As filed with the Securities and Exchange Commission on March 29, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ALEXANDER & ALEXANDER SERVICES INC.
(Exact name of registrant as specified in its charter)
------------------------
MARYLAND 52-0969822
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 444-4500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
DONNA SOMMA, ESQ.
CORPORATE COUNSEL & ASSISTANT VICE PRESIDENT
ALEXANDER & ALEXANDER SERVICES INC.
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 444-4533
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time 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|
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<TABLE><CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE(1) REGISTRATION
<S> <C> <C> <C> <C>
Common Stock(2)(4) ___
Preferred Stock(3) ___
Debt Securities ___
Warrants to purchase ___
Common Stock $250,000,000 $250,000,000 $86,207
Warrants to purchase ___
debt securities
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</TABLE>
1. ESTIMATED SOLELY FOR PURPOSES OF CALCULATING THE REGISTRATION FEE.
2. INCLUDES THE PREFERRED SHARE PURCHASE RIGHTS ASSOCIATED WITH THE COMMON
STOCK.
3. SUCH INDETERMINATE NUMBER OF SHARES OF PREFERRED STOCK AS MAY,
FROM TIME TO TIME, BE ISSUED AT INDETERMINATE PRICES, INCLUDING PREFERRED
STOCK ISSUABLE UPON CONVERSION INTO OR EXCHANGE OF SECURITIES OF THE
COMPANY.
4. SUCH INDETERMINATE NUMBER OF SHARES OF COMMON STOCK AS MAY,
FROM TIME TO TIME, BE ISSUED AT INDETERMINATE PRICES, INCLUDING COMMON
STOCK ISSUABLE UPON CONVERSION INTO OR EXCHANGE OF SECURITIES OF THE
COMPANY.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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(SUBJECT TO COMPLETION) ISSUED ___________, 1996
PROSPECTUS
ALEXANDER & ALEXANDER SERVICES INC.
COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES, AND
WARRANTS TO PURCHASE COMMON STOCK AND DEBT SECURITIES
Alexander & Alexander Services Inc. (the "Company") may offer to sell from time
to time under this prospectus, together or separately (i) shares of its common
stock, $1.00 par value (the "Common Stock"), together with preferred share
purchase rights (the "Rights"), (ii) shares of its preferred stock, $1.00 par
value (the "Preferred Stock"), (iii) its unsecured debt securities (the "Debt
Securities"), which may be either senior (the "Senior Debt Securities") or
subordinated (the "Subordinated Debt Securities"), (iv) warrants to purchase
Common Stock (the "Common Warrants"), and (v) warrants to purchase Debt
Securities (the "Debt Warrants") (the Common Warrants and the Debt Warrants,
collectively, "the Warrants"), all on terms to be determined at the time of
offering. The Preferred Stock and the Debt Securities may be convertible into or
exchangeable for Common Stock or other securities as herein described. The
Common Stock, Preferred Stock, Debt Securities and Warrants, or any combination
thereof, proposed to be sold pursuant to this prospectus and the accompanying
prospectus supplement are referred to as the "Offered Securities", and the
Offered Securities, together with any Common Stock and Debt Securities issuable
upon exercise of the Warrants or exchange of other securities, are referred to
as the "Securities". The Securities offered pursuant to this prospectus may be
issued in one or more series or issuances and will be limited to an aggregate
initial offering price of up to $250,000,000 (or the equivalent thereof if any
of the Securities are denominated in a currency ("Currency") other than U.S.
dollars). FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED WITH THE PURCHASE OF THE
SECURITIES, SEE "RISK FACTORS".
The prospectus supplement accompanying this prospectus sets forth, with respect
to each series or issue of Securities for which this prospectus and the
prospectus supplement are being delivered: (i) the terms of any Preferred Stock
offered, including the specific designations and dividend, redemption,
liquidation, voting and other rights not described in this prospectus and any
terms for the conversion or exchange thereof; (ii) the terms of any Debt
Securities offered, including where applicable, their title, ranking, aggregate
principal amount, maturity, rate of any interest (or manner of calculation) and
time of payment thereof, any redemption or repayment terms, the Currency or
Currencies in which such Debt Securities will be denominated or payable, any
index, formula or other method pursuant to which
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principal, premium, if any, or interest, if any, may be determined, any terms
for the conversion or exchange thereof and the form of such Debt Securities
(which may be registered, bearer or global form);
(iii) the terms of any Warrants offered, including where applicable, the
exercise price, detachability, expiration date and other terms and (iv) any
initial offering price, the purchase price and net proceeds to the Company and
other specific terms related to the offering of such Securities.
The Company may sell the Offered Securities to or through underwriters, dealers
or agents, and also may sell the Offered Securities directly to other
purchasers, or through a combination of such methods. See "Plan of
Distribution". No Offered Securities may be sold without delivery of a
prospectus supplement describing such Offered Securities and the method and
terms of offering thereof. The prospectus supplement will contain information
concerning certain U.S. federal income tax considerations, if applicable, to the
Offered Securities.
The Company's Common Stock is listed on the New York Stock Exchange under the
trading symbol "AAL" and on the London Stock Exchange Limited under the trading
symbol "ALXA". The Company's Rights are listed on the New York Stock Exchange.
Any Common Stock and accompanying Rights sold pursuant to a prospectus
supplement will be listed on such exchanges, subject to an official notice of
issuance.
Unless otherwise specified in a prospectus supplement, the Senior Debt
Securities, when issued, will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated Debt
Securities, when issued, will be subordinated in right of payment to all Senior
Debt (as defined herein) of the Company.
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 __________, 1996.
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FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER 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 OR ANY UNDERWRITERS, AGENTS OR DEALERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AND ITS SUBSIDIARIES
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
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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"). The Company has filed
with the Commission a registration statement, of which this prospectus is a
part, (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
prospectus does not contain all of the information set forth in the Registration
Statement. Certain portions of the Registration Statement have been omitted as
permitted by the rules and regulations of the Commission. Statements made in
this prospectus as to the contents of any contract, agreement, instrument or
other document are not necessarily complete, and in each instance reference is
made to the copy of such contract, agreement, instrument or document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference and the exhibits and schedules thereto.
The Registration Statement and the reports and other information filed by the
Company with the Commission may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following regional offices of the
Commission: New York Regional Office, Seven World Trade Center, 13th Floor, New
York, New York 10048 and the Chicago Regional Office, Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained by mail from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of
the fees prescribed by the Commission. Such reports, Registration Statement and
exhibits and other information concerning the Company can also be inspected at
the offices of the New York Stock Exchange at 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-8282) are hereby incorporated by reference in this prospectus: (1) The
Company's Annual Report on Form 10-K for the year ended December 31, 1995; and
(2) The description of the Company's Common Stock and the Rights associated with
the Common Stock filed pursuant to Section 12 of the Exchange Act and any
amendment or report filed for the purposes of updating those descriptions
contained in its registration statements on Form 8-A, including any subsequent
amendments or reports filed for the purpose of updating such description.
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All documents filed by the Company with the Commission pursuant to Section
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 Securities covered by this
prospectus shall be deemed to be incorporated herein by reference into this
prospectus and to be a part hereof from their respective dates of filing. Any
statement contained in this prospectus or in a document incorporated or deemed
incorporated herein by reference 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 which is or is
deemed to be incorporated herein by reference, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL
OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF
SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS THAT HAVE BEEN INCORPORATED
BY REFERENCE (OTHER THAN ANY EXHIBITS THERETO). REQUESTS FOR SUCH DOCUMENTS
SHOULD BE DIRECTED TO ALEXANDER & ALEXANDER SERVICES INC. AT 10461 MILL RUN
CIRCLE, OWINGS MILLS, MARYLAND 21117, ATTENTION: ALICE L.
RUSSELL, CORPORATE SECRETARY.
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RISK FACTORS
Prospective purchasers should consider carefully all information set forth or
incorporated by reference in this prospectus in analyzing this offering and, in
particular, prospective purchasers should consider the following risk factors:
PROSPECTS FOR REVENUE STABILITY AND GROWTH. As a result of its restructuring
efforts the Company has made substantial progress since mid-1994 stabilizing its
operations, rebuilding its balance sheet, and improving its cost structure.
Operating initiatives will continue through 1996 as the Company plans, among
other things, to make investments in its operating systems and training programs
and to pursue additional internal consolidation and cost savings. Such actions
may impact the Company's operating profits during 1996 and may impact quarterly
and annual results until the benefits of such efforts have been fully realized
by the Company's operations. The Company will also continue to focus on revenue
growth. The Company's revenues are generally derived from commissions and fees.
Insurance broking commissions and fee growth continue to be constrained,
particularly in the U.S., due to soft pricing and excess market capacity and the
resultant intense competition among insurance carriers and brokers for market
share. These market conditions are becoming increasingly evident in the U.K.,
Continental Europe and in other parts of the world. During 1996, soft market
conditions are expected to continue in most liability coverages. The Company
anticipates modest broking revenue growth for its insurance broking operations
and moderate revenue growth in its human resource management consulting
operations. In addition to commissions and fees, the Company derives revenues
from investment income earned on fiduciary funds. Despite a rise in worldwide
interest rates in 1995, the trend in recent years has been downward. There is
also pressure from insurance companies to shorten the time that fiduciary funds
are held prior to remittance to carriers. Investment income earned on fiduciary
funds during 1996 is anticipated to remain near 1995 levels. The Company's 1996
revenue growth projections may be adversely affected by lower than estimated
renewal and client retention rates, market and industry conditions, operating
margins, and interest rates. In addition, the Company's future revenue growth
will depend increasingly on the development of new products and services, new
business generation and selective acquisitions, such as the October 1995
purchase of most of the U.S. insurance broking and consulting operations of
Jardine Insurance Brokers Inc. Efforts will continue during 1996 to identify
other areas of additional expense reductions. Future earnings growth, however,
will depend largely on revenue expansion rather than cost reduction. There is no
guarantee that the Company can sustain its general improvement without
improvement in revenue growth.
POTENTIAL ACQUISITIONS. The Company will continue to explore geographical market
expansion and further industry specialization as well as consider possible niche
and substantial strategic acquisitions relating to its core business and other
opportunities within the financial services industry. As part of its review of
opportunities, the Company has evaluated and is evaluating such opportunities
and
6
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prospects and will continue to do so. The Company cannot predict if any
transaction will be consummated, nor the terms or form of consideration
required. Nor can the Company predict, if any such transaction is consummated,
what the financial benefit, if any, will be to the Company or if the transaction
can be successfully integrated into the Company.
ADDITIONAL FINANCING. The Company believes that cash flow from operations, along
with current cash balances, will be sufficient to fund working capital as well
as other obligations on a timely basis. Should the Company expand its operations
through acquisitions, mergers or other combinations, however, additional
financing may be required. No assurance can be given that such additional
financing, if required, will be available to the Company on reasonable terms.
PRICING AND SEASONALITY. The Company's revenues can be affected by pricing and
seasonality. The Company's insurance broking revenues are generally affected by
premium rates charged by insurance companies in the property and casualty
markets and the overall available market capacity. It is management's view that
insurance premium pricing is not likely to improve in the foreseeable future.
The timing and realization of revenues are also affected by the timing of
renewal cycles in different parts of the world and lines of business. This
produces a degree of seasonability in the Company's results. Broking revenues
for risk management and insurance broking services are the strongest in
Continental Europe during the first quarter and the strongest in the U.S. and
Asia-Pacific during the fourth quarter. Specialist and reinsurance broking
revenues are the strongest in the first and second quarters. Revenues for human
resource management consulting are typically strongest in the fourth quarter and
weakest in the first quarter.
LIMITATIONS ON PAYMENT OF COMMON STOCK DIVIDENDS. Dividends on the Series B
Cumulative Convertible Preferred Stock, $1.00 par value (the "Series B
Convertible Preferred Stock"), will reduce the amount of earnings otherwise
available for distribution to holders of the Common Stock by approximately $18.5
million in 1996, and increasing to approximately $23 million in 1999, assuming
dividends on the Series B Convertible Preferred Shares were to be paid in kind
over this period. The holders of the Series B Convertible Preferred Stock also
have the right to require the Company to repurchase their shares at specified
premium prices if a "Special Event" occurs. This right may tend to deter the
Company from engaging in a Special Event, which includes, for example, the
declaration or payment of dividends aggregating in excess of (x) cumulatively
25% of earnings in 1996, and (y) cumulatively 50% of earnings thereafter; the
disposition by the Company of assets representing 35% or more of the Company's
book value or gross revenues; and certain mergers of the Company or any of its
principal subsidiaries with or into any other firm or entity involving more than
20% of the total market value of the Company's equity securities. Other Special
Events include the acquisition by a third party, with the consent or approval of
the Company, of beneficial ownership of securities representing 35% or more of
the Company's total outstanding voting power. In addition, no dividends may be
declared or paid on the Company's Common Stock, unless an equivalent amount per
share is declared and paid on the
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dividend paying shares associated with the Company's Common Stock equivalents.
The Board of Directors will continue to take into consideration the Company's
financial performance and projections, as well as the provisions of the Series B
Convertible Preferred Stock pertaining to declaration of dividends on Common
Stock. These factors, as well as other factors, could affect future decisions of
the Board of Directors with respect to the size and timing of dividends and
other distributions on the Company's Common Stock and other matters generally
affecting the rights of holders of the Common Stock.
DISCONTINUED OPERATIONS. Claims relating to the Company's discontinued
operations are expected to develop and be settled over the next twenty to thirty
years. These claims are primarily asbestosis, environmental pollution, and
latent disease risks in the U.S. which are coupled with substantial litigation
expenses. Liabilities stemming from these claims cannot be estimated using
conventional actuarial reserving techniques because the available historical
experience is not adequate to support the use of such techniques and because
case law, as well as scientific standards for measuring the adequacy of site
cleanup (both of which have had, and will continue to have, a significant
bearing on the ultimate extent of the liabilities) is still evolving. The
Company has certain protection against adverse developments of its insurance
liabilities through two finite risk contracts issued by a reinsurance company.
The amounts recorded for these liabilities represent the Company's best estimate
of the probable liabilities within a range of independent actuarial estimates of
reasonably probable loss amounts. There is no assurance that future adverse
developments may not occur due to variables inherent in the estimation process.
Based on independent actuarial estimates of a range of reasonably possible loss
amounts, liabilities could exceed recorded amounts by approximately $170
million. However, in the event of such adverse development, based on independent
actuarial estimates of payout patterns, up to approximately $130 million of this
excess would be recoverable under the finite risk contracts. The Company
believes that, based on current estimates, the established total net liabilities
of discontinued operations are sufficient to cover its exposures.
CONTINGENT LIABILITIES AND LEGAL PROCEEDINGS. The Company and its subsidiaries
are subject to various claims and lawsuits from both private and governmental
parties, which include claims and lawsuits in the ordinary course of business,
consisting principally of alleged errors and omissions in connection with the
placement of insurance and in rendering consulting services. In some of these
cases, the remedies that may be sought or damages claimed are substantial.
Additionally, the Company and its subsidiaries are subject to the risk of losses
resulting from the potential uncollectibility of insurance and reinsurance
balances, claims advances made on behalf of clients, exceeding policy limits,
and indemnifications connected with the sales of certain businesses. The
Company's contingent liabilities involve significant amounts. While it is not
possible to predict with certainty the outcome of such contingent liabilities,
the applicability of coverage for such matters under the Company's professional
indemnity insurance program or the financial impact of such contingent
liabilities on the Company, management presently believes that such impact will
not be material to the Company's financial condition. However, it is possible
that future developments with respect to these matters could have a material
adverse impact on future interim or annual results of operations.
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SHAND CONTINGENCIES. During 1995, the Company negotiated the settlements of
certain indemnification obligations relating to the 1987 sale of Shand Morahan &
Company, Inc., the Company's U.S. underwriting subsidiary. Notwithstanding the
settlements, certain of the Company's indemnification provisions under the 1987
agreement are still in effect. As a result, there remains the possibility of
substantial exposure under the indemnification provisions of the 1987 agreement
although the Company, based on current facts and circumstances, believes that
the possibility of a material loss resulting from these exposures is remote.
