing November 1, 1997, November 1, 1998 and
November 1, 1999, the product of 105.0%, 104.5% and 104.0%, respectively,
times $50) plus (y) any then-accrued and unpaid distributions on one
Debenture; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of Debentures immediately following such Common Stock Fundamental
Change shall be the conversion price in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to the preceding paragraphs, multiplied by a
fraction, the numerator of which is the Purchaser Stock Price (as defined
below) and the denominator of which is the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental Change in which
(A) 100% of the value of the consideration received by a holder of the
Common Stock is common stock of the successor, acquiror or other third
party (and cash, if any, paid with respect to any fractional interests in
such common stock resulting from such Common Stock Fundamental Change) and
(B) all of the Common Stock shall have been exchanged for, converted into
or acquired for, common stock of the successor, acquiror or other third
party (and any cash with respect to fractional interests), the conversion
price of the Debentures immediately following such Common Stock Fundamental
Change shall be the conversion price in effect immediately prior to such
Common Stock Fundamental Change multiplied by a fraction, the numerator of
which is one (1) and the denominator of which is the number of shares of
common stock of the successor, acquiror or other third party received by a
holder of one share of the Common Stock as a result of such Common Stock
Fundamental Change.
Depending upon whether a Fundamental Change is a Non-Stock Fundamental
Change or a Common Stock Fundamental Change, a holder may receive significantly
different consideration upon conversion. In the event of a Non-Stock Fundamental
Change, the holder has the right to convert Debentures into the kind and amount
of the shares of stock and other securities or property or assets (including
cash), except as otherwise provided above, as is determined by the number of
shares of the Common Stock receivable upon conversion at the conversion price as
adjusted in accordance with clause (i) of the preceding paragraph. However, in
the event of a Common Stock Fundamental Change in which less than 100% of the
value of the consideration received by a holder of the Common Stock is common
stock of the successor, acquiror or other third party, a holder of a Debenture
who converts such share following the Common Stock Fundamental Change will
receive consideration in the form of such common stock only, whereas a holder
who converted such share prior
19
<PAGE> 21
to the Common Stock Fundamental Change would have received consideration in the
form of such common stock as well as any other securities or assets (which may
include cash) issuable upon conversion of such Debenture immediately prior to
such Common Stock Fundamental Change.
The term "Applicable Price" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a holder of one share of the Common Stock and
(ii) in the event of any other Fundamental Change, the average of the daily
Closing Price for one share of the Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the holders of the
Common Stock entitled to receive cash, securities, property or other assets in
connection with such Fundamental Change or, if there is no such record date,
prior to the date upon which the holders of the Common Stock shall have the
right to receive such cash, securities, property or other assets.
The term "Closing Price" of any common stock on any day shall mean the last
recorded sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of such common stock, in each case on the New York Stock Exchange Composite
Tape or, if the common stock is not listed or admitted to trading on such
exchange, on the principal national securities exchange on which such common
stock is listed or admitted to trading, or, if not listed or admitted to trading
on any national securities exchange, the average of the closing bid and asked
prices as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors of the Company for that purpose or, if
not so available in such manner, as otherwise determined in good faith by the
Board of Directors of the Company.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of the Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Debentures continue to exist as outstanding Debentures or (ii)
not later than the occurrence of such Fundamental Change, the outstanding
Debentures are converted into or exchanged for debentures of a corporation
succeeding to the business of the Company, which debentures have terms
substantially similar to those of the Debentures.
The term "Fundamental Change" means the occurrence of any transaction or
event or series of transactions or events pursuant to which all or substantially
all of the Common Stock shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the conversion price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Stock shall have been exchange for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of the Common Stock received in the transaction or event as a result of
which more than 50% of the Common Stock shall have been exchanged for, converted
into or acquired for, or shall constitute solely the right to receive, such
cash, securities, property or other assets.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of the Common Stock in such Common Stock
Fundamental Change during the 10 Trading Days immediately prior to the date
fixed for the determination of the holders of the Common Stock entitled to
receive such common stock or, if there is no such date, prior to the date upon
which the holders of the Common Stock shall have the right to receive such
common stock.
20
<PAGE> 22
The term "Reference Market Price" shall initially mean $43.00 (which is an
amount equal to 66.67% of the reported last sale price for the Common Stock on
the NYSE on October 28, 1997) and, in the event of any adjustment to the
conversion price other than as a result of a Fundamental Change, the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the conversion price after giving effect to any such adjustment shall
always be the same as the ratio of the initial Reference Market Price to the
initial conversion price of $80.00 per share.
The term "Trading Day" means a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
OPTIONAL REDEMPTION BY THE COMPANY
The Company shall have the right to redeem the Debentures, in whole or in
part, from time to time, on or after November 4, 2000 (the "Redemption Date"),
upon not less than 30 nor more than 60 days notice, at the following prices
(expressed as percentages of the principal amount of the Debentures) together
with accrued and unpaid interest, including Compound Interest to, but excluding,
the redemption date, if redeemed during the 12-month period beginning November
1:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2000........................................................ 103.5%
2001........................................................ 103.0
2002........................................................ 102.5
2003........................................................ 102.0
2004........................................................ 101.5
2005........................................................ 101.0
2006........................................................ 100.5
On or after November 1, 2007................................ 100.0
</TABLE>
If Debentures are redeemed on any February 1, May 1, August 1, or November
1, accrued and unpaid interest shall be payable to holders of record on the
relevant record date.
If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures to be redeemed in principal amounts of $50
or multiples thereof by lot, pro rata or by another method the Trustee considers
fair and appropriate. If a portion of a holder's Debentures is selected for
partial redemption and such holder converts a portion of such Debentures, such
converted portion shall be deemed to be of the portion selected for redemption.
SUBORDINATION OF DEBENTURES
The Indenture provides that the Debentures are subordinated and junior in
right of payment to all Senior Indebtedness of the Company. No payment of
principal (including redemption payments, if any), premium, if any, or interest
on the Debentures may be made (i) if any Senior Indebtedness of the Company is
not paid when due and any applicable grace period with respect to such default
has ended and such default has not been cured or waived or ceased to exist or
(ii) if the maturity of any Senior Indebtedness of the Company has been
accelerated because of a default. The Company also may not make any payment upon
or in respect of the Debentures if any nonpayment default occurs and is
continuing with respect to certain Designated Senior Indebtedness that permits
the lenders to accelerate the maturity of the loans made thereunder and the
Trustee receives a Payment Blockage Notice from the Company or other person
permitted to give such notice under the Indenture. Payments on the Debentures
may and shall be resumed (a) in case of a payment default, upon the date on
which such default is cured or waived and (b) in case of a nonpayment default,
the earlier of the date on which such nonpayment default is cured or waived or
ceases to exist or 179 days after the date on which the applicable Payment
Blockage Notice is received if the maturity of the Designated Senior
Indebtedness has not been accelerated. No new period of payment blockage may be
commenced pursuant to a Payment Blockage Notice unless and until (i) 365 days
have elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal, premium, if any,
21
<PAGE> 23
and interest on the Debentures that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.
Upon any distribution of assets of the Company to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all principal, premium, if any, and interest due or to become due on all Senior
Indebtedness of the Company must be paid in full before the holders of
Debentures are entitled to receive or retain any payment. Upon satisfaction of
all claims of all Senior Indebtedness then outstanding, the rights of the
holders of the Debentures will be subrogated to the rights of the holders of
Senior Indebtedness of the Company to receive payments or distributions
applicable to Senior Indebtedness until all amounts owing on the Debentures are
paid in full.
By reason of the subordination provisions described above, in the event of
the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and holders of the Debentures may
receive less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of Default under the
Indenture.
The term "Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company, for money borrowed under any credit agreements, notes, guarantees or
similar documents and (B) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company, (ii) all capital lease
obligations of the Company, (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement on any letter of credit, bankers' acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the Company
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreements, hedge transactions or other similar instruments or agreements
or foreign currency hedge, exchange, purchase or similar instruments or
agreements, (vi) all obligations of the types referred to in clauses (i) through
(v) above of other persons for the payment of which the Company is responsible
or liable as obligor, guarantor or otherwise and (vii) all obligations of the
types referred to in clauses (i) through (vi) above of other persons secured by
any lien on any property or asset of the Company (whether or not such obligation
is assumed by the Company), whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the
Company, except for any such indebtedness that is by its terms subordinated to
or pari passu with the Debentures and any indebtedness between the Company and
its Affiliates. Such Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the benefits of the subordination provisions
irrespective of any deferrals, renewals, extensions or refundings of, or
amendments, modifications, supplements or waivers of any term of such Senior
Indebtedness.
The term "Designated Senior Indebtedness" shall mean the Company's
principal bank credit facility and any other Senior Indebtedness of the Company
so designated at the time of incurrence thereof.
The Indenture will not limit the amount of additional Senior Indebtedness
which the Company can create, incur, assume or guarantee, nor will the Indenture
limit the amount of indebtedness or liabilities which any subsidiary can create,
incur, assume or guarantee. At December 31, 1997, the Company had approximately
$24.2 million of outstanding Senior Indebtedness consisting of indebtedness
under the Company's working capital facilities and approximately $66.5 million
(excluding intercompany obligations) of other indebtedness and liabilities with
respect to the Company's subsidiaries.
In the event that, notwithstanding the foregoing, the Trustee or any holder
of the Debentures receives any payment or distribution of assets of the Company
or any kind in contravention of any of the subordination provisions of the
Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Debentures before
all Senior Indebtedness is paid in full, then such payment or distribution will
be held by the recipient in trust for the benefit of holders of Senior
Indebtedness or their representatives to the extent necessary to make payment in
full of all Senior Indebtedness remaining
22
<PAGE> 24
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to or for the holders of Senior Indebtedness.
The Company is obligated to pay reasonable compensation to the Trustee and
to indemnify the Trustee against certain losses, liabilities or expenses
incurred by it in connection with its duties relating to the Debentures. The
Trustee's claims for such payments generally are senior to those of holders of
the Debentures in respect of all funds collected or held by the Trustee.
EVENTS OF DEFAULT; NOTICE AND WAIVER
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Debentures: (i) failure for 30 days to pay interest on the
Debentures, including any Compound Interest in respect thereof, when due;
provided that a valid extension of an interest payment period will not
constitute a default in the payment of interest (including any Compound
Interest) for this purpose; or (ii) failure to pay principal of or premium, if
any, on the Debentures when due whether at maturity, upon redemption, by
declaration or otherwise; or (iii) failure by the Company to convert the
Debentures; or (iv) failure to observe or perform any other covenant contained
in the Indenture for 90 days after notice to the Company by the Trustee or by
the holders of not less than 25% in aggregate outstanding principal amount of
the Debentures; or (v) certain events in bankruptcy, insolvency or
reorganization of the Company.
If any Event of Default shall occur and be continuing, the Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Debentures, will have the right to declare the principal of and the interest on
the Debentures (including any Compound Interest, if any) and any other amounts
payable under the Indenture to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Debentures. In the case of
certain events of bankruptcy or insolvency, the principal of, premium, if any,
and interest on the Debentures shall automatically become and be immediately due
and payable. However, if the Company shall cure all defaults (except the
nonpayment of principal of, premium, if any, and interest on any of the
Debentures which shall have become due by acceleration) and certain other
conditions are met, with certain exceptions, such declaration may be canceled
and past defaults may be waived by the holders of a majority of the principal
amount of the Debentures then outstanding.
The Indenture contains provisions permitting the holders of a majority in
aggregate principal amount of the Debentures, on behalf of all of the holders of
the Debentures, to waive any past default in the performance of any of the
covenants contained in the Indenture, except a default in the payment of the
principal of or premium, if any, or interest on any of the Debentures.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the outstanding Debentures, to modify the Indenture or the
rights of the holders of Debentures; provided, however, that no such
modification may, without the consent of the holder of each outstanding
Debenture affected thereby, among other things, (i) extend the stated maturity
of the Debentures or reduce the principal amount thereof, or reduce the rate or
extend the time for payment of interest thereon, or reduce any premium payable
upon the redemption thereof, or adversely affect the right to convert Debentures
or the subordination provisions of the Indenture; or (ii) reduce the percentage
in aggregate principal amount of outstanding Debentures, the holders of which
are required to consent to any such supplemental indenture.
In addition, the Company and the Trustee may execute, without the consent
of any holder of Debentures, any supplemental indenture to cure any ambiguities,
comply with the Trust Indenture Act and for certain other customary purposes.
23
<PAGE> 25
REGISTRATION RIGHTS
The Company entered into the Registration Rights Agreement with the Initial
Purchasers pursuant to which the Company, at its expense, for the benefit of the
holders, has filed with the Commission the Registration Statement, of which this
Prospectus forms a part, covering the resale of the Debentures and the Shares.
The Company has agreed to use reasonable efforts to cause the Registration
Statement to become effective promptly and to keep the Registration Statement
effective until the earlier of (i) the sale pursuant to the Registration
Statement or Rule 144 under the Securities Act of all the Debentures and the
Shares and (ii) the expiration of the holding period applicable to sales of such
securities under Rule 144(k) under the Securities Act, or any successor
provision. Under certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events, the Company
is permitted to suspend the use of this Prospectus which is a part of the
Registration Statement for a period not to exceed 30 days in any three month
period (or an additional 30 days if it gives a second notice during such 30 day
period) and not to exceed an aggregate of 60 days in any 12-month period. The
Company has agreed to pay predetermined liquidated damages to Selling
Securityholders of Debentures and the Shares who have requested to sell such
securities pursuant to the Registration Statement if the Commission issues a
stay order suspending the effectiveness of the Registration Statement or if this
Prospectus is unavailable for periods in excess of those permitted above until
such time as the stay order is removed or this Prospectus is again made
available. The Company has further agreed, if such unavailability continues for
an additional 30-day period, to pay such predetermined liquidated damages to all
holders of Debentures and Shares, whether or not any such holder has requested
to sell such securities pursuant to the Registration Statement, until such time
as this Prospectus is again made available. A Selling Securityholder who sells
Debentures or Shares pursuant to the Registration Statement generally will be
required to be named as a Selling Securityholder in this Prospectus, deliver
this Prospectus to purchasers and be bound by those provisions of the
Registration Rights Agreement that are applicable to such holder (including
indemnification provisions).
The Company will pay all expenses of the Registration Statement, provide to
each Selling Securityholder copies of this Prospectus, notify each Selling
Securityholder when the Registration Statement has become effective and take
certain other actions as are required to permit, subject to the foregoing,
unrestricted resales of the Debentures or the Shares.
The shares of Common Stock issuable upon conversion of the Debentures have
been approved for listed on the NYSE, subject to official notice of issuance.
The summary herein of certain provisions of the Registration Rights
Agreement is subject to, and is qualified in its entirety by reference to, all
the provisions of the Registration Rights Agreement, a copy of which is
available upon request to the Company or the Initial Purchasers and has been
filed as an exhibit to the Registration Statement.
INFORMATION CONCERNING THE TRUSTEE
The Chase Manhattan Bank, as Trustee under the Indenture, has been
appointed by the Company as paying agent, Conversion Agent, registrar and
custodian with regard to the Debentures.
The Trustee, prior to default, has undertaken to perform only such duties
as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Trustee is
under no obligation to exercise any of the powers vested in it by the Indenture
at the request of any holder of Debentures, unless offered reasonable indemnity
by such holder against the costs, expenses and liabilities which might be
incurred thereby. The Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
The Indenture also contains limitations on the right of the Trustee, as a
creditor of the Company, to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. In addition, the Trustee may be deemed to have a conflicting interest
and may be
24
<PAGE> 26
required to resign as Trustee if at the time of a default under the Indenture it
is a creditor of the Company. The Company may from time to time maintain deposit
accounts and conduct its banking transactions with the Trustee in the ordinary
course of business.
GOVERNING LAW
The Indenture and the Debentures are governed by, and construed in
accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Indenture provides that the Company will pay all fees and expenses
related to the enforcement by the Trustee of the rights of the holders of the
Debentures. The payment of such fees and expenses will be fully and
unconditionally guaranteed by the Company.
The Company has the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly owned
subsidiary of the Company; provided that, in the event of any such assignment,
the Company will remain liable for all of their respective obligations. Subject
to the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 80,000,000 shares of
Common Stock, par value $1.00 per share, and 3,000,000 shares of Preferred
Stock, par value $1.00 per share ("Preferred Stock"). At January 26, 1998,
47,240,374 shares of Common Stock were outstanding, including 53,916 shares of
Common Stock remaining to be exchanged for shares of common stock of GulfMark
International, Inc. ("GulfMark") in connection with the Company's prior
acquisition of GulfMark. In addition, at January 26, 1998, there were 2,540,012
shares of Common Stock reserved for issuance pursuant to various employee
benefit plans of the Company and its subsidiaries, of which 1,411,192 shares of
Common Stock were reserved for issuance upon the exercise of outstanding options
and awards, and 5,031,250 shares of Common Stock reserved for issuance upon the
conversion of the Debentures. At January 26, 1998, there were no shares of
Preferred Stock issued or outstanding. The holders of shares of Common Stock are
not liable to further calls or assessments by the Company. The description below
is a summary of and is qualified in its entirety by the provisions of the
Company's Restated Certificate of Incorporation as currently in effect.
Subject to the rights of the holders of any outstanding shares of Preferred
Stock and those rights provided by law, (i) dividends may be declared and paid
or set apart for payment upon the Common Stock out of any assets or funds of EVI
legally available for the payment of dividends and may be payable in cash, stock
or otherwise, (ii) the holders of EVI stock have the exclusive right to vote for
the election of directors and, except as provided below, on all other matters
requiring stockholder action generally, with each share being entitled to one
vote and (iii) upon the voluntary or involuntary liquidation, dissolution or
winding up of the Company, the net assets of the Company will be distributed pro
rata to the holders of the Common Stock in accordance with their respective
rights and interests to the exclusion of the holders of any outstanding shares
of Preferred Stock.
Although the holders of the Common Stock are generally entitled to vote for
the approval of amendments to the Company's Restated Certificate of
Incorporation, the voting rights of the holders of the Common Stock are limited
with respect to certain amendments to the Company's Restated Certificate of
Incorporation that affect only the holders of the Preferred Stock. Specifically,
subject to the rights of any outstanding shares of any series of Preferred
Stock, EVI's Restated Certificate of Incorporation provides that it may be
amended from time to time in any manner that would solely modify or change the
relative powers, preferences and rights and the qualifications or restrictions
of any issued shares of any series of Preferred Stock then outstanding with the
only required vote or consent for approval of such amendment being the
affirmative vote
25
<PAGE> 27
or consent of the holders of a majority of the outstanding shares of the series
of Preferred Stock so affected, provided that the powers, preferences and rights
and the qualifications and limitations or restrictions of such series after
giving effect to such amendment are no greater than the powers, preferences and
rights and qualifications and limitations or restrictions permitted to be fixed
and determined by the Board of Directors with respect to the establishment of
any new series of shares of Preferred Stock pursuant to the authority vested in
the Board of Directors as to such matters.
Holders of the Common Stock do not have any cumulative voting, redemptive
or conversion rights and have no preemptive rights to subscribe for, purchase or
receive any class of shares or securities of the Company. Holders of the Common
Stock have no fixed dividend rights. Dividends may be declared by the Board of
Directors at its discretion depending on various factors, although no dividends
are anticipated for the foreseeable future. The Company is currently subject to
certain prohibitions on the declaration and payment of cash dividends on the
Common Stock under the terms of the Company's existing credit facilities. Under
the most restrictive of these credit facilities, the Company is limited in the
amount of dividends, distributions and other restricted payments that it may
make to $352.6 million as of December 31, 1997.
The Preferred Stock may be issued from time to time in one or more series,
with each such series having such powers, preferences and rights and
qualifications and limitations or restrictions as may be fixed by the Company's
Board of Directors pursuant to the resolution or resolutions providing for the
issuance of such series.
Under Delaware law, a corporation may include provisions in its certificate
of incorporation that will relieve its directors of monetary liability for
breaches of their fiduciary duty to the corporation, except under certain
circumstances, including a breach of the director's duty of loyalty, acts or
omissions of the director not in good faith or which involve intentional
misconduct or a knowing violation of law, the approval of an improper payment of
a dividend or an improper purchase by the Company of stock or any transaction
from which the director derived an improper personal benefit. The Company's
Restated Certificate of Incorporation provides that the Company's directors are
not liable to the Company or its stockholders for monetary damages for breach of
their fiduciary duty, subject to the above described exceptions specified by
Delaware law.
As a Delaware corporation, the Company is subject to Section 203 of the
Delaware General Corporation Law (the "DGCL"). In general, Section 203 prevents
an "interested stockholder" (defined generally as a person owning 15% or more of
a corporation's outstanding voting stock) from engaging in a "business
combination" (as defined) with a Delaware corporation for three years following
the time such person became an interested stockholder unless (i) before such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination; (ii) upon
consummation of the transaction that resulted in the stockholder becoming an
interested stockholder, the interested stockholder owns at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding stock held by directors who are also officers of the
corporation and by employee stock plans that do not provide employees with the
rights to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer); or (iii) following the transaction
in which such person became an interested stockholder, the business combination
is approved by the board of directors of the corporation and authorized at a
meeting of stockholders by the affirmative vote of the holders of two-thirds of
the outstanding voting stock of the corporation not owned by the interested
stockholder. Under Section 203, the restrictions described above also do not
apply to certain business combinations proposed by an interested stockholder
following the announcement or notification of one of certain extraordinary
transactions involving the corporation and a person who had not been an
interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of the corporation's
directors, if such extraordinary transaction is approved or not opposed by a
majority of the directors who were directors prior to any person becoming an
interested stockholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors.
The Registrar and Transfer Agent for the Company Common Stock is American
Stock Transfer and Trust Company, New York, New York.
26
<PAGE> 28
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of certain material United States federal income
tax consequences pertaining to the purchase, ownership, disposition, and
conversion of Debentures. Unless otherwise stated, this summary deals only with
Debentures held as capital assets by holders who purchased the securities upon
original issuance. This summary does not deal with special classes of holders
such as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors, or persons which hold the Debentures as other than a capital asset.
This summary does not address the tax consequences to persons which have a
functional currency other than the U.S. Dollar or the tax consequences to
shareholders, partners, or beneficiaries of a holder of Debentures. Further,
this summary does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government which may be applicable to the Debentures. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
promulgated thereunder, and administrative and judicial interpretations thereof,
as of the date hereof, all of which are subject to change, possibly on a
retroactive basis.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Because the Company has the option, under the terms of the Debentures, to
defer payments of stated interest by extending interest payment periods for up
to 20 quarters, interest on the Debentures will be reportable as "original issue
discount". Holders of debt instruments issued with OID must include that
discount in income on an economic accrual basis regardless of their method of
tax accounting, and without regard to whether such accrual causes amounts to be
included in income prior to the receipt of cash attributable to the interest.
Generally, all of a holder's taxable interest income with respect to the
Debentures will be accounted for as OID. Actual payments of stated interest will
not, however, be separately reported as includable in taxable income. The amount
of OID which accrues on a Debenture in any quarter will approximately equal the
amount of the interest which accrues on the Debenture in that quarter at the
stated interest rate. In the event the interest payment period is extended,
holders will continue to accrue OID approximately equal to the amount of the
interest payment due at the end of the extended interest payment period on an
economic accrual basis over the length of the extended interest payment.
MARKET DISCOUNT
Subject to a de minimis exception, a holder of a Debenture acquired at a
market discount generally will be required to treat as ordinary income any gain
recognized on the disposition of the Debenture to the extent of the accrued
market discount on the Debenture at the time of disposition. For this purpose,
the market discount on a Debenture generally will be equal to the amount, if
any, by which the stated redemption price at maturity of the Debenture exceeds
the holder's tax basis in the Debenture immediately after its acquisition. In
general, market discount on a Debenture will be treated as accruing on a ratable
basis over the term of the Debenture or, at the election of the holder, under a
constant yield method. A holder of a Debenture acquired at a market discount may
also be required to defer the deduction of a portion of the interest on any
indebtedness incurred or maintained to purchase or carry the Debenture until the
Debenture is disposed of in a taxable transaction. The foregoing rules will not
apply if the holder elects to include accrued market discount in income
currently. If a holder acquires a Debenture at a market discount and receives
Common Stock upon conversion of the Debenture, the amount of accrued market
discount with respect to the Debenture through the date of the conversion should
be treated, under regulations to be issued by the Treasury Department, as
ordinary income on the disposition of the Common Stock.
BOND PREMIUM
A holder that purchases a Debenture for an amount in excess of its
principal amount may be entitled to elect to treat a portion of such excess as
"amortizable bond premium," which will reduce the amount required to be included
in the holder's income each year as interest on the Debenture by the amount of
such premium
27
<PAGE> 29
allocable to that year based on the Debenture's yield to maturity. However,
under proposed Treasury Regulations, the present value of the conversion feature
of the Debentures would be subtracted from the cost of the Debenture in
determining the amount of any amortizable bond premium. An election to amortize
bond premium would apply to all debt instruments held by the holder at the
beginning of the taxable year to which the election applies or thereafter
acquired by the holder.
SALES, EXCHANGES OR RETIREMENTS OF DEBENTURES
Upon the sale, exchange, redemption, retirement at maturity or other
disposition (other than a conversion) of a Debenture, the holder thereof will
recognize gain or loss equal to the difference between the amount realized on
such disposition of the Debenture and the holder's adjusted tax basis in such
Debenture. A holder's adjusted tax basis in the Debenture generally will be
equal to its initial purchase price increased by OID previously includable in
such holder's gross income to the date of disposition and decreased by payments
received on the Debenture to the date of disposition. Such gain or loss will be
a capital gain or loss and will be long-term gain or loss if the Debenture has
been held for more than 18 months at the time of sale. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income.
The Debentures may trade at a price which does not accurately reflect the
value of accrued but unpaid interest thereon. A holder which disposes of its
Debentures between record dates for payments thereon will be required to include
in its income, as ordinary income, the accrued but unpaid interest on the
Debentures through the date of disposition, and to add such amount to its
adjusted tax basis in the Debentures to be disposed.
CERTAIN NON-U.S. HOLDERS
For purposes of this discussion, the term "Non-U.S. Holder" refers to any
corporation, individual, partnership, estate or trust which is, for United
States tax purposes, treated as a foreign corporation, a non-resident alien
individual, a foreign partnership or a non-resident fiduciary of a foreign
estate or trust.
Under present United States federal income tax law, interest on the
Debentures, including OID, will generally be classified as "portfolio interest"
to a Non-U.S. Holder of a Debenture provided such interest is not effectively
connected with the conduct of a trade or business within the United States by
the holder. As a result, payments of stated interest to any holder of a
Debenture which is a Non-U.S. Holder will not be subject to withholding of
United States federal income tax provided:
(a) the beneficial owner of the Debenture does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, which ownership is
determined after the application of certain attribution rules;
(b) the beneficial owner of the Debenture is not a controlled foreign
corporation which is related to the Company through stock ownership; and
(c) either (i) the beneficial owner of the Debenture or (ii) a
securities clearing organization, a bank or other financial institution
which holds customers' securities in the ordinary course of its trade or
business and which holds the Debenture in such capacity certifies to the
Company or its agent, under penalties of perjury, that it is not a United
States person, or in the case of an individual, is neither a citizen nor a
resident of the United States, and provides the owner's name and address to
the Company or its agent.
If a Non-U.S. Holder is treated as receiving a deemed dividend as a result
of an adjustment of the conversion price of the Debentures, as described below
under the heading "Adjustment of Conversion Price", such deemed dividend will be
subject to United States federal withholding tax at a 30% (or lower treaty)
rate.
CONVERSION OF DEBENTURES INTO COMMON STOCK
A holder will not recognize gain or loss upon the conversion of Debentures
into Common Stock. A holder will, however, recognize gain upon the receipt of
cash in lieu of a fractional share of Common Stock equal to
28
<PAGE> 30
the amount of cash received less the holder's tax basis in such fractional
share. A holder's tax basis in the Common Stock received upon conversion should
generally be equal to the holder's tax basis in the Debentures converted less
the basis allocated to any fractional share for which cash is received, and a
holder's holding period in the Common Stock received upon conversion should
generally begin on the date the holder acquired the Debentures converted.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Debentures as having received a constructive distribution from the
Company in the event the conversion ratio of the Debentures is adjusted if (i)
as a result of such adjustment, the proportionate interest (measured by the
number of shares of Common Stock into which the Debentures are convertible) of
the holder's Debentures in the assets or earnings and profits of the Company is
increased and (ii) the adjustment is not made pursuant to a bona fide,
reasonable, antidilution formula. An adjustment in the conversion ratio would
not be considered made pursuant to such formula if the adjustment were made to
compensate for certain taxable distributions with respect to the Common Stock.
Thus, under certain circumstances, a reduction in the conversion price of the
Debentures may result in deemed dividend income to holders thereof to the extent
of the current or accumulated earnings and profits of the Company. Holders of
the Debentures would be required to include their allocable share of such deemed
dividend income in gross income but would not receive any cash related thereto.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Generally, income on the Debentures will be reported to holders on Forms
1099, which forms should be mailed to holders of Debentures by January 31
following each calendar year. Payments made on, and proceeds from the sale of,
the Debentures may be subject to a "backup" withholding tax of 31% unless the
holder complies with certain identification requirements. Any withheld amounts
will be allowed as a credit against the holder's United States federal income
tax, provided the required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP, DISPOSITION AND
CONVERSION OF THE DEBENTURES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
LEGAL MATTERS
The validity of the issuance of the Debentures offered hereby and the
Shares issuable upon conversion of the Debentures have been passed upon for the
Company by Fulbright & Jaworski L.L.P., Houston, Texas. Uriel E. Dutton, a
director of the Company, is a partner of Fulbright & Jaworski L.L.P. Mr. Dutton
currently holds options to purchase 70,000 shares of Common Stock, which options
were granted to him pursuant to the Company's Amended and Restated Non-Employee
Director Stock Option Plan.
EXPERTS
The Company's consolidated financial statements and the Company's related
consolidated financial statement schedules as of December 31, 1996 and 1995 and
for each of the three years in the period ended December 31, 1996, incorporated
by reference into this Prospectus and the Registration Statement have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
The historical balance sheets of TCA, as of December 31, 1995 and 1994, and
the consolidated statements of income, retained earnings and cash flows for the
fiscal years ended December 31, 1995 and
29
<PAGE> 31
1994, incorporated by reference into this Prospectus and the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.
GulfMark Retained Assets financial statements as of December 31, 1996 and
1995, and for each of the three years in the period ended December 31, 1996,
incorporated by reference in this Prospectus and the Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
30
<PAGE> 32
======================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
SECURITYHOLDER OR ANY UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SHARES BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. UNDER NO
CIRCUMSTANCES SHALL THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE PURSUANT TO
THIS PROSPECTUS CREATE ANY IMPLICATION THAT INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Forward-Looking Statements............ 3
Risk Factors.......................... 4
The Company........................... 8
Ratio of Earnings to Fixed Charges.... 9
Use of Proceeds....................... 10
Selling Securityholders............... 10
Plan of Distribution.................. 12
Description of Debentures............. 13
Description of Capital Stock.......... 25
Certain Federal Income Tax
Considerations...................... 27
Legal Matters......................... 29
Experts............................... 29
</TABLE>
======================================================
======================================================
[EVI LOGO]
EVI, INC.
8,050,000 5% CONVERTIBLE
SUBORDINATED PREFERRED
EQUIVALENT DEBENTURES DUE 2027
5,031,250 SHARES
OF COMMON STOCK
--------------------
PROSPECTUS
--------------------
, 1998
======================================================
<PAGE> 33
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee . . . . . . . $118,738
New York Stock Exchange Listing Fee . . . . . . . . . . . . . . . . 1,500
Printing and engraving expenses . . . . . . . . . . . . . . . . . . 3,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . 5,000
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . 2,500
Blue Sky Fees and Expenses (including legal fees) . . . . . . . . . 1,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,262
--------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . $135,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Delaware law, a corporation may include provisions in its
certificate of incorporation that will relieve its directors of monetary
liability for breaches of their fiduciary duty to the corporation, except under
certain circumstances, including a breach of the director's duty of loyalty,
acts or omissions of the director not in good faith or which involve
intentional misconduct or a knowing violation of law, the approval of an
improper payment of a dividend or an improper purchase by the corporation of
stock or any transaction from which the director derived an improper personal
benefit. The Company's Restated Certificate of Incorporation provides that the
Company's directors are not liable to the Company or its stockholders for
monetary damages for breach of their fiduciary duty, subject to the described
exceptions specified by Delaware law.
Section 145 of the Delaware General Corporation Law grants to the
Company the power to indemnify each officer and director of the Company against
liabilities and expenses incurred by reason of the fact that he is or was an
officer or director of the Company if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The By-laws of the
Company provide for indemnification of each officer and director of the Company
to the fullest extent permitted by Delaware law. Messrs. David J. Butters,
Eliot M. Fried and Robert B. Millard, employees of Lehman Brothers Inc.
("Lehman"), constitute three of the eight members of the Board of Directors of
the Company. Under the restated certificates of incorporation, as amended to
date, of Lehman and its parent, Lehman Brothers Holdings Inc. ("Holdings"),
both Delaware corporations, Messrs. Butters, Fried and Millard, in their
capacity as directors of the Company, are to be indemnified by Lehman and
Holdings to the fullest extent permitted by Delaware law. Messrs. Butters,
Fried and Millard are serving as directors of the Company at the request of
Lehman and Holdings.
Section 145 of the Delaware General Corporation Law also empowers the
Company to purchase and maintain insurance on behalf of any person who is or
was an officer or director of the Company against liability asserted against or
incurred by him in any such capacity, whether or not the Company would have the
power to indemnify such officer or director against such liability under the
provisions of Section 145. The Company has purchased and maintains a
directors' and officers' liability policy for such purposes. Messrs. Butters,
Fried and Millard are insured against certain liabilities which they may incur
in their capacity as directors pursuant to insurance maintained by Holdings.
II-1
<PAGE> 34
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
4.1 Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to
Exhibit No. 3.1 to Form 8-K, File 1-13086, dated May 13, 1997).
4.2 By-laws of the Company, as amended (incorporated by reference to Exhibit No. 3.2 to Form 10-K, File 1-
13086, filed March 1, 1994).
4.3 Amended and Restated Credit Agreement among Energy Ventures, Inc., the Subsidiary Guarantors defined
therein, the Lenders defined therein and The Chase Manhattan Bank dated as of December 6, 1996,
including the form of Note (incorporated by reference to Exhibit No. 4.1 to Form 8-K, File 1-13086,
filed December 26, 1996).
4.4 First Amendment to Amended and Restated Credit Agreement dated as of August 8, 1997, by and between
EVI, Inc., the Subsidiary Guarantors defined therein and The Chase Manhattan Bank and the other lenders
defined therein (incorporated by reference to Exhibit No. 4.4 to the Registration Statement on Form
S-8; Registration No. 333-44345).
4.5 Second Amendment to Amended and Restated Credit Agreement by and between EVI, Inc., the Subsidiary
Guarantors defined therein and The Chase Manhattan Bank and the other lenders defined therein dated as
of October 23, 1997 (incorporated by reference to Exhibit No. 4.2 to Form 8-K, File 1-13086, filed
December 31, 1997).
4.6 Indenture dated March 15, 1994, among Energy Ventures, Inc., as Issuer, the Subsidiary Guarantors party
thereto, as Guarantors, and Chemical Bank, as Trustee (incorporated by reference to Form 8-K, File 1-
13086, filed April 5, 1994).
4.7 Specimen 10 1/4% Senior Note due 2004 of Energy Ventures, Inc. (incorporated by reference to Form 8-K,
File 1-13086, filed April 5, 1994).
4.8 First Supplemental Indenture by and among Energy Ventures, Inc., Prideco and Chemical Bank, as trustee,
dated June 30, 1995 (incorporated by reference to Exhibit No. 4.4 to the Registration Statement on Form
S-3; Registration No. 33-61933).
4.9 Second Supplemental Indenture by and among Energy Ventures, Inc., EVI Arrow, Inc., EVI Watson, Inc. and
The Chase Manhattan Bank, as trustee, dated effective as of December 6, 1996 (incorporated by reference
to Exhibit 4.6 to Form 10-K, File 1-13086, filed March 20, 1997).
4.10 Third Supplemental Indenture by and among EVI, Inc., Ercon, Inc. and The Chase Manhattan Bank, as
trustee, dated effective as of May 1, 1997 (incorporated by reference to Exhibit 99.2 to Form 8-K, File
1-13086, filed October 27, 1997).
4.11 Fourth Supplemental Indenture by and among EVI, Inc., XLS Holding, Inc., XL Systems, Inc. and The Chase
Manhattan Bank, as trustee, dated effective as of August 25, 1997 (incorporated by reference to Exhibit
99.3 to Form 8-K, File 1-13086, filed October 27, 1997).
4.12 Fifth Supplemental Indenture by and between EVI, Inc. and The Chase Manhattan Bank dated as of December
12, 1997 (including the Form of Note and Form of Exchange Note) (incorporated by reference to Exhibit
4.1 to Form 8-K, File 1-13086, filed December 31, 1997).
*4.13 Indenture dated as of October 15, 1997, between EVI, Inc. and The Chase Manhattan Bank, as Trustee.
4.14 First Supplemental Indenture dated as of October 28, 1997, between EVI, Inc. and The Chase Manhattan
Bank, as Trustee (including form of Debenture) (incorporated by reference to Exhibit 4.2 to Form 8-K,
File 1-13086, filed November 5, 1997).
4.15 Registration Rights Agreement dated November 3, 1997, by and among EVI, Inc., Morgan Stanley & Co.
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Prudential Securities Incorporated and Schroder & Co. Inc.
(incorporated by reference to Exhibit 4.3 to Form 8-K, File 1-13086, filed November 5, 1997).
*5.1 Opinion of Fulbright & Jaworski L.L.P.
*12.1 Statement re: calculation of ratio of earnings to fixed charges.
*23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).
*23.2 Consent of Arthur Andersen LLP, with respect to the financial statements of EVI, Inc.
</TABLE>
II-2
<PAGE> 35
<TABLE>
<S> <C>
*23.3 Consent of Arthur Andersen LLP, with respect to the financial statements of Tubular Corporation of
America.
*23.4 Consent of Arthur Andersen LLP, with respect to the GulfMark Retained Assets' financial statements.
*24.1 Powers of Attorney from certain members of the Board of Directors of the Company (contained on page
II-5).
*25.1 Statement of Eligibility of the Trustee on Form T-1.
</TABLE>
- - - - - - - - - - - - - - - --------------------
* Filed herewith.
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has not
filed with this Registration Statement certain instruments defining the rights
of holders of long-term debt of the Company and its subsidiaries because the
total amount of securities authorized under any of such instruments does not
exceed 10% of the total assets of the Company and its subsidiaries on a
consolidated basis. The Company agrees to furnish a copy of any such agreement
to the Commission upon request.
ITEM 17. UNDERTAKINGS.
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment hereof) which, individually
or in the aggregate, represent a fundamental change in the information
set forth in this Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high 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; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (i) and (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
Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Company'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 Exchange Act) that is
incorporated by reference in this Registration
II-3
<PAGE> 36
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the Securities Act or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 37
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 Houston, State of Texas, on January 28, 1998.
EVI, INC.
By: /s/ Bernard J. Duroc-Danner
-----------------------------------------------
Bernard J. Duroc-Danner
President, Chief Executive Officer and Director
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Bernard J. Duroc-Danner and James G.
Kiley, or any of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and any of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or any of
them, or his or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Bernard J. Duroc-Danner President, Chief Executive January 28, 1998
------------------------------------------ Officer and Director
Bernard J. Duroc-Danner (Principal Executive Officer)
/s/ James G. Kiley Vice President and January 28, 1998
------------------------------------------ Chief Financial Officer
James G. Kiley (Principal Financial Officer)
/s/ Frances R. Powell Vice President, Accounting January 28, 1998
------------------------------------------ and Controller
Frances R. Powell (Principal Accounting Officer)
/s/ David J. Butters Director and January 28, 1998
------------------------------------------ Chairman of the Board
David J. Butters
/s/ Uriel E. Dutton Director January 28, 1998
------------------------------------------
Uriel E. Dutton
/s/ Eliot M. Fried Director January 28, 1998
------------------------------------------
Eliot M. Fried
/s/ Sheldon S. Gordon Director January 28, 1998
------------------------------------------
Sheldon S. Gordon
/s/ Sheldon B. Lubar Director January 28, 1998
------------------------------------------
Sheldon B. Lubar
/s/ Robert B. Millard Director January 28, 1998
------------------------------------------
Robert B. Millard
/s/ Robert A. Rayne Director January 28, 1998
------------------------------------------
Robert A. Rayne
</TABLE>
II-5
<PAGE> 38
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Exhibit
- - - - - - - - - - - - - - - ------ -------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit No. 3.1
to Form 8-K, File 1-13086, dated May 13, 1997).
4.2 By-laws of the Company, as amended (incorporated by reference to Exhibit No. 3.2 to Form 10-K, File 1-13086,
filed March 1, 1994).
4.3 Amended and Restated Credit Agreement among Energy Ventures, Inc., the Subsidiary Guarantors defined therein,
the Lenders defined therein and The Chase Manhattan Bank dated as of December 6, 1996, including the form of
Note (incorporated by reference to Exhibit No. 4.1 to Form 8-K, File 1-13086, filed December 26, 1996).
4.4 First Amendment to Amended and Restated Credit Agreement dated as of August 8, 1997, by and between EVI, Inc.,
the Subsidiary Guarantors defined therein and The Chase Manhattan Bank and the other lenders defined therein
(incorporated by reference to Exhibit No. 4.4 to the Registration Statement on Form S-8; Registration
No. 333-44345).
4.5 Second Amendment to Amended and Restated Credit Agreement by and between EVI, Inc., the Subsidiary Guarantors
defined therein and The Chase Manhattan Bank and the other lenders defined therein dated as of October 23,
1997 (incorporated by reference to Exhibit No. 4.2 to Form 8-K, File 1-13086, filed December 31, 1997).
4.6 Indenture dated March 15, 1994, among Energy Ventures, Inc., as Issuer, the Subsidiary Guarantors party
thereto, as Guarantors, and Chemical Bank, as Trustee (incorporated by reference to Form 8-K, File 1-13086,
filed April 5, 1994).
4.7 Specimen 10 1/4% Senior Note due 2004 of Energy Ventures, Inc. (incorporated by reference to Form 8-K, File 1-
13086, filed April 5, 1994).
4.8 First Supplemental Indenture by and among Energy Ventures, Inc., Prideco and Chemical Bank, as trustee, dated
June 30, 1995 (incorporated by reference to Exhibit No. 4.4 to the Registration Statement on Form S-3;
Registration No. 33-61933).
4.9 Second Supplemental Indenture by and among Energy Ventures, Inc., EVI Arrow, Inc., EVI Watson, Inc. and The
Chase Manhattan Bank, as trustee, dated effective as of December 6, 1996 (incorporated by reference to Exhibit
4.6 to Form 10-K, File 1-13086, filed March 20, 1997).
4.10 Third Supplemental Indenture by and among EVI, Inc., Ercon, Inc. and The Chase Manhattan Bank, as trustee,
dated effective as of May 1, 1997 (incorporated by reference to Exhibit 99.2 to Form 8-K, File 1-13086, filed
October 27, 1997).
4.11 Fourth Supplemental Indenture by and among EVI, Inc., XLS Holding, Inc., XL Systems, Inc. and The Chase
Manhattan Bank, as trustee, dated effective as of August 25, 1997 (incorporated by reference to Exhibit 99.3
to Form 8-K, File 1-13086, filed October 27, 1997).
4.12 Fifth Supplemental Indenture by and between EVI, Inc. and The Chase Manhattan Bank dated as of December 12,
1997 (including the Form of Note and Form of Exchange Note) (incorporated by reference to Exhibit 4.1 to Form
8-K, File 1-13086, filed December 31, 1997).
*4.13 Indenture dated as of October 15, 1997, between EVI, Inc. and The Chase Manhattan Bank, as Trustee.
4.14 First Supplemental Indenture dated as of October 28, 1997, between EVI, Inc. and The Chase Manhattan Bank, as
Trustee (including form of Debenture) (incorporated by reference to Exhibit 4.2 to Form 8-K, File 1-13086,
filed November 5, 1997).
4.15 Registration Rights Agreement dated November 3, 1997, by and among EVI, Inc., Morgan Stanley & Co.
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, Credit Suisse First Boston Corporation,
Lehman Brothers Inc., Prudential Securities Incorporated and Schroder & Co. Inc. (incorporated by reference to
Exhibit 4.3 to Form 8-K, File 1-13086, filed November 5, 1997).
*5.1 Opinion of Fulbright & Jaworski L.L.P.
*12.1 Statement re: calculation of ratio of earnings to fixed charges.
*23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).
*23.2 Consent of Arthur Andersen LLP, with respect to the financial statements of EVI, Inc.
*23.3 Consent of Arthur Andersen LLP, with respect to the financial statements of Tubular Corporation of America.
*23.4 Consent of Arthur Andersen LLP, with respect to the GulfMark Retained Assets' financial statements.
*24.1 Powers of Attorney from certain members of the Board of Directors of the Company (contained on page II-5).
*25.1 Statement of Eligibility of the Trustee on Form T-1.
</TABLE>
- - - - - - - - - - - - - - - --------------------
* Filed herewith.