NOTICE OF PROPOSED 1991 TAX ADJUSTMENTS. In 1994, the Company received a Notice
of Proposed Adjustment from the Internal Revenue Service (the "IRS") proposing
an increase in taxable income for the 1991 year which, if sustained, would
result in an additional tax liability estimated by the Company at $50 million.
This proposed adjustment relates to intercompany transactions involving the
stock of a U.K. subsidiary. The Company disagrees with the IRS position on this
issue. Although the ultimate outcome of the matter cannot be predicted with
certainty, the Company and its independent tax counsel, White & Case, believe
there are meritorious defenses to the proposed adjustment and substantial
arguments to sustain the Company's position and that the Company should prevail
in the event this issue is litigated. (White & Case's belief is based upon the
Internal Revenue Code, Treasury regulations, administrative rulings and other
applicable authorities as in effect on March 27, 1996, and is subject to the
accuracy of facts represented to White & Case concerning the 1991 transaction.)
A similar set of transactions occurred in 1993 for which the IRS could propose
an increase in taxable income which would result in an additional tax liability
estimated by the Company at $25 million. The Company's 1993 tax return is not
currently under examination. The Company believes it should prevail in the event
this similar issue is raised by the IRS. Accordingly, no provision for any
liability with respect to the 1991 and 1993 transactions has been made in the
consolidated financial statements. The Company believes that its current tax
reserves are adequate to cover all of its tax liabilities. Under the purchase
agreement for the Series B Convertible Preferred Stock, the Company has agreed
to make certain payments to the purchaser pursuant to an indemnification,
limited to $10 million, to cover tax payments and reserves in excess of recorded
tax reserves as of March 31, 1994, including the tax matters described above.
FOREIGN CURRENCY TRANSLATION, DERIVATIVE PRODUCTS AND OTHER RISKS. Changes in
foreign currency exchange rates and interest rates could significantly impact
the Company's interim and annual net consolidated operating income. To reduce
the risk of currency exchange fluctuations, the Company utilizes derivative
products. The Company enters into foreign exchange contracts primarily to cover
exposures that arise at its London-based specialty and reinsurance broking
operations. These exposures arise because a significant portion of the revenues
of these operations are denominated in U.S. dollars, while their expenses are
primarily denominated in
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U.K. pounds sterling. To hedge this exposure, the Company generally sells U.S.
dollars and purchases U.K. pounds sterling. The Company also utilizes foreign
exchange options to supplement this activity. In addition, the Company has also
entered into interest rate swaps and forward rate agreements as a means to limit
the earnings volatility associated with changes in short-term interest rates,
primarily in the U.S. and the U.K., on its existing and anticipated fiduciary
investments with maturities of three months or less. These instruments are
contractual agreements between the Company and financial institutions which
exchange fixed and floating interest rate payments periodically over the life of
the agreements without exchanges of the underlying principal amounts. In
addition to interest rate swaps and forward rate agreements as part of its
interest rate management program, the Company utilizes various types of interest
rate options, including caps, collars, floors and interest rate guarantees. As
to fluctuations in interest rates, a 1 percent change in worldwide interest
rates could affect the Company's annual fiduciary investment income by
approximately $8 million; however, the impact is reduced to approximately $7
million in 1996 when the financial hedging instruments are included.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS. This prospectus and the
Company's financial statements incorporated herein by reference contain
forward-looking statements. Such statements include without limitation,
discussions concerning revenue growth, market and industry conditions, interest
rates, restructuring charges, contingencies and matters relating to the
Company's discontinued operations and income taxes. Such forward-looking
statements are based on available current market and industry materials,
expert's reports and opinions, as well as management's expectations concerning
future events impacting the Company. There can be no assurance that such
forward-looking statements will occur or that the Company's results will be as
anticipated. Accordingly, the Company's actual consolidated results for the
first quarter of 1996 and beyond could differ materially from the
forward-looking statements incorporated herein.
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SUMMARY FINANCIAL INFORMATION
<TABLE><CAPTION>
For the years Ended December 31, 1995 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C>
(dollars in millions, except per share amounts)
OPERATING RESULTS:
Operating Revenues $1,282.4 $1,323.9 $1,341.6 $1,369.5 $1,385.1
Operating Income (Loss)(1) 122.7 (82.9) 52.3 85.5 16.4
Other Income (Expenses)(2) 33.3 (63.9) (20.4) 17.4 (22.8)
Income (Loss) from Continuing Operations 89.4 (107.2) 23.6 57.1 (9.5)
Loss from Discontinued Operations(3) -- (28.9) -- (145.0) --
Cumulative Effect of Change in Acounting -- (2.6) 3.3 -- (2.2)
Net Income (Loss) 89.4 (138.7) 26.9 (87.9) (11.7)
Earnings (Loss) Attributable to
Common Shareholders 64.0 (153.8) 20.7 (87.9) (11.7)
- ------------------------------------------------------------------------------------------------------------
PER SHARE INFORMATION:
Primary Earnings Per Share
Income (Loss) from Continuing Operations $ 1.44 $ (2.79) $ .40 $ 1.32 $ (.22)
Loss from Discontinued Operations -- (.66) -- (3.35) --
Cumulative Effect of Change in Accounting -- (.06) .08 -- (.05)
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Net Earnings (Loss) $ 1.44 (3.51) $ .48 $ (2.03) $ (.27)
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Fully Diluted Earnings Per Share:
Income (Loss) from Coninuing Operations $ 1.42 $ (2.79) $ .40 -- $ (.22)
Loss from Discontinued Operations -- (.66) -- (3.35) --
Cumulative Effect of Change in Accounting -- (.06) .08 $ -- (.05)
- ------------------------------------------------------------------------------------------------------------
Net Earnings (Loss) $ 1.42 $ (3.51) $ .48 $ (2.03) $ (.27)
- ------------------------------------------------------------------------------------------------------------
Cash Dividends Per Common Share $0.10 $ .325 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION:
Total Assets $2,942.4 $2,945.7 $2,793.8 $2,609.6 $2,737.8
Working Capital 251.5 237.6 186.2 191.7 172.6
Long-Term Debt 126.2 132.7 111.8 125.1 169.9
Stockholders' Equity 402.6 317.5 276.2 185.5 370.1
- ------------------------------------------------------------------------------------------------------------
OTHER DATA:
Average Common and Common
Equivalent Shares Outstanding 44.6 43.8 43.4 43.2 43.1
Average Common and Common Equivalent
Shares Outstanding, Assuming Full Dilution 57.1 43.8 43.4 43.2 43.1
Cash Dividends Paid: (4)
Common Stock $ 4.4 14.3 $ 41.7 40.9 40.6
Series A. Preferred 8.3 8.3 6.2 -- --
</TABLE>
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(1) Includes restructuring and special charges of $17.6 million in 1995 and $69
million in 1994, and $45.5 million in 1991.
(2) Includes special charges primarily related to contingency settlements and
other indemnity costs of $69.7 million in 1994, $16.5 million in 1992 and
$13 million in 1991. Also includes gains on sales of non-core businesses of
$30.4 million in 1995, $20.2 million in 1994, $3.9 million in 1993 and
$43.8 million in 1992.
(3) Includes $145 million in 1992 relating to an increase in the estimated
liabilities under indemnities provided to the purchasers of discontinued
business.
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(4) Dividends on the Series B Cumulative Convertible Preferred Shares are
payable in kind (additional Series B preferred shares) until December 15,
1996 and thereafter, at the Board of Directors' discretion, until December
15, 1999.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE><CAPTION>
For the years ended December 31, 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Earnings
--------
Pre-tax Earnings (Loss) $156.0 $ (146.8) $31.9 $102.9 $(6.4)
Less: Minority Interest (5.7) (3.0) (1.9) (1.8) (2.4)
------- -------- ----- ------ ----
Adjusted Pre-Tax Earnings (Loss) 150.3 (149.8) 30.0 101.1 (8.8)
----- -------- ----- ----- ----
Plus Fixed Charges 46.5 46.2 44.6 49.8 50.5
---- ---- ---- ---- ----
Total Earnings (Loss) $196.8 $ (103.6) $74.6 $150.9 $41.7
Fixed Charges
-------------
Interest Expense $16.8 $15.6 $13.6 $17.3 $21.6
Amortization of debt discount 1.8 0.4 0.8 0.7 0.6
Interest factor in rental expense 27.9 30.2 30.2 31.8 28.3
---- ---- ---- ---- -----
Total Fixed Charges $46.5 $46.2 $44.6 $49.8 $50.5
----- ----- ----- ----- ------
Ratio Earnings(Loss)/Fixed Charges 4.2 (2.2) 1.7 3.0 0.8
Coverage Deficiency N/A $149.8 N/A N/A $ 8.8
</TABLE>
- --------------
(1) Earnings to fixed charges have been determined based on continuing
operations and have been computed by dividing earnings before income taxes
and fixed charges by fixed charges. Fixed charges are considered to be
interest on indebtedness, amortization of debt discount and one-third of
rentals, which the Company believes is representative of the interest
factor of such rentals.
(2) Earnings for 1991 and 1994 were insufficient to cover fixed charges; the
amount of the coverage deficiency was $8.8 million in 1991 and $149.8
million in 1994.
12
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE><CAPTION>
For the years ended December 31. 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings
- --------
Pre-tax Earnings (Loss) $156.0 $ (146.8) $31.9 $102.9 $ (6.4)
Less: Minority Interest (5.7) (3.0) (1.9) (1.8) (2.4)
----- ----- ----- ----- -----
Adjusted Pre-Tax Earnings (Loss) 150.3 (149.8) 30.0 101.1 (8.8)
------- ------ ----- ----- ----
Plus Fixed Charges 46.5 46.2 44.6 49.8 50.5
---- ---- ---- ---- ----
Total Earnings (Loss) $196.8 $ (103.6) $74.6 $150.9 $ 41.7
------ ------ ------ ----- ----
Fixed Charges + Preferred Stock Dividends
- -----------------------------------------
Fixed Charges
Interest Expense $ 16.8 $15.6 $13.6 $17.3 $ 21.6
Amortization of debt discount 1.8 0.4 0.8 0.7 0.6
Interest factor in rental expense 27.9 30.2 30.2 31.8 28.3
---- ----- ---- ---- -----
Total 46.5 46.2 44.6 49.8 50.5
---- ----- ---- ---- -----
Preferred Dividends 25.4 15.1 6.2 0.0 0.0
Adj, Pref Stock Dividend
(Utilized 35% tax rate) 39.1 23.2 9.5 0.0 0.0
Total Fixed Charges + Adj. Pref
Stock Dividend $ 85.6 $69.4 $54.1 $49.8 $ 50.5
------ ------ ----- ----- ------
Ratio Earnings (Loss)lFixed
Charges + Adjusted
Preferred Stock Dividend 2.3 (1.5) 1.4 3.0 0.8
Coverage Deficiency N/A $173.0 N/A N/A $8.8
</TABLE>
- --------------------
(1) Earnings to fixed charges and adjusted preferred stock dividends have been
determined based on continuing operations and have been computed by
dividing earnings before income taxes and fixed charges by fixed charges
plus adjusted preferred stock dividends. Fixed charges are considered to
be interest on indebtedness, amortization of debt discount and one-third
of rentals, which the Company believes is representative of the interest
factor of such rentals.
(2) Earnings for 1991 and 1994 were insufficient to cover fixed charges; the
amount of the coverage deficiency was $173.0 million in 1994 and $8.8
million in 1991.
13
<PAGE>
THE COMPANY
Alexander & Alexander Services Inc. is a holding company which, through its
subsidiaries, provides risk management, insurance brokerage and human resource
management consulting services on a global basis. It is one of the few
organizations capable of providing such services to clients with multinational
operations. As at December 31, 1995, the Company had approximately 11,900
employees. The Company was incorporated under the laws of the State of Maryland
in 1973 and through predecessor entities has been in business since 1899.
Its clients are primarily commercial enterprises including a broad range of
industrial transportation service, financial and other businesses. The Company
operates from offices located in more than 80 countries and territories through
wholly owned subsidiaries, affiliates and other servicing capabilities. Its
international operations represent 53 percent, 48 percent and 46 percent of the
Company's consolidated operating revenues for the years ended December 31, 1995,
1994 and 1993, respectively. Based on 1994 revenues, the Company believes that
it is the fourth largest insurance broker worldwide and the eighth largest human
resource management consultant worldwide.
During 1994, the Board of Directors effected significant changes in the
Company's management. In the last half of 1994, new management conducted a
thorough worldwide review of the Company's operations, expense structure and
business strategy. As a result of this review, new management restructured, to
varying degrees, each of the Company's core businesses. During 1995, the Company
made certain strategic purchases of businesses, both domestic and international,
to complement existing operations. In addition, new offices were opened in
Bahrain, Greece, India, Indonesia, Norway, South Africa and Switzerland. The
Company will continue to explore geographical market expansion and further
industry specialization as well as consider possible niche and substantial
strategic acquisitions relating to its core business and other opportunities
within the financial services industry.
The Company's principal industry segment is insurance services which includes
risk management and insurance services, specialist and reinsurance broking. For
each of the years ended December 31, 1995, 1994 and 1993, total revenues
contributed by the Company's insurance services segment accounted for 84 percent
of its consolidated operating revenues. The Company's extensive services permit
it to handle diverse lines of coverage. For the years ended December 31, 1995,
1994 and 1993, the Company's risk management and insurance services operations
accounted for approximately 60 percent, 64 percent and 64 percent, respectively,
of the Company's consolidated operating revenues. For the years ended December
31, 1995, 1994 and 1993, the Company's combined specialist and reinsurance
broking operations accounted for approximately 24 percent, 20 percent and 20
percent, respectively, of the Company's consolidated operating revenues.
14
<PAGE>
For each of the years ended December 31, 1995, 1994 and 1993, total revenues
contributed by the Company's human resource management consulting services
segment accounted for 16 percent of the Company's consolidated operating
revenues.
RECENT DEVELOPMENTS
The Company reported net income of $89.4 million, or $1.44 per share for 1995.
Fully diluted earnings per share for the period were $1.42. Included in the
results is an after-tax gain of $18.7 million, or $0.42 per share, from the sale
of Alexsis Inc., the Company's U.S.-based third party claims administrator and a
pre-tax charge of $17.6 million ($11.2 million after-tax or $0.25 per share)
primarily associated with the JIB acquisition (described below) in the fourth
quarter.
Pressure on the Company's revenues will continue into 1996. The Company
anticipates modest revenue growth for its insurance broking operations and
moderate revenue growth for its human resource consulting operations. Revenue
growth will depend increasingly on the development of new products and services,
new business generation and selective acquisitions, such as the October 1995 JIB
Acquisition.
On October 12, 1995, the Company completed its acquisition of most of the U.S.
retail insurance and consulting business of JIB for a purchase price not to
exceed approximately $48.3 million. The Company paid $21.1 million at closing
and issued two 6.375% promissory notes totaling $21.2 million with payments of
$10.6 million due on April 9 and October 12, 1996, respectively. The latter
payment is subject to adjustment based on certain revenue retention criteria at
the former JIB offices. As of December 31, 1995, this payment was adjusted to
$8.1 million. The remaining purchase price of approximately $6 million is
contingent on the retention of specific accounts over a four year period ending
October 12, 1999.
The Company will continue to explore geographical market expansion and further
industry specialization as well as consider possible niche and substantial
strategic acquisitions relating to its core business and other opportunities
within the financial services industry. As part of its review of opportunities,
the Company has evaluated and is evaluating such opportunities and prospects and
will continue to do so. The Company cannot predict if any transaction will be
consummated, nor the terms or form of consideration required. Nor can the
Company predict, if any such transaction is consummated, what the financial
benefit, if any, will be to the Company or if the transaction can be
successfully integrated into the Company.