<PAGE> 1
Exhibit 4.13
EVI, INC.,
as Issuer
TO
THE CHASE MANHATTAN BANK,
as Trustee
Indenture
Dated as of October 15, 1997
Subordinated Debentures
<PAGE> 2
TABLE OF CONTENTS:(1)
<TABLE>
PAGE
RECITALS OF THE COMPANY
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C> <C>
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.3 Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.4 Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.5 Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.6 Notice to Holders of Debentures; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.7 Language of Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.8 Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.9 Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.11 Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.12 Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.14 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.15 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.16 Immunity of Incorporators, Shareholders, Officers, Directors and Employees . . . . . . . . . 13
ARTICLE II
DEBENTURE FORMS
<S> <C> <C>
Section 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.2 Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.3 Debentures in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.4 Form of Legend for Book-Entry Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.5 Form of Conversion Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
- - - - - - - - - - - - - - - --------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-i-
<PAGE> 3
<TABLE>
ARTICLE III
THE DEBENTURES
<S> <C> <C>
Section 3.1 Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.2 Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.3 Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.4 Temporary Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.5 Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . 23
Section 3.6 Mutilated, Destroyed, Lost and Stolen Debentures and Coupons . . . . . . . . . . . . . . . . 26
Section 3.7 Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.8 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.9 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.10 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.11 Electronic Debenture Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.2 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.3 Company's Option to Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . 30
Section 4.4 Discharge and Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.5 Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.6 Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE V
REMEDIES
Section 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.2 Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . 35
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . 36
Section 5.4 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.5 Trustee May Enforce Claims Without Possession of Debentures or Coupons . . . . . . . . . . . 37
Section 5.6 Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.7 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.9 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.10 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.11 Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.12 Control by Holders of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.13 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.14 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.15 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
-ii-
<PAGE> 4
<TABLE>
ARTICLE VI
THE TRUSTEE
<S> <C> <C>
Section 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default . . . . . . . . 41
Section 6.2 Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.3 Not Responsible for Recitals or Issuance of Debentures . . . . . . . . . . . . . . . . . . . 43
Section 6.4 May Hold Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.5 Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.6 Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.7 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.8 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.9 Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.10 Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.11 Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.12 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . 46
Section 6.13 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.14. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Company to Furnish Trustee Names and Addresses of Debentureholders . . . . . . . . . . . . . 49
Section 7.2 Preservation of Information: Communications to Holders . . . . . . . . . . . . . . . . . . . 49
Section 7.3 Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.4 Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
</TABLE>
-iii-
<PAGE> 5
<TABLE>
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
<S> <C> <C>
Section 8.1 Company May Consolidate, Etc. on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.2 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.3 Opinion of Counsel to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . 52
Section 9.2 Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.3 Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.4 Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.5 Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.6 Reference in Debentures to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE X
COVENANTS
Section 10.1 Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.3 Money for Debentures Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.4 Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.5 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.6 Purchase of Debentures by Company or Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.7 Statement by Officers as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.8 Calculation of Original Issue Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.9 Financial Information; SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE XI
REDEMPTION OF DEBENTURES
Section 11.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 11.2 Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 11.3 Selection by Trustee of Debentures to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.5 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.6 Debentures Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.7 Debentures Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
-iv-
<PAGE> 6
<TABLE>
ARTICLE XII
SINKING FUNDS
<S> <C> <C>
Section 12.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 12.2 Satisfaction of Sinking Fund Payments with Debentures . . . . . . . . . . . . . . . . . . . . 63
Section 12.3 Redemption of Debentures for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES
Section 13.1 Purposes for Which Meetings May be Called . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 13.2 Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 13.3 Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 13.4 Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 13.5 Determination of Voting Rights; Conduct and Adjournment of Meetings . . . . . . . . . . . . . 65
Section 13.6 Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XIV
CONVERSION OF DEBENTURES
Section 14.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 14.2 Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 14.3 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 14.4 Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 14.5 Notice of Certain Corporate Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 14.6 Reservation of Shares of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 14.7 Payment of Certain Taxes upon Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 14.8 Nonassessability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 14.9 Effect of Consolidation or Merger on Conversion Privilege . . . . . . . . . . . . . . . . . . 69
Section 14.10 Duties of Trustee Regarding Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 14.11 Repayment of Certain Funds upon Conversion . . . . . . . . . . . . . . . . . . . . . . . . . 70
</TABLE>
-v-
<PAGE> 7
<TABLE>
ARTICLE XV
SUBORDINATION OF DEBENTURES
<S> <C> <C>
Section 15.1 Debentures Subordinate to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 15.2 Payment Over of Proceeds Upon Dissolution, Etc . . . . . . . . . . . . . . . . . . . . . . . 70
Section 15.3 Prior Payment to Senior Indebtedness Upon Acceleration of Debentures . . . . . . . . . . . . 71
Section 15.4 No Payment When Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . . 72
Section 15.5 Payment Permitted in Certain Situations . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 15.6 Subrogation to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . 73
Section 15.7 Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 15.8 Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 15.9 No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 15.10 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 15.11 Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . . . . 75
Section 15.12 Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . 75
Section 15.13 Rights of Trustee as Holder of Senior Indebtedness, Preservation of Trustee's
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 15.14 Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 15.15 Certain Conversions Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
</TABLE>
-vi-
<PAGE> 8
Cross-Reference Table*
<TABLE>
<CAPTION>
Section of the Trust Indenture Act of 1939, as amended Section of Indenture
------------------------------------------------------ --------------------
<S> <C> <C>
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.7, 6.8, 6.9
(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(f) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.1, 6.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.14
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
Section 316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 5.2, 5.12, 5.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . None
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 5.3, 6.2
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 5.4, 6.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1.8
</TABLE>
- - - - - - - - - - - - - - - --------------------
* This Cross-Reference Table does not constitute part of the Indenture
and shall not affect the interpretation of any of its terms or provisions.
<PAGE> 9
INDENTURE, dated as of October 15, 1997, between EVI, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 5 Post Oak Park,
Suite 1760, Houston, Texas 77027-3415 and The Chase Manhattan Bank, a New York
banking corporation having its principal corporate trust office at 450 West
33rd Street, 15th Floor, New York, New York 10001, 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 secured or
unsecured subordinated debentures, notes or other evidences of indebtedness
(herein called the "Debentures"), 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
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures or of a series thereof,
as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) 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;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, 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 in the United States
of America at the date of such computation; and
(d) 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.
-1-
<PAGE> 10
"Act", when used with respect to any Holder of a Debenture, has
the meaning specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.13 to act on behalf of the Trustee to authenticate
Debentures of one or more series.
"Authorized Newspaper" means a newspaper, in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in the place, in connection with which the
term is used, or in the financial community of such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any Business Day.
"Bearer Debenture" means any Debenture in the form established
pursuant to Section 2.1 which is payable to bearer.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"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, and delivered to the Trustee.
"Book-Entry Debenture" means a Debenture bearing the legend
specified in Section 2.4, evidencing all or part of a series of Debentures,
issued to the Depositary for such series or its nominee, and registered in the
name of such Depositary or nominee. Book-Entry Debentures shall not be deemed
to be securities in global form for purposes of Sections 2.1 and 2.3 and
Article III of this Indenture.
"Business Day", when used with respect to any Place of Payment or
any other particular location referred to in this Indenture or in the
Debentures, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions and trust companies in the City of New
York, that Place of Payment or other location are authorized or obligated by
law or executive order to close.
"Cedel S.A." means Cedel Bank, societe anonyme, or its successor.
"Commission" means the United States Securities and Exchange
Commission.
"Common Depositary" has the meaning specified in Section 3.4.
"Common Stock" includes any stock of any class of the Company or
its successor which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which is not subject to redemption by the
Company. Subject to the anti-dilution provisions of any convertible Debenture,
however, shares of
-2-
<PAGE> 11
Company Common Stock issuable on conversion of a Debenture shall include only
(i) shares of the class designated as Common Stock of the Company at the date
of any supplemental indenture, Board Resolution or other instrument authorizing
such Debenture or (ii) shares of any class or classes resulting from any
reclassification or reclassifications thereof or merger (in which the Company
is not the surviving public company and such previously outstanding Common
Stock of the Company is converted into common stock of such surviving public
company) and which have no preference in respect of the payment of dividends or
the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to
redemption by the Company, provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board of
Directors or the President or any Executive Vice President or any Vice
President and by the Treasurer or the Secretary or any Assistant Treasurer or
any Assistant Secretary of the Company and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered.
"Corporation" means a corporation, association, company,
joint-stock company or business trust.
"Coupon" means any interest coupon appertaining to a Bearer
Debenture.
"Credit Agreement" means, the Amended and Restated Credit
Agreement dated as of December 6, 1996 among the Company, the Subsidiary
Guarantors defined therein, the Lenders defined therein and The Chase Manhattan
Bank and any renewal, extension or replacement thereof which shall constitute
the principal bank credit agreement of the Company.
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 3.5.
"Debentures" has the meaning stated in the first recital of this
Indenture and more particularly means any Debentures authenticated and
delivered under this Indenture.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 4.4
"Depositary" means, with respect to the Debentures of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Debentures, the clearing agency registered under the Exchange Act specified for
that purpose as contemplated by Section 3.1.
-3-
<PAGE> 12
"Designated Senior Indebtedness" shall mean Senior Indebtedness
under the Credit Agreement and any other Senior Indebtedness of the Company so
designated at the time of the incurrence thereof.
"Dollar" or "$" means a dollar or other equivalent unit in such
coin or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"Euro-clear" means Morgan Guaranty Trust Company of New York,
Brussels Office, or its successor as operator of the Euro-clear System.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Date" has the meaning specified in Section 3.4.
"Holder", when used with respect to any Debenture, means in the
case of a Registered Debenture, the Person in whose name the Debenture is
registered in the Debenture Register and in the case of a Bearer Debenture the
bearer thereof and, when used with respect to any Coupon, means the bearer
thereof.
"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 Debentures of any series established as
contemplated by Section 3.1.
"Interest," when used with respect to an Original Issue Discount
Debenture which by its terms bears interest only at Maturity, means interest
payable at Maturity.
"Interest Payment Date," when used with respect to any Debenture,
means the Stated Maturity of an installment of interest on such Debenture.
"Maturity," when used with respect to any Debenture, means the
date on which the principal of such Debenture or an installment of such
principal becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption, notice
of option to elect repayment or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board of Directors or the President or any Executive Vice President or
any Vice President and by the Treasurer or the Secretary or any Assistant
Treasurer or any Assistant Secretary of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be an employee of or counsel for the Company and who shall be acceptable to the
Trustee.
"Original Issue Discount Debenture" means any Debenture which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2.
-4-
<PAGE> 13
"Outstanding," when used with respect to Debentures of any series,
means, as of the date of determination, all Debentures of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures of such series theretofore canceled by the
Trustee or any Paying Agent or delivered to the Trustee for cancellation or
that have previously been canceled;
(ii) Debentures of such series for whose payment or redemption
of which money or United States Government Obligations in the necessary
amount has been theretofore deposited in accordance with Article IV 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 Debentures of such series and any
Coupons appertaining thereto; provided that, if Debentures of such series
or portions of Debentures of such series are to be redeemed prior to the
Maturity thereof, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Debentures of such series which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other Debentures of such
series have been authenticated and delivered pursuant to this Indenture,
other than any Debentures of such series in respect of which there shall
have been presented to the Trustee proof satisfactory to it that Debentures
of such series are held by a bona fide purchaser in whose hands Debentures
of such series are valid obligations of the Company; and
(iv) Debentures of such series as to which Defeasance has been
effected pursuant to Section 4.4.
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of the Outstanding Debentures of such series have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder or whether a quorum is present at a meeting of Holders of Debentures
of such Series (A) the principal amount of an Original Issue Discount Debenture
of such series 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 acceleration of the Maturity thereof pursuant to Section
5.2, (B) the principal amount of a Debenture of such series denominated in a
foreign currency or currencies shall be the U.S. dollar equivalent, determined
on the date of original issuance of such Debenture, of the principal amount
(or, in the case of an Original Issue Discount Debenture of such series, the
U.S. dollar equivalent on the date of original issuance of such Debenture of
the amount determined as provided in (A) above) of such Debenture, and (C)
Debentures of such series owned by the Company or any other obligor upon such
Debentures, 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, or upon any such
determination as to the presence of a quorum, only Debentures of such series
which the Trustee actually knows to be so owned shall be so disregarded.
Debentures of such series 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 Debentures and that
the pledgee is not the Company or any other obligor upon such Debentures or any
Affiliate of the Company or of such other obligor.
-5-
<PAGE> 14
"Paying Agent" means any Person authorized by the Company to pay
the principal of and any premium and interest on any Debentures or any Coupons
appertaining thereto on behalf of the Company.
"Person" means a legal person, including any individual,
corporation, state, partnership, joint venture, trust, association, joint stock
company, limited liability company, unincorporated association or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
"Place of Payment," when used with respect to the Debentures of
any series, means the place or places where, subject to the provisions of
Section 10.2, the principal of and any premium and interest on Debentures of
such series are payable as specified as contemplated by Section 3.1.
"Predecessor Debenture" of a Debenture of any series means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such Debenture; and, for the purposes of this definition, any
Debenture of any series authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture or
a Debenture to which a mutilated, destroyed, lost or stolen Coupon appertains
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Debenture or the Debenture to which the mutilated, destroyed, lost or
stolen Coupon appertains, as the case may be.
"Redemption Date," when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Debenture" means any Debenture in the form established
pursuant to Section 2.1 which is registered in the Debenture Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Debentures of any series means the date
specified for that purpose as contemplated by Section 3.1, whether or not such
day is a Business Day.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for any Designated Senior Indebtedness or (b) with
respect to any Designated Senior Indebtedness that does not have any such
trustee, agent or other representative, (i) in the case of such Designated
Senior Indebtedness issued pursuant to an agreement providing for voting
arrangements as among the holders or owners of such Designated Senior
Indebtedness, any holder or owner of such Designated Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Designated Senior Indebtedness and (ii) in the case of all other
such Designated Senior Indebtedness, the holder or owner of such Designated
Senior Indebtedness.
"Responsible Officer" means, when used with respect to the
Trustee, the chairman of the board of directors, the executive committee of the
board of directors, the chairman of the trust committee, the president, any
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust
-6-
<PAGE> 15
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Rule 144(k)" means Rule 144(k) under The Securities Act or any
successor rule.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor statute.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of the
Company for money borrowed under any credit agreements, notes, guarantees or
similar documents and (b) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company, including, without
limitation, all indebtedness and all obligations of the Company to pay fees and
other amounts, under the Credit Agreement, and any refinancing of the Credit
Agreement in the bank credit market (including institutional participants
therein), including interest accruing on or after a bankruptcy or other similar
event, whether or not an allowed claim therein; (ii) all capital lease
obligations of the Company; (iii) all obligations of the Company incurred,
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Company and all obligations of the Company under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the Company
(contingent or otherwise) with respect to interest rate or other swap, cap or
collar agreements, oil or gas commodity hedge transactions or other similar
instruments or agreements or foreign currency hedge, exchange, purchase or
similar instruments or agreements; (vi) all obligations of the types referred
to in clauses (i) through (v) of other Persons for the payment of which the
Company is responsible or liable as obligor, guarantor, surety or otherwise;
and (vii) all obligations of the types referred to in clauses (i) through (vi)
of other Persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), whether outstanding
on the date of the Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company, except for (A) any such
indebtedness that is by its terms subordinated to or pari passu with the
Debentures, and (B) any indebtedness between the Company and its Affiliates,
including all other debt securities and guarantees in respect of those debt
securities, issued to any trust, or a trustee of such trust, partnership or
other entity affiliated with the Company that is a financing vehicle of the
Company (a "Financing Entity") in connection with the issuance by such
Financing Entity of preferred securities or other securities that rank pari
passu with, or junior to, such preferred securities.
"Special Record Date" for the payment of any Defaulted Interest on
Registered Debentures of any series means a date fixed by the Trustee pursuant
to Section 3.7.
"Stated Maturity", when used with respect to any Debenture or any
installment of principal thereof or interest thereon, means the date specified
in such Debenture or a Coupon representing such installment of interest as the
fixed date on which the principal of such Debenture or such installment of
principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock shall at the
time be owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture, business trust or similar entity, at least
a majority of whose outstanding partnership or similar interests shall at the
time be owned by such Person or by one or more of its
-7-
<PAGE> 16
Subsidiaries or by such Person and one or more of its Subsidiaries and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner.
"Transfer Restriction Termination Date" means the first date on
which the Debentures and any Common Stock issued or issuable upon the
conversion or exchange thereof (other than (i) such securities acquired by the
Company or any Affiliate thereof and (ii) Common Stock issued upon the
conversion or exchange of any such security described in clause (i) above) may
be sold pursuant to Rule 144(k).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture 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 Debentures of any series shall mean the Trustee with respect to
Debentures of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by any
such amendment, the Trust Indenture Act of 1939 as so amended.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States
federal income tax purposes, is a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which is, for United States
federal income tax purposes, a foreign corporation, a non-resident alien
individual or a nonresident alien fiduciary of a foreign estate or trust of a
foreign partnership.
"U.S. Government Obligations" means direct obligations of the
United States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any such U.S. Government Obligations or a specific payment of
principal of or interest on any such U.S. Government Obligations held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depository receipt.
"Voting Stock", as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than
shares, interests, participations or other equivalents having such power only
by reason of the occurrence of a contingency.
-8-
<PAGE> 17
"Yield to Maturity" means the yield to maturity on Debentures of
any series, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
Section 1.2 Compliance Certificates and Opinions. Except as
otherwise expressly provided by this Indenture, 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 by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture, except for certificates provided for in Section 10.8, shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
the individual has made such examination or investigation as is necessary
to enable such individual to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company 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.
-9-
<PAGE> 18
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.
Section 1.4 Acts of Holders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing.
If Debentures of any series are issuable as Bearer Debentures of such series,
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Debentures of such series may, alternatively, be embodied in and evidenced
by the record of Holders of Debentures of such series voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Debentures of such series duly called and held in accordance with
the provisions of Article XIII, or a combination of such instruments and any
such record. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments and so voting at
any such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent or proxy, or of the holding by any Person of a
Debenture of any series, shall be sufficient for any purpose of this Indenture
and (subject to Section 6.2) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders of Debentures of any series shall be proved in the manner
provided in Section 13.6.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) The principal amount and serial numbers of Registered
Debentures of any series held by any Person, and the date of holding the same,
shall be proved by the Debenture Register.
(d) The principal amount and serial numbers of Bearer
Debentures of any series held by any Person, and the date of holding the same,
may be proved by the production of such Bearer Debentures or by a certificate
executed, as depositary, by any trust company, bank, banker or other
depositary, wherever situated, if such certificate shall be deemed by the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Debentures therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Debentures, if such certificate or
affidavit is deemed by the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Debenture continues until
(i) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Debenture is produced, or (ii) such Bearer Debenture is
produced to the Trustee by some other Person, or (iii) such Bearer Debenture is
surrendered in exchange for a Registered Debenture, or (iv) such Bearer
Debenture is no longer Outstanding. The principal amount and serial numbers of
Bearer Debentures held by any Person, and the date of holding the same, may
also be proved in any other manner which the Trustee deems sufficient.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Debenture of any series shall
bind every future Holder of the same Debenture and the Holder of every
Debenture issued upon the registration of transfer thereof or in exchange
therefor
-10-
<PAGE> 19
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 Debenture.
(f) With respect to the Debentures of any series, upon receipt
by the Trustee of (i) any written notice directing the time, method or place of
conducting any proceeding or exercising any trust or power pursuant to Section
5.1 with respect to Debentures of such series or (ii) any written demand,
request or notice with respect to any matter on which the Holders of Debentures
of such series are entitled to act under this Indenture, in each case from
Holders of less than, or proxies representing less than, the requisite
principal amount of Outstanding Debentures of such series entitled to give such
demand, request or notice, the Trustee shall establish a record date for
determining Holders of Outstanding Debentures of such series entitled to join
in such demand, request or notice, which record date shall be the close of
business on the day the Trustee received such demand, request or notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such demand, request or notice whether or
not such Holders remain Holders after such record date; provided, however, that
unless the Holders of the requisite principal amount of Outstanding Debentures
of such series shall have joined in such demand, request or notice prior to the
day which is the ninetieth day after such record date, such demand, request or
notice shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or
a proxy of a Holder, from giving, (i) after the expiration of such 90-day
period, a new demand, request or notice identical to a demand, request or
notice which has been canceled pursuant to the proviso to the preceding
sentence or (ii) during any such 90-day period, a new demand, request or notice
which has been canceled pursuant to the proviso to the preceding sentence or
(iii) during any such 90-day period, a new demand, request or notice contrary
to or different from such demand, request or notice, in either of which events
a new record date shall be established pursuant to the provisions of this
clause.
(g) The Company may set any day as the record date for the
purpose of determining the Holders of Outstanding Debentures of any series
entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders of Debentures of such series. With regard to any
record date set pursuant to this paragraph, the Holders of Outstanding
Debentures of such series on such record date (or their duly appointed agents),
and only such Persons, shall be entitled to give or take the relevant action,
whether or not such Holders remain Holders after such record date. With regard
to any action that may be given or taken hereunder only by Holders of a
requisite principal amount of Outstanding Debentures of any series (or their
duly appointed agents) and for which a record date is set pursuant to this
paragraph, the Company may, at its option, set an expiration date after which
no such action purported to be given or taken by any Holder shall be effective
hereunder unless given or taken on or prior to such expiration date by Holders
of the requisite principal amount of Outstanding Debentures of such series on
such record date (or their duly appointed agents). On or prior to any
expiration date set pursuant to this paragraph, the Company may, on one or more
occasions at its option, extend such date to any later date. Nothing in this
paragraph shall prevent any Holder (or any duly appointed agent thereof) from
giving or taking, after any expiration date, any action identical to, or, at
any time, contrary to or different from, any action given or taken, or
purported to have been given or taken, hereunder by a Holder on or prior to
such date, in which event the Company may set a record date in respect thereof
pursuant to this clause. Notwithstanding the foregoing or the Trust Indenture
Act, the Company shall not set a record date for, and the provisions of this
clause shall not apply with respect to, any action to be given or taken by
Holders pursuant to Section 5.1, 5.2 or 5.12.
-11-
<PAGE> 20
Section 1.5 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,
(a) 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 the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Group, or
(b) 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 Indenture, to the attention of
its Treasurer, or at any other address previously furnished in writing to the
Trustee by the Company.
Section 1.6 Notice to Holders of Debentures; Waiver. Except
as otherwise expressly provided herein, where this Indenture provides for
notice to Holders of Debentures of any event:
(a) such notice shall be sufficiently given to Holders of
Registered Debentures of any series if in writing and mailed, first-class
postage prepaid, to each Holder of a Registered Debenture affected by such
event, at the address of such Holder as it appears in the Debenture
Register, not earlier than the earliest date, and not later than the latest
date, prescribed for the giving of such notice; and
(b) such notice shall be sufficiently given to Holders of
Bearer Debentures of any series if published in an Authorized Newspaper in
The City of New York, The City of London and in such other city or cities
as may be specified in such Debentures on a Business Day at least twice,
the first such publication to be not earlier than the earliest date, and
the second such publication to be not later than the latest date,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Debentures by mail, then such notification as shall be
made with the approval of the Trustee shall constitute sufficient notice to
such Holders for every purpose hereunder. In any case where notice to Holders
of Registered Debentures is given by mail, neither the failure to mail such
notice, nor any defect in any notice mailed to any particular Holder of a
Registered Debenture shall affect the sufficiency of such notice with respect
to other Holders of Registered Debentures or the sufficiency of any notice to
Holders of Bearer Debentures given as provided herein.
In case by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause
it shall be impracticable to publish any notice to Holders of Bearer Debentures
as provided above, then such notification as shall be given with the approval
of the Trustee shall constitute sufficient notice to such Holders for every
purpose hereunder. Neither the failure to give notice by publication to
Holders of Bearer Debentures as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice to Holders of Registered
Debentures given as provided herein.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be
-12-
<PAGE> 21
the equivalent of such notice. Waivers of notice by Holders of Debentures
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.
Section 1.7 Language of Notices, Etc. Any request, demand,
authorization, direction, notice, consent or waiver required or permitted under
this Indenture shall be in the English language, except that any published
notice may be in an official language of the country of publication.
Section 1.8 Conflict with Trust Indenture Act. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
another provision included in this Indenture which is required to be included
in this Indenture by any of Sections 310 to 318, inclusive, of the Trust
Indenture Act of 1939, such required provision shall control.
Section 1.9 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 1.10 Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
Section 1.11 Separability Clause. In case any provision in
this Indenture or the Debentures or Coupons shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.12 Benefits of Indenture. Nothing in this
Indenture or the Debentures or Coupons, express or implied, shall give to any
Person, other than the parties hereto, any Authenticating Agent, any Paying
Agent, any Debenture Registrar and their successors hereunder, and the Holders
of Debentures and Coupons, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 1.13 Governing Law. This Indenture and the Debentures
and Coupons shall be governed by and construed in accordance with the laws of
the State of New York, without regard to conflicts of laws principles thereof.
Section 1.14 Legal Holidays. In any case where any Interest
Payment Date, Redemption Date, sinking fund payment date, Maturity or Stated
Maturity of any Debenture of any series shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this Indenture
or of the Debentures or Coupons other than a provision in the Debentures of any
series which specifically states that such provision shall apply in lieu of
this Section) payment of interest or principal (and premium, if any) need not
be made on the next succeeding Business Day 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 the amount so payable for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be, to such
succeeding Business Day.