On October 13, 1995, the Company redeemed all $60.2 million of its outstanding
11% Convertible Subordinated Debentures due 2007, together with accrued
15
<PAGE>
interest and a $0.9 million redemption premium. This redemption was primarily
funded by the Company through the borrowing of $60 million under its long-term
revolving credit facility. In December 1995, the Company repaid $30 million of
its long-term revolving credit agreement borrowings. The interest rate on the
remaining $30 million is 6.3125 percent as of December 31, 1995. The Company
borrowed $10 million under this agreement in January 1996 and an additional $20
million in February 1996.
On November 16, 1995, the Board of Directors amended the Company's Rights Plan
(see "Description of Outstanding Capital"), raising from 15 to 20 percent the
threshold of stock ownership needed to trigger certain actions under the plan.
Also on November 16, 1995, the Company amended its $200 million long-term
revolving credit agreement to delete the Minimum Consolidated Tangible Capital
Fund covenant. This provision was rendered unnecessary by the Company's
redemption of its Debentures. In connection with the deletion of this covenant,
the maximum debt-to-capital ratio at which the Company can operate was reduced.
In addition, the Minimum Consolidated Tangible Net Worth covenant was modified
to reduce the required level of net worth in certain circumstances. After giving
effect to the $60 million borrowing for the Debenture redemption and $10 million
letter of credit, the Company currently has immediate access to the remaining
$130 million credit line under this agreement.
USE OF PROCEEDS
Except as may be described otherwise in the applicable prospectus supplement,
the net proceeds from the sale of the Securities shall be utilized by the
Company for general corporate purposes, including without limitation, working
capital, capital expenditures, investment in subsidiaries, refinancing of equity
and debt securities, possible future business acquisitions and for the
repurchase of the Company's securities.
DESCRIPTION OF COMMON STOCK
The Company may issue (either separately or together with the Offered
Securities) shares of its Common Stock. The Company is authorized to issue up to
200,000,000 shares of Common Stock. As of March 15, 1996 of the 200,000,000
shares of Common Stock authorized for issuance approximately 42,306,378 were
outstanding and 36,984,197 shares were reserved for issuance. Reference is made
to the prospectus supplement relating to the offered Common Stock (the "Offered
Common Stock"), or the Offered Securities convertible or exchangeable for, or
exercisable into Common Stock for the terms relevant thereto, including the
number of shares offered, any initial offering price, and market price and
dividend information, as well as, if applicable, information on
16
<PAGE>
such other Offered Securities. Common Stock may also be issued upon the exercise
of a Common Stock warrant, or issued upon the conversion of other Offered
Securities. For further information concerning Common Stock see "Description of
Outstanding Capital Stock" below.
DESCRIPTION OF PREFERRED STOCK
The Company may issue (either separately or together with other Offered
Securities) shares of its Preferred Stock. The Company is authorized to provide
for the issuance, in one or more series, of up to 15,000,000 shares of its
Preferred Stock, with such powers, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof as shall be adopted by the Board of Directors or a duly authorized
committee thereof.
As of March 15, 1996, there were 2,300,000 shares of the Company's $3.625 Series
A Convertible Preferred Stock, $1.00 par value (the "Series A Convertible
Preferred Stock") outstanding and 4,566,713 shares of the Company's Series B
Cumulative Convertible Preferred Stock $1.00 par value (the "Series B
Convertible Preferred Stock") outstanding. In addition, as of March 15, 1996
approximately 1,633,287 shares of the Company's Series B Convertible Preferred
Stock, have been reserved for potential issuance of dividend-in-kind payments
and 2,000,000 shares of Series A Junior Participating Preferred Stock, $1.00 par
value (the "Junior Participating Preferred Stock"), have been reserved in
connection with the Company's Rights.
The following summary of certain provisions of the Preferred Stock does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the Articles of Incorporation, the Articles of Amendment and the
Articles Supplementary (collectively, the "Charter") relating to the subject
Preferred Stock.
The specific terms of (i) any Preferred Stock proposed to be sold pursuant to
this prospectus and the accompanying prospectus supplement (the "Offered
Preferred Stock") will be described in such prospectus supplement.
If so indicated in the prospectus supplement, the terms of the Offered Preferred
Stock may differ from the terms set forth below, except those terms required by
the Company's Charter.
Under the Company's Charter, each series of Preferred Stock of the Company will
rank on a parity as to dividends and distributions of assets upon liquidation
with every other series of Preferred Stock of the Company except the Junior
Participating Preferred Stock, when and if issued. The Offered Preferred Stock
will, when issued, be fully paid and non-assessable and holders thereof will
have no preemptive rights.
17
<PAGE>
Reference is made to the prospectus supplement for the terms of the Offered
Preferred Stock, including:
(1) The title and stated value of such Preferred Stock.
(2) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the offering price of such
Preferred Stock.
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Stock.
(4) The date from which dividends on such Preferred Stock shall
accumulate, if applicable.
(5) The procedures for any auction and remarketing, if any, of such
Preferred Stock.
(6) The provision for a sinking fund, if any, for such Preferred
Stock.
(7) The provision for redemption, if applicable, of such Preferred
Stock.
(8) Whether such Preferred Stock will be convertible into or
exchangeable for shares of Common Stock or other Securities and,
if so, the terms and conditions upon which such Preferred Stock
will be so convertible or exchangeable, including the conversion
price or exchange ratio and the conversion or exchange period (or
the method of determining the same).
(9) Whether such Preferred Stock will be listed on any securities
exchange.
(10) Whether such Preferred Stock will be issued with any other
Securities.
(11) Any other specific terms, preferences or rights of, or
limitations or restrictions on, such Preferred Stock.
Subject to the Company's Charter and to any limitations contained in the
outstanding Preferred Stock, the Company may issue additional series of
Preferred Stock, at any time or from time to time, with such powers, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, as the Board of Directors
or any duly authorized committee thereof may determine, all without further
action of the stockholders, including holders of then outstanding Preferred
Stock of the Company.
18
<PAGE>
If applicable, the prospectus supplement will also set forth information
concerning any other Securities offered thereby and a discussion of federal
income tax considerations relevant thereto.
DIVIDENDS
Holders of Preferred Stock will be entitled to receive cash dividends, when, as
and if declared by the Board of Directors, out of assets of the Company legally
available for payment, at such rate and on such dates as will be set forth in
the prospectus supplement. Each dividend will be payable to holders of record as
they appear on the stock books of the Company on the record date fixed by the
Board of Directors. Dividends, if cumulative, will be cumulative from and after
the date set forth in the prospectus supplement.
The Company may not (i) declare or pay dividends other than dividends payable
solely in shares of Common Stock, Class A Common Stock, $.00001 par value (the
"Class A Stock"), Class C Common Stock, $1.00 par value (the "Class C Stock"),
or Class D Common Stock, $1.00 par value (the "Class D Stock"), or other stock
of the Company ranking junior as to dividends and as to liquidation preference
to the Preferred Stock or make any other distributions on any shares of Common
Stock, Class A Stock, Class C Stock or Class D Stock or other stock of the
Company ranking junior as to dividends to the Preferred Stock, including Junior
Participating Preferred Stock, when and if issued (collectively the "Junior
Stock"), or (ii) purchase, redeem or otherwise acquire Junior Stock or set aside
funds for such purpose (except (A) in a reclassification or exchange of Junior
Stock through the issuance of other Junior Stock or (B) with the proceeds of a
reasonably contemporaneous sale of Junior Stock), if there are arrearages in
dividends or failure in the payment of the Company's sinking fund or redemption
obligations on any of its Preferred Stock and, in the case of (i) above, if
dividends in full for the current quarterly dividend period have not been paid
or declared on any of its Preferred Stock.
Dividends in full may not be declared or paid or set apart for payment on any
series of Preferred Stock unless (i) there are no arrearages in dividends for
any past quarterly dividend periods on any series of Preferred Stock and (ii) to
the extent that such dividends are cumulative, dividends in full for the current
quarterly dividend period have been declared or paid on all Preferred Stock. Any
dividends declared or paid when dividends are not so declared, paid or set apart
in full will be shared ratably by the holders of all series of Preferred Stock
in proportion to such respective arrearages and undeclared and unpaid current
quarterly cumulative dividends. No interest, or sum of money in lieu of
interest, will be payable in respect of any dividend payment or payments that
may be in arrears.
19
<PAGE>
CONVERSION AND EXCHANGE
If the Offered Preferred Stock will be convertible into or exchangeable for
Common Stock or other Securities, the prospectus supplement will set forth the
terms and conditions of such conversion or exchange, including the conversion
price or exchange ratio (or the method of calculating the same), the conversion
or exchange period (or the method of determining the same), whether conversion
or exchange will be mandatory or at the option of the holder or the Company, the
events requiring an adjustment of the conversion price or the exchange ratio and
provisions affecting conversion or exchange in the event of the redemption of
such Preferred Stock. Such terms may also include provisions under which the
number of shares of Common Stock or the number or amount of other Securities to
be received by the holders of such Preferred Stock upon such conversion or
exchange would be calculated according to the market price of the Common Stock
or such other Securities as of a time stated in such prospectus supplement.
LIQUIDATION RIGHTS
In the event of any voluntary of involuntary liquidation, dissolution or winding
up of the Company, the holders of each series of the Preferred Stock will be
entitled to receive out of assets of the Company available for distribution to
stockholders, before any distribution of assets is made to holders of any Junior
Stock, liquidating distributions in the amount set forth in the prospectus
supplement plus all accrued and unpaid dividends. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the amounts
payable with respect to the Preferred Stock are not paid in full, the holders of
Preferred Stock of each series will share ratably in any such distribution of
assets of the Company in proportion to the full respective preferential amounts
to which they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of the Preferred Stock will
not be entitled to any further participation in any distribution of assets by
the Company. A consolidation or merger of the Company with or into any other
corporation or corporations or a sale of all or substantially all of the assets
of the Company will not be deemed to be a liquidation, dissolution or winding up
of the Company.
REDEMPTION
If so provided in the prospectus supplement, the Offered Preferred Stock will be
redeemable in whole or in part at the option of the Company, at the times and at
the redemption prices set forth therein.
If dividends on any series of Preferred Stock are in arrears or the Company has
failed to fulfill its sinking fund or redemption obligations with respect to any
series of Preferred Stock, the Company may not purchase or redeem any shares of
Preferred Stock or any other capital stock ranking on a parity with the
Preferred Stock as to dividends or upon liquidation, nor permit any subsidiary
to do so,
20
<PAGE>
without in either case the consent of the holders of at least two-thirds of all
shares of Preferred Stock then outstanding; provided, however, that (1) to meet
its purchase, retirement or sinking fund obligations with respect to any series
of Preferred Stock, the Company may use shares of such Preferred Stock acquired
prior to such arrearages or failure of payment; and (2) the Company may complete
the purchase or redemption of shares of Preferred Stock for which a contract was
entered into for any purchase, retirement or sinking fund purposes prior to such
arrearages or failure of payment.
VOTING RIGHTS
Except as indicated below or in the prospectus supplement, or except as
expressly required by applicable law, the holders of the Preferred Stock will
not be entitled to vote. As used herein, the term "Applicable Preferred Stock"
means those series of Preferred Stock to which the provisions described herein
are expressly made applicable by resolutions of the Board of Directors of the
Company.
If the equivalent of six quarterly dividends payable on any share of any series
of Applicable Preferred Stock are in arrears (whether or not such dividends have
been declared or such unpaid dividends are consecutive), the number of directors
of the Company will be increased by two and the holders of all outstanding
series of Applicable Preferred Stock (whether or not dividends thereon are
unpaid), voting as a single class without regard to series, will be entitled to
elect the two additional directors until four consecutive quarterly dividends
are paid or declared and set apart for payment, if such share is non-cumulative,
or until all arrearages in dividends and dividends in full for the current
quarterly period are paid or declared and set apart for payment, if such share
is cumulative, whereupon all voting rights described herein shall be divested
from the Applicable Preferred Stock. The holders of Applicable Preferred Stock
may exercise their special class voting rights at meetings of the stockholders
for the election of directors or at special meetings for the purpose of electing
such directors, in either case at which the holders of not less than one-third
of the aggregate number of shares of Applicable Preferred Stock are present in
person or by proxy.
The affirmative vote of the holders of at least two-thirds of the outstanding
shares of Preferred Stock will be required (i) for any amendment of the
Company's Charter that will adversely affect the powers, preferences or rights
of the holders of the Preferred Stock or the holders of the Class D Common Stock
or the Common Stock or (ii) to create any class of stock (or increase the
authorized number of shares of any class of stock) that will have preference as
to dividends or upon liquidation over the Preferred Stock or create any stock or
other security convertible into or exchangeable for or evidencing the right to
purchase any such stock. The affirmative vote of the holders of at least
two-thirds of the outstanding shares of Preferred Stock or a series will be
required for any amendment of the Company's Charter that will adversely affect
the powers, preferences or rights of Preferred Stock of such series.
21
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of the
Debt Securities to which any prospectus supplement may relate. The particular
terms of the Debt Securities offered by any prospectus supplement and the
extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the prospectus supplement relating to
such Debt Securities. The prospectus supplement will also set forth a discussion
of federal income tax considerations relevant to the Debt Securities offered
thereby.
The Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), to be entered into between the Company and PNC Bank, N.A. (the
"Trustee"), as trustee. The Subordinated Debt Securities are to be issued under
a separate Indenture (the "Subordinated Indenture"), to be entered into between
the Company and the Trustee, as trustee. The Senior Indenture and the
Subordinated Indenture are sometimes referred to collectively as the
"Indentures." Copies of the Senior Indenture and the Subordinated Indenture have
been filed as exhibits to the Registration Statement. The following summaries of
certain provisions of the Senior Debt Securities, the Subordinated Debt
Securities and the Indentures do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all the provisions of the
Indentures applicable to a particular series of Debt Securities, including the
definitions therein of certain terms. Wherever particular Sections, Articles or
defined terms of the Indentures are referred to, it is intended that such
Sections, Articles or defined terms shall be incorporated herein by reference.
Article and Section references used herein are references to the applicable
Indenture. Capitalized terms not otherwise defined herein shall have the meaning
given in the Indentures.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt Securities
which may be issued thereunder and each Indenture provides that Debt Securities
may be issued thereunder from time to time in one or more series. The prospectus
supplement will specify the Currency or Currencies in which the Debt Securities
are denominated and payable. Unless otherwise specified in the prospectus
supplement, the Senior Debt Securities when issued will be unsecured and
unsubordinated obligations of the Company and will rank equally and ratably with
all other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Debt Securities when issued will be subordinated in right of
payment to the prior payment in full of all Senior Debt (as defined below) of
the Company, as described under "Description of Debt Securities -- Subordination
of Subordinated Debt Securities" and in the prospectus supplement applicable to
an offering of Subordinated Debt Securities.
22
<PAGE>
Reference is made to the prospectus supplement relating to the particular Debt
Securities offered thereby (the "Offered Debt Securities") which shall set forth
whether the Offered Debt Securities shall be Senior Debt Securities or
Subordinated Debt Securities, and shall further set forth the following terms of
the Offered Debt Securities:
(1) The title of the Offered Debt Securities;
(2) Any limit on the aggregate principal amount of the Offered Debt
Securities;
(3) The Person to whom any interest on the Offered Debt Securities
will be payable, if other than the Person in whose name such
Offered Debt Securities are registered on any Regular Record
Date;
(4) The date or dates on which the principal of the Offered Debt
Securities will be payable;
(5) The rate or rates per annum (which may be fixed, floating or
adjustable) at which the Offered Debt Securities will bear
interest, if any, or the formula pursuant to which such rate or
rates shall be determined, the date or dates from which such
interest will accrue and the dates on which such interest, if
any, will be payable and the Regular Record Dates for such
interest payment dates;
(6) The Currency or Currencies in which the Debt Securities are
denominated and payable, including all interest thereon.