Section 1.15 Judgment Currency. The Company agrees, to the
fullest extent that it may effectively do so under applicable law, that (a) if
for the purpose of obtaining judgment in any court it is necessary to convert
the sum due on the Debentures of any series from the currency in which such sum
-13-
<PAGE> 22
is payable in accordance with the terms of such Debentures (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the New York Banking
Day preceding that on which a final unappealable judgment is rendered and (b)
its obligations under this Indenture to make payments in the Required Currency
(i) shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the actual receipt, by the payee,
of the full amount of the Required Currency expressed to be payable in respect
of such payments, (ii) shall be enforceable as an alternative or additional
cause of action for the purpose of recovering in the Required Currency the
amount, if any, by which such actual receipt shall fall short of the full
amount of the Required Currency so expressed to be payable and (iii) shall not
be affected by judgment being obtained for any other sum due under this
Indenture. For purposes of the foregoing, "New York Banking Day" means any day
except a Saturday, Sunday or a legal holiday in The City of New York or a day
on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
Section 1.16 Immunity of Incorporators, Shareholders,
Officers, Directors and Employees. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of a Debenture of any series, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, shareholder, officer, director or employee, as such,
past, present or future, of the Company or of any successor corporation, either
directly or through the Company, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations of the Company,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, shareholders, officers, directors or employees,
as such, of the Company or of any successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations or agreements contained in this Indenture or in any
of the Debentures or implied therefrom; and that any and all such personal
liability, either at common law or in equity or by constitution or statute, of,
and any and all such rights and claims against, every such incorporator,
shareholder, officer, director or employee, as such, because of the creation of
the indebtedness hereby authorized, or under of by reason of the obligations or
agreements contained in this Indenture or in any of the Debentures or implied
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of such
Debentures.
All payments of interest and other amounts, if any, to be made by
the Trustee hereunder shall be made only from the money deposited with the
Trustee and only to the extent that the Trustee shall have sufficient income or
proceeds to make such payments in accordance with the terms of this Indenture,
and each Holder thereof, by its acceptance of a Debenture, agrees that it will
look solely to the income and proceeds deposited with the Trustee to the extent
available for distribution to such Holder as provided and that the Trustee is
not personally liable in any manner to such Holder for any amounts payable or
any liability under this Indenture or any Debenture.
-14-
<PAGE> 23
ARTICLE II
DEBENTURE FORMS
Section 2.1 Forms Generally. The Registered Debentures, if
any, of each series and the Bearer Debentures, if any, of each series and
related Coupons shall be in such form (including temporary or permanent global
form) as shall be established by or pursuant to a Board Resolution or in one or
more 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 Debentures
or Coupons, as evidenced by their execution of the Debentures or Coupons. If
temporary Debentures of any series are issued in global form as permitted by
Section 3.4, the form thereof shall be established as provided in the preceding
sentence. If the forms of Debentures or Coupons of any series (or any such
temporary global Debenture) 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 any Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by
Section 3.3 for the authentication and delivery of such Debentures (or any such
temporary global Debenture) or Coupons.
Unless otherwise specified as contemplated by Section 3.1,
Debentures in bearer form shall have interest Coupons attached.
The definitive Debentures and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner permitted by the rules of any securities exchange, all as
determined by the officers executing such Debentures or Coupons, as evidenced
by their execution of such Debentures or Coupons.
Section 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank,
As Trustee
By:_____________________
Authorized Signatory
Section 2.3 Debentures in Global Form. If Debentures
of a series are issuable in global form, as contemplated by Section 3.1, then,
notwithstanding clause (e) of Section 3.1 and the provisions of Section 3.2,
any such Debenture shall represent such of the Outstanding Debentures of such
series as shall be specified therein and may provide that it shall represent
the aggregate amount of Outstanding Debentures from time to time endorsed
thereon and that the aggregate amount of Outstanding Debentures represented
thereby may from time to time be reduced to reflect exchanges. Any endorsement
of a Debenture in global form to reflect the amount, or any increase or
decrease in the amount, of Outstanding Debentures represented thereby shall be
made by the Trustee in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 3.3 or Section 3.4. Subject to
the provisions of Section 3.3 and, if
-15-
<PAGE> 24
applicable, Section 3.4, the Trustee shall deliver and redeliver any Debenture
in permanent global form in the manner and upon instructions given by the
Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 3.3 or 3.4 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Debenture in global form shall be in writing but
need not comply with Section 1.2 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 3.3 shall apply to
any Debenture represented by a Debenture in global form if such Debenture was
never issued and sold by the Company and the Company delivers to the Trustee
the Debenture in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Debentures represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of and
any premium and interest on any Debenture in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent of
the Company and the Trustee shall treat a Person as the Holder of such
principal amount of Outstanding Debentures represented by a permanent global
Debenture as shall be specified in a written statement of the Holder of such
permanent global Debenture or, in the case of a permanent global Debenture in
bearer form, of Euro-clear or Cedel S.A. which is provided to the Trustee by
such Person.
Section 2.4 Form of Legend for Book-Entry Debentures. Any
Book-Entry Debenture authenticated and delivered hereunder shall bear a legend
in substantially the following form:
"This Debenture is a Book-Entry Debenture within the meaning of
the Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Debenture is exchangeable for
Debentures registered in the name of a Person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and no
transfer of this Debenture (other than a transfer of this Debenture as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in such limited circumstances."
Section 2.5 Form of Conversion Notice. The form of
conversion notice for the conversion of Debentures into shares of Common Stock
or other securities of the Company shall be in substantially the form included
with the applicable form of Debentures as shall be established pursuant to
Section 2.1 hereinabove.
-16-
<PAGE> 25
ARTICLE III
THE DEBENTURES
Section 3.1 Amount Unlimited; Issuable in Series. The
aggregate principal amount of Debentures which may be authenticated and
delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series. There shall
be established in or pursuant to a Board Resolution and, subject to Section
3.3, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Debentures of any series:
(i) the title of the
Debentures of the series
(which shall distinguish the
Debentures of the series from
all other series of
Debentures);
(ii) any limit upon the
aggregate principal amount of
the Debentures of the series
which may be authenticated and
delivered under this Indenture
except for Debentures of the
series authenticated and
delivered upon registration of
transfer of, or in exchange
for, or in lieu of, other
Debentures of the series
pursuant to Section 3.4, 3.5,
3.6, 9.6 or 11.7 and except for
any Debentures which, pursuant
to Section 3.3, are deemed
never to have been
authenticated and delivered
hereunder;
(iii) whether Debentures of
the series are to be issuable
as Registered Debentures,
Bearer Debentures or both,
whether any Debentures of the
series are to be issuable
initially in temporary global
form and whether any Debentures
of the series are to be
issuable in permanent global
form with or without Coupons
and, if so, whether beneficial
owners of interests in any such
permanent global Debenture may
exchange such interests for
Debentures of such series and
of like tenor of any authorized
form and denomination and the
circumstances under which any
such exchanges may occur, if
other than in the manner
provided in Section 3.5;
(iv) the Person to whom any
interest on any Registered
Debenture of the series shall
be payable, if other than the
Person in whose name that
Debenture (or one or more
Predecessor Debentures) is
registered at the close of
business on the Regular Record
Date for such interest, the
manner in which, or the Person
to whom, any interest on any
Bearer Debenture of the series
shall be payable, if otherwise
than upon presentation and
surrender of the Coupons
appertaining thereto as they
severally mature, and the
extent to which, or the manner
in which, any interest payable
on a temporary global Debenture
on
-17-
<PAGE> 26
an Interest Payment Date will
be paid if other than in the
manner provided in Section
3.4;
(v) the date or dates, or
the method by which such date
or dates will be determined or
extended, on which the
principal of the Debentures of
the series is payable;
(vi) the rate or rates at
which the Debentures 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 any such
interest shall accrue, the
Interest Payment Dates on which
any such interest shall be
payable, and the Regular Record
Date for any interest payable
on any Registered Debentures on
any Interest Payment Date and
the basis upon which interest
shall be calculated if other
than that of a 360-day year
consisting of twelve 30-day
months;
(vii) the place or places
where, subject to the
provisions of Sections 11.4 and
10.2, the principal of and any
premium and interest on
Debentures of the series shall
be payable, any Registered
Debentures of the series may be
surrendered for registration of
transfer, Debentures of the
series may be surrendered for
conversion or exchange, notices
and demands to or upon the
Company in respect of the
Debentures of the series and
this Indenture may be served
and where notices to Holders
of Bearer Debentures pursuant
to Section 1.6 will be
published;
(viii) the right, if any, to
extend the interest
payment periods and the
duration of such extension;
(ix) the period or periods
within which, the price or
prices at which and the terms
and conditions upon which
Debentures of the series may be
redeemed, in whole or in part,
at the option of the Company;
(x) the obligation, if
any, of the Company to redeem,
repay or purchase Debentures of
the series, or particular
Debentures within the series,
pursuant to any sinking fund or
analogous provisions and the
period or periods within which,
the price or prices at which
and the terms and conditions
upon which such Debentures
shall be redeemed, repaid or
purchased, in whole or in part,
pursuant to such obligation;
-18-
<PAGE> 27
(xi) the terms of any
right to convert or exchange
Debentures of the series,
either at the option of the
Holder thereof or the Company,
into or for shares of Common
Stock of the Company or other
securities or property,
including without limitation
the period or periods within
which and the price or prices
(including adjustments thereto)
at which any Debentures of the
series shall be converted or
exchanged, in whole or in part
and any other provision in
addition to or in lieu of
those set forth in this
Indenture;
(xii) the denominations
in which any Registered
Debentures of the series shall
be issuable, if other than
denominations of $1,000 and any
integral multiple thereof, and
the denomination or
denominations in which any
Bearer Debentures of the series
shall be issuable, if other
than the denomination of
$5,000;
(xiii) the currency or
currencies, including composite
currencies, in which payment of
the principal of and any
premium and interest on the
Debentures of the series shall
be payable if other than
the currency of the United
States of America;
(xiv) if the principal of
and any premium or interest on
the Debentures of the series
are to be payable, at the
election of the Holders thereof
or the Company, in a currency
or currencies, including
composite currencies, other
than that or those in which the
Debentures are stated to be
payable, the currency or
currencies in which payment of
the principal of and any
premium and interest on
Debentures 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;
(xv) if the amount of
payments of principal of and
any premium or interest on the
Debentures of the series may be
determined with reference to an
index, the manner in which
such amounts shall be
determined;
(xvi) if other than the
principal amount thereof, the
portion of the principal amount
of any Debentures of the
series which shall be payable
upon
-19-
<PAGE> 28
declaration of acceleration of
the Maturity thereof pursuant
to Section 5.2;
(xvii) the Person who
shall be the Debenture
Registrar, if other than the
Trustee;
(xviii) whether the Debentures
of the series shall be issued
upon original issuance in whole
or in part in the form of one
or more Book-Entry Debentures
and, in such case, (a) the
Depositary with respect to such
Book-Entry Debenture or
Debentures; and (b) the
circumstances under which any
such Book-Entry Debenture may
be exchanged for Debentures
registered in the name of, and
any transfer of such Book-Entry
Debenture may be registered to,
a Person other than such
Depositary or its nominee,
if other than as set forth in
Section 3.5;
(xix) if the provisions of
Section 4.4 or 4.5 are
applicable to the Debentures of
such series;
(xx) provisions, if any,
granting special rights to the
Holders of Debentures of the
series upon the occurrence of
such events as may be
specified;
(xxi) any deletions from,
modifications of or additions
to the Events of Default or
covenants of the Company with
respect to Debentures of the
series, whether or not such
Events of Default or covenants
are consistent with the Events
of Default or covenants set
forth herein;
(xxii) whether and under what
conditions additional amounts
will be payable to Holders of
Debentures of the series
pursuant to Section 10.4;
(xxiii) the terms and
conditions, if any,
pursuant to which such
Debentures are secured;
(xxiv) the subordination
terms of the Debentures
of the series;
(xxv) the restrictions, if
any, limiting the transfer
of the Debentures; and
(xxvi) any other terms of the
series.
-20-
<PAGE> 29
All Debentures of any one series and the Coupons appertaining to
any Bearer Debentures of such series shall be substantially identical except,
in the case of Registered Debentures, as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 3.3) set forth in, or determined in the manner provided
in, the Officers' Certificate referred to above or in any such indenture
supplemental hereto. Not all Debentures of any one series need be issued at
the same time, and, unless otherwise provided, a series may be reopened for
issuances of additional Debentures of such series.
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 of the Company and delivered to the Trustee
at or prior to the delivery of the Officers' Certificate setting forth the
terms, or the manner of determining the terms, of the series.
Section 3.2 Denominations. Unless otherwise
provided as contemplated by Section 3.1 with respect to Debentures of any
series, any Registered Debentures of a series shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Debentures shall be issuable in the denomination of $5,000.
Section 3.3 Execution, Authentication, Delivery and Dating.
Debentures shall be signed on behalf of the Company by both (a) its Chairman of
the Board of Directors or any Vice Chairman of the Board of Directors or its
President or one of its Vice Presidents and (b) its Treasurer or one of its
Assistant Treasurers or its Secretary or one of its Assistant Secretaries,
under its corporate seal which may, but need not, be attested. The signature
of any of these officers on the Debentures may be manual or facsimile. Coupons
shall bear the facsimile signature of the Treasurer of the Company.
Debentures and Coupons bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Debentures of any series, together
with any Coupons appertaining thereto executed by the Company to the Trustee
for authentication, together with a Company Order for the authentication and
delivery of Debentures of such series, and the Trustee in accordance with the
Company Order shall authenticate and make Debentures of any series available
for delivery; provided, however, that, in connection with its original
issuance, no Bearer Debenture of such series shall be mailed or otherwise
delivered to any location in the United States; and provided, further, that a
Bearer Debenture of such series may be delivered in connection with its
original issuance only if the Person entitled to receive such Bearer Debenture
shall have furnished a certificate in the form specified in the Debenture of
such series as to certain tax matters in respect of United States citizens,
dated no earlier than 15 days prior to the earlier of the date on which the
Bearer Debenture of such series is delivered and the date on which any
temporary global Debenture first becomes exchangeable for such Bearer Debenture
in accordance with the terms of such temporary global Debenture and this
Indenture. If any Debenture of such series shall be represented by a permanent
global Bearer Debenture of such series, then, for purposes of this Section and
Section 3.4, the notation of a beneficial owner's interest therein upon
original issuance of such Debenture or upon exchange of a portion of a
temporary global Debenture shall be deemed to be delivery in connection with
its original issuance of such beneficial owner's interest in such permanent
global Debenture. Except as permitted by Section 3.6, the Trustee shall not
authenticate and deliver any
-21-
<PAGE> 30
Bearer Debenture of such series unless all appurtenant Coupons for interest
then matured have been detached and canceled.
If all the Debentures of any series are not to be issued at one
time and if the Board Resolution and indenture supplement establishing such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of Debentures of such series and determining
the terms of such series, such as interest rate, maturity date, date of
issuance and date from which interest shall accrue.
If the forms or terms of the Debentures of any series, together
with any Coupons appertaining thereto, have been established in or pursuant to
one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in
authenticating Debentures of such series, and accepting the additional
responsibilities under this Indenture in relation to such Debentures of such
series, the Trustee shall be entitled to receive, and (subject to Section 6.2)
shall be fully protected in relying upon, an Opinion of Counsel stating
(subject to reasonable and customary qualifications) substantially as follows:
(a) that such forms have been established in conformity with
the provisions of this Indenture;
(b) that such terms, or the manner of determining such terms,
have been established in conformity with the provisions of this Indenture;
(c) that Debentures of such series, together with any Coupons
appertaining thereto, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except, as enforcement may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting the enforcement of creditors' rights generally and general
equity principles (regardless of whether enforceability is considered in a
proceeding at law or equity): and
(d) that the Company has complied with all laws and
requirements in respect of the execution and delivery by the Company of
Debentures of such series.
If such forms or terms have been so established, the Trustee shall
not be required to authenticate Debentures of such series if the issue of such
Debentures pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under such Debentures and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the two
preceding paragraphs, if all Debentures of any series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 3.1 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraphs at
or prior to the time of authentication of each Debenture of such series if such
documents are delivered at or prior to the authentication upon original
issuance of the first Debenture of such series to be issued. In authenticating
any Debentures of any series issued subsequent to the original issuance of the
first Debenture of such series, the Trustee may and shall be fully protected in
relying upon the Officers' Certificate delivered to the Trustee pursuant to
Section 3.1 or the Company Order and Opinion of Counsel otherwise required
-22-
<PAGE> 31
pursuant to such preceding paragraphs that were delivered to the Trustee at or
prior to the authentication upon original issuance of the first Debenture of
such series to be issued.
Each Registered Debenture shall be dated the date of its
authentication; and each Bearer Debenture shall be dated as of the date of
original issuance of the first Debenture of such series to be issued.
No Debenture of such series or any Coupon appertaining thereto
shall be entitled to any benefit under this Indenture nor shall such Debenture
or Coupon be a valid obligation for any purpose unless there appears on the
Debenture or the Coupon appertaining to such Debenture, a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Debenture shall be
conclusive evidence, and the only evidence, that such Debenture has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Debenture shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Debenture to
the Trustee for cancellation as provided in Section 3.9 together with a written
statement (which need not comply with Section 1.2 and need not be accompanied
by an Opinion of Counsel) stating that such Debenture has never been issued and
sold by the Company, for all purposes of this Indenture such Debenture shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
Section 3.4 Temporary Debentures. Pending the preparation of
definitive Debentures of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and make available for delivery, temporary
Debentures of such series which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more Coupons or without Coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Debentures or Coupons may determine, as evidenced by their execution of such
Debentures or Coupons. In the case of Debentures of any series issuable as
Bearer Debentures, such temporary Debentures may be in global form. A
temporary Bearer Debenture shall be delivered only in compliance with the
conditions set forth in Section 3.3.
Except in the case of temporary Debentures in global form issued
in a transaction exempt from registration under the Securities Act pursuant to
Regulation S thereunder (a "Regulation S Debenture") (which shall be exchanged
in accordance with the provisions of the following paragraphs), if temporary
Debentures of any series are issued, the Company will cause definitive
Debentures of such series to be prepared without unreasonable delay. After the
preparation of definitive Debentures of such series, the temporary Debentures
of such series shall be exchangeable for definitive Debentures of such series
upon surrender of the temporary Debentures of such series at the office or
agency of the Company maintained pursuant to Section 10.2 in a Place of Payment
for such series for the purpose of exchanges of Debentures of such series,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Debentures of any series (accompanied by any unmatured Coupons
appertaining thereto) the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
aggregate principal amount of definitive Debentures of such series and of like
tenor of authorized denominations; provided, however, that no definitive Bearer
Debenture shall be delivered in exchange for a temporary Registered Debenture.
Until so exchanged the temporary Debentures shall in all respects be entitled
to the same benefits under this Indenture as definitive Debentures.
-23-
<PAGE> 32
If Regulation S temporary Debentures of any series are issued in
global form, any such temporary global Regulation S Debenture shall, unless
otherwise provided therein, be delivered to the London office of a depositary
or common depositary (the "Common Depositary"), for the benefit of Euro-clear
and Cedel S.A., for credit to the respective accounts of the beneficial owners
of such Debentures (or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Regulation S Debenture (the "Exchange Date"), the Company shall deliver to the
Trustee definitive Debentures of such series, in aggregate principal amount
equal to the principal amount of such temporary global Regulation S Debenture,
executed by the Company. On or after the Exchange Date such temporary global
Regulation S Debenture shall be surrendered by the Common Depositary to the
Trustee, as the Company's agent for such purpose, to be exchanged, in whole or
from time to time in part, for definitive Debentures of such series without
charge to the Holder and the Trustee shall authenticate and make available for
delivery, in exchange for each portion of such temporary global Regulation S
Debenture, a like aggregate principal amount of definitive Debentures of such
series of authorized denominations and of like tenor as the portion of such
temporary global Regulation S Debenture to be exchanged; provided, however,
that, unless otherwise specified in such temporary global Regulation S
Debenture, upon such presentation by the Common Depositary, such temporary
global Regulation S Debenture is accompanied by a certificate dated the
Exchange Date or a subsequent date and signed by Cedel S.A. as to the portion
of such temporary global Regulation S Debenture held for its account then to be
exchanged, each in the form or in such form as shall be specified in such
Regulation S Debenture. The definitive Debentures of such series to be
delivered in exchange for any such temporary global Regulation S Debenture
shall be in bearer form, registered form, permanent global bearer form or
permanent global registered form, or any combination thereof, as specified as
contemplated by Section 3.1, and, if any combination thereof is so specified,
as requested by the beneficial owner thereof; provided, however, that
definitive Bearer Debentures of such series shall be delivered in exchange for
a portion of a temporary global Regulation S Debenture of such series only in
compliance with the requirements of Section 3.3.
Unless otherwise specified in such temporary global Regulation S
Debenture, the interest of a beneficial owner of Debentures of any series in a
temporary global Regulation S Debenture shall be exchanged for definitive
Debentures of such series and of like tenor following the Exchange Date when
the account holder instructs Euro-clear or Cedel S.A., as the case may be, to
request such exchange on the Holder's behalf and delivers to Euro-clear or
Cedel S.A., as the case may be, a certificate in such form as shall be
specified in the Regulation S Debenture of such series, dated no earlier than
15 days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euro-clear and Cedel S.A., the Trustee, any
Authenticating Agent appointed for the Debentures of such series and each
Paying Agent. Unless otherwise specified in such temporary global Regulation S
Debenture, any such exchange shall be made free of charge to the beneficial
owners of such temporary global Regulation S Debenture, except that a Person
receiving definitive Debentures must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take
delivery of such definitive Debentures of such series in person at the offices
of Euro-clear or Cedel S.A. Definitive Debentures of such series in bearer
form to be delivered in exchange for any portion of a temporary global
Regulation S Debenture of such series shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary
Regulation S Debentures of any series shall in all respects be entitled to such
benefits under this Indenture as definitive Debentures of such series and of
like tenor authenticated and delivered hereunder, except that, unless otherwise
-24-
<PAGE> 33
specified as contemplated by Section 3.1, interest payable on a temporary
global Regulation S Debenture on an Interest Payment Date for Debentures of
such series occurring prior to the applicable Exchange Date shall be payable to
Euro-clear and Cedel S.A. on such Interest Payment Date upon delivery by
Euro-clear and Cedel S.A. to the Trustee of a certificate or certificates in
such form as shall be specified in the Debenture of such series, for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of such
temporary global Regulation S Debenture on such Interest Payment Date and who
have each delivered to Euro-clear or Cedel S.A., as the case may be, a
certificate in such form as shall be specified in the Debenture of such series.
Any interest so received by Euro-clear and Cedel S.A. and not paid as herein
provided shall be returned to the Trustee immediately prior to the expiration
of two years after such Interest Payment Date in order to be repaid to the
Company in accordance with Section 10.3.
Section 3.5 Registration, Registration of Transfer and
Exchange. The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 10.2 a register (the
"Debenture Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Debentures and the registration of transfers of Registered Debentures. The
Trustee is hereby appointed "Debenture Registrar" for the purpose of
registering Registered Debentures and transfers of Registered Debentures as
herein provided.
Upon due surrender for registration of transfer of any Registered
Debenture of any series at the office or agency of the Company maintained
pursuant to Section 10.2 for such purpose in a Place of Payment for such
series, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or
transferees, one or more new Registered Debentures of the such series of any
authorized denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Registered Debentures of any series
may be exchanged for other Registered Debentures of such series of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Debentures to be exchanged at any such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,
the Debentures which the Holder making the exchange is entitled to receive.
Bearer Debentures will not be issued in exchange for Registered Debentures.
At the option of the Holder, Bearer Debentures of any series may
be exchanged for Registered Debentures of such series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Bearer Debentures of such series to be exchanged at any such
office or agency, with all unmatured Coupons, and all matured Coupons in
default appertaining thereto. If the Holder of a Bearer Debenture of such
series is unable to produce any such unmatured Coupon or Coupons or matured
Coupon or Coupons in default, such exchange may be effected if the Bearer
Debentures of such series are accompanied by payment in funds acceptable to the
Company in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived by
the Company and the Trustee if there is furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Debentures of such series shall
surrender to any Paying Agent any such missing Coupon in respect of which such
a payment shall have been made, such Holder shall be entitled to receive the
amount of such payment; provided, however, that, except as otherwise provided
in Section 10.2, interest represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
-25-
<PAGE> 34
Debenture of any series is surrendered at any such office or agency in exchange
for a Registered Debenture of such series and of like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of Defaulted
Interest, the Bearer Debenture of such series shall be surrendered without the
Coupon relating to such Interest Payment Date or proposed date for payment, as
the case may be, and interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of the Registered Debenture of such series issued
in exchange for such Bearer Debenture, but will be payable only to the Holder
of such Coupon when due in accordance with the provisions of this Indenture.
Whenever any Debentures of any series are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, the Debentures of such series which the Holder
making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Regulation S Debenture of any
series shall be exchangeable only as provided in this paragraph. If the
beneficial owners of interests in a permanent global Regulation S Debenture are
entitled to exchange such interests for Debentures of such series and of
principal amount and like tenor of another authorized form and denomination, as
specified as contemplated by Section 3.1, then without unnecessary delay but in
any event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Debentures of
such series in aggregate principal amount equal to the principal amount of such
permanent global Regulation S Debenture executed by the Company. On or after
the earliest date on which such interests may be so exchanged, such permanent
global Regulation S Debenture of any series shall be surrendered by the Common
Depositary or such other depositary or Common Depositary as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in part,
for definitive Debentures of such series without charge and the Trustee shall
authenticate and make available for delivery, in exchange for each portion of
such permanent global Regulation S Debenture, a like aggregate principal amount
of definitive Debentures of such series of authorized denominations and of like
tenor as the portion of such permanent global Debenture of such series to be
exchanged which, unless the Debentures of such series are not issuable both as
Bearer Debentures and as Registered Debentures of such series, as specified as
contemplated by Section 3.1, shall be in the form of Bearer Debentures or
Registered Debentures of such series, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no Bearer
Debenture delivered in exchange for a portion of a permanent global Debenture
of such series shall be mailed or otherwise delivered to any location in the
United States. If a Registered Debenture of such series is issued in exchange
for any portion of a permanent global Debenture of such series after the close
of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Debenture of
such series, but will be payable on such Interest Payment Date or proposed date
for payment, as the case may be, only to the Person to whom interest in respect
of such portion of such permanent global Debenture of such series is payable in
accordance with the provisions of this Indenture.
-26-
<PAGE> 35
All Debentures issued upon any registration of transfer or
exchange of Debentures shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debentures surrendered upon such registration of transfer or
exchange.
Every Registered Debenture presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company
or the Trustee or any transfer agent) be duly endorsed, or be accompanied by a
written instrument of transfer, in form satisfactory to the Company and the
Debenture Registrar or any transfer agent, duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Debentures, 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 Debentures, other
than exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Debentures of any series during a period beginning at
the opening of business 15 days before any selection of Debentures of such
series to be redeemed and ending at the close of business on (A) if Debentures
of such series are issuable only as Registered Debentures, the day of the
mailing of the relevant notice of redemption and (B) if Debenture of such
series are issuable as Bearer Debentures, the day of the first publication of
the relevant notice of redemption or, if Debentures of such series are also
issuable as Registered Debentures and there is no publication, the mailing of
the relevant notice of redemption, (ii) to register the transfer of or exchange
any Registered Debenture so selected for redemption, in whole or in part,
except the unredeemed portion of any Debenture being redeemed in part, or (iii)
to exchange any Bearer Debenture so selected for redemption except that such a
Bearer Debenture may be exchanged for a Registered Debenture of such series and
like tenor, provided that such Registered Debenture shall be simultaneously
surrendered for redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 3.1, any Book-Entry Debenture shall be exchangeable
pursuant to this Section 3.5 or Sections 3.4, 9.6 and 11.7 for Debentures
registered in the name of, and a transfer of a Book-Entry Debenture of any
series may be registered to, any Person other than the Depositary for such
Debenture or its nominee only if (i) such Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for such Book-Entry
Debenture 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 Book-Entry Debenture shall be so
exchangeable and the transfer thereof so registerable or (iii) there shall have
occurred and be continuing an Event of Default, or an event which after notice
or lapse of time would be an Event of Default, with respect to the Debentures
of such series. Upon the occurrence in respect of any Book-Entry Debenture 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 3.1 for such series, such Book-Entry Debenture may
be exchanged for Debentures registered in the names of, and the transfer of
such Book-Entry Debenture may be registered to, such Persons (including Persons
other than the Depositary with respect to such series and its nominees) as such
Depositary shall direct. Notwithstanding any other provision of this
Indenture, any Debenture authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Book-Entry Debenture shall
also be a Book-Entry Debenture and shall bear the legend specified in Section
2.4 except for any Debenture authenticated and delivered in exchange for, or
upon registration or transfer of, any Book-Entry Debenture pursuant to the
preceding sentence.
-27-
<PAGE> 36
Notwithstanding anything in this Indenture or in the terms of a
Debenture to the contrary, the exchange of Bearer Debentures for Registered
Debentures will be subject to satisfaction of the provisions of the United
States federal income tax laws in effect at the time of such exchange. None of
the Company, the Trustee or any Authenticating Agent of the Company or the
Trustee (any of which, other than the Company, shall rely on an Officers'
Certificate and an Opinion of Counsel) shall be required to exchange any Bearer
Debenture for a Registered Debenture if as a result thereof and in the
Company's reasonable judgment, the Company would incur adverse consequences
under then applicable United States federal income tax laws.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Debentures
and Coupons. If any mutilated Debenture of any series or a Debenture of any
series with a mutilated Coupon appertaining thereto is surrendered to the
Trustee, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery in exchange therefor a new
Debenture of the same series and of principal amount and like tenor and bearing
a number not contemporaneously outstanding, with Coupons corresponding to the
Coupons, if any, appertaining to the surrendered Debenture and such mutilated
Debenture or a Debenture with a mutilated Coupon, if any, shall be canceled by
the Trustee in accordance with the Indenture.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture of any series or Coupon appertaining thereto and (ii) such security
or indemnity as may be required by them to hold each of them harmless, then, in
the absence of notice to the Company or the Trustee that such Debenture or
Coupon has been acquired by a bona fide purchaser, the Company shall, subject
to the following paragraph, execute, and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Debenture or in exchange for the Debenture to which a destroyed,
lost or stolen Coupon appertains (with all appurtenant Coupons not destroyed,
lost or stolen), a new Debenture of such series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding, with Coupons
corresponding to the Coupons, if any, appertaining to such destroyed, lost or
stolen Debenture or to the Debenture to which such destroyed, lost or stolen
Coupon appertains.
In case any such mutilated, destroyed, lost or stolen Debenture or
Coupon appertaining thereto has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new Debenture pay such
Debenture or Coupon; provided, however, that principal of and any premium and
interest on Bearer Debentures shall, except as otherwise provided in Section
10.2, be payable only at an office or agency located outside the United States.
Upon the issuance of any new Debenture under this Section, the
Company may require 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 Debenture of any series, with any Coupons appertaining
thereto, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Debenture or in exchange for a Debenture to which a destroyed, lost or
stolen Coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Debenture and any Coupons appertaining thereto, or the destroyed, lost or
stolen Coupon shall be at any time enforceable by anyone, and any such new
Debenture and Coupons, if any, shall be entitled to all the benefits of this
Indenture equally and
-28-
<PAGE> 37
proportionately with any and all other Debentures of such series and their
Coupons appertaining thereto, if any, 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 Debentures or
Coupons.
Section 3.7 Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 3.1 with respect to any
series of Debentures, interest on any Registered Debenture 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 Debenture (or one or more Predecessor
Debentures) is registered at the close of business on the Regular Record Date
for such interest.
Unless otherwise provided as contemplated by Section 3.1 with
respect to any series of Debentures, any interest on any Registered Debenture
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 (a) and (b)
below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Debentures of such
series (or their respective Predecessor Debentures) 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 Registered Debenture 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
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 Registered Debentures of such series at
the address of such Holder as it appears in the Debenture Register, not
less than 10 days prior to such Special Record Date. The Trustee may, in
its discretion, in the name and at the expense of the Company, cause a
similar notice to be published at least once in an Authorized Newspaper in
each Place of Payment, but such publication shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Registered Debentures of such series (or
their respective Predecessor Debentures) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (b); and
(b) The Company may make payment of any Defaulted Interest on
the Registered Debentures of any series in any other lawful manner not
inconsistent with the requirements of any
-29-
<PAGE> 38
securities exchange on which such Debentures 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 and Section
3.5, each Debenture delivered under this Indenture upon registration of,
transfer of or in exchange for or in lieu of any other Debenture shall carry
the rights to interest accrued and unpaid, and to accrue, which were carried by
such other Debenture.
Except as otherwise specified as contemplated by Section 3.1, in
the case of any Debenture which is converted into Common Stock of the Company
after any Regular Record Date and on or prior to the next succeeding Interest
Payment Date (other than any Debenture whose Maturity is prior to such Interest
Payment Date), interest whose Stated Maturity is on such Interest Payment Date
shall be payable on such Interest Payment Date notwithstanding such conversion,
and such interest (whether or not punctually paid or duly provided for) shall
be paid to the Person in whose name that Debenture (or one or more Predecessor
Debentures) is registered at the close of business on such Regular Record Date.
However, if a Redemption Date falls between a Regular Record Date and the
subsequent Interest Payment Date, the amount of such payment shall include
accumulated and unpaid interest accrued to, but excluding, such Redemption Date
and shall be made on such Redemption Date. Except as otherwise expressly
provided in the first two sentences of this paragraph, in the case of any
Debenture which is converted, interest whose Stated Maturity is after the date
of conversion of such Debenture shall not be payable.
Section 3.8 Persons Deemed Owners. Prior to due presentment
of a Registered Debenture 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 Registered Debenture is registered as the owner of such
Registered Debenture for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 3.5 and 3.7) any interest on such
Debenture and for all other purposes whatsoever, whether or not such Debenture
shall 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.
Title to any Bearer Debenture and any Coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Debenture and the bearer of
any Coupon as the absolute owner of such Debenture or Coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Debenture or Coupon shall 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.
Section 3.9 Cancellation. All Debentures and Coupons
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. All Registered Debentures
and matured Coupons so delivered shall be promptly canceled by the Trustee.
All Bearer Debentures and unmatured Coupons so delivered shall be canceled.
All Bearer Debentures and unmatured Coupons held by the Trustee pending such
cancellation or reissuance shall be deemed to be delivered for cancellation for
all purposes of this Indenture and the Debentures. The Company may at any time
deliver to the Trustee for cancellation any Debentures 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 Debentures previously authenticated
hereunder
-30-
<PAGE> 39
which the Company has not issued and sold, and all Debentures so delivered
shall be promptly canceled by the Trustee. No Debentures shall be
authenticated in lieu of or in exchange for any Debentures canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Debentures and Coupons held by the Trustee shall be destroyed and certification
of their destruction delivered to the Company unless by a Company Order the
Company shall direct that cancelled Debentures be returned to it.
Notwithstanding the foregoing, with respect to any Book-Entry
Debenture, 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 holders of beneficial interests in any Book-Entry Debenture, the
operation of customary practices governing the exercise of the rights of the
Depositary (or its nominee) as Holder of such Book-Entry Debenture.
Section 3.10 Computation of Interest. Except as otherwise
specified as contemplated by Section 3.1 for Debentures of any series, interest
on the Debentures of each series shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 3.11 Electronic Debenture Issuance. The Debentures
may, pursuant to a Board Resolution and Officers' Certificate complying with
Section 3.1 hereof, be issued by means of an electronic issuance system. Any
such Debenture issuance instructions may specify the name, address and taxpayer
identification number of the Holder, the principal amount and Maturity of the
Debenture, the interest rate to be borne by the Debenture and any other terms
not inconsistent with such Board Resolution and Officers' Certificate. Nothing
in this Section 3.11 shall be construed as prohibiting the Company from issuing
Debentures by any means not inconsistent with the provisions of this Indenture.
Section 3.12 CUSIP Numbers. The Company in issuing the
Debentures may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that the Trustee makes no
representation with respect to and is not responsible for the correctness or
accuracy of such numbers either as printed on the Debentures or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debentures, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture. Except
as otherwise specified as contemplated by Section 3.1, 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 Debentures herein expressly
provided for, and any right to receive additional amounts, as provided in
Section 10.4), and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when:
(a) either
-31-
<PAGE> 40
(1) all Debentures theretofore authenticated and
delivered and all Coupons, if any, appertaining thereto (other
than (i) Coupons appertaining to Bearer Debentures surrendered for
exchange for Registered Debentures and maturing after such
exchange, whose surrender is not required or has been waived as
provided in Section 3.5, (ii) Debentures and Coupons which have
been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.6, (iii) Coupons appertaining to
Debentures called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 11.6, and (iv) Debentures and Coupons 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 10.3) have
been delivered to the Trustee canceled or for cancellation; or
(2) all such Debentures and, in the case of (i) or
(ii) below, any Coupons appertaining thereto not theretofore
delivered to the Trustee canceled or 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 sufficient to pay and
discharge the entire indebtedness on such Debentures and Coupons
not theretofore delivered to the Trustee canceled or for
cancellation, for principal (and premium, if any) and any interest
to the date of such deposit (in the case of Debentures which have
become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) 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 6.6, the
obligations of the Company to any Authenticating Agent under Section 6.13 and,
if money shall have been deposited with the Trustee pursuant to clause (a)(2)
of this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
Section 4.2 Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.3, all money and U.S. Government
Obligations deposited with the Trustee pursuant to Section 4.1 or 4.3 and all
money received by the Trustee in respect of such U.S. Government Obligations
shall be held in trust and applied by it, in accordance with the provisions of
the Debentures,
-32-
<PAGE> 41
the Coupons 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 any interest for whose payment such money and U.S.
Government Obligations has been deposited with or received by the Trustee, but
such money need not be segregated from other funds held in trust by the Trustee
except to the extent required by law. Money deposited pursuant to this Section
not in violation of this Indenture shall not be subject to claims of the
holders of Senior Indebtedness under Article XV.
Section 4.3 Company's Option to Effect Defeasance or Covenant
Defeasance. If applicable to Debentures of any series, the Company may elect,
at its option at any time, to have Section 4.4 or Section 4.5 applied to any
such series of Debentures or any Debentures of such series, as the case may be,
designated pursuant to Section 3.1 as being defeasible pursuant to such Section
4.4 or 4.5, in accordance with any applicable requirements provided pursuant to
Section 3.1 and upon compliance with the conditions set forth below in this
Article. Any such election shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 3.1 for such Debentures.
Section 4.4 Discharge and Defeasance. If this Section 4.4 is
specified, as contemplated by Section 3.1, to be applicable to Debentures of
any series, then notwithstanding Section 4.1 and upon compliance with the
applicable conditions set forth in 4.6: (1) the Company shall be deemed to have
paid and discharged the entire indebtedness on all the Outstanding Debentures
of any such series ("Defeasance"); and (2) the provisions of this Indenture as
it relates to such Outstanding Debentures shall no longer be in effect (except
as to the rights of Holders of Debentures of such series to receive, solely
from the trust fund described in Section 4.6, payment of (a) the principal of
(and premium, if any) and any installment of principal of (and premium, if any)
or interest on Debentures of such series on the Stated Maturity of such
principal (and premium, if any) or installment of principal (and premium, if
any) or interest or upon optional redemption and/or (b) any mandatory sinking
fund payments or analogous payments applicable to the Debentures of such series
on that day on which such payments are due and payable in accordance with the
terms of the Indenture and of Debentures of such series, the Company's
obligations with respect to Debentures of such series under Sections 3.4, 3.5,
3.6, 10.2, 10.3, and 10.4 and the rights, powers, trusts, duties and immunities
of the Trustee hereunder, including those under Section 6.8 hereof;
Section 4.5 Covenant Defeasance. If this Section 4.5 is
specified, as contemplated by Section 3.1, to be applicable to any series of
Debentures or any Debentures of such series, as the case may be, (a) the
Company shall be released from its obligations under Sections 10.4 through
10.5, inclusive, and any covenants provided pursuant to Section 3.1(u) or
9.1(b) for the benefit of the Holders of Debentures of such series that
pursuant to the terms of such Debentures of such series are defeasible pursuant
to this Section 4.5 and (b) the occurrence of any event specified in Sections
5.1(d) (with respect to any of Sections 10.4 through 10.5, inclusive, and any
such covenants provided pursuant to Section 3.1(u) or 9.1(b) shall be deemed
not to be or result in an Event of Default, in each case with respect to
Debentures of such series as provided in this Section on and after the date the
conditions set forth in Section 4.6 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to Debentures of such series, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section (to the extent so specified in the case of
Section 5.1(d)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Debentures shall be unaffected thereby.
-33-
<PAGE> 42
Section 4.6 Conditions to Defeasance or Covenant
Defeasance. The following shall be the conditions to the application of
Section 4.4 or Section 4.5 to any applicable series of Debentures or any
Debentures of such series, as the case may be.
(a) either
(1) with respect to all Outstanding Debentures of
such series or such Debentures of such Series, as the case may
be, with reference to this Section 4.6, the Company has deposited
or caused to be deposited with the Trustee irrevocably (but
subject to the provisions of Section 4.2 and the last paragraph of
Section 10.3), as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders
of the Debentures of such series, (i) lawful money of the United
States 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 the
opening of business on the due dates of any payment referred to in
clause (i) or (ii) of this subparagraph (a)(1) lawful money of the
United States 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 (and premium, if any) and interest on
such Debentures the Stated Maturity of such principal or
installment of principal or interest or upon optional redemption
and (B) any mandatory sinking fund payments or analogous payments
applicable to the Debentures of such series on the day on which
such payments are due and payable in accordance with the terms of
this Indenture and of the Debentures of such series; or
(2) the Company has properly fulfilled such other
means of satisfaction and discharge as is specified, as
contemplated by Section 3.1, to be applicable to the Debentures of
such series;
(b) the Company has paid or caused to be paid all other sums
payable with respect to the Debentures of such series;
(c) such deposit for the benefit of Holders of Debentures of
such series 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;
(d) no Event of Default or event which with the giving of
notice or lapse of time, or both, would become an Event of Default with
respect to the Debentures of such series shall have occurred and be
continuing on the date of such deposit and no Event of Default under
Section 5.1(e) or Section 5.1(f) or event which with the giving of notice
or lapse of time, or both, would become an Event of Default under Section
5.1(e) or Section 5.1(f) shall have occurred and be continuing on the 91st
day after such date;
(e) in the event of an election to have Section 4.4 apply to
the Debentures of any series, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of
-34-
<PAGE> 43
Debentures of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit, defeasance and discharge had not occurred;
(f) in the event of an election to have Section 4.5 apply to
Debentures of any series, the Company shall have delivered to the Trustee
an Opinion of Counsel, to the effect that the Holders of Debentures of such
series will not recognize gain or loss for federal income tax purposes as a
result of the deposit and Covenant Defeasance to be effected with respect
to the Debentures of such series and will be subject to United States
federal income tax on the same amount, in the same manner and at the same
times as would be the case if such deposit and Covenant Defeasance were not
to occur;
(g) if the Debentures of such series are then listed on any
domestic or foreign securities exchange, the Company shall have delivered
to the Trustee an Opinion of Counsel to the effect that such deposit,
defeasance and discharge will not cause the Debentures of such series to be
delisted;
(h) no default in the payment of the principal (and premium,
if any) or any interest on any Senior Indebtedness beyond any applicable
grace period shall have occurred and be continuing;
(i) no other default with respect to any Senior Indebtedness
shall have occurred and be continuing and shall have resulted in the
acceleration of such Senior Indebtedness; and
(j) 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 or Covenant
Defeasance with respect to Debentures of such series have been complied
with and an Opinion of Counsel to the effect that either (i) as a result of
such deposit and the related exercise of the Company's option under this
Article, registration is not required under the Investment Company Act of
1940, as amended, by the Company, the trust funds representing such deposit
or the Trustee or (ii) all necessary registrations under said Act have been
effected.
Any deposits with the Trustee referred to in Section 4.6(a)(1)
above shall be irrevocable and shall be made under the terms of an escrow/trust
agreement in form and substance satisfactory to the Trustee. If any
Outstanding Debentures of such series are to be redeemed prior to their Stated
Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable escrow
trust agreement shall provide therefor and the Company shall make such
arrangements as are satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
Upon Defeasance with respect to all the Debentures of any series,
the terms and conditions of the Debentures of such series, including the terms
and conditions with respect thereto set forth in this Indenture, shall no
longer be binding upon, or applicable to, the Company; provided that the
Company shall not be discharged from any payment obligations in respect of
Debentures of such series which are deemed not to be Outstanding under clause
(iii) of the definition thereof if such obligations continue to be valid
obligations of the Company under applicable law.
Notwithstanding the cessation, termination and discharge of all
obligations, covenants and agreements (except as provided above in this Section
4.6) of the Company under this Indenture with
-35-
<PAGE> 44
respect to the Debentures of any series, the obligations of the Company to the
Trustee under Section 6.6, and the obligations of the Trustee under Section 4.2
and the last paragraph of Section 10.3 shall survive with respect the
Debentures of such series.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in this
Section 4.6 with respect to Debentures of any series which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to
Debentures of such series.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to this Section 4.6 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of Outstanding
Debentures.
ARTICLE V
REMEDIES
Section 5.1 Events of Default. "Event of Default", wherever
used herein with respect to Debentures of any series, unless otherwise provided
in the applicable supplemental indenture, means any one or more 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):
(a) default in the payment of any interest upon or any
additional amounts payable in respect of any Debenture of such series when
it becomes due and payable, and continuance of such default for a period of
30 days (whether or not such payment is prohibited by the subordination
provisions set forth in Article XV hereof); provided, however, that a valid
extension of an interest payment period by the Company in accordance with
the terms of any indenture supplemental hereto, shall not constitute a
default in the payment of interest for this purpose; or
(b) default in the payment of the principal of (or premium, if
any, on) any Debenture of such series as and when the same shall become due
and payable whether at maturity, upon redemption, by declaration or
otherwise, or in any payment required by any sinking or analogous fund
established with respect to that series (whether or not such payment is
prohibited by the subordination provisions set forth in Article XV hereof);
provided, however, that a valid extension of the maturity of the Debentures
of such series in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of principal or
premium, if any; or
(c) if the Debentures of such series are convertible or
exchangeable into or for shares of Common Stock of the Company or other
securities, cash or other property pursuant to any supplemental indenture,
Board Resolution or other instrument authorizing Debentures of such series,
failure by the Company to convert such Debentures (whether or not
conversion or exchange is prohibited by the subordination provisions set
forth in Article XV); or
-36-
<PAGE> 45
(d) 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 specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of any series of Debentures other
than such series), and continuance of such default or breach for a period
of 90 days after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Outstanding Debentures
of such 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
(e) the entry by a court having jurisdiction in the premises
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 appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(f) 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 as 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 law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidation, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors; or
(g) any other Event of Default provided with respect to
Debentures of such series.
Section 5.2 Acceleration of Maturity; Rescission and
Annulment. If an Event of Default described in clause (a), (b), (c), (d) or
(g) (if the Event of Default under clause (d) is with respect to less than all
series of Debentures then Outstanding) of Section 5.1 above occurs and is
continuing, then, and in each and every such case, unless the principal of all
of the Debentures of such series shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Debentures of such series then Outstanding hereunder (each such
series voting as a separate class), by notice in writing to the Company (and to
the Trustee if given by the Holders of Debentures of such series), may declare
the entire principal (or, if the Debentures of such series are Original Issue
Discount Debentures, such portion of the principal amount as may be specified
in the terms of such series) of all Debentures of such series and the interest
accrued thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable. If an Event of
Default described in clause (d) (if the Event of Default under clause (d)
relates to all series of Debentures then Outstanding), (e) or (f) of Section
5.1 occurs and is continuing, then and in each and every such case, unless the
principal of all the Debentures of all series shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Debentures of all series then Outstanding hereunder
(treated as one class), by notice in writing to the
-37-
<PAGE> 46
Company (and to the Trustee if given by Holders of Debentures), may declare the
entire principal (or, if any Debentures are Original Issue Discount Debentures
such portion of the principal as may be specified in the terms thereof) of all
Debentures of all series then Outstanding and interest accrued thereon, if any,
to be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable.