(7) Whether the Offered Debt Securities will be secured;
(8) The place or places where principal of (and premium, if any) and
interest, if any, on Offered Debt Securities will be payable;
(9) If applicable, the price at which, the periods within which and
the terms and conditions upon which the Offered Debt Securities
may be redeemed in whole or in part at the option of the Company
pursuant to a sinking fund or otherwise;
(10) If applicable, any obligation of the Company to redeem or
purchase Offered Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which
and the terms and conditions upon which the Offered Debt
Securities will be redeemed or purchased, in whole or in part;
23
<PAGE>
(11) If applicable, the terms of any right to convert or exchange the
Offered Debt Securities into other Securities or property of the
Company;
(12) If other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Offered Debt Securities
will be issuable;
(13) If the amount of payments of principal of (or premium, if any) or
interest, if any, on the Offered Debt Securities may be
determined with reference to one or more indices, the manner in
which such amounts will be determined;
(14) The portion of the principal amount of the Offered Debt
Securities, if other than the principal amount thereof, payable
upon acceleration of maturity thereof;
(15) Whether all or any part of the Offered Debt Securities will be
issued in the form of a Global Security or Securities and, if so,
the depositary for, and other terms relating to, such Global
Security or Securities;
(16) Any event or events of default applicable with respect to the
Offered Debt Securities in addition to those provided in the
Indentures;
(17) Any other covenant or warranty included for the benefit of the
Offered Debt Securities in addition to (and not inconsistent
with) those included in the Indentures for the benefit of Debt
Securities of all series, or any other covenant or warranty
included for the benefit of the Offered Debt Securities in lieu
of any covenant or warranty included in the Indentures for the
benefit of Debt Securities of all series, or any provision that
any covenant or warranty included in the Indentures for the
benefit of Debt Securities of all series shall not be for the
benefit of the Offered Debt Securities, or any combination of
such covenants, warranties or provisions;
(18) Any restriction or condition on the transferability of the
Offered Debt Securities;
(19) Any authenticating or paying agents, registrars, conversion
agents or any other agents with respect to the Offered Debt
Securities; and
(20) Any other terms of the Offered Debt Securities. (Indentures,
Section 301) Debt Securities may also be issued under the
Indentures upon the exercise of Warrants.
24
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Unless otherwise indicated in the prospectus supplement relating thereto, the
Offered Debt Securities are to be issued as registered securities without
coupons in denominations of $1,000 or any integral multiple of $1,000.
(Indentures, Section 302) No service charge will be made for any transfer or
exchange of such Offered Debt Securities, but the Company or the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Indentures, Section 305)
Debt Securities may be issued under the Indentures as Original Issue Discount
Securities to be sold at a substantial discount below their stated principal
amount. Federal income tax consequences and other considerations applicable
thereto will be described in the prospectus supplement relating thereto.
Since the Company is a holding company, the rights of the Company, and hence the
rights of creditors of the Company (including the Holders of the Debt
Securities), to participate in any distribution of the assets of any subsidiary
upon its liquidation or reorganization or otherwise is necessarily subject to
the prior claims of creditors of such subsidiary, except to the extent that
claims of the Company itself as a creditor of such subsidiary may be recognized.
Generally, the Debt Securities will be effectively subordinated to all existing
and future indebtedness of the Company's operating subsidiaries.
The Indentures do not contain any provisions that limit the ability of the
Company or any subsidiary to incur indebtedness or that afford Holders of the
Debt Securities protection in the event of a highly leveraged or similar
transaction involving the Company or any subsidiary.
The terms of the Company's presently outstanding Long-Term Credit Facility dated
as of March 27, 1995, as amended, limit the amount and type of prepayments of
existing indebtedness and liens by the Company and require the Company to meet
minimum consolidated tangible net worth, maximum leverage and minimum cash flow
coverage requirements.
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EVENTS OF DEFAULT AND NOTICE THEREOF
Unless otherwise specified in the prospectus supplement, the following events
are defined in the Indentures as "Events of Default" with respect to Debt
Securities of any series: (a) failure to pay principal (including any sinking
fund payment) of, or premium (if any) on, any Debt Security of that series when
due (in the case of the Subordinated Indenture, whether or not payment is
prohibited by the subordination provisions); (b) failure to pay interest, if
any, on any Debt Security of that series when due and such failure continues for
a period of 30 days; (c) failure by the Company to perform in any material
respect any other covenant in the Indentures (other than a covenant included in
the Indentures solely for the benefit of a series of Debt Securities other than
that series) which continues for a period of 90 days after written notice to the
Company; (d) due to acceleration (which acceleration shall not have been
rescinded within 30 days after written notice to the Company) of any
indebtedness for borrowed money in a principal amount in excess of $25,000,000
for which the Company or any Principal Subsidiary (as defined) is liable,
including Debt Securities of another series, or a default by the Company or any
Principal Subsidiary in the payment at final maturity of outstanding
indebtedness for borrowed money in a principal amount in excess of $25,000,000
unless such acceleration or default at maturity shall be remedied or cured by
the Company or such Principal Subsidiary or rescinded, annulled or waived by the
holders of such indebtedness, in which case such acceleration or default at
maturity shall not constitute an Event of Default under this provision and any
acceleration relating thereto shall be rescinded; and (e) certain events of
insolvency, reorganization, receivership or liquidation of the Company.
(Indentures, Section 501)
No Event of Default with respect to Debt Securities of a particular series shall
necessarily constitute an Event of Default with respect to Debt Securities of
any other series. If an Event of Default with respect to Debt Securities of any
series at the time Outstanding shall occur and be continuing, either the Trustee
or the Holders of at least 25% in principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Debt Securities, such portion of
the principal amount as may be specified in the terms of that series) of all
Debt Securities of that series to be due and payable immediately; provided,
however, that under certain circumstances the Holders of a majority in aggregate
principal amount of Outstanding Debt Securities of that series may rescind or
annul such declaration and its consequences.
(Indentures, Section 502)
Reference is made to the prospectus supplement relating to any series of Offered
Debt Securities which are Original Issue Discount Securities for the particular
provisions relating to the principal amount of such Original Issue Discount
Securities due on acceleration upon the occurrence of an Event of Default and
the continuation thereof.
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Subject to Sections 6.01 and 6.02 of the Indenture, the Trustee is not charged
with knowledge of any Event of Default unless written notice thereof shall have
been given to the Trustee by the Company, the Paying Agent, or any Holder of
that series or an agent of any Holder, or as provided with respect to Events of
Default under clause (d) above. (Indentures, Section 501) Each Indenture
provides that the Trustee may withhold notice to the Holders of the Debt
Securities of any default (except in payment of principal (or premium, if any)
or interest, if any) if it considers it in the interest of the Holders of the
Debt Securities to do so. (Indentures, Section 602) The Company will be required
to furnish to the applicable Trustee annually a statement by certain officers of
the Company as to the compliance with all conditions and covenants of the
Indentures. (Indentures, Section 1004)
The Holders of a majority in principal amount of the Outstanding Debt Securities
of any series affected will have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding for any remedy
available to the applicable Trustee or exercising any trust or power conferred
on such applicable Trustee with respect to the Debt Securities of such series,
and to waive certain defaults. (Indentures, Sections 512 and 513)
The Indentures provide that, in case an Event of Default shall occur and be
continuing, the applicable Trustee shall exercise such of its rights and powers
under the Indentures, and use the same degree of care and skill in its exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs. (Indentures, Section 601). Subject to such
provisions, the applicable Trustee will be under no obligation to exercise any
of its rights or powers under the Indentures at the request of any of the
Holders of Debt Securities unless they shall have offered to such Trustee
security or indemnity in form and substance reasonably satisfactory to such
Trustee against the costs, expenses and liabilities which might be incurred by
it in compliance with such request.
(Indentures, Section 603)
No Holder of a Debt Security of any series will have any right to institute any
proceeding with respect to the Indentures or for any remedy thereunder, unless
such Holder shall have previously given to the applicable Trustee written notice
of a continuing event of Default and unless also the Holders of at least 25% in
aggregate principal amount of the Outstanding Debt Securities of the same series
shall have made written request, and offered security or indemnity to such
Trustee in form and substance reasonably satisfactory to such Trustee, to
institute such proceeding as trustee, and such Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of the same series a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days. (Indentures,
Section 507). However, such limitations do not apply to a suit instituted by a
Holder of a Debt Security for enforcement of payment of the principal of (or
premium, if any) or interest, if any, on such Debt Security on or after the
respective due dates expressed in such Debt Security, or of the right to convert
such Debt Security in accordance with the Indentures (if applicable).
(Indentures, Section 308)
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MODIFICATION AND WAIVER
Each Indenture provides that from time to time, the Company and the Trustee,
without the consent of the Holders of any series of Debt Securities, may amend
the Indenture or such series of Debt Securities for certain specified purposes,
including curing ambiguities, defects, or inconsistencies and making any such
change that does not adversely affect the rights of any Holder of such series of
Debt Securities. Modifications and amendments of the Indentures may also be made
by the Company and the applicable Trustee, with the consent of the Holders of
not less than a majority of aggregate principal amount of each series of the
Outstanding Debt Securities issued under the Indentures which is affected by the
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of each Holder of such Debt Security affected
thereby: (1) change the Stated Maturity of the principal of (or premium, if any)
or any installment of principal or interest, if any, on any such Debt Security;
(2) reduce the principal amount of (or premium, if any) or the interest rate, if
any, on any such Debt Security or the principal amount due upon acceleration of
any Original Issue Discount Security; (3) change the place or currency of
payment of principal of (or premium, if any) or the interest, if any, on any
such Debt Security; (4) impair the right to institute suit for the enforcement
of any such payment on or with respect to any such Debt Security; (5) adversely
change the right to convert or exchange, including decreasing the conversion
rate or increasing the conversion price of, such Debt Security (if applicable);
(6) reduce the percentage of Holders of Debt Securities necessary to modify or
amend the Indentures; (7) in the case of the Subordinated Indenture, modify the
subordination provisions in a manner adverse to the holders of the Subordinated
Debt Securities; or (8) modify the foregoing requirements or reduce the
percentage of outstanding Debt Securities necessary to waive compliance with
certain provisions of the Indentures or for waiver of certain defaults.
(Indentures, Section 902)
The holders of at least a majority of the aggregate principal amount of the
Outstanding Debt Securities of any series may, on behalf of all Holders of that
series, waive compliance by the Company with certain restrictive provisions of
the Indentures and waive any past default under the Indentures, except a default
in the payment of principal (or premium, if any), or interest (if any) or in the
performance of certain covenants. (Indentures, Sections 907 and 513)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide that the Company may elect either (A) to defease and be
discharged from any and all obligations with respect to any series of such Debt
Securities (including, in the case of Subordinated Debt Securities, the
provisions described under "Subordinated Debt Securities" herein and except for
the obligations to exchange or register the transfer of such Debt Securities to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an
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office or agency in respect of the Debt Securities, and to hold monies for
payments in trust) ("defeasance"), or (B) to be released from its obligations
with respect to such Debt Securities concerning the restrictions described under
"Limitations on Liens on Common Stock of Principal Subsidiaries" and
"Consolidation, Merger and Sale of Assets" and any other covenants applicable to
such Debt Securities (including, in the case of Subordinated Debt Securities,
the provisions described under "Subordination of Subordinated Debt Securities"
herein), which are subject to covenant defeasance ("covenant defeasance"), and
the occurrence of an event described and notice thereof in clauses (c) and (d)
under "Events of Default and Notice Thereof" (with respect to covenants subject
to covenant defeasance) shall no longer be an Event of Default, in each case,
upon the irrevocable deposit with the applicable Trustee (or other qualifying
trustee), in trust for such purpose, of money and U.S. Government Obligations
(as defined) which through the payment of principal and interest in accordance
with their terms will provide money in an amount sufficient to pay the principal
of (and premium, if any) and interest, if any, on such Debt Securities, and any
mandatory sinking fund or analogous payments thereon, on the scheduled due dates
therefor. Such a trust may only be established if, among other things, (i) the
Company has delivered to the applicable Trustee (A) in the case of defeasance,
an Opinion of Counsel (as defined) stating that (1) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or
(2) since the date of the Indenture, there has been a change in the applicable
Federal income tax law, in case of either (1) or (2) to the effect that the
Holders of such Securities will not recognize a gain or loss for Federal income
tax purposes as a result of the deposit, Defeasance and discharge to be effected
with respect to such Securities and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case if
such deposit, Defeasance and discharge were not to occur or (B) in the case of
covenant defeasance, an Opinion of Counsel to the effect that the Holders of
such Debt Securities will not recognize gain or loss for Federal income tax
purposes as a result of such deposit and covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and covenant defeasance had
not occurred, (ii) no Event of Default or event which with the giving of notice
or lapse of time, or both, would become an Event of Default under the Indenture
shall have occurred and be continuing on the date of such deposit and (iii) in
the case of Subordinated Debt Securities, (x) no default in the payment of
principal of (or premium, if any) or interest, if any, on any Senior Debt beyond
any applicable grace period shall have occurred and be continuing, or (y) no
other default with respect to any Senior Debt shall have occurred and be
continuing and shall have resulted in the acceleration of such Senior Debt.
(Indentures, Article Thirteen) The Company may exercise its defeasance option
with respect to such Debt Securities notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its defeasance option,
payment of such Debt Securities may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of
such Debt Securities may not be accelerated by
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reference to the covenants noted under Clause (B) above. In the event the
Company omits to comply with its remaining obligations with respect to such Debt
Securities under the Indentures after exercising its covenant defeasance option
and such Debt Securities are declared due and payable because of the occurrence
of any Event of Default, the amount of money and U.S. Government Obligations on
deposit with the Trustee may, in certain circumstances, be insufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default; however, the Company will
remain liable in respect of such payments. (Indentures, Article Thirteen)
LIMITATION ON LIENS ON COMMON STOCK OF PRINCIPAL SUBSIDIARIES
Except as set forth below, so long as any of the Senior Securities or the
Subordinated Debt Securities (as the case may be) remains outstanding, the
Company will not, and will not permit any Principal Subsidiary to, issue,
assume, incur or guarantee any indebtedness for borrowed money secured by a
mortgage, pledge, lien or other encumbrance in the nature of a lien ("Lien") on
any shares of the Common Stock of a Principal Subsidiary, which Common Stock is
owned by the Company or by a Principal Subsidiary, without effectively providing
that such Debt Securities, and, if the Company so elects, any other indebtedness
for borrowed money of the Company ranking senior to or on a parity with such
Debt Securities, shall be secured equally and ratably with, or prior to, such
indebtedness so long as such indebtedness shall be so secured unless after
giving effect thereto, the aggregate amount of all such secured indebtedness of
the Company and its Subsidiaries would not exceed 15% of the Consolidated
Tangible Net Worth of the Company and its Subsidiaries as reflected on the
Company's most recently prepared quarterly balance sheet; provided, however,
that this covenant shall not apply to, and there shall be excluded from secured
indebtedness in any computation under this covenant, indebtedness for borrowed
money secured by: (i) Liens existing on the date of the Indenture; (ii) Liens on
any shares of common stock of any corporation existing at the time such
corporation becomes a Principal Subsidiary or merges into or consolidates with
the Company or any Principal Subsidiary; (iii) Liens on shares of common stock
of any Person existing at the time of acquisition thereof by the Company or any
Principal Subsidiary; (iv) Liens to secure the financing of the acquisition,
construction or improvement of property, or the acquisition of shares of stock,
by the Company or any Principal Subsidiary if such Liens are created not later
than one year after such acquisition, or in the case of property, completion of
construction or commencement of commercial operation, whichever is later, (v)
Liens in favor of the Company or any Subsidiary; (vi) Liens required by or in
favor of governments or agencies thereof including those to secure progress,
advance or other payments pursuant to any contract or provision of any statute;
(vii) Liens in the nature of rights of set-off or bankers' liens pursuant to any
contract or statute; and (viii) any extension, renewal or replacement (or
successive extensions, renewals or replacements) as a whole or in part of any
Lien referred to in the foregoing clauses (i) to (vii) inclusive; provided,
further that (a) such extension, renewal or
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replacement Lien shall be limited to all or a part of the same shares of stock
that secured the Lien extended, renewed or replaced and (b) the indebtedness
secured by such Lien at such time is not increased. (Indentures, Section 1005)
See "General" above.
"Principal Subsidiary" means any Subsidiary of the Company which at the time of
determination has, (A) assets which, as of the date of the Company's most
recently prepared quarterly consolidated balance sheet, constituted at least 15%
of the Company's total assets on a consolidated basis as of such date, or (B)
revenues for the 12-month period ending on the date of the Company's most
recently prepared quarterly consolidated statement of income which constituted
at least 15% of the Company's total revenues on a consolidated basis for such
period or (C) net earnings for the 12-month period ending on the date of the
Company's most recently prepared quarterly consolidated statement of income
which constituted at least 15% of the Company's total net earnings on a
consolidated basis for such period.
(Indentures, Section 101)
"Consolidated Tangible Net Worth" means, at any date, the total assets appearing
on the most recently prepared consolidated balance sheet of the Company and its
Subsidiaries as of the end of a fiscal quarter of the Company, prepared in
accordance with generally accepted accounting principles consistently applied
(subject to normal year-end adjustments and except to the extent an
inconsistency results from compliance with new financial accounting standards
with which the Company's independent public accountants concur), less (a) the
total liabilities appearing on such balance sheet and (b) intangible assets. For
this purpose, "intangible assets" means the value (net of any applicable
reserves), as shown on or reflected in such balance sheet, of (i) all trade
names, trademarks, licenses, patents, copyrights and goodwill; (ii)
organizational and development costs; and (iii) unamortized debt discount and
expense, less unamortized premium; but (iv) excludes deferred policy acquisition
costs and deferred income tax assets.
For purposes of the Indentures, "Common Stock" means, with respect to the
Company, its common capital stock, and with respect to any Principal Subsidiary,
stock of any class, however designated, except stock which is non-participating
beyond fixed dividend and liquidation preferences and the holders of which have
either no voting rights or limited voting rights entitling them, only in the
case of certain contingencies, to elect less than a majority of the directors
(or persons performing similar functions) of such Principal Subsidiary, and
shall include securities of any class, however designated, which are convertible
into such Common Stock. (Indentures, Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or sell its
property and assets as, or substantially as, an entirety to any Person and may
not permit any Person to merge into or consolidate with the Company unless (i)
either
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the Company will be the resulting or surviving entity or any successor or
purchaser is a corporation, partnership or trust organized under the law of the
United States of America, any State or the District of Columbia, and any such
successor or purchaser expressly assumes the Company's obligations on the Debt
Securities under a supplemental Indenture, (ii) immediately after giving effect
to the transaction no Event of Default shall have occurred and be continuing,
and (iii) certain other conditions are met. (Indentures, Section 801)
CONVERSION RIGHTS
The terms on which Debt Securities of any series may be convertible or
exchangeable into Common Stock or other Securities of the Company or
exchangeable into securities of another corporation will be set forth in the
prospectus supplement relating thereto. Such terms shall include provisions as
to whether conversion or exchange is mandatory, at the option of the holder or
at the option of the Company, and may include provisions pursuant to which the
number of shares of Common Stock or other securities of the Company or the
securities of another corporation as the case may be, to be received by the
holders of Debt Securities would be calculated according to the market price of
Common Stock or other securities of the Company as of a time stated in the
Prospectus Supplement. (Indentures, Article Twelve)
SUBORDINATION OF DEBT SECURITIES
Unless otherwise indicated in the prospectus supplement, the following
provisions will apply to the Subordinated Debt Securities.
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all Senior Debt, including the Senior Debt Securities. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshalling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Debt will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of the Subordinated
Debt Securities will be entitled to receive or retain any payment in respect of
the principal of (and premium, if any) or interest, if any, on the Subordinated
Debt Securities. (Subordinated Indenture, Section 1502)
By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company who are not Holders of Senior Debt may recover less,
ratably, than Holders of Senior Debt and may recover more, ratably, than the
Holders of the Subordinated Debt Securities.
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In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the Holders of
the Subordinated Debt Securities will be entitled to receive any payment upon
the principal of (or premium, if any) or interest, if any, on the Subordinated
Debt Securities. (Subordinated Indenture, Section 1503)
No payments on account of principal (or premium, if any) or interest, if any, in
respect of the Subordinated Debt Securities may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior Debt,
or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. (Subordinated Indenture, Section 1504)
For purposes of the subordination provisions, the payment, issuance and delivery
of cash, property or securities (other than stock and certain subordinated
securities of the Company) upon conversion of a Subordinated Debt Security will
be deemed to constitute payment on account of the principal of such Subordinated
Debt Security.
"Debt" means (without duplication and without regard to any portion of principal
amount that has not accrued and to any interest component thereof (whether
accrued or imputed) that is not due and payable) with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed; (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (v) every capital lease
obligation of such Person; (vi) the maximum fixed redemption or repurchase price
of redeemable stock of such Person at the time of mandatory redemption and (vii)
every obligation of the type referred to in clauses (i) through (vi) of another
Person and all dividends of another Person the payment of which, in either case,
such Person has guaranteed or is responsible or liable, directly or indirectly,
as obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if any
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent that such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Subordinated Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Subordinated Debt
Securities or to other Debt which is pari passu
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with, or subordinated to, the Subordinated Debt Securities; provided, however,
that Senior Debt shall not be deemed to include (i) the Subordinated Debt
Securities or (ii) the Debt referred to in clause (vi) of the definition of
Debt.
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Debt, which may include indebtedness that is senior to the
Subordinated Debt Securities, but subordinate to other obligations of the
Company. The Senior Debt Securities, when issued, will constitute Senior Debt.
The indebtedness under the Company's presently outstanding Credit Facility
constitutes Senior Debt. At March 15, 1996 Senior Debt outstanding aggregated
approximately $218 million.
The prospectus supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of one or more Global
Securities that will be deposited with a Depositary or its nominee. In such a
case, one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of Outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the Depositary for such
Global Security to a nominee for such Depositary and except in the circumstances
described in the applicable prospectus supplement. (Indentures, Sections 204 and
305)
The specific terms of the depositary arrangement with respect to any portion of
a series of Debt Securities to be represented by a Global Security and a
description of the Depositary will be contained in the applicable prospectus
supplement.
THE TRUSTEE
Each Indenture 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
required to resign as Trustee if at the time of a default under the applicable
Indenture it is a creditor of the Company. The Trustee is a lender under the
Company's Long-Term Credit Facility. See "The Company." At March 15, 1996, the
Trustee's portion of the outstanding indebtedness thereunder was approximately
$3,125,000 and is committed to lending thereunder up to $12,500,000.
The applicable Trustee or its affiliates may act as depositary for funds of,
make loans to and perform other services for, or may be a customer of, the
Company in the ordinary course of business.
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GOVERNING LAW
The Indentures are governed by and shall be construed in accordance with the
laws of the State of New York, but without regard to principles of conflicts of
laws.
DESCRIPTION OF COMMON WARRANTS
The Company may issue (either separately or together with other Offered
Securities) Common Warrants to purchase Common Stock (the "Offered Common
Warrants"). The Common Warrants will be issued under warrant agreements (each a
"Common Warrant Agreement") to be entered into between the Company and a bank or
trust company, as warrant agent (the "Common Warrant Agent"). A Copy of the
forms of Common Warrant Agreement have been filed as exhibits to the
registration statement. The following summary of certain provisions of the
Common Warrant Agreement does not purport to be complete and is subject to, and
is qualified in its entirety by reference to the Common Warrant Agreement,
including the definitions of certain topics.
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GENERAL
Reference is made to the prospectus supplement for the terms of the
Offered Common Warrants, including:
(1) The title and aggregate number of such Common Warrants.
(2) The number of shares of Common Stock that may be purchased upon
exercise of each such Common Warrant; the price, or the manner of
determining the price, at which such shares may be purchased upon such
exercise; if other than cash, the property and manner in which the
exercise price may be paid; and any minimum number of such Common
Warrants that are exercisable at any one time.
(3) The time or times at which, or period or periods in which, such Common
Warrants may be exercised and the expiration date of such Common
Warrants.
(4) The terms of any right of the Company to redeem such Common Warrants.
(5) The terms of any right of the Company to accelerate the exercise of
such Common Warrants upon the occurrence of certain events.
(6) Whether such Common Warrants will be sold with any other Offered
Securities.
(7) The date, if any, on and after which such Common Warrants and such
Offered Securities will be separately transferable.
(8) Any other terms of such Common Warrants.
If applicable, the prospectus supplement will also set forth information
concerning any other Securities offered thereby and a discussion of federal
income tax considerations relevant thereto.
Certificates representing Common Warrants (the "Common Warrant Certificates")
will be exchangeable for new Common Warrant Certificates of different
denominations. No service charge will be made for any permitted transfer or
exchange of Common Warrant Certificates, but the Company may require payment of
any tax or other governmental charge payable in connection therewith. Common
Warrants may be exercised at the corporate trust office of the Common Warrant
Agent or any other offices indicated in the prospectus supplement.
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EXERCISE OF COMMON WARRANTS
Each Offered Common Warrant will entitle the holder thereof to purchase such
number of shares of Common Stock at the exercise price set forth in, or
calculable from, the prospectus supplement relating to such Offered Common
Warrants. After the close of business on the applicable expiration date,
unexercised Common Warrants will become void.
Offered Common Warrants may be exercised by payment to the Common Warrant Agent
of the exercise price and by delivery to the Common Warrant Agent of the related
Common Warrant Certificate, with the reverse side thereof properly completed.
Offered Common Warrants will be deemed to have been exercised upon receipt of
the exercise price, subject to the receipt by the Common Warrant Agent, within
five business days thereafter, of the Common Warrant Certificate or Certificates
evidencing such Offered Common Warrants. Upon receipt of such payment and the
properly completed Common Warrant Certificates at the corporate trust office of
the Common Warrant Agent or such other office acceptable to the Common Warrant
Agent, the Company will, as soon as practicable, deliver the shares of Common
Stock purchased upon such exercise. If fewer than all of the Offered Common
Warrants represented by any Common Warrant Certificate are exercised, a new
Common Warrant Certificate will be issued for the unexercised Offered Common
Warrants. The holder of an Offered Common Warrant will be required to pay any
tax or other governmental charge that may be imposed in connection with any
transfer involved in the issuance of Common Stock purchased upon such exercise.
MODIFICATIONS
The Common Warrant Agreement and the terms of the Offered Common Warrants may be
modified or amended by the Company and the Common Warrant Agent, without the
consent of any holder, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective or inconsistent provision contained
therein, or in any other manner that the Company deems necessary or desirable
and that will not materially and adversely affect the interests of the holders
of the Offered Common Warrants.
COMMON WARRANT ADJUSTMENTS
The terms and conditions on which the exercise price of and/or the number of
shares of Common Stock covered by an Offered Common Warrant are subject to
adjustment will be set forth in the Common Warrant Agreement and the prospectus
supplement. Such terms will include provisions for adjusting the exercise price
and/or the number of shares of Common Stock covered by such Offered Common
Warrant; the events requiring such adjustment; the events upon
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which the Company may, in lieu of making such adjustment, make proper provisions
so that the holder of such Offered Common Warrant, upon exercise thereof, would
be treated as if such holder had exercised such Offered Common Warrant prior to
the occurrence of such events; and provisions affecting exercise in the event of
certain events affecting the Common Stock.
NO RIGHTS AS STOCKHOLDERS
Holders of Common Warrants are not entitled, by virtue of being such holders, to
vote, consent or receive notice as stockholders of the Company in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, or exercise any other rights whatsoever as stockholders of the
Company.
DESCRIPTION OF DEBT WARRANTS
The Company may issue (either separately or together with other Offered
Securities) Debt Warrants to purchase the underlying Debt Securities (the
"Offered Debt Warrants"). Such Debt Warrants will be issued under warrant
agreements (each a "Debt Warrant Agreement") to be entered into between the
Company and a bank or trust company, as warrant agent (the "Debt Warrant
Agent"), all as shall be set forth in the prospectus supplement. A copy of the
forms of Debt Warrant Agreement have been filed as an exhibit to the
registration statement. The following summary of certain provisions of the Debt
Warrant Agreement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all the provisions of the Debt
Warrant Agreement including the definitions of certain terms.
GENERAL
Reference is made to the prospectus supplement for the terms of the Offered Debt
Warrants, including the following:
(1) The title and aggregate number of such Debt Warrants.
(2) The title, rank, aggregate principal amount and terms of the
underlying Debt Securities purchasable upon exercise of such Debt
Warrants.
(3) The principal amount of the underlying Debt Securities that may
be purchased upon exercise of each such Debt Warrant, and the
price, or the manner of determining the price, at which such
principal amount may be purchased upon such exercise.
(4) The time or times at which, or period or periods in which, such
Debt Warrants may be exercised and the expiration date of such
Debt Warrants.
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(5) The terms of any right of the Company to redeem such Debt
Warrants.
(6) Whether certificates evidencing such Debt Warrants ("Debt Warrant
Certificates") will be issued in registered or bearer form, and,
if registered, where they may be transferred and exchanged.
(7) Whether such Debt Warrants are to be issued with any Debt
Securities or any other Securities.
(8) The date, if any, on and after which such Debt Warrants and such
Debt Securities or other Securities will be separately
transferable.
(9) Any other terms of such Debt Warrants.
If applicable, the prospectus supplement will also set forth information
concerning any other Securities offered thereby and a discussion of federal
income tax considerations relevant thereto.
Debt Warrant Certificates will be exchangeable for new Debt Warrant Certificates
of different denominations. No service charge will be made for any permitted
transfer or exchange of Debt Warrant Certificates, but the Company may require
payment of any tax or other governmental charge payable in connection therewith.
Debt Warrants may be exercised and exchanged, and Debt Warrants in registered
form may be presented for registration or transfer at the corporate trust office
of the Debt Warrant Agent or any other office indicated in the prospectus
supplement.
EXERCISE OF DEBT WARRANTS
Each Offered Debt Warrant will entitle the holder thereof to purchase such
amount of underlying Debt Securities at the exercise price set forth in, or
calculable from, the prospectus supplement relating to such Offered Debt
Warrants. After the close of business on the applicable expiration date,
unexercised Debt Warrants will become void.
Debt Warrants may be exercised by payment to the Debt Warrant Agent of the
applicable exercise price and by delivery to the Debt Warrant Agent of the
related Debt Warrant Certificate, with the reverse side thereof properly
completed. Debt Warrants will be deemed to have been exercised upon receipt of
the exercise price, subject to the receipt by the Debt Warrant Agent, within
five business days thereafter, of the Debt Warrant Certificate or Certificates
evidencing such Debt Warrants. Upon receipt of such payment and the properly
completed Debt Warrant Certificates at the corporate trust office of the Debt
Warrant Agent or any
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other office indicated in the prospectus supplement, the Company will, as soon
as practicable, deliver the amount of the underlying Debt Securities purchased
upon such exercise. If fewer than all of the Debt Warrants represented by any
Debt Warrant Certificate are exercised, a new Debt Warrant Certificate will be
issued for the unexercised Debt Warrants. The holder of a Debt Warrant will be
required to pay any tax or other governmental charge that may be imposed in
connection with any transfer involved in the issuance of Underlying Debt
Securities purchased upon such exercise.
MODIFICATIONS
The Debt Warrant Agreement and the terms of the Offered Debt Warrants may be
modified or amended by the Company and the Debt Warrant Agent, without the
consent of any holder, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective or inconsistent provision contained
therein, or in any other manner that the Company deems necessary or desirable
and that will not materially and adversely affect the interests of the holders
of the Offered Debt Warrants.
NO RIGHTS AS HOLDERS OF UNDERLYING DEBT SECURITIES
Holders of Debt Warrants are not entitled, by virtue of being such holders, to
payments of principal of (or premium, if any) or interest, if any, on the
related Underlying Debt Securities or to exercise any other rights whatsoever as
holders of the Underlying Debt Securities.