The foregoing provisions, however, are subject to the condition
that if, at any time after the principal (or, if any Debentures are Original
Issue Discount Debentures, such portion of the principal as may be specified in
the terms thereof) of the Debentures of any series (or of all the Debentures of
all series, as the case may be) then Outstanding shall have been so declared
due and payable, and before any judgment or decree for the payment of such
moneys shall have been obtained or entered as hereinafter provided, the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debentures of such series (or of all
Debentures of all series, as the case may be) and the principal of (and
premium, if any on) Debentures of such series (or of all Debentures of all
series, as the case may be) which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments
of interest, at the same rate as the rate of interest or Yield to Maturity (in
the case of Original Issue Discount Debentures) specified in the Debentures of
such series (or at the respective rates of interest or Yields to Maturity of
all Debentures of all series, as the case may be) to the date of such payment
or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee, and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith, and if any and all Events of Default under
the Indenture, other than the non-payment of the principal of Debentures of
such series (or, if any Debentures are Original Issue Discount Debentures, such
portion of the principal as may be specified in the terms thereof) which shall
have become due by acceleration, shall have been cured, waived or otherwise
remedied as provided herein -- then and in every such case the Holders of a
majority in aggregate principal amount of all the Debentures of such series,
each series voting as a separate class (or of all Debentures of all series, as
the case may be, voting as a single class), then Outstanding, by written notice
to the Company and to the Trustee, may waive all such defaults with respect to
the Debentures of such series (or with respect to all Debentures of all series,
as the case may be) and rescind and annul such declaration and its consequence,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of such series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to
the Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
Section 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if,
(a) default is made in the payment of any interest on any
Debenture of any series, or any payment required by any sinking or analogous
fund established with respect to Debentures of such series as and when the same
shall have become due and payable and such default continues for a period of 30
days, or
-38-
<PAGE> 47
(b) default is made in the payment of the principal of (or
premium, if any, on) any Debenture of any series when the same shall have
become due and payable, whether upon maturity of the Debentures of such series
or upon redemption or upon declaration or otherwise,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of Debentures of such series and any Coupons appertaining thereto, the
whole amount then due and payable on such Debentures of such series and Coupons
for principal and any premium and interest and, to the extent that payment of
such interest shall be legally enforceable under applicable law, interest on
any overdue principal and on the premium, if any, and overdue interest, at the
rate or rates prescribed therefor in Debentures of such series; 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 under Section
6.6.
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 Debentures of
such series 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 Debentures of such series, wherever situated.
If an Event of Default with respect to Debentures 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 Debentures of such
series and any Coupons appertaining thereto by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, either at law or in equity or in bankruptcy or otherwise 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 5.4 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 Debentures of
any series or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Debentures
of such series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(a) to file and prove a claim for the whole amount of
principal and any premium and interest owing and unpaid in respect of the
Debentures of any series and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of Debentures of such series and Coupons allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Debentures of such series and Coupons
-39-
<PAGE> 48
appertaining thereto 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 of Debentures of such series and Coupons appertaining thereto, 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 6.6.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder of a
Debenture of any series or any Coupon appertaining thereto, any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
of such series or Coupons appertaining thereto or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of Debentures of any series or Coupon appertaining thereto in any such
proceeding.
Section 5.5 Trustee May Enforce Claims Without Possession of
Debentures or Coupons. All rights of action and claims under this Indenture or
under any of the terms established with respect to the Debentures of any series
or Coupons appertaining thereto may be prosecuted and enforced by the Trustee
without the possession of any of the Debentures of such series or Coupons
appertaining thereto 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 due
under Section 6.6, be for the ratable benefit of the Holders of the Debentures
of such series and Coupons appertaining thereto in respect of which such
judgment has been recovered.
Section 5.6 Application of Money Collected. Any money
collected by the Trustee pursuant to this Article with respect to Debentures of
any series 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 any premium or interest, upon presentation of the Debentures of
such series or any Coupons appertaining thereto, or both, as the case may be,
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 6.6;
SECOND: To the payment of all Senior Indebtedness of the Company
and to the extent required by Article XV:
THIRD: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Debentures of such series
and Coupons appertaining thereto 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
Debentures of such series and Coupons appertaining thereto for principal
and any premium and interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company.
Section 5.7 Limitation on Suits. No Holder of any
Debenture of any series or any Coupons appertaining thereto 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;
-40-
<PAGE> 49
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Debentures of
such series and of the continuance thereof with respect to the Debentures
of such series specifying such Event of Default, as hereinbefore provided;
(b) the Holders of not less than 25% in principal amount of
the Outstanding Debentures of such series shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60 day period by the Holders of a
majority in principal amount of the Outstanding Debentures of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 5.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest. Notwithstanding any other provision in this
Indenture, but subject to Article XV of this Indenture, the Holder of any
Debenture of any series or Coupon appertaining thereto shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
any premium and (subject to Section 3.7) interest on Debentures of such series,
and any additional amounts contemplated by Section 10.4 in respect of
Debentures of such series or payment of any Coupons appertaining thereto on the
Stated Maturity or Maturities expressed in Debentures of such series or Coupons
appertaining thereto (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 5.9 Restoration of Rights and Remedies. If the
Trustee or any Holder of Debentures of any series or Coupon appertaining
thereto 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 of Debentures of such series and any
Coupons appertaining thereto 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 5.10 Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debentures or Coupons in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Debentures or Coupons 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
-41-
<PAGE> 50
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Debenture or Coupon to exercise
any right or remedy accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Subject to the
provisions of Section 5.7, every right and remedy given by this Article or by
law to the Trustee or to the Holders of Debentures or Coupons may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders of Debentures or Coupons, as the case may be.
Section 5.12 Control by Holders of Debentures. The Holders of
a majority in aggregate principal amount of the Outstanding Debentures 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 Debentures of such
series, provided that,
(a) such direction shall not be in conflict with any rule of
law or with this Indenture or expose the Trustee to personal liability, or
be unduly prejudicial to Holders of Debentures not joining therein, and
(b) the Trustee may take any other action deemed proper by the
Trustee; provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture or be unduly prejudicial to the
rights of Holders of Debentures of any other series at the time
Outstanding. Subject to the provisions of Section 6.2, the Trustee shall
have the right to decline to follow any such direction if the trustee in
good faith shall, by a Responsible Officer or Officers of the Trustee,
determine that the proceeding so directed would involve the Trustee in
personal liability.
Section 5.13 Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Debentures of any series
may on behalf of the Holders of all the Debentures of such series and any
Coupons appertaining thereto waive any past default hereunder with respect to
the Debentures of such series and its consequences, except a default
(a) in the payment of the principal of (or premium, if any) or
any interest on any Debenture of such series as and when the same shall
become due by the terms of Debentures of such series otherwise than by
acceleration (unless such default has been cured and sums sufficient to pay all
matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 5.2), or
(b) in the covenants contained in Section 10.4, or
(c) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding Debenture of such series affected.
Upon any such waiver, the default covered thereby shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture and the Company, the Trustee and the
holders of the Debentures of such series shall be restored to their
-42-
<PAGE> 51
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
Section 5.14 Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Debenture or Coupon by his acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any 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 and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 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 Debentures of any series, or to any suit
instituted by any Holder of any Debenture or Coupon for the enforcement of the
payment of the principal of or any premium or interest on such Debenture or the
payment of any Coupon on or after the Stated Maturity or Maturities expressed
in such Debenture or Coupon (or, in the case of redemption, on or after the
Redemption Date).
Section 5.15 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.
ARTICLE VI
THE TRUSTEE
Section 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. With respect to the Holders of any series of
Debentures issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Debentures of a such series and after the curing
or waiving of all Events of Default which may have occurred with respect to
Debentures of such series, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied covenants
or obligations shall be read into this Indenture against the Trustee. In case
an Event of Default with respect to the Debentures of such series has occurred
(which has not been cured or waived), the Trustee shall exercise with respect
to the Debentures of such series such of the rights and powers vested in it by
this Indenture, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that:
-43-
<PAGE> 52
(a) prior to the occurrence of an Event of Default with
respect to the Debentures of any series and after the curing or waiving of
all such Events of Default with respect to the Debentures of such series
which may have occurred:
(i) the duties and obligations of the Trustee with
respect to the Debentures of such series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or mobilizations shall be read
into this Indenture against the Trustee: and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture: but
in the case of any such statement, certificates or opinions which
by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements
of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders pursuant to Section
5.12 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or Power conferred upon the Trustee, under this
Indenture.
No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 6.2 Certain Rights of Trustee. Subject to the
provisions of the Trust Indenture Act:
(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, Coupon, 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;
(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
-44-
<PAGE> 53
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 of its selection 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 of Debentures of any series or any Coupons
appertaining thereto 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, Coupon, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(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; and
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
Section 6.3 Not Responsible for Recitals or Issuance of
Debentures. The recitals contained herein and in the Debentures (except the
Trustee's certificates of authentication) and in any Coupons shall be taken as
the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of any
Debentures or Coupons. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Debentures or the
proceeds thereof.
Section 6.4 May Hold Debentures. The Trustee, any
Authenticating Agent, any Paying Agent, any Debenture Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Debentures and Coupons and, subject to Sections 6.9 and
6.11, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Authenticating Agent, Paying Agent, Debenture Registrar or
such other agent.
Section 6.5 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 in writing with the
Company.
-45-
<PAGE> 54
Section 6.6 Compensation and Reimbursement. The Company
agrees:
(a) to pay to the Trustee or any successor Trustee from time
to time such compensation as shall be agreed in writing between the Company
and the Trustee 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);
(b) except as otherwise expressly provided herein, to
reimburse the Trustee or any predecessor 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
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
(c) to indemnify the Trustee and any predecessor Trustee for,
and to hold it harmless against, any and all loss, damage, claim, liability
or expense, including taxes (other than taxes based on the income of the
Trustee) 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.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(e) or Section 5.1(f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar laws.
As security for the performance of the obligations of the Company
under this Section 6.6, the Trustee shall have a lien prior to the Debentures
on all property and funds held or collected by it hereunder for any amount
owing it or any predecessor Trustee pursuant to this Section 6.6, except with
respect to funds held in trust for the payment of the principal of (and
premium, if any) or interest on particular Debentures. The obligations of the
Company under this Section 6.6 shall not be subordinated to the payment of
Senior Indebtedness pursuant to Article Fifteen.
The provisions of this Section 6.6 shall survive the termination
of this Indenture.
Section 6.7 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 6.8.
(b) The Trustee may resign at any time with respect to the
Debentures 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 6.8 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 Debentures of such series.
(c) The Trustee may be removed at any time with respect to the
Debentures of any series by Act of the Holders of a majority in principal
amount of the Outstanding Debentures of such series delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
-46-
<PAGE> 55
required by Section 6.8 shall not have been delivered to the Trustee within 30
days after the delivery of such Act of removal, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Debentures of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
310(b) of the Trust Indenture Act after written request therefor by the
Company or by any Holder of a Debenture who has been a bona fide Holder of
a Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 6.10 and Section 310(a) of the Trust Indenture Act and shall fail
to resign after written request therefor by the Company or by any such
Holder of a Debenture who has been a bona fide Holder of Debenture for at
least six months, or
(3) the Trustee shall become incapable of acting or
shall be adjudged 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 Debentures, or (ii) subject to Section 5.14 any
Holder of a Debenture who has been a bona fide Holder of a Debenture 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 Debentures 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 Debentures of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Debentures of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the Debentures
of one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Debentures of any particular series) and shall
comply with the applicable requirements of Section 6.8. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debentures of any series shall
be appointed by Act of the Holders of a majority in principal amount of
Outstanding Debentures of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 6.8, become the successor Trustee with respect to the Debentures of
such series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Debentures of any series
shall have been so appointed by the Company or the Holders of Debentures of
such series and accepted appointment in the manner required by Section 6.8, any
Holder of a Debenture of such series who has been a bona fide Holder of a
Debenture 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 Debentures of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Debentures of any series and each
appointment of a successor Trustee with respect to the Debentures of any series
in the manner provided in Section 1.6. Each notice shall include the
-47-
<PAGE> 56
name of the successor Trustee with respect to the Debentures of such series and
the address of its Corporate Trust Office.
Section 6.8 Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Debentures, 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 written
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, subject
nevertheless to its lien, if any, provided for in Section 6.6.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Debentures of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Debentures of such series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which
(i) shall contain such provisions as shall be necessary or desirable to
transfer and conform to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Debentures of such series to which the appointment of such successor Trustee
relates, (ii) if the retiring Trustee is not retiring with respect to all
Debentures, 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 Debentures of such series as to which the
retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (iii) 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
as 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 Debentures of such series to which the appointment
of such successor Trustee relates; but, on the written 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 Debentures of such series to which the
appointment of such successor Trustee relates, subject nevertheless to such
retiring Trustee's lien, if any, provided for in Section 6.6.
(c) Upon the written 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) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
-48-
<PAGE> 57
Section 6.9 Disqualification; Conflicting Interests. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
Section 6.10 Corporate Trustee Required; Eligibility. There
shall be at all times a Trustee hereunder which shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If such Person publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereunder specified in this Article.
Section 6.11 Preferential Collection of Claims Against
Company. If and when the Trustee shall be or become a creditor, directly or
indirectly, secured or unsecured, of the Company (or any other obligor upon the
Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company (or any
such other obligor).
Section 6.12 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 Debentures 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 Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.
Section 6.13 Appointment of Authenticating Agent. The Trustee
may appoint an Authenticating Agent or Agents with respect to Debentures of one
or more series which shall be authorized to act on behalf of the Trustee to
authenticate Debentures of each such series issued upon original issue or upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.6, and Debentures of such series 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 Debentures 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. 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.
-49-
<PAGE> 58
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such 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 such 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 promptly give notice
of such appointment to all Holders of Debentures pursuant to Section 1.6. 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 Debentures of one or more series
is made pursuant to this Section, the Debentures of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication,
an alternative certificate of authentication in the following form:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank
As Trustee
By
-----------------------------
Authenticating Agent
By
-----------------------------
Authorized Signatory
If all of the Debentures of any series may not be originally
issued at one time, and if the Company has an Affiliate eligible to be
appointed as an Authenticating Agent hereunder or the Trustee does not have an
office capable of authenticating Debentures of such series upon original
issuance located in a Place of Payment where the Company wishes to have
Debentures of such series authenticated upon original issuance, the Trustee, if
so requested by the Company in writing (which writing need not comply with
Section 1.2 and need not be accompanied by an Opinion of Counsel), shall
appoint in accordance with this Section an Authenticating Agent (which if so
requested by the Company, shall be such Affiliate of the Company) having an
office in a Place of Payment designated by the Company with respect to such
series of Debentures.
-50-
<PAGE> 59
Section 6.14. Notice of Defaults. If a default occurs
hereunder with respect to Debentures of any series, the Trustee shall give the
Holders of Debentures of such series notice of such default as and to the
extent provided by the Trust Indenture Act; provided, however, that in the case
of any default of the character specified in Section 5.1(d) with respect to
Debentures 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 Debentures of such
series.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Company to Furnish Trustee Names and Addresses of
Debentureholders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Debentures as of such Regular Record
Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Debenture Registrar.
Section 7.2 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 of Debentures (i)
contained in the most recent list furnished to the Trustee as provided in
Section 312(a) of the Trust Indenture Act, (ii) received by the Trustee in its
capacity as Debenture Registrar and (iii) filed with it within the two
preceding years pursuant to Section 313(c)(2) of the Trust Indenture Act. The
Trustee may (A) destroy any list furnished to it as provided in Section 312(a)
of the Trust Indenture Act upon receipt of a new list so furnished, (B) destroy
any information received by it as Paying Agent (if so acting) hereunder upon
delivering to itself as Trustee, not earlier than March 20 or September 20 of
each year, a list containing the names and addresses of the Holders of
Debentures obtained from such information since the delivery of the next
previous list, if any, (C) destroy any list delivered to itself as Trustee
which was compiled from information received by it as Paying Agent (if so
acting) hereunder upon the receipt of a new list so delivered and (D) destroy
not earlier than two years after filing, any information filed with it pursuant
to Section 313(c)(2) of the Trust Indenture Act. For purposes of Section
312(a) of the Trust Indenture Act, the term "stated intervals" shall mean
January 15 and July 15.
(b) If three or more Holders of Debentures of any series
(herein referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Debenture of such series for a period of at least six months preceding the date
of such application, and such application states that the applicants desire to
communicate with other Holders of Debentures of such series with respect to
their rights under this Indenture or under the Debentures of
-51-
<PAGE> 60
such series and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 7.2(a), or
(ii) inform such applicants as to the approximate number of
Holders of Debentures of such series whose names and addresses appear in
the information preserved at the time by the Trustee in accordance with
Section 7.2(a), and as to the approximate cost of mailing to such Holders
the form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Debentures of such series whose name and
address appears in the information preserved at the time by the Trustee in
accordance with Section 7.1(a) a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interest of the Holders of Debentures of
such series or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if after the
entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Holders of Debentures of such
series with reasonable promptness after the entry of such order and the renewal
of such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Every Holder of Debentures or Coupons, 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 of Debentures in accordance with Section 7.2(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 7.2(b).
Section 7.3 Reports by Trustee. The Trustee shall in each
year transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act in
the manner provided pursuant thereto. If required by Section 313(a) of the
Trust Indenture Act, the Trustee shall, within sixty days after each May 15
following the date of this Indenture transmit by mail to Holders a brief
report, dated as of such May 15, which complies with the provisions of 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 Debentures are listed, with the Commission and with the
Company. The Company will promptly notify the Trustee when any Debentures
are listed on any stock exchange or market center.
-52-
<PAGE> 61
Section 7.4 Reports by Company. The Company shall:
(a) 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 Exchange
Act; or, if the Company is not required to file information, documents or
reports pursuant to either of such 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 Exchange Act in respect of a security listed
and registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(b) 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 required to be filed
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; and
(c) transmit to all Holders, in the manner and to the extent
provided in Trust Indenture Act Section 313(c), 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 (a) and (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates and Opinion of Counsel).
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 8.1 Company May Consolidate, Etc. on Certain Terms.
The Company shall not merge or consolidate with any other corporation or sell
or convey all or substantially all of its assets to any Person, unless (a)
either the Company shall be the continuing corporation, or the successor
corporation (if other than the Company, which term shall include a parent of
the Company in the event the Company's outstanding Common Stock is converted
into common stock of such parent) shall be a corporation organized under the
laws of the United States of America or any State thereof and shall expressly
assume the due and punctual payment of the principal of and interest on all the
Debentures, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, by supplemental indenture satisfactory to
the Trustee, executed and delivered to the Trustee by such corporation, (b) the
Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or
-53-
<PAGE> 62
condition, (c) immediately after giving effect to 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 (d) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger, conveyance or transfer
and such supplemental indenture comply with this Article and that all
conditions precedent herein provided relating to such transaction have been
complied with.
Section 8.2 Successor Corporation Substituted. In case of
any such consolidation, merger, sale or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it
had been named herein. Such successor corporation may cause to be signed, and
may issue either in its own name or in the name of the Company prior to such
succession any or all of the Debentures issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any securities which previously
shall have been signed and delivered by the officers of the Company, to the
Trustee for authentication, and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Debentures so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Company or any successor corporation which
shall theretofore have become such in the manner described in this Article
shall be discharged from all obligations and covenants under this Indenture and
the Debentures and may be liquidated and dissolved.
Section 8.3 Opinion of Counsel to Trustee. The Trustee shall
receive an Opinion of Counsel, prepared in accordance with Sections 1.2 and
8.1(d), as conclusive evidence that any such consolidation, merger, sale, lease
or conveyance, and any such assumption, and any such liquidation or
dissolution, complies with the applicable provisions of this Indenture.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders of Debentures or Coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) 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 Debentures; or
-54-
<PAGE> 63
(b) to add to the covenants of the Company for the benefit of
the Holders of Debentures of all or any series (and if such covenants are
to be for the benefit of Debentures of less than all series, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(c) to add any additional Events of Default (and if such
Events of Default are to be for the benefit of Debentures of less than all
series, stating that such Events of Default are expressly being included
solely for the benefit of such series); or
(d) to add to or change any of the provisions of this
Indenture to provide that Bearer Debentures may be registerable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium or interest on Bearer Debentures, to permit
Bearer Debentures to be issued in exchange for Registered Debentures, to
permit Bearer Debentures to be issued in exchange for Bearer Debentures of
other authorized denominations or to permit or facilitate the issuance of
Debentures in uncertificated form, provided that any such action shall not
adversely affect the interests of the Holders of Debentures of any series
or any related Coupons in any material respect; or
(e) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Debenture Outstanding of any series created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision; or
(f) to establish the form or terms of Debentures of any series
and any related Coupons as permitted by Sections 2.1 and 3.1; or
(g) to evidence and provide for the acceptance of appointment
thereunder by a successor Trustee with respect to the Debentures 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 6.8(b); or
(h) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIV, including providing
for the conversion of the Debentures into any security or property (other
than the Common Stock of the Company); or
(i) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture, provided that such other
provisions shall not adversely affect the interests of the Holders of
Debentures of any series or any related Coupons in any material respect.
Section 9.2 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 Debentures 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 Debentures of such series and any related Coupons under this
Indenture;
-55-
<PAGE> 64
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Debenture affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debenture of any series, or
reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or change any obligation of
the Company to pay additional amounts pursuant to Section 10.4 (except as
contemplated by Section 8.1 and permitted by Section 9.1(a)), or reduce the
amount of the principal of an Original Issue Discount Debenture that would
be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2 or change the coin or currency in which any
Debenture or any premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(b) reduce the percentage in principal amount of the
Outstanding Debentures 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 certain defaults hereunder and their
consequences provided for in this Indenture, or reduce the requirements of
Section 13.4 for quorum or voting, or
(c) change any obligation of the Company to maintain an office
or agency in the places and for the purposes specified in Section 10.2, or
(d) modify any of the provisions of this Section or Section
5.13, 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 Debenture affected thereby;
provided, however, that this clause shall not be deemed to require the
consent of any Holder of a Debenture of such series or Coupon with respect
to changes in the references to "the Trustee" and concomitant changes in
this Section or the deletion of this proviso, in accordance with the
requirements of Sections 6.7(b) and 9.1(h), or
(e) make any change that adversely affects the right to
convert any Debenture of any series as provided in Article XIV or pursuant
to Section 3.1 (except as permitted by Section 9.1) or decrease the
conversion rate or increase the conversion price of any such Debenture of
such series, or
(f) if the Debentures of any series are secured, change the
terms and conditions pursuant to which the Debentures of such series are
secured in a manner adverse to the Holders of the secured Debentures of
such series, or
(g) make any change in Article XV that adversely affects the
rights of any Holders of Outstanding Debentures of such series.
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 Debentures of one or more particular series, or which
modifies the rights of the Holders of Debentures 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 Debentures of any other series.
-56-
<PAGE> 65
It shall not be necessary for any Act of Holders of Debentures of
any series 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 9.3 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 6.2) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 9.4 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
Debentures theretofore or thereafter authenticated and delivered hereunder and
of any Coupons appertaining thereto shall be bound thereby.
Section 9.5 Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act of 1939, as amended, in effect on such
date.
Section 9.6 Reference in Debentures to Supplemental
Indentures. Debentures of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Debentures 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 Debentures of such series.
ARTICLE X
COVENANTS
Section 10.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of Debentures of any series
that it will duly and punctually pay the principal of and any premium and
interest on the Debentures of such series in accordance with the terms of the
Debentures of such series, any Coupons appertaining thereto and this Indenture.
Unless otherwise specified as contemplated by Section 3.1 with respect to
Debentures of such series, any interest due on Bearer Debentures of such series
on or before Maturity shall be payable only upon presentation and surrender
outside the United States of the several Coupons for such interest installments
as are evidenced thereby as they severally mature.