DESCRIPTION OF OUTSTANDING CAPITAL STOCK
Pursuant to the Company's Charter, it has authorized capital stock of
292,000,000 shares of five classes consisting of 200,000,000 shares of Common
Stock, par value $1.00 ("Common Stock"); 26,000,000 shares of Class A Common
Stock, par value $.00001 ("Class A Stock"), 11,000,000 shares of Class C Common
Stock, par value $1.00 ("Class C Stock"), 40,000,000 shares of Class D Common
Stock, par value $1.00 ("Class D Stock"); and 15,000,000 shares of Preferred
Stock, par value $1.00 ("Preferred Stock").
On March 15, 1996 there were outstanding (a) 42,306,378 shares of Common Stock,
(b) employee stock options to purchase an aggregate 6,242,209 shares of Common
Stock (of which options to purchase an aggregate 2,560,100 shares of Common
Stock were exercisable), (c) 1,865,030 shares of Class A Stock, (d) 356,491
shares of Class C Stock, (e) no shares of Class D Stock, (f) 2,300,000 shares of
the Series A Convertible Preferred Stock, (g) 4,566,713 shares of Series B
Convertible Preferred Stock and (h) no shares of Junior Participating Preferred
Stock. Rights to purchase Junior Participating Preferred Stock have been
distributed to the holders of the Common Stock, Class A Stock and Class C Stock.
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The following descriptions and the descriptions contained in "Description of
Common Stock" and "Description of Preferred Stock" are summaries, and reference
is herein made to the detailed provisions of the following documents,
instruments and agreements copies of which are filed as exhibits to the
Registration Statement and are incorporated herein by reference:
(1) Amended and Restated Articles of Incorporation of the Company.
(2) Articles of Amendment, dated July 15, 1994, to the Articles of
Incorporation of the Company.
(3) Articles Supplementary of the Company, dated March 18, 1993 relating
to the $3.625 Series A Convertible Preferred Stock.
(4) Articles Supplementary of the Company, dated July 15, 1994 relating to
the 8% Series B Cumulative Convertible Preferred Stock.
(5) Article Supplementary of the Company, dated July 15, 1994 relating to
the Series A Junior Participating Preferred Stock.
(6) Rights Agreement dated as of June 11, 1987 between the Company and
First Chicago Trust Company of New York, formerly Morgan Shareholder
Services Trust Company, as Rights Agent, as amended and restated on
March 28, 1990, as amended by Amendment No. 1 on April 21, 1992,
Amendment No. 2 on June 6, 1994, Amendment No. 3 on July 15, 1994, and
Amendment No. 4 on November 16, 1995, pursuant to which shares of the
Junior Participating Preferred Stock are issuable under certain
circumstances.
(7) Form of Trust Agreement dated as of June 11, 1987, amended and
restated as of March 28, 1990, between the Company and Montreal Trust
Company of Canada, as successor to The Canada Trust Company.
(8) Stock Purchase and Sale Agreement dated as of June 6, 1994, between
the Company and American International Group, Inc. ("AIG").
(9) Amendment No. 1, dated as of November 10, 1994 to the Stock Purchase
and Sale Agreement between the Company and AIG.
(10) Amendment No. 2, dated March 16, 1995, to the Stock Purchase and Sale
Agreement between the Company and AIG.
COMMON STOCK CLASSES. The Company has four classes of common stock --
Common Stock, Class A Stock, Class C Stock and Class D Stock. Each holder of the
Common Stock, Class A Stock and Class C Stock is entitled to one vote for each
share held on all matters voted upon by the stockholders of the Company,
including the election of directors. In certain instances, however, holders of
the
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Class A and Class C Stock vote as a group. Holders of the Class D Stock are not
entitled to vote, except that the Company's Charter cannot be amended so as to
adversely affect the holders of the Class D Stock without the approval of the
holders of two-thirds of such shares then outstanding. The Common Stock, Class A
Stock, Class C Stock and Class D Stock do not have pre-emptive or conversion
rights or cumulative voting rights for the election of directors and there are
no redemption or sinking fund provisions applicable thereto.
Subject to the provisions of Maryland law, dividends on the Common Stock and the
Class D Stock (when and if issued) may be declared and paid by the board of
directors. Neither the Class A Stock nor the Class C Stock have dividend rights;
however, associated with each share of Class A Stock is a dividend paying share
(RSC Class 1 Share) issued by Reed Stenhouse Companies Limited, a Canadian
subsidiary of the Company, and associated with each share of Class C Stock is a
dividend paying (U.K. Dividend Share) issued by Alexander & Alexander Services
UK plc, a U.K. subsidiary of the Company. No dividends may be declared or paid
on the Common Stock, unless an equivalent amount per share is declared and paid
on the RSC Class 1 Shares and the UK Dividend Shares. Accordingly, the Company's
ability to pay dividends is limited by the amounts payable to the Canadian and
U.K. subsidiaries for such purposes. At December 31, 1995 these amounts
approximate Canadian $96.5 million or $70.9 million, assuming certain solvency
tests are met under Canadian law and 127 million pounds sterling or $199.6
million. In the event sufficient earnings are not available in the Canadian or
U.K. subsidiary to pay dividends the Company's legal structure allows it to make
earnings or capital available in those subsidiaries to pay dividends.
Holders of the Common Stock, Class C Stock and Class D Stock are entitled to
receive ratably, upon liquidation of the Company, all remaining assets available
for distribution to stockholders after satisfaction of the Company's liabilities
and the preferential rights of any Preferred Stock which may then be
outstanding. Holders of the Class A Stock are not entitled to receive any
dividends or liquidating or other distributions with respect to such shares from
the Company, but are entitled to receive in respect of their associated RSC
Class 1 Shares an amount in Canadian dollars equivalent to the U.S. dollar
amount to be paid on the Common Stock.
The shares on the Class C Stock are convertible at any time into, and shares of
RSC Class 1 Shares are exchangeable at any time (and the Class A Stock is
concurrently redeemable), for fully paid, non-assessable shares of Common Stock
on the basis of one share of Common Stock for each share of Class C Stock or RSC
Class 1 Share (subject to adjustment). In addition, upon the happening of
certain events, the Company can require such conversion. Shares of the Series B
Convertible Preferred Stock are convertible into Class D Stock, at a conversion
price of $17 per share (subject to adjustment). The Class D Stock (when and if
issued) may be exchanged for Common Stock, at anytime on a share-for-share
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basis, provided, however, that no person is entitled to acquire Common Stock
upon such exchange if after giving effect thereto such person has more than 9.9
percent of the combined voting power of the common stock voting shares then
outstanding, absent certain events. The Common Stock, Class A Stock, Class C
Stock and Class D Stock have customary anti-dilution provisions.
The Common Stock is listed on the New York and London stock exchanges. In the
United States, the Company's transfer agent and registrar is First Chicago Trust
Company of New York. In London, the Company's transfer agent and registrar is
The R-M Trust Company. In Canada the Company's transfer agent and registrar is
Montreal Trust Company of Canada. The RSC Class 1 Shares are traded on the
Toronto and Montreal stock exchanges and the Class C Stock is traded on the
London Stock exchange.
PREFERRED STOCK SERIES. The Company has one class of Preferred Stock which can
be issued in one or more series with full or limited voting rights, with the
rights of each series to be determined by the Board of Directors before each
issuance. The Company currently has authorized three series of Preferred Stock,
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and
Junior Participating Preferred Stock.
SERIES A CONVERTIBLE PREFERRED STOCK. Holders of the Series A Convertible
Preferred Stock are entitled to receive cumulative cash dividends at an annual
rate of $3.625 per share, payable quarterly in arrears. The Series A Convertible
Preferred Stock has priority as to dividends over the Company's common capital
stock. The shares are convertible into Common Stock at a conversion price of
$31.875 per share (subject to adjustments). The Series A Convertible Preferred
Stock may be redeemed by the Company on or after March 22, 1997, at $52.18 per
share until March 14, 1998 and declining ratably annually to $50 per share on or
after March 15, 2003, plus accrued and unpaid dividends. The Series A
Convertible Preferred Stock is non-voting, except as provided by law, and except
that, among other things, holders will be entitled to vote as a separate class
with other series of outstanding Preferred Stock to elect a maximum of two
directors if the equivalent of six or more quarterly dividends of the Series A
Convertible Stock is in arrears. With respect to dividend rights and rights of
liquidation, dissolution and winding up, the Series A Convertible Preferred
Stock ranks senior to all classes of common capital stock and to the Junior
Participating Preferred Stock (when and if issued) and pari passu to the Series
B Convertible Preferred Stock. The liquidation preference for the Series A
Convertible Preferred Stock is $50 per share.
SERIES B CONVERTIBLE PREFERRED STOCK. Holders of the Series B Convertible
Preferred Stock are entitled to receive dividends at a rate of 8% per annum
payable quarterly in arrears. Until December 15, 1996, dividends on the Series B
Convertible Preferred Stock are payable in kind and thereafter, at the election
of the Company's board of directors either in cash or in kind until December 15,
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1999. The Series B Convertible Preferred Stock has the same dividend rights,
voting rights and rights of liquidation, dissolution and winding up as the
Series A Convertible Preferred Stock. In addition, however, following the
occurrence of a Specified Corporate Action (as defined in the Company's Charter)
holders of the Series B Convertible Preferred Stock also have the right to vote
as a class with the holders of the Common Stock and the Class D Stock on all
matters as to which the holders of Common Stock are entitled to vote. A
Specified Corporate Action is defined generally as an action by the Company that
would permit a change in control and certain related events. For the purposes of
such vote, the holders of the Series B Convertible Preferred Shares will be
deemed holders of that number of shares of Class D Stock into which such shares
would then be convertible.
The Series B Convertible Preferred Stock may be redeemed in whole or in part by
the Company after December 15, 1999, so long as after that date the Common Stock
has traded 30 consecutive trading days on the New York Stock Exchange at a price
in excess of 150 percent of the then effective conversion price. The redemption
price is $54 per share until December 14, 2000, declining ratably annually to
$50 per share on or after December 14, 2006, plus accrued and unpaid dividends.
All redemptions are to be made pro-rata.
Holders of Series B Convertible Preferred Stock have the right to require the
Company to purchase all or any part of the Series B Convertible Preferred Stock
then held by such holders upon the occurrence of a Special Event. A Special
Event consists of actions solely within the control of the Company and includes
the declaration or payments of dividends aggregating in excess of cumulatively
25 percent of earnings in 1996, and cumulatively 50 percent of earnings
thereafter; the disposition by the Company of assets representing 35 percent or
more of the Company's book value or gross revenues; certain mergers or
consolidations of the Company or any of its principal subsidiaries with or into
any other firm or entity involving 20 percent or more of the total market value
of the Company's equity securities; and repurchases and redemptions of the
Company's securities (other than the Company's Series B Convertible Preferred
Stock) in excess of net proceeds to the Company from the sale of stock (less
amounts expended for repurchases and redemptions of the Company's preferred
shares). Other Special Events include the acquisition by a third party, with the
consent or approval of the Company, of beneficial ownership of securities
representing 35 percent or more of the Company's total outstanding voting power.
The repurchase price in the event of a Special Event is $72.06 per share, plus
in each case accrued and unpaid dividends. The approximately 13,431,000 shares
of Common Stock issuable upon the ultimate conversion of the Series B
Convertible Preferred Shares represent approximately 23 percent of the aggregate
number of voting shares outstanding after giving effect to such issuance. If
dividends on the Series B Convertible Preferred Stock are paid in kind for the
full five year period permitted, approximately 18,077,000 shares of Common Stock
will be issuable upon such exchange, representing approximately 29 percent of
the total number of voting shares outstanding after giving effect to such
issuance.
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JUNIOR PARTICIPATING PREFERRED STOCK. Each share of Junior Participating
Preferred Stock (when and if issued) will be entitled to a minimum preferential
quarterly dividend payment of $10 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per share of Common Stock. In the
event of liquidation, the holders of the Junior Participating Preferred Stock
will be entitled to a minimum preferential liquidation payment of $100 per share
but will be entitled to an aggregate payment of 100 times the payment made per
share of Common Stock. Each share of Junior Participating Preferred Stock will
have 100 votes, voting together with the Company's common voting shares. In the
event of any merger, consolidation or other transaction in which voting shares
are exchanged, each share of Junior Participating Preferred Stock will be
entitled to receive 100 times the amount received per share of Common Stock. The
Junior Participating Preferred Stock shares have customary anti-dilution
provisions. Because of the nature of the dividend, liquidation and voting rights
of the Junior Participating Preferred Stock, the value of the one one-hundredth
interest in a share of Junior Participating Preferred Stock purchasable upon
exercise of each Right should approximate the value of one share of Common
Stock. Shares of Junior Participating Preferred Stock purchasable upon exercise
of the Rights will not be redeemable.
ANTITAKEOVER RESTRICTIONS
PREFERRED SHARE PURCHASE RIGHTS. The Company has a Shareholder Rights Plan (the
"Rights Plan") designed to deter coercive takeover tactics and to prevent an
acquirer from gaining control of the Company without offering a fair price to
all stockholders.
Under the terms of the Rights Plan, adopted in July 1987 and as amended, one
preferred share purchase right (a "Right") accompanies each share of outstanding
Common Stock, Class A Stock, Class C Stock and Class D Stock. Each Right
entitles the holder thereof to purchase one one-hundredth of a share of Junior
Participating Preferred Stock.
The Rights become exercisable only following the public announcement by the
Company that a person or group (i) has acquired beneficial ownership of 20
percent or more of the Company's voting shares or (ii) has commenced a tender or
exchange offer that if consummated would result in the ownership of 20 percent
or more of such voting shares. Under such circumstances, if the Rights become
exercisable, each holder will be entitled to purchase at the then-current
exercise price, that number of Junior Participating Preferred Stock equal to
twice the exercise price of the Right. If the Company is subsequently acquired,
each right will entitle the holder to purchase at the then-current exercise
price, stock of the surviving company having a market value of twice the
exercise price of one right. In addition, if a person or group acquires more
than 20 percent, but less than 50 percent, of the Company's common voting
shares, the Board of Directors may
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exchange each Right for one one-hundredth of a share of Junior Participating
Preferred Stock. Rights beneficially owned by a holder of 20 percent or more of
the voting shares become void once such holder passes the 20 percent threshold.
The Rights, which expire on July 6, 1997, are redeemable by the Board of
Directors prior to becoming exercisable at a redemption price of $.01 per Right.
In June 1994, the Board of Directors amended the Rights Plan so that the initial
acquisition of the Series B Convertible Preferred Stock, the acquisition of the
Class D Stock upon conversion of the Series B Convertible Preferred Stock, the
acquisition of Common Stock upon exchange of the Class D Stock, or permitted
acquisitions by the purchaser, its affiliates or any transferee thereof of the
Company's securities will not cause the Rights to become exercisable. In
addition, on November 16, 1995, the Rights Plan was amended to provide for
modifications of the definitions of Acquiring Person and Distribution Date to
raise from 15 percent to 20 percent the percentage of stock ownership needed to
cause a person to become an Acquiring Person or to cause a Distribution Date to
occur (as such capitalized terms are defined in the Rights Agreement).
MARYLAND BUSINESS COMBINATION LAW. The Maryland Business Combination Law
prohibits any "Business Combination" (as defined generally to include a merger,
consolidation, share exchange or, in certain circumstances, an asset transfer or
issuance or reclassification of equity securities) between a Maryland
corporation (such as the Company) and any "Interested Stockholder" (defined
generally as any person that, directly or indirectly, beneficially owns 10
percent or more of the outstanding voting stock of the corporation) for a period
of five years after the date the person becomes an Interested Stockholder. After
such five year period, a Business Combination between a Maryland corporation and
such Interested Stockholder is prohibited unless either certain "fair price"
provisions are complied with or the Business Combination Law restrictions do not
apply to a Business Combination with an Interested Stockholder if such Business
Combination is approved by a resolution of the board of directors of the
corporation adopted prior to the date on which the Interested Stockholder became
such.
GENERAL DIVIDEND RESTRICTIONS ON OUTSTANDING CAPITAL STOCK
All dividends of a Maryland Corporation are authorized by its board of
directors, without stockholder approval, unless otherwise specified in its
charter. Pursuant to the Company's Charter, no dividends may be issued on the
Common Stock, unless concurrent dividends are declared on shares of Class A
Stock, Class C Stock and Class D Stock outstanding. In addition, under Maryland
General Corporation Law Section 2-311, the Board of Directors of the Company may
not declare or pay dividends to holders of any class of the Company's Capital
Stock if, after giving effect to such distribution, (1) the Company would be
unable to pay its debts as they become due in the usual course; or (2) the
Company's total assets
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would be less than the sum of its liabilities plus the dissolution preference of
the holders of any class or series of preferred stock issued and outstanding.
The Company currently has issued and outstanding Series A Convertible Preferred
Stock and Series B Convertible Preferred Stock. Pursuant to the Company's
Charter, however, the aggregate liquidation preference on the Series B
Convertible Preferred Stock will not be counted as a liability. In addition, the
Company's Long-Term Credit Facility contains provisions requiring the
maintenance of a minimum consolidated tangible net worth.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to or through underwriters or
dealers, and also may sell the Offered Securities directly to one or more other
purchasers or through agents.
The prospectus supplement sets forth the terms of the offering of the particular
series of Offered Securities to which such prospectus supplement relates,
including (i) the name or names of any underwriters or agents with whom the
Company has entered into arrangements with respect to the sale of such series of
Offered Securities, (ii) the initial public offering or purchase price of such
series of Offered Securities, (iii) any underwriting discounts, commissions and
other items constituting underwriters' compensation from the Company and any
other discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to the Company and (vi) the securities exchanges, if any, on which
such series of Offered Securities will be listed.
Unless otherwise set forth in the prospectus supplement relating to a particular
series of Offered Securities, the obligations of the underwriters to purchase
such series of Offered Securities will be subject to certain conditions
precedent and each of the underwriters with respect to such series of Offered
Securities will be obligated to purchase all of the Offered Securities of such
series allocated to it if any such Offered Securities are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The Offered Securities may be offered and sold by the Company directly or
through agents designated by the Company from time to time. Unless otherwise
indicated in the applicable prospectus supplement, each such agent will be
acting on a best efforts basis for the period of its appointment. Any agent
participating in the distribution of Offered Securities may be deemed to be an
"underwriter," as that term is defined in the Securities Act of 1933, as amended
(the "Securities Act"), of the Offered Securities so offered and sold. The
Offered Securities also may be sold to dealers at the applicable price to the
public set forth in the prospectus supplement relating to a particular series of
Offered Securities who later resell to investors. Such dealers may be deemed to
be "underwriters" within the meaning of the Securities Act.
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Underwriters, dealers and agents may be entitled, under agreement entered into
with the Company, to indemnification by the Company against certain civil
liabilities under the Securities Act.
If so indicated in the prospectus supplement relating to a particular series of
Offered Securities, the Company will authorize underwriters, dealers or agents
to solicit offers by certain institutions to purchase Offered Securities of such
series from the Company pursuant to delayed delivery contracts providing for
payment and delivery at a future date. Such contracts will be subject only to
those conditions set forth in the prospectus supplement and the prospectus
supplement will set forth the commission payable for solicitation of such
contracts.
LEGAL MATTERS
The legality of the Shares is being passed upon by Albert A. Skwiertz, Jr.,
Esq., Senior Vice President and General Counsel of the Company. Mr. Skwiertz
owns 1,666 shares directly of the Company's Common Stock, and holds options for
43,500 shares of Common Stock. In addition, 1,646 shares of Common Stock are
attributed to Mr. Skwiertz's account under the Company's Thrift Plan.
EXPERTS
The financial statements and financial statement schedules incorporated in this
prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance and
distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
registration fee.
SEC registration fee------------------------------$86,207
Printing and engraving expenses-------------------$15,000
Legal fees and expenses--------------------------$125,000
Fees of accountants-------------------------------$40,000
Fees of trustee-----------------------------------$14,000
Rating agency fees--------------------------------$70,000
Miscellaneous-------------------------------------$20,000
Total-------------------------------------$370,207
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 2-418 of the Maryland General Corporation Law establishes provisions
whereby a Maryland corporation may indemnify any director or officer, made party
to an action or proceeding by reason of service in that capacity, against
judgments, penalties, fines, settlements and reasonable expenses incurred in
connection with such action or proceeding unless it is proved that the director
or officer (i) acted in bad faith or with active and deliberate dishonesty, (ii)
actually received an improper personal benefit in money, property or services or
(iii) in the case of a criminal proceeding had reasonable cause to believe that
his act was unlawful. However, if the proceeding is a derivative suit in favor
of the corporation, indemnification may not be made if the individual is
adjudged to be liable to the corporation. In no case may indemnification be made
until a determination has been reached that the director or officer has met the
applicable standard of conduct. Indemnification for reasonable expenses is
mandatory if the director or officer has been successful on the merits or
otherwise in the defense of any action or proceeding covered by the
indemnification statute. The statute also provides for indemnification of
directors and officers by court order. The indemnification provided or
authorized in the indemnification statute does not preclude a corporation from
extending other rights (indemnification or otherwise) to directors and officers.
The Company's Bylaws provide for indemnification of any person who is serving or
has served as a director or officer of the Company, against all liabilities and
expenses incurred in connection with any action, suit or proceeding arising out
of such service to the full extent permitted under Maryland law.
49
<PAGE>
The Company currently maintains policies of insurance under which the Company
and the directors and officers of the Company are insured, within the limits of
the policies, against certain expenses in connection with the defense of
actions, suits or proceedings, and certain liabilities which might be imposed as
a result of such actions, suits or proceedings, to which directors and officers
of the Company are parties by reason of being or having been such directors or
officers.
ITEM 16. LIST OF EXHIBITS.
The following exhibits are filed with this Registration Statement:
EXHIBIT INDEX
EXHIBIT
- -------
1.1 Proposed form of underwriting agreement.
2 Not applicable.
4.1 Proposed form of Senior Indenture between the Company and PNC Bank,
N.A.
4.2 Proposed form of Subordinated Indenture between the Company and PNC
Bank, N.A.
4.3 Proposed form of Common Stock Warrant Agreement.
4.4 Proposed form of Common Stock Warrant Agreement (for warrants sold
alone).
4.5 Proposed form of Debt Warrant Agreement.
4.6 Proposed form of Debt Securities Warrant Agreement (for warrants sold
alone).
*4.7 Rights Agreement dated as of June 11, 1987, amended and restated as of
March 27, 1990, between the Company and First Chicago Trust Company of
New York, formerly Morgan Shareholder Services Trust Company, as
Rights Agent (incorporated herein by reference to the Company's
Registration Statement on Form 8-A filed with the Commission on June
19, 1987, as amended by Amendment No. 1 dated April 21, 1992,
Amendment No. 2 dated June 6, 1995, Amendment No. 3 dated July 15,
1994, and Amendment No. 4 dated November 16, 1995.
*4.8 Form of Trust Agreement dated as of June 11, 1987, amended and
restated as of March 28, 1990, between the Company and Montreal Trust
Company of Canada, as successor to The Canada Trust Company.
(incorporated herein by reference to Registration Statement on Form
8-A filed with the Commission on June 19, 1987, as amended)
5.1 Opinion of Counsel of Albert A. Skwiertz, Jr., Esq., Senior Vice
President and General Counsel of the Company.
8.1 Not applicable.
50
<PAGE>
12.1 The Company and consolidated subsidiaries computation of ratio of
earnings before fixed charges.
12.2 The Company and consolidated subsidiaries computation of ratio of
earnings to fixed charges and preferred stock dividends
15.1 Not applicable.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Albert A. Skwiertz, Jr., Esq., Senior Vice President and
General Counsel of the Company included in Exhibit 5.1.
23.3 Consent of White & Case
24.1 Power of Attorney is included in the Signature Page contained in Part
II of the Registration Statement dated March 29, 1996.
25.1 Statement of eligibility of PNC Bank, N.A. under the Trust Indenture
Act of 1939 on Form T-1.
26 Not applicable.
27 Financial Data Schedule.
28 None. 99 None. ----------
* Incorporated by reference
ITEM 17. UNDERTAKINGS
The undersigned Registrant 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 the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement; (iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement; provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated in the 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 therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof. (3) To remove from registration by means of a
post-effective amendment any of the Shares being registered which remain unsold
at the termination of the offering.
The undersigned Registrant hereby further undertakes that for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act
51
<PAGE>
(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 the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby further undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act, and, where
interim financial information to be presented by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver, or cause to be delivered to each
person to whom the prospectus is sent or given, the latest quarterly report that
is specifically incorporated by reference in the prospectus to provide such
interim financial information.
The undersigned Registrant hereby further undertakes to supplement the
prospectus, after the expiration of the subscription period, to set forth the
results of the subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities to be purchased
by the underwriters, and the terms of any subsequent reoffering thereof. If any
public offering by the underwriters is to be made on terms differing from those
set forth on the cover page of the prospectus, a post-effective amendment will
be filed to set forth the terms of such offering.
The undersigned Registrant hereby further undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the questions whether such indemnification by itself is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
52
<PAGE>
The undersigned Registrant hereby further undertakes that: (1) for the purposes
of determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of the Registration Statement as of the time it was
declared effective; (2) for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to the initial bona fide offering thereof.
53
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 29th day of
March, 1996.
ALEXANDER & ALEXANDER SERVICES INC.
By:
/s/ Frank G. Zarb
------------------
Frank G. Zarb Chairman of the Board,
Chief Executive Officer, President and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the officers and directors
whose signature appears below constitutes and appoints Frank G. Zarb and Edward
F. Kosnik, and each of them, their true and lawful attorneys and agents, with
full power of substitution each with power to act alone, to sign and execute on
behalf of the undersigned any and all amendments (including pre-effective and
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them acting singly, full power and authority to do and
perform each and every act and thing necessary and requisite to be done, as
fully and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys and agents or their or his
substitutes, shall 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 on March 29, 1996 by the following
persons in the capacities indicated.
54
<PAGE>
Name Title
- ---- -----
/s/ Frank G. Zarb Chairman of the Board, Chief Executive Officer,
Frank G. Zarb President and Director
/s/ Edward F. Kosnik Senior Executive Vice President,
Edward F. Kosnik Chief Financial Officer and Director
/s/ Richard P. Sneeder, Jr. Vice President and Controller
Richard P. Sneeder, Jr.
/s/ Robert E. Boni Director
Robert E. Boni
/s/ W. Peter Cooke Director
W. Peter Cooke
/s/ E. Gerald Corrigan Director
E. Gerald Corrigan
/s/ Joseph L. Dionne Director
Joseph L. Dionne
/s/ Gerald R. Ford Director
Gerald R. Ford
<PAGE>
/s/ Peter C. Godsoe Director
Peter C. Godsoe
/s/ Angus M.M. Grossart Director
Angus M.M. Grossart
/s/ Maurice H. Hartigan, II Director
Maurice H. Hartigan, II
/s/ James B. Hurlock Director
James B. Hurlock
/s/ Ronald A. Iles Deputy Chairman of the Board
Ronald A. Iles and Director
/s/ Vincent R. McLean Director
Vincent R. McLean
/s/ James D. Robinson III Director
James D. Robinson III
/s/ H. Furlong Baldwin, II Director
H. Furlong Baldwin, II
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
1.1 Proposed form of underwriting agreement.
2 Not applicable.
4.1 Proposed form of Senior Indenture between the Company and PNC
Bank, N.A.
4.2 Proposed form of Subordinated Indenture between the Company
and PNC Bank, N.A.
4.3 Proposed form of Common Stock Warrant Agreement.
4.4 Proposed form of Common Stock Warrant Agreement (for warrants
sold alone).
4.5 Proposed form of Debt Warrant Agreement.
4.6 Proposed form of Debt Securities Warrant Agreement (for
warrants sold alone).
*4.7 Rights Agreement dated as of June 11, 1987, amended and
restated as of March 27, 1990, between the Company and First
Chicago Trust Company of New York, formerly Morgan Shareholder
Services Trust Company, as Rights Agent (incorporated herein
by reference to the Company's Registration Statement on Form
8-A filed with the Commission on June 19, 1987, as amended by
Amendment No. 1 dated April 21, 1992, Amendment No. 2 dated
June 6, 1995, Amendment No. 3 dated July 15, 1994, and
Amendment No. 4 dated November 16, 1995.
*4.8 Form of Trust Agreement dated as of June 11, 1987, amended and
restated as of March 28, 1990, between the Company and
Montreal Trust Company of Canada, as successor to The Canada
Trust Company. (incorporated herein by reference to
Registration Statement on Form 8-A filed with the Commission on
June 19, 1987, as amended)
5.1 Opinion of Counsel of Albert A. Skwiertz, Jr., Esq., Senior
Vice President and General Counsel of the Company.
8.1 Not applicable.
12.1 The Company and consolidated subsidiaries computation of ratio
of earnings before fixed charges.
12.2 The Company and consolidated subsidiaries computation of ratio
of earnings to fixed charges and preferred stock dividends
15.1 Not applicable.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Albert A. Skwiertz, Jr., Esq., Senior Vice President
and General Counsel of the Company included in Exhibit 5.1.
23.3 Consent of White & Case
24.1 Power of Attorney is included in the Signature Page contained
in Part II of the Registration Statement dated March 29, 1996.
25.1 Statement of eligibility of PNC Bank, N.A. under the Trust
Indenture Act of 1939 on Form T-1.
26 Not applicable.
27 Financial Data Schedule.
28 None.
99 None.
- ----------
* Incorporated by reference
Exhibit 1.1
PROPOSED DRAFT
--------------
ALEXANDER & ALEXANDER SERVICES INC.
Debt Securities
Preferred Common Stock
UNDERWRITING AGREEMENT
----------------------
Introductory. Alexander & Alexander Services Inc., a Maryland
corporation ("Company"), proposes to issue and sell from time to time
certain of its unsecured debt securities, preferred stock and Common Stock,
$1.00, par value, ("Common Stock") registered under the registration
statement referred to in Section 2(a) ("Registered Securities"). The
Registered Securities constituting debt securities will be issued under an
indenture, dated as of , 19 ("Indenture"), between the Company
and PNC Bank, N.A., as Trustee, in one or more series, which series may
vary as to interest rates, maturities, redemption provisions, selling
prices and other terms. The Registered Securities constituting preferred
stock may be issued in one or more series, which series may vary as to
dividend rates, redemption provisions, selling prices and other terms.
Particular series or offerings of Registered Securities will be sold
pursuant to a Terms Agreement referred to in Section 3, for resale in
accordance with terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Offered Securities". The firm or firms
which agree to purchase the Offered Securities are hereinafter referred to
as the "Underwriters" of such Securities, and the representative or
representatives of the Underwriters, if any, specified in a Terms Agreement
referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives",
as used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the
second sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company, as of
the date of each Terms Agreement referred to in Section 3, represents and
warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33- ), including a
prospectus, relating to the Registered Securities has been filed with
the Securities and Exchange Commission ("Commission") and has become
effective. Such registration statement, as amended at the time of any
Terms Agreement referred to in Section 3, is hereinafter referred to
as the "Registration Statement", and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3
to reflect the terms of the Offered Securities (if they are debt
securities or preferred stock) and the terms of the offering of the
Offered Securities, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under the Securities
Act of 1933 ("Act"), including all material incorporated by reference
therein, is hereinafter referred to as the "Prospectus". No document
has been or will be prepared or distributed in reliance on Rule 434
under the Act.