Section 10.2 Maintenance of Office or Agency. If Debentures
of any series are issuable only as Registered Debentures, the Company will
maintain in each Place of Payment for such series an office or agency where
Debentures of such series may be presented or surrendered for payment, where
Debentures of such series may be surrendered for registration of transfer,
exchange, or conversion and
-57-
<PAGE> 66
where notices and demands to or upon the Company in respect of the Debentures
of such series and this Indenture may be served. If Debentures of any series
are issuable as Bearer Debentures, the Company will maintain (a) in The City of
New York, an office or agency where any Registered Debentures of such series
may be presented or surrendered for payment, where any Registered Debentures of
such series may be surrendered for registration of transfer, where Debentures
of such series may be surrendered for conversion or exchange, where notices and
demands to or upon the Company in respect of Debentures of such series and this
Indenture may be served and where Bearer Debentures of such series and related
Coupons may be presented or surrendered for payment in the circumstances
described in the following paragraph (and not otherwise), (b) subject to any
laws or regulations applicable thereto, in a Place of Payment for such series
which is located outside the United States, an office or agency where
Debentures of such series and related Coupons may be presented and surrendered
for payment (including payment of any additional amounts payable on Debentures
of such series pursuant to Section 10.4); provided, however, that if the
Debentures of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland, the Luxembourg Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent for the Debentures of such
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as Debentures of such series are
listed on such exchange, and (c) subject to any laws or regulations applicable
thereto in a Place of Payment for such series located outside the United States
an office or agency where any Registered Debentures of such series may be
surrendered for registration of transfer, where Debentures of such series may
be surrendered for conversion or exchange and where notices and demands to or
upon the Company in respect of the Debentures of such series and this Indenture
may be served. The Company will give prompt notice to the Trustee and to the
Holders as provided in Sections 1.5 and 1.6, respectively, of the location and
any change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency in respect of
Debentures of any series or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Debentures of such series may be
made and notices and demands may be made or served at the Corporate Trust
Office of the Trustee, except that Bearer Debentures of such series and the
related Coupons may be presented and surrendered for payment (including payment
of any additional amounts payable on Bearer Debentures of such series pursuant
to Section 10.4) at the office of the Trustee for such series located outside
the United States, and the Company hereby appoints the same as its agent to
receive such respective presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Debentures
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to any account
maintained with a bank located in the United States; provided, however, that if
the Debentures of any series are denominated and payable in Dollars, payment of
principal of and any premium and interest on any Bearer Debenture of such
series (including any additional amounts payable on Debentures of such series
pursuant to Section 10.4) shall be made at the office of the Company's Paying
Agent in The City of New York, if (but only if) payment in Dollars of the full
amount of such principal, premium, interest or additional amounts, as the case
may be, at all offices or agencies outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures 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
-58-
<PAGE> 67
in accordance with the requirements set forth above for Debentures of any
series for such purposes. The Company will give prompt written notice to the
Trustee and the Holders of Debentures of such series of any such designation or
rescission and of any change in the location of any such other office or
agency.
Section 10.3 Money for Debentures Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with
respect to Debentures of any series, it will, on or before each due date of the
principal of and any premium or interest on any of the Debentures of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure to act.
Whenever the Company shall have one or more Paying Agents for
Debentures of any series it will, prior to each due date of the principal of
and any premium or interest on any Debentures of such series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium 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, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure to act.
The Company will cause each Paying Agent for Debentures of any
series 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:
(a) hold all sums held by it for the payment of the principal
of and any premium or interest on Debentures of such 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;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Debentures of such series) in the making of any
payment of principal of and any premium or interest on the Debentures of
such series; and
(c) 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 any
premium or interest on any Debenture of any series and remaining unclaimed for
two years after such principal and any premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of the
Debenture of such series or any Coupon appertaining thereto 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
-59-
<PAGE> 68
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 an Authorized Newspaper in each Place of Payment or mail to
each such Holder of the Debentures of such series or both, notice that such
money remains unclaimed and that after a date specified therein, which shall
not be less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 10.4 Additional Amounts. If the Debentures of any
series provide for the payment of additional amounts, the Company will pay to
the Holder of any Debenture of such series or any Coupon appertaining thereto
additional amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of any Debenture of any series or payment of any
related Coupon or the net proceeds received on the sale or exchange of any
Debenture of any series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in this Section to the extent that,
in such context additional amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of additional amounts (if applicable) in any provisions hereof shall
not be construed as excluding additional amounts in those provisions hereof
where such express mention is not made.
If the Debentures of any series provide for the payment of
additional amounts, at least 10 days prior to the first Interest Payment Date
with respect to Debentures of such series (or if the Debentures of such series
will not bear interest prior to Maturity, the first day on which a payment of
principal and any premium is made), and at least 10 days prior to each date of
payment of principal and any premium or interest if there has been any change
with respect to the matters set forth in the below-mentioned Officers'
Certificate, the Company will furnish the Trustee and the Company's principal
Paying Agent or Paying Agents, if other than the Trustee, with an Officers'
Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of and any premium or interest on the
Debentures of such series shall be made to Holders of Debentures of such series
or any Coupons appertaining thereto who are United States Aliens without
withholding for or on account of any tax assessment or other governmental
charge described in the Debentures of such series. If any such withholding
shall be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of
Debentures of such series or any Coupons appertaining thereto and the Company
will pay to the Trustee or such Paying Agent the additional amounts required by
this Section. The Company covenants to indemnify the Trustee and any Paying
Agent for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or willful misconduct on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section.
Section 10.5 Existence. Subject to Article VIII, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights (charter and statutory) and 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 10.6 Purchase of Debentures by Company or Subsidiary.
If and so long as the Debentures of any series are listed on The Stock Exchange
of the United Kingdom and the Republic of
-60-
<PAGE> 69
Ireland and such stock exchange shall so require, the Company will not, and
will not permit any of its Subsidiaries to, purchase any Debentures of such
series by private treaty at a price (exclusive of expenses and accrued
interest) which exceeds 120% of the mean of the nominal quotations of the
Debentures of such series as shown in The Stock Exchange Daily Official List
for the last trading day preceding the date of purchase.
Section 10.7 Statement by Officers as to Default. The Company
will deliver to the Trustee, within 120 days after the end of each fiscal year
of the Company ending after the date hereof, an Officers' Certificate signed by
any two of its principal executive officer, president, principal financial
officer, principal accounting officer or any vice president stating as to each
signer thereof, that a review of the activities of the Company during such year
and of its performance under this Indenture has been made under his supervision
and whether or not to the best knowledge of the signer thereof, based on such
review, the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture, and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge and the nature and status thereof.
The Company shall file with the Trustee written notice of the
occurrence of any default or Event of Default within five Business Days of its
becoming aware of any such default or Event of Default.
Section 10.8 Calculation of Original Issue Discount. The
Company shall file with the Trustee promptly at the end of each year a written
notice specifying the amount of Original Issue Discount (including daily rates
and accrual periods) accrued on Outstanding Debentures as of the end of such
year.
Section 10.9 Financial Information; SEC Reports. The Company
will deliver to the Trustee (a) as soon as available and in any event within
115 days after the end of each fiscal year of the Company (i) a consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of operations, stockholders'
equity and cash flows for such fiscal year, all reported on by an independent
public accountant of nationally recognized standing and (ii) a report
containing a management's discussion and analysis of the financial condition
and results of operations and a description of the business and properties of
the Company and (b) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the Company
(i) an unaudited consolidated financial report for such quarter and (ii) a
report containing a management's discussion and analysis of the financial
condition and results of operations of the Company; provided that the foregoing
shall not be required for any fiscal year or quarter, as the case may be, with
respect to which the Company files or expects to file with the Trustee an
annual report or quarterly report, as the case may be, pursuant to the second
paragraph of this Section 10.9.
The Company shall file with the Trustee, within 15 days after it
files such annual and quarterly reports, information, documents and other
reports with the Commission, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Company is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act.
-61-
<PAGE> 70
With respect to Debentures originally issued in an offering not
registered pursuant to the Securities Act, if prior to the Transfer Restriction
Termination Date, the Company is neither subject to Section 13 or 15(d) of the
Exchange Act, the Company shall at the request of any Holder provide to such
Holder and any prospective purchaser designated by such Holder such
information, if any, required by Rule 144A(d)(4) under the Securities Act.
ARTICLE XI
REDEMPTION OF DEBENTURES
Section 11.1 Applicability of Article. Debentures 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 3.1 for Debentures of any series) in accordance with this Article.
Section 11.2 Election to Redeem; Notice to Trustee. The
election of the Company to redeem Debentures of any series shall be evidenced
by an Officers' Certificate. In the case of any redemption, at the election of
the Company, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal
amount of Debentures of such series to be redeemed. In the case of any
redemption of Debentures of such series (a) prior to the expiration of any
restriction on such redemption provided in the terms of such Debentures of such
series or elsewhere in this Indenture, or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of Debentures of
such series, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.
Section 11.3 Selection by Trustee of Debentures to Be
Redeemed. If less than all the Debentures of any series and of like tenor are
to be redeemed, the particular Debentures of such series to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Debentures of such series and of like tenor not previously
called for redemption, by lot, pro rata or 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
Debentures of such series or any integral multiple thereof) of the principal
amount of Registered Debentures of such series of a denomination larger than
the minimum authorized denomination for Debentures of such series. If so
specified in the Debentures of any series, partial redemptions must be in an
amount not less than $1,000,000 principal amount of Debentures.
If Debentures of any series selected for partial redemption are
converted in part before termination of the conversion right with respect to
the portion of the Debenture of such series so selected, the converted portion
of the Debentures of such series shall be deemed (so far as may be) to be the
portion selected for redemption. Debentures (or portions thereof) which have
been converted during a selection of Debentures of such series to be redeemed
shall be treated by the Trustee as Outstanding for the purpose of such
selection. In any case where more than one Debenture of such series is
registered in the same name, the Trustee in its discretion may treat the
aggregate principal amount so registered as if it were represented by one
Debenture of such series.
-62-
<PAGE> 71
The Trustee shall promptly notify the Company in writing of the
Debentures of such series selected for redemption and, in the case of any
Debentures of such series 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 Debentures of such
series of such series shall relate, in the case of any Debentures of such
series redeemed or to be redeemed only in part, to the portion of the principal
amount of the Debentures of such series which has been or is to be redeemed.
Section 11.4 Notice of Redemption. Notice of redemption shall
be given in the manner provided in Section 1.6 to the Holders of Debentures to
be redeemed not less than 30 nor more than 60 days prior to the Redemption
Date.
All notices of redemption shall identify the Debentures (including
the CUSIP number) to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all the Outstanding Debentures of any series
are to be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Debentures of such series to be
redeemed, and a statement to the effect that on or after the Redemption Date
upon surrender of such Debenture a new Debenture of such series in the
principal amount equal to the unredeemed portion will be issued;
(d) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debenture of such series to be redeemed
and, if applicable, that interest thereon will cease to accrue on and after
said date;
(e) the place or places where such Debentures of such series,
together in the case of Bearer Debentures of such series with all Coupons
appertaining thereto, if any maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price which shall be the office or
agency of the Company in each Place of Payment;
(f) that the redemption is for a sinking fund, if such is the
case;
(g) if applicable, the conversion rate or price, the date on
which the right to convert the Debentures of such series to be redeemed will
terminate and the place or places where such Debentures may be surrendered for
conversion; and
(h) that the Trustee is not responsible for the correctness or
accuracy of any CUSIP number.
A notice of redemption published as contemplated by Section 1.6
need not identify particular Registered Debentures of such series to be
redeemed.
-63-
<PAGE> 72
Notice of redemption of Debentures 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 11.5 Deposit of Redemption Price. 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 10.3) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Debentures which are to be redeemed
on that date.
If any Debenture called for redemption is converted into Common
Stock of the Company, any money deposited with the Trustee or with any Paying
Agent or so segregated and held in trust for the redemption of such Debenture
shall (subject to any right of the Holder of such Debenture or any Predecessor
Debenture to receive interest as provided in the last paragraph of Section 3.7)
be paid to the Company upon Company Request or, if then held by the Company,
shall be discharged from such trust.
Section 11.6 Debentures Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Debentures 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
Debentures shall cease to bear interest and the Coupons for such interest
appertaining to any Bearer Debentures so to be redeemed except to the extent
provided below, shall be void. Upon surrender of any such Debenture for
redemption in accordance with said notice together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Debenture shall
be paid by the Company at the Redemption Price together with accrued interest
to the Redemption Date; provided, however, that installments of interest on
Bearer Debentures whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 10.2) and, unless otherwise specified
as contemplated by Section 3.1, only upon presentation and surrender of Coupons
for such interest; and provided, further, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest on Registered Debentures
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Debentures or one or more Predecessor Debentures,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.7.
If any Bearer Debenture surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date, such
Debenture may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Debenture shall surrender to the Trustee or any Paying Agent any such missing
Coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by Coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 10.2) and unless otherwise specified as contemplated by
Section 3.1 only upon presentation and surrender of those Coupons.
-64-
<PAGE> 73
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Debenture.
Section 11.7 Debentures Redeemed in Part. Any Registered
Debenture of any series which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Debenture without service charge, a new Registered Debenture
or Debentures of such 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 Debenture of such
series so surrendered.
ARTICLE XII
SINKING FUNDS
Section 12.1 Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of
Debentures of any series except as otherwise specified as contemplated by
Section 3.1 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures 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 Debentures of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debentures of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 12.2. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of such series.
Section 12.2 Satisfaction of Sinking Fund Payments with
Debentures. The Company (a) may deliver Outstanding Debentures of any series
(other than any previously called for redemption), together in the case of any
Bearer Debentures of such series with all unmatured Coupons appertaining
thereto, and (b) may apply as a credit Debentures of such series which have
been redeemed either at the election of the Company pursuant to the terms of
the Debentures of such series or through the application of permitted optional
sinking fund payments pursuant to the terms of the Debentures, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debentures of such series required to be made pursuant to the terms of the
Debentures of such series; provided that the Debentures of such series have not
been previously so credited. The Debentures shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in the Debentures
of such series for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.
Section 12.3 Redemption of Debentures for Sinking Fund. Not
less than 60 days prior to each sinking fund payment date for Debentures of any
series, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such series
pursuant to the terms of such series, the portion thereof, if any, which is to
be satisfied by payment of
-65-
<PAGE> 74
cash and the portion thereof, if any, which is to be satisfied by delivering
and crediting Debentures of such series pursuant to Section 12.2 and will also
deliver to the Trustee any Debentures of such series to be so delivered. Not
less than 45 days before each such sinking fund payment date the Trustee shall
select the Debentures of such series to be redeemed upon such sinking fund
payment date in the manner specified in Section 11.3 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 11.4. Such notice having been duly given,
the redemption of such Debentures of such series shall be made upon the terms
and in the manner stated in Sections 11.6 and 11.7.
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES
Section 13.1 Purposes for Which Meetings May be Called. If
Debentures of any series are issuable as Bearer Debentures, a meeting of
Holders of Debentures of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Debentures of such
series.
Section 13.2 Call, Notice and Place of Meetings. (a) The
Trustee may at any time call a meeting of Holders of Debentures of such series
for any purpose specified in Section 13.1, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, or in London as the
Trustee shall determine. Notice of every meeting of Holders of Debentures of
any series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 1.6, not less than 21 nor more than 90 days prior to
the date fixed for the meeting (or, in the case of a meeting of Holders with
respect to Debentures of any series all or part of which are represented by a
Book-Entry Debenture, not less than 20 nor more than 40 days).
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in principal amount of the
Outstanding Debentures of any series shall have requested the Trustee to call a
meeting of the Holders of Debentures of such series for any purpose specified
in Section 13.1, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have made
the first publication of the notice of such meeting within 20 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Debentures of
such series in the amount above specified, as the case may be, may determine
the time and the place in the Borough of Manhattan, The City of New York or in
London for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in subsection (a) of this Section.
Section 13.3 Persons Entitled to Vote at Meetings. Upon the
calling of any meeting of Holders with respect to the Debentures of any series
all or part of which are represented by a Book-Entry Debenture, a record date
shall be established for determining Holders of Outstanding Debentures of such
series entitled to vote at such meeting, which record date shall be the close
of business on the day the notice of the meeting of Holders is given in
accordance with Section 13.2. The Holders on such record date, and their
designated proxies, and only such Persons, shall be entitled to vote at any
meeting of Holders. To be entitled to vote at any meeting of Holders a Person
shall (a) be a Holder of one or more
-66-
<PAGE> 75
Debentures of such series or (b) be a Person appointed by an instrument in
writing as proxy by a Holder of one or more Debentures of such series;
provided, however, that in the case of any meeting of Holders with respect to
the Debentures of any series all or part of which are represented by a
Book-Entry Debenture, only Holders, or their designated proxies, of record on
the record date established pursuant to Section 13.3 hereof shall be entitled
to vote at such meeting. The only Persons who shall be entitled to be present
or to speak at any meeting of Holders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 13.4 Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Debentures of any series shall
constitute a quorum for a meeting of Holders of Debentures of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of a specified percentage in aggregate principal amount of
Outstanding Debentures of such series that is less or greater than a majority
in principal amount of the Outstanding Debentures of such series, then, with
respect to such action (and only such action) the Persons entitled to vote such
lesser or greater percentage in principal amount of the Outstanding Debentures
of such series shall constitute a quorum. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Debentures of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 13.2 (a), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of an adjourned
meeting shall state expressly the percentage, as provided above, of the
principal amount of the outstanding Debentures of such series which shall
constitute a quorum. Notwithstanding the foregoing, no meeting of Holders with
respect to Debentures of any series which is represented in whole or in part by
a Book-Entry Debenture, shall be adjourned to a date more than 90 days after
the record date for such meeting unless the Trustee shall send out a new notice
of meeting and establish, in accordance with Section 13.3, a new record date
for Holders entitled to vote at such meeting.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Debentures of such series;
provided, however, that, except as limited by the proviso to Section 9.2, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of a specified percentage in aggregate
principal amount of Outstanding Debentures of such series that is less or
greater than a majority in principal amount of the Outstanding Debentures of
such series may be adopted at a meeting or an adjourned meeting duly convened
and at which a quorum is present as aforesaid only by the affirmative vote of
the Holders of such specified percentage in principal amount of the Outstanding
Debentures of such series.
Any resolution passed or decision taken at any meeting of Holders
of Debentures of any series duly held in accordance with this Section shall be
binding on all the Holders of Debentures of such series and the Coupons
appertaining thereto, whether or not present or represented at the meeting.
-67-
<PAGE> 76
Section 13.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings. (a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Debentures of any series in regard to
proof of the holding of Debentures of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Debentures of such series shall be proved in
the manner specified in Section 1.4 and the appointment of any proxy shall be
proved in the manner specified in Section 1.4 or by having the signature of the
person executing the proxy witnessed or guaranteed by any trust company, bank
or banker authorized by Section 1.4 to certify to the holding of Bearer
Debentures of such series. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 1.4 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Debentures of such series as provided in Section
13.2(b), in which case the Company or the Holders of Debentures of such series
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Debentures of such series represented at
the meeting.
(c) At any meeting each Holder of a Debenture of such series or
proxy shall be entitled to one vote for each $ 1,000 principal amount of the
Outstanding Debentures of such series held or represented by him (or
proportionate fraction of a vote for any lesser principal amount thereof);
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Debenture challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder of a Debenture of such series
or proxy.
(d) Any meeting of Holders of Debentures of any series duly called
pursuant to Section 13.2 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Debentures of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
Section 13.6 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Debentures
of any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Debentures of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Debentures of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Debentures of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 13.2 and, if
applicable, Section 13.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the
-68-
<PAGE> 77
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
ARTICLE XIV
CONVERSION OF DEBENTURES
Section 14.1 Applicability of Article. The provisions of this
Article shall be applicable to the Debentures of any series which are
convertible into shares of Common Stock of the Company, and the issuance of
such shares of Common Stock upon the conversion of Debentures of such series,
except as otherwise specified as contemplated by Section 3.1 for the Debentures
of such series. The terms and provisions applicable to the conversion of
Debentures of any series into securities of the Company (other than Common
Stock) shall, if applicable, be set forth in an Officers' Certificate or
established in one or more indentures supplemental hereto, prior to the
issuance of Debentures of such series in accordance with Section 3.1.
Section 14.2 Exercise of Conversion Privilege. In order to
exercise a conversion privilege, the Holder of a Debenture of any series with
such a privilege shall surrender such Debenture to the Company at the office or
agency maintained for that purpose pursuant to Section 10.2, accompanied by
written notice to the Company that the Holder elects to convert such Debenture
or a specified portion thereof. Such notice shall also state, if different
from the name and address of such Holder, the name or names (with address) in
which the certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued. Debentures of such series
surrendered for conversion shall (if so required by the Company or the Trustee)
be duly endorsed by or accompanied by instruments of transfer in forms
satisfactory to the Company and the Trustee duly executed by the registered
Holder or its attorney duly authorized in writing. As promptly as practicable
after the receipt of such notice and of any payment required pursuant to a
Board Resolution and, subject to Section 3.1, set forth, or determined in the
manner provided, in an Officers' Certificate, or established in one or more
indentures supplemental hereto setting forth the terms of Debentures and the
surrender of such Debentures in accordance with such reasonable regulations as
the Company may prescribe, the Company shall issue and shall deliver, at the
office or agency at which such Debenture is surrendered, to such Holder or on
its written order, a certificate or certificates for the number of full shares
of Common Stock issuable upon the conversion of such Debenture (or specified
portion thereof), in accordance with the provisions of such Board Resolution,
Officers' Certificate or supplemental indenture, and cash as provided therein
in respect of any fractional share of such Common Stock otherwise issuable upon
such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such notice and
such payment, if required, shall have been received in proper order for
conversion by the Company and such Debenture shall have been surrendered as
aforesaid (unless such Holder shall have so surrendered such Debenture and
shall have instructed the Company to effect the conversion on a particular date
following such surrender and such Holder shall be entitled to convert such
Debenture on such date, in which case such conversion shall be deemed to be
effected immediately prior to the close of business on such date) and at such
time the rights of the Holder of such Debenture as such Debenture Holder shall
cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock of the Company shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby. Except as set forth above and subject to
the final paragraph of Section 3.7, no payment or adjustment shall be made upon
any conversion on account of any interest accrued on the Debentures of such
series surrendered for
-69-
<PAGE> 78
conversion or on account of any dividends on the Common Stock of the Company
issued upon such conversion.
In the case of any Debenture of any series which is converted in
part only, upon such conversion the Company shall execute and, upon Company
Order, the Trustee shall authenticate and make available for delivery to or on
the order of the Holder thereof, at the expense of the Company, a new Debenture
or Debentures of such series, of authorized denominations, in aggregate
principal amount equal to the unconverted portion of such Debenture.
Section 14.3 No Fractional Shares. No fractional share of
Common Stock of the Company shall be issued upon conversions of Debentures of
any series. If more than one Debenture of such series shall be surrendered for
conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Debentures of such series (or specified
portions thereof to the extent permitted hereby) so surrendered. If, except
for the provisions of this Section 14.3, any Holder of a Debenture or
Debentures of such series would be entitled to a fractional share of Common
Stock of the Company upon the conversion of such Debenture or Debentures, or
specified portions thereof, the Company shall pay to such Holder an amount in
cash equal to the current market value of such fractional share computed, (a)
if such Common Stock is listed or admitted to unlisted trading privileges on a
national securities exchange, on the basis of the last reported sale price
regular way on such exchange on the last trading day prior to the date of
conversion upon which such a sale shall have been effected, or (b) if such
Common Stock is not at the time so listed or admitted to unlisted trading
privileges on a national securities exchange or market, on the basis of the
average of the bid and asked prices of such Common Stock in the
over-the-counter market, on the last trading day prior to the date of
conversion, as reported by the National Quotation Bureau, Incorporated or
similar organization if the National Quotation Bureau, Incorporated is no
longer reporting such information, or if not so available, the fair market
price as determined by the Board of Directors. For purposes of this Section,
"trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
other than any day on which the Common Stock is not traded on the New York
Stock Exchange, or if the Common Stock is not traded on the New York Stock
Exchange, on the principal exchange or market on which the Common Stock is
traded or quoted.
Section 14.4 Adjustment of Conversion Price. The conversion
price of Debentures of any series that is convertible into Common Stock of the
Company shall be adjusted for any stock dividends, stock splits,
reclassification, combinations or similar transactions in accordance with the
terms of the supplemental indenture or Board Resolutions setting forth the
terms of the Debentures of such series.
Whenever the conversion price is adjusted, the Company shall
compute the adjusted conversion price in accordance with terms of the
applicable Board Resolution or supplemental indenture and shall prepare an
Officers' Certificate setting forth the adjusted conversion price and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each office or agency maintained for
the purpose of conversion of Debentures of such series pursuant to Section 10.2
and, if different, with the Trustee. The Company shall forthwith cause a
notice setting forth the adjusted conversion price to be mailed, first class
postage prepaid, to each Holder of Debentures of such series at its address
appearing on the Debenture Register and to any conversion agent other than the
Trustee.
-70-
<PAGE> 79
Section 14.5 Notice of Certain Corporate Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out of its
retained earnings (other than a dividend for which approval of any
shareholders of the Company is required); or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights
(other than any such grant for which approval of any shareholders of the
Company is required); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of
Common Stock) or of any consolidation, merger or share exchange to which
the Company is a party and for which approval of any shareholders of the
Company is required, or of the sale of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Trustee, and shall cause to
be mailed to all Holders at their last addresses as they shall appear in the
Debenture Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options or warrants, or, if
a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution, rights, options or
warrants are to be determined, or (ii) the date on which such reclassification,
consolidation, merger, share exchange, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, share exchange, sale,
dissolution, liquidation or winding up. If at any time the Trustee shall not
be the conversion agent, a copy of such notice shall also forthwith be filed by
the Company with the Trustee.
Section 14.6 Reservation of Shares of Common Stock. The
Company shall at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock or treasury shares, for
the purpose of effecting the conversion of Debentures, the full number of
shares of Common Stock of the Company then issuable upon the conversion of all
outstanding Debentures of any series that has conversion rights.
Section 14.7 Payment of Certain Taxes upon Conversion. The
Company will pay any and all taxes that may be payable in respect of the issue
or delivery of shares of its Common Stock on conversion of Debentures pursuant
hereto. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of
shares of its Common Stock in a name other than that of the Holder of the
Debenture or Debentures to be converted, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid to the Company
the amount of any such tax, or has established, to the satisfaction of the
Company, that such tax has been paid.
-71-
<PAGE> 80
Section 14.8 Nonassessability. The Company covenants that all
shares of Common Stock which may be issued upon conversion of Debentures will
upon issue in accordance with the terms hereof be duly and validly issued and
fully paid and nonassessable.
Section 14.9 Effect of Consolidation or Merger on Conversion
Privilege. Unless otherwise provided as contemplated by Section 3.1 with
respect to Debentures of any series, in case of any consolidation of the
Company with, or merger of the Company into or with any other Person, or in
case of any sale of all or substantially all of the assets of the Company, the
Company or the Person formed by such consolidation or the Person into which the
Company shall have been merged or the Person which shall have acquired such
assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Debenture then
outstanding of any series that is convertible into Common Stock shall have the
right, which right shall be the exclusive conversion right thereafter available
to said Holder (until the expiration of the conversion right of such
Debenture), to convert such Debenture into the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
consolidation, merger or sale by a holder of the number of shares of Common
Stock into which such Debenture might have been converted immediately prior to
such consolidation, merger or sale, subject to compliance with the other
provisions of this Indenture, such Debenture and such supplemental indenture.
Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in such
Debenture. The above provisions of this Section shall similarly apply to
successive consolidations, mergers or sales. Unless otherwise provided as
contemplated by Section 3.1 with respect to Debentures of any series, it is
expressly agreed and understood that anything in this Indenture to the contrary
notwithstanding, if, pursuant to such merger, consolidation or sale, holders of
outstanding shares of Common Stock do not receive shares of common stock of the
surviving corporation but receive other securities, cash or other property or
any combination thereof, Holders of Debentures shall not have the right to
thereafter convert their Debentures into common stock of the surviving
corporation or the corporation which shall have acquired such assets, but
rather, shall have the right upon such conversion to receive the other
securities, cash or other property receivable by a holder of the number of
shares of Common Stock into which the Debentures held by such Holder might have
been converted immediately prior to such consolidation, merger or sale, all as
more fully provided in the first sentence of this Section 14.9. Anything in
this Section 14.9 to the contrary notwithstanding, the provisions of this
Section 14.9 shall not apply to a merger or consolidation of another
corporation with or into the Company pursuant to which both of the following
conditions are applicable: (i) the Company is the surviving corporation and
(ii) the outstanding shares of Common Stock are not changed or converted into
any other securities or property (including cash) or changed in number or
character or reclassified pursuant to the terms of such merger or
consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Debentures may properly be
convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and may accept the certificate or
opinion of an independent certified public accountant with respect thereto;
and, in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely thereon, and shall not be responsible or accountable to any
Holder of Debentures for any provision in conformity therewith or approved by
such independent certified accountant which may be contained in said
supplemental indenture.
Section 14.10 Duties of Trustee Regarding Conversion. Neither
the Trustee nor any conversion agent shall at any time be under any duty or
responsibility to any Holder of Debentures of
-72-
<PAGE> 81
any series that is convertible into Common Stock to determine whether any facts
exist which may require any adjustment of the conversion price, or with respect
to the nature or extent of any such adjustment when made, or with respect to
the method employed, whether herein or in any supplemental indenture (or
whether a supplemental indenture need be entered into), any resolutions of the
Board of Directors or written instrument executed by one or more officers of
the Company provided to be employed in making the same. Neither the Trustee
nor any conversion agent shall be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any Debentures and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property upon the surrender of any Debenture for the purpose of
conversion or to comply with any of the covenants of the Company contained in
this Article XIV or in the applicable supplemental indenture, resolutions of
the Board of Directors or written instrument executed by one or more duly
authorized officers of the Company. All Debentures delivered for conversion
shall be delivered to the Trustee to be canceled by or at the direction of the
Trustee, which shall dispose of the same as provided in Section 3.9.
Section 14.11 Repayment of Certain Funds upon Conversion. Any
funds which at any time shall have been deposited by the Company or on its
behalf with the Trustee or any other paying agent for the purpose of paying the
principal of, and premium, if any, and interest, if any, on any of the
Debentures (including funds deposited for the sinking fund referred to in
Article III hereof) and which shall not be required for such purposes because
of the conversion of such Debentures as provided in this Article XIV shall
after such conversion be repaid to the Company by the Trustee upon the
Company's written request, subject to the final paragraph of Section 3.7
hereof.
ARTICLE XV
SUBORDINATION OF DEBENTURES
Section 15.1 Debentures Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Debenture, by the
Holder's acceptance thereof, likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article, the indebtedness
represented by the Debentures and the payment of the principal of (and premium,
if any) and interest on each and all of the Debentures are hereby expressly
made subordinate and junior in right of payment to the prior payment in full of
all Senior Indebtedness of the Company, whether outstanding at the date of this
Indenture or thereafter incurred. No provision of this Article shall prevent
the occurrence of any default or Event of Default hereunder.
Section 15.2 Payment Over of Proceeds Upon Dissolution, Etc.
Upon any payment by the Company or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company on account
of the principal (and premium, if any) or interest on the Debentures; and upon
any such dissolution or winding-up or liquidation or reorganization, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities,
-73-
<PAGE> 82
which the Holders of the Debentures or the Trustee would be entitled to receive
from the Company, except for the provisions of this Article, shall be paid by
the Company or by any receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Debentures or by the Trustee under the Indenture if received by them or it,
directly to the holders of Senior Indebtedness of the Company (pro rata to such
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holders of the
Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee or any Holder of the Debentures before all Senior Indebtedness of
the Company is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of such
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, and their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company, as the case may be,
remaining unpaid to the extent necessary to pay such Senior Indebtedness in
full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of
such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Debentures are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
VIII shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of
assets and liabilities of the Company for the purposes of this Section if the
Person formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article VIII.
Section 15.3 Prior Payment to Senior Indebtedness Upon
Acceleration of Debentures. In the event that any Debentures are declared due
and payable before their Stated Maturity, then and in such event the holders of
Senior Indebtedness outstanding at the time the Debentures become due and
payable shall be entitled to receive payment in full of all amounts due or to
become due on or in respect of all Senior Indebtedness or provision shall be
made for such payment in cash, before the Holders of the Debentures are
entitled to receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Debentures) by the Company on account of the
principal of (or premium, if any) or interest on the
-74-
<PAGE> 83
Debentures or on account of the purchase or other acquisition of Debentures;
provided, however, that nothing in this Section shall prevent the satisfaction
of any sinking fund payment in accordance with Article XII by delivering and
crediting pursuant to Section 12.2 Debentures which have been acquired (upon
redemption or otherwise) prior to such declaration of acceleration or which
have been converted pursuant to Article XIV.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Debenture prohibited
by the foregoing provisions of this Section, and if such fact shall, at or
prior to the time of such payment, have been made known to the Trustee or, as
the case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
Section 15.4 No Payment When Senior Indebtedness in Default.
In the event and during the continuation of any default by the Company in the
payment of principal, premium, interest or any other payment due on any Senior
Indebtedness of the Company, as the case may be, beyond any applicable grace
period with respect thereto, or in the event that the maturity of any Senior
Indebtedness of the Company, as the case may be, has been accelerated because
of a default, then, in any such case, no payment shall be made by the Company
with respect to the principal (including redemption and sinking fund payments)
of, or premium, if any, or interest on the Debentures until such default is
cured or waived or ceases to exist or any such acceleration or demand for
payment has been rescinded; provided, however, that nothing in this Section
shall prevent the satisfaction of any sinking fund payment in accordance with
Article XII by delivering and crediting pursuant to Section 12.2 Debentures
which have been acquired (upon redemption or otherwise) prior to such
declaration or acceleration or which have been converted pursuant to Article
XIV.
No payment shall be made with respect to the principal of, or
premium, if any, or interest on the Debentures if a default, other than a
payment default, on Designated Senior Indebtedness occurs and is continuing
that then permits the lenders to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Representative or the Company. If the Trustee receives any Payment Blockage
Notice, no subsequent Payment Blockage Notice shall be effective for purposes
of this Section unless and until (a) at least 365 days shall have elapsed since
the initial effectiveness of the immediately prior Payment Blockage Notice, and
(b) all scheduled payments of principal, premium, if any, and interest on the
Debentures that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Debentures upon the earlier of: (x) the date upon which the
default is cured or waived or ceases to exist or (y) 179 days pass after a
Payment Blockage Notice is received by the Trustee if the maturity of the
Designated Senior Indebtedness has not been accelerated, unless this Section
15.4 otherwise prohibits the payment or distribution at the time of such
payment or distribution.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 15.4, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness
-75-
<PAGE> 84
or their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that
the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
The provisions of this Section shall not apply to any payment to
which Section 14.2 would be applicable.
Section 15.5 Payment Permitted in Certain Situations. Nothing
contained in this Article or elsewhere in this Indenture or in any of the
Debentures shall prevent (a) the Company, at any time except during the
pendency of any dissolution, winding-up, liquidation or reorganization of the
Company, whether voluntary or involuntary or any bankruptcy, insolvency,
receivership or other proceedings of the Company referred to in Section 15.2 or
under the conditions described in Section 15.3 or 15.4, from making payments at
any time of principal of or premium, if any, or interest on the Debentures, or
(b) the application by the Trustee of any money deposited with it hereunder to
the payment of or on account of the principal of, or premium, if any, or
interest on the Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge that
such payment would have been prohibited by the provisions of this Article.
Section 15.6 Subrogation to Rights of Holders of Senior
Indebtedness. Subject to the payment in full of all Senior Indebtedness or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the Holders
of Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Debentures
are subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of (and premium, if any) and
interest on the Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of
Debentures or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to or
for the benefit of the holders of Senior Indebtedness by Holders of Debentures
or the Trustee, shall, as among the Company, its creditors other than holders
of Senior Indebtedness and the Holders of Debentures, be deemed to be a payment
or distribution by the Company to or on account of the Senior Indebtedness.
Section 15.7 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of Debentures on the one hand and
the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Debentures is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Debentures, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Indebtedness, is intended to rank
equally with all other general obligations of the Company), to pay to the
Holders of Debentures the principal of (and premium, if any) and interest on
the Debentures as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the Company of the
Holders of Debentures and
-76-
<PAGE> 85
creditors of the Company, as the case may be, other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Debenture from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
Section 15.8 Trustee to Effectuate Subordination. Each Holder
of a Debenture by such Holder's acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
Section 15.9 No Waiver of Subordination Provisions. No right
of any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Debentures, without incurring responsibility to the Holders of Debentures and
without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of Debentures to the holders of Senior
Indebtedness do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the payment or collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against
the Company and any other Person.
Section 15.10 Notice to Trustee. The Company shall give prompt
written notice to a Responsible Officer of the Trustee located at the Corporate
Trust Office of any fact known to the Company which would prohibit the making
of any payment to or by the Trustee in respect of the Debentures pursuant to
the provisions of this Article. Notwithstanding the provisions of this Article
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article, unless and until a Responsible Officer of the
Trustee shall have received at its Corporate Trust Office written notice
thereof from the Company or a holder or holders of Senior Indebtedness or from
any trustee therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.2, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall have not received the notice provided for in this Section at
least three Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any
Debentures), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within three
Business Days prior to such date.
-77-
<PAGE> 86
Subject to the provisions of Section 6.2, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 15.11 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
6.2, and the Holders of Debentures shall be entitled to conclusively rely upon
any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Debentures, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, as the case may be, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
Section 15.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture against the Trustee. Except with respect to Section
15.4, the Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness and shall not be liable to any such holders or creditors
if it shall in good faith pay over or distribute to Holders of Debentures or to
the Company or to any other Person cash, property or securities to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
Section 15.13 Rights of Trustee as Holder of Senior
Indebtedness, Preservation of Trustee's Rights. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article with
respect to any Senior Indebtedness which may at any time be held by it, to the
same extent as any other holder of Senior Indebtedness and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall subordinate to Senior Indebtedness
the claims of, or payments to, the Trustee under or pursuant to Section 6.6.
Section 15.14 Article Applicable to Paying Agents. In case at
any time any Paying Agent other than the Trustee shall have been appointed by
the Company and be then acting hereunder, the term "Trustee" as used in this
Article shall in such case (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided,
-78-
<PAGE> 87
however, that Section 14.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 15.15 Certain Conversions Deemed Payment. For the
purposes of this Article only, (a) the issuance and delivery of junior
securities (or cash paid in lieu of fractional shares) upon conversion of
Debentures in accordance with Article XIV, or pursuant to the terms set forth
in an Officers' Certificate or established in one or more indentures
supplemental hereto in accordance with Section 3.1, shall not be deemed to
constitute a payment or distribution on account of the principal of or premium
or interest on Debentures or on account of the purchase or other acquisition of
Debentures, and (b) the payment, issuance or delivery of cash, property or
securities (other than junior securities and cash paid in lieu of fractional
shares) upon conversion of a Debenture shall be deemed to constitute payment on
account of the principal of such Debenture. For the purposes of this Section,
the term "junior securities" means (i) shares of any stock of any class of the
Company and (ii) securities of the Company which are subordinated in right of
payment to all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Debentures are so subordinated as provided in
this Article. Nothing contained in this Article or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of
Debentures, the right, which is absolute and unconditional, of the Holder of
any Debenture to convert such Debenture in accordance with Article XIV.
-79-
<PAGE> 88
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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the day and year first above written.
EVI, INC.
By: /s/ James G. Kiley
------------------------------------
James G. Kiley, Vice President
and Chief Financial Officer
THE CHASE MANHATTAN BANK, AS TRUSTEE
By: /s/ W. B. Dodge
------------------------------------
Name: W. B. Dodge
-----------------------------------
Title: Vice President
-----------------------------------
-80-
<PAGE> 1
EXHIBIT 5.1
[FULBRIGHT & JAWORSKI L.L.P. Letterhead]
January 29, 1998
EVI, Inc.
5 Post Oak Park, Suite 1760
Houston, Texas 77027-3415
Gentlemen:
We have acted as counsel for EVI, Inc., a Delaware corporation (the
"Company"), in connection with the registration under the Securities Act of
1933 of the Company's 8,050,000 5% Convertible Subordinated Preferred
Equivalent Debentures due 2027 (the "Debentures"), having a $402,500,000
aggregate principal amount, and 5,031,250 shares (the "Shares") of the
Company's common stock, $1.00 par value, that are issuable upon conversion of
the Debentures, to be offered by certain holders thereof (the "Selling
Securityholders") upon the terms and subject to the conditions set forth in the
Company's Registration Statement on Form S-3 (the "Registration Statement")
filed with the Securities and Exchange Commission. The Debentures were issued
pursuant to an Indenture dated as of October 15, 1997, as supplemented by the
First Supplemental Indenture dated as of October 28, 1997 (collectively, the
"Indenture"), between the Company and The Chase Manhattan Bank, as trustee (the
"Trustee").
In connection therewith, we have examined the Registration Statement,
the Indenture under which the Debentures were issued, originals or copies
certified or otherwise identified to our satisfaction of the Restated
Certificate of Incorporation, as amended, of the Company, the amended By-laws
of the Company, the corporate proceedings with respect to the registration of
the Debentures and the Shares and such other documents and instruments as we
have deemed necessary or appropriate for the expression of the opinions
contained herein.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that:
1. The Debentures have been validly issued, executed and
delivered, are entitled to the benefits of the Indenture and constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except (i) as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws relating to or affecting the enforcement of creditors'
rights generally and (ii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought; and
2. The Shares issuable upon conversion of the Debentures have
been validly authorized and reserved for issuance and, when duly issued and
delivered upon conversion of the Debentures in accordance with the terms of the
Debentures and the Indenture, will be validly issued, fully paid and
nonassessable.
In rendering the opinions expressed herein, we have assumed that the
Trustee has power and authority to enter into and perform its obligations under
the Indenture, that the Indenture has been duly authorized, executed and
delivered by the Trustee, and that the Indenture constitutes a legal, valid and
binding obligation of the Trustee, enforceable against the Trustee in
accordance with the terms of the Indenture.
<PAGE> 2
EVI, Inc.
January 29, 1998
Page 2
The opinions expressed herein relate solely to, are based solely upon
and are limited exclusively to the laws of the States of New York and Delaware
and the federal laws of the United States of America, to the extent applicable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus included as part of the Registration Statement.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
PRO
HISTORICAL FORMA HISTORICAL PRO FORMA
------------------------------------------------------ -------- ------------------- ---------
YEAR NINE
ENDED NINE MONTHS MONTHS
YEAR ENDED DECEMBER ENDED ENDED
DECEMBER 31, 31, SEPTEMBER 30, SEPT. 30
-------------------------------------------------------- -------- ------------------- ---------
1992 1993 1994 1995 1996 1996 1996 1997 1997
-------- ------- ------- ------- ------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from
continuing operations
before income taxes
and extraordinary items $(4,683) $ 666 $(9,487) $ 2,362 $31,546 $27,006 $21,091 $87,095 $ 80,716
Fixed charges:
Interest expense (a) 5,258 7,574 13,537 16,287 16,454 24,228 12,265 13,080 18,911
Interest factor
portion of rentals (b) 940 698 1,220 1,203 1,726 1,726 1,352 1,804 1,804
-------- ------- ------- ------- ------- ------- ------- -------- --------
Total fixed charges 6,198 8,272 14,757 17,490 18,180 25,954 13,617 14,884 20,715
Earnings before income
taxes and fixed charges $ 1,515 $ 8,938 $ 5,270 $19,852 $49,726 $52,960 $34,708 $101,979 $101,431
======== ======= ======= ======= ======= ======= ======= ======== ========
Ratio of earnings to
fixed charges 0.24 (c) 1.08 0.36 (c) 1.14 2.74 2.04 2.55 6.85 4.90
======== ======= ======= ======= ======= ======= ======= ======== ========
</TABLE>
(a) Interest expense consists of interest expense incurred from continuing
operations and amortization of debt issuance costs.
(b) Interest factor portion of rentals is estimated to be one third of rental
expense.
(c) In 1992 and 1994, earnings, as-defined, before fixed charges were
inadequate to cover fixed charges. Such deficiencies were $4.7 million and
$9.5 million, respectively.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
February 10, 1997 included in EVI, Inc.'s (the "Company") Form 10-K/A for the
year ended December 31, 1996, as supplemented in the Company's Form 8-K dated
October 20, 1997, and to all references to our Firm included in this
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Houston, Texas
January 29, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
April 18, 1996 on the consolidated financial statements for Tubular Corporation
of America and subsidiary included in EVI, Inc.'s Form 8-K dated June 24, 1996
and Form 8-K dated August 5, 1996 and to all references to our Firm included in
this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Tulsa, Oklahoma
January 29, 1998
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-3 of our
report dated February 26, 1997 on the financial statements of GulfMark Retained
Assets (a business segment of GulfMark International, Inc.) at December 31,
1996 and 1995 and each of the three years in the period ended December 31, 1996
and to all references to our Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Houston, Texas
January 29, 1998
<PAGE> 1
EXHIBIT 25.1
-------------------------------------------------------------
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) _______
------------------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
------------------------------------------------
EVI, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 04-2515019
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
5 POST OAK PARK
HOUSTON, TEXAS 77027-3415
(Address of principal executive offices) (Zip Code)
------------------------------------------------
5% CONVERTIBLE SUBORDINATED PREFERRED EQUIVALENT
DEBENTURES DUE 2027
(Title of the indenture securities)
-------------------------------------------------------------
<PAGE> 2
GENERAL
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.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-06249, which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which
is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York, on the 22nd day
of January, 1998.
THE CHASE MANHATTAN BANK
By /s/ W. B. Dodge
--------------------------------
W. B. Dodge
Vice President
-3-
<PAGE> 4
EXHIBIT 7 TO FORM T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
ASSETS MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . .
$ 11,760
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . 4,343
Securities: . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Held to maturity securities . . . . . . . . . . . . . . . . . . . . . 2,704
Available for sale securities . . . . . . . . . . . . . . . . . . . . 37,885
Federal funds sold and securities purchased under agreements to
resell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,358
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,370
Less: Allowance for loan and lease losses 2,760
Less: Allocated transfer risk reserve 13
--------
Loans and leases, net of unearned income, allowance, and
reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,597
Trading Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,630
Premises and fixed assets (including capitalized leases) . . . . . . 2,925
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . 286
Investments in unconsolidated subsidiaries and associated
companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
Customers' liability to this bank on acceptances outstanding . . . . --------
2,212
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,480
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,117
--------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . $291,529
========
</TABLE>
-4-
<PAGE> 5
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices . . . . . . . . . . . . . . . . . . . . . $86,574
Noninterest-bearing . . . . . . . . . . . . . . $31,818
Interest-bearing . . . . . . . . . . . . . . . . . 54,756
-------
In foreign offices, Edge and Agreement subsidiaries, and
IBF's . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,887
Noninterest-bearing . . . . . . . . . . . . . . $ 3,777
Interest-bearing . . . . . . . . . . . . . . . . 66,110
Federal funds purchased and securities sold under agreements to
repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,307
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . 161
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . 47,406
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less . . . . . . . . . 4,578
With a remaining maturity of more than one year through
three years . . . . . . . . . . . . . . . . . . . . . . . . . . 261
With a remaining maturity of more than three years . . . . . . .
131
Bank's liability on acceptances executed and outstanding
2,212
Subordinated notes and debentures . . . . . . . . . . . . . . . . . 5,715
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 12,355
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . 274,587
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,211
Surplus (exclude all surplus related to preferred stock) . . . . . . 10,294
Undivided profits and capital reserves . . . . . . . . . . . . . . . 5,414
Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Cumulative foreign currency translation adjustments . . . . . . . . 16
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . 16,942
--------
TOTAL LIABILITIES AND EQUITY CAPITAL . . . . . . . . . . . . . . . . $291,529
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is
true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
-5-