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in
all respects to the requirements of the Act, the Trust Indenture Act
of 1939 ("Trust Indenture Act") and the rules and regulations of the
Commission
1
<PAGE>
("Rules and Regulations") and did not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in
Section 3, the Registration Statement and the Prospectus will conform
in all respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations, and neither of such documents will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not
apply to statements in or omissions from any of such documents based
upon written information furnished to the Company by any Underwriter
through the Representatives, if any, specifically for use therein.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Maryland,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(d) Each significant subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing under the
laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and each significant
subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification; all of the issued and
outstanding capital stock of each significant subsidiary of the
Company has been duly authorized and validly issued and is fully paid
and nonassessable; and the capital stock of each significant
Subsidiary owned by the Company, directly or through subsidiaries, is
owned free from liens, encumbrances and defects. A "significant
subsidiary" means each subsidiary of the Company which has assets in
excess of 5% of the consolidated assets of the Company or contributes
more than 5% of the consolidated revenues of the Company.
(e ) If the Offered Securities are debt securities: The Indenture
has been duly authorized and has been duly qualified under the Trust
Indenture Act; the Offered Securities have been duly authorized; and
when the Offered Securities are delivered and paid for pursuant to the
Terms Agreement on the Closing Date (as defined below) or pursuant to
Delayed Delivery Contracts (as hereinafter defined), the Indenture
will have been duly executed and delivered, such Offered Securities
will have been duly executed, authenticated, issued and delivered and
will conform to the description thereof contained in the Prospectus
and the Indenture and such Offered Securities will constitute valid
and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
(f ) If the Offered Securities are preferred stock: The Offered
Securities have been duly authorized and, when the Offered Securities
have been delivered and paid for in accordance with the Terms
Agreement on the Closing Date, such Offered Securities will have been
validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus; and the stockholders
of the Company have no preemptive rights with respect to the Offered
Securities.
(g ) If the Offered Securities are Common Stock: The Offered
Securities and all other outstanding shares of capital stock of the
Company have been duly authorized; all outstanding
2
<PAGE>
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with the
Terms Agreement on the Closing Date, such Offered Securities will have
been, validly issued, fully paid and nonassessable and will conform to
the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to
the Offered Securities.
(h ) If the Offered Securities are convertible: When the Offered
Securities are delivered and paid for pursuant to the Terms Agreement
on the Closing Date, such Offered Securities will be convertible into
Common Stock of the Company in accordance with their terms (if the
Offered Securities are preferred stock) or the Indenture (if the
Offered Securities are debt securities); the shares of Common Stock
initially issuable upon conversion of such Offered Securities have
been duly authorized and reserved for issuance upon such conversion
and, when issued upon such conversion, will be validly issued, fully
paid and nonassessable; the outstanding shares of Common Stock have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Common Stock.
(i ) If the Offered Securities are Common Stock or are convertible
into Common Stock: Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like
payment.
(j) If the Offered Securities constitute Common Stock or are
convertible into Common Stock, the outstanding shares of Common Stock
are listed on The New York Stock Exchange (the "Stock Exchange") and
the Offered Securities (if they are Common Stock) or the Common Stock
into which the Offered Securities are convertible (if they are
convertible) has been approved for listing on the Stock Exchange,
subject to notice of issuance. If the Offered Securities are debt
securities or preferred stock, they have been approved for listing on
the stock exchange indicated in the Terms Agreement, subject to notice
of issuance.
(k ) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance and sale of the Offered Securities by the Company, except
such as have been obtained and made under the Act and, if the Offered
Securities are debt securities, the Trust Indenture Act and such as
may be required under state securities laws.
(l ) The execution, delivery and performance of the Indenture (if
the Offered Securities are debt securities), the Terms Agreement
(including the provisions of this Agreement) and any Delayed Delivery
Contracts and the issuance and sale of the Offered Securities and, if
the Offered Securities are debt securities or preferred stock,
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any agreement or instrument to which
the Company or any such subsidiary is a party or by which the Company
or any such subsidiary is bound or to which any of the properties of
the Company or any such subsidiary is subject, or the charter or
Bylaws of the Company or any such subsidiary, and the Company has full
power and authority to authorize, issue and sell the Offered
Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement).
(m ) The Terms Agreement (including the provisions of this
Agreement) and, if the Offered
3
<PAGE>
Securities are debt securities or preferred stock, any Delayed
Delivery Contracts have been duly authorized, executed and delivered
by the Company.
(n ) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by them, in each case free from
liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the
Company and its subsidiaries hold any leased real or personal property
under valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by them.
(o ) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(p ) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent
that might have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(q ) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "intellectual property
rights") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with
respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(r ) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of
its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole, or
would materially and adversely affect the ability of the Company to
perform its obligations under the Indenture (if the Offered Securities
are debt securities), the Terms Agreement (including the provisions of
this Agreement) or any Delayed Delivery Contracts, or which are
otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(s ) The financial statements included in the Registration Statement
and Prospectus present fairly the financial position of the Company
and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the
generally accepted accounting principles
4
<PAGE>
in the United States applied on a consistent basis; and any schedules
included in the Registration Statement present fairly the information
required to be stated therein.
(t ) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(u ) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
3. Purchase and Offering of Offered Securities. The obligation of
the Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement")
at the time the Company determines to sell the Offered Securities. The
Terms Agreement will incorporate by reference the provisions of this
Agreement, except as otherwise provided therein, and will specify the firm
or firms which will be Underwriters, the names of any Representatives, the
purchase price to be paid by the Underwriters and (if the Offered
Securities are debt securities or preferred stock) the terms of the Offered
Securities not already specified (in the Indenture, in the case of Offered
Securities that are debt securities), including, but not limited to,
interest rate (if debt securities), dividend rate (if preferred stock),
maturity (if debt securities), any redemption provisions and any sinking
fund requirements and whether any of the Offered Securities may be sold to
institutional investors pursuant to Delayed Delivery Contracts (as defined
below). The Terms Agreement will also specify the time and date of
delivery and payment (such time and date, or such other time not later than
seven full business days thereafter as the Underwriter first named in the
Terms Agreement (the "Lead Underwriter") and the Company agree as the time
for payment and delivery, being herein and in the Terms Agreement referred
to as the "Closing Date"), the place of delivery and payment and any
details of the terms of offering that should be reflected in the prospectus
supplement relating to the offering of the Offered Securities. For
purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, the
Closing Date (if later than the otherwise applicable settlement date) shall
be the date for payment of funds and delivery of securities for all the
Offered Securities sold pursuant to the offering, other than Contract
Securities for which payment of funds and delivery of securities shall be
as hereinafter provided. The obligations of the Underwriters to purchase
the Offered Securities will be several and not joint. It is understood
that the Underwriters propose to offer the Securities for sale as set forth
in the Prospectus.
If the Terms Agreement provides for sales of Offered Securities
pursuant to delayed delivery contracts, the Company authorizes the
Underwriters to solicit offers to purchase Offered Securities pursuant to
delayed delivery contracts substantially in the form of Annex I attached
hereto ("Delayed Delivery Contracts") with such changes therein as the
Company may authorize or approve. Delayed Delivery Contracts are to be
with institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and educational
and charitable institutions. On the Closing Date the Company will pay, as
compensation, to the Representatives for the accounts of the Underwriters,
the fee set forth in such Terms Agreement in respect of the principal
amount or number of shares] of Offered Securities to be sold pursuant to
Delayed Delivery Contracts ("Contract Securities"). The Underwriters will
not have any responsibility in respect of the validity or the performance
of Delayed Delivery Contracts. If the Company executes and delivers
Delayed Delivery Contracts, the Contract Securities will be deducted from
the Offered Securities to be purchased by the several Underwriters and the
aggregate principal amount or number of shares of Offered Securities to be
purchased by each Underwriter will be reduced pro rata in proportion to the
principal amount or
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number of shares of Offered Securities set forth opposite each
Underwriter's name in such Terms Agreement, except to the extent that the
Lead Underwriter determines that such reduction shall be otherwise than pro
rata and so advise the Company. The Company will advise the Lead
Underwriter not later than the business day prior to the Closing Date of
the principal amount or number of shares of Contract Securities.
If the Offered Securities are debt securities and the Terms Agreement
specifies "Book-Entry Only" settlement or otherwise states that the
provisions of this paragraph shall apply, the Company will deliver against
payment of the purchase price the Offered Securities in the form of one or
more permanent global Securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository
Trust Company ("DTC") and registered in the name of Cede & Co., as nominee
for DTC. Interests in any permanent global Securities will be held only in
book-entry form through DTC, except in the limited circumstances described
in the Prospectus. Payment for the Offered Securities shall be made by the
Underwriters (if the Terms Agreement specifies that the Offered Securities
will not trade in DTC's Same Day Funds Settlement System) by certified or
official bank check or checks in New York Clearing House (next day) funds
or (if the Terms Agreement specifies that the Offered Securities will trade
in DTC's Same Day Funds Settlement System) in Federal (same day) funds by
official check or checks or wire transfer to an account in New York
previously designated to the Lead Underwriter by the Company at a bank
acceptable to the Lead Underwriter, in each case drawn to the order of
at the place of payment specified in the Terms Agreement on the
Closing Date, against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Offered Securities.
4. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish to counsel for the Underwriters,
one signed copy of the registration statement relating to the Registered
Securities, including all exhibits, in the form it became effective and of
all amendments thereto and that, in connection with each offering of
Offered Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Lead Underwriter, subparagraph (5)) not
later than the second business day following the execution and
delivery of the Terms Agreement.
(b) The Company will advise the Lead Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Lead Underwriter a reasonable
opportunity to comment on any such proposed amendment or supplement;
and the Company will also advise the Lead Underwriter promptly of the
filing of any such amendment or supplement and of the institution by
the Commission of any stop order proceedings in respect of the
Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain
as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will notify the Lead Underwriter of such event
and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance.
Neither the Lead Underwriter's consent to, nor the Underwriters'
delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 5.
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(d) As soon as practicable, but not later than 16 months, after the
date of each Terms Agreement, the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the registration statement relating to the
Registered Securities, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become
effective prior to the date of such Terms Agreement and (iii) the date
of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of such Terms Agreement, which will
satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement,
the Prospectus and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the Lead
Underwriter reasonably requests. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale and (if the Offered Securities are debt securities
or preferred stock) the determination of their eligibility for
investment] under the laws of such jurisdictions as the Lead
Underwriter designates and will continue such qualifications in effect
so long as required for the distribution.
(g) During the period of five years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as
practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to
the Representatives (i) as soon as available, a copy of each report
and any definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Company as the Lead Underwriter may reasonably request.
(h) The Company will pay all expenses incident to the performance
of its obligations under the Terms Agreement (including the provisions
of this Agreement) and will reimburse the Underwriters (if and to the
extent incurred by them) for any filing fees or other reasonable
expenses (including reasonable fees and disbursements of counsel)
incurred by them in connection with qualification of the Registered
Securities for sale (if the Offered Securities are debt securities or
preferred stock) any determination of their eligibility for investment
under the laws of such jurisdictions as the Lead Underwriter may
designate and the printing of memoranda relating thereto (if they are
debt securities or preferred stock), for any applicable filing fee of
the National Association of Securities Dealers, Inc. relating to the
Registered Securities, for any travel expenses of the Company's
officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective
purchasers of Registered Securities and for expenses incurred in
distributing the Prospectus, any preliminary prospectuses, any
preliminary prospectus supplements or any other amendments or
supplements to the Prospectus to the Underwriters.
(i) If the Offered Securities are debt securities or preferred
stock, the Company will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to United
States dollar-denominated debt securities issued or guaranteed by the
Company and having a maturity of more than one year from the date of
issue (if the Offered Securities are debt securities) or any series of
preferred stock issued or guaranteed by the Company (if the Offered
Securities are preferred
7
<PAGE>
stock), or publicly disclose the intention to make any such offer,
sale, pledge, disposal or filing, without the prior written consent of
the Lead Underwriter for a period beginning at the time of execution
of the Terms Agreement and ending the number of days after the Closing
Date specified under "Blackout" in the Terms Agreement.
(j ) If the Offered Securities are Common Stock or are convertible
into Common Stock, the Company will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to, any
additional shares of its Common Stock or securities convertible into
or exchangeable or exercisable for any shares of its Common Stock, or
publicly disclose the intention to make any such offer, sale, pledge,
disposal or filing, without the prior written consent of the Lead
Underwriter for a period beginning at the time of execution of the
Terms Agreement and ending the number of days after the Closing Date
specified under "Blackout" in the Terms Agreement, except issuances of
Common Stock pursuant to the conversion or exchange of convertible or
exchangeable securities or the exercise of warrants or options, in
each case outstanding on the date of the Terms Agreement, grants
pursuant to the Company's employee incentive compensation programs
pursuant to the terms of a plan in effect on the date of the Terms
Agreement, issuances of Common Stock pursuant to the exercise of
options under such programs or issuances of Common Stock pursuant to
the Company's compensation and employee benefits programs.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Securities
will be subject to the accuracy of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of
Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Deloitte & Touche LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:
(i) in their opinion the financial statements and any
schedules and any summary of earnings examined by them and
included in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review
of interim financial information as described in Statement of
Auditing Standards No. 71, Interim Financial Information, on any
unaudited financial statements included in the Registration
Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company
who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements, if any, and any
summary of earnings included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or any material modifications should
be made
8
<PAGE>
to such unaudited financial statements and summary of
earnings for them to be in conformity with generally
accepted accounting principles;
(B) if any unaudited "capsule" information is contained
in the Prospectus, the unaudited consolidated net sales, net
operating income, net income and net income per share
amounts or other amounts constituting such "capsule"
information and described in such letter do not agree with
the corresponding amounts set forth in the unaudited
consolidated financial statements or were not determined on
a basis substantially consistent with that of the
corresponding amounts in the audited statements of income;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than five days prior to the date of the Terms
Agreement, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of the
Company and its consolidated subsidiaries or, at the date of
the latest available balance sheet read by such accountants,
there was any decrease in consolidated [net current assets
or] net assets, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year in consolidated
net sales, net operating income in the total or (if the
Offered Securities are Common Stock or are convertible into
Common Stock) per share amounts of consolidated income
before extraordinary items or net income or (if the Offered
Securities are debt securities) in the ratio of earnings to
fixed charges or (if the Offered Securities are preferred
stock) in the ratio of earnings to fixed charges and
preferred stock dividends combined;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of
the Company and its subsidiaries subject to the internal controls
of the Company's accounting system or are derived directly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial infor-
mation to be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effec
9
<PAGE>
tiveness of the Registration Statement or of any part thereof shall
have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or any Underwriter,
shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including any Representatives, is material and adverse
and makes it impractical or inadvisable to proceed with completion of
the public offering or the sale of and payment for the Offered
Securities; (ii) any downgrading in the rating of any debt securities
or preferred stock of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and
no implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; or (iv) any
banking moratorium declared by the U.S. Federal Reserve Bank of
New York
(d) The Representatives shall have received an opinion of
counsel for the Company dated the Closing Date to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Maryland,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification;
(ii) If the Offered Securities are debt securities: The
Indenture has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture
Act; the Offered Securities have been duly authorized; the
Offered Securities other than any Contract Securities have been
duly executed, authenticated, issued and delivered; the Indenture
and the Offered Securities other than any Contract Securities
constitute, and any Contract Securities, when executed,
authenticated, issued and delivered in the manner provided in the
Indenture and sold pursuant to Delayed Delivery Contracts, will
constitute, valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
and the Offered Securities other than any Contract Securities
conform, and any Contract Securities, when so issued and
delivered and sold will conform, to the description thereof
contained in the Prospectus;
(iii) If the Offered Securities are preferred stock: The
Offered Securities have been duly authorized; the Offered Securities
other than any Contract Securities have been validly issued and
are fully paid and nonassessable; any Contract Securities, when
issued, delivered and sold pursuant to Delayed Delivery
Contracts, will be validly issued, fully paid and non-assessable;
and the Offered Securities other than any Contract Securities
conform, and any Contract Securities, when so issued, delivered
and
10
<PAGE>
sold, will conform, to the description thereof contained in the
Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Offered Securities;
(iv) If the Offered Securities are Common Stock: The Offered
Securities and all other outstanding shares of the Common Stock
of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Offered
Securities;
(v) If the Offered Securities are convertible: The Offered
Securities other than any Contract Securities are, and any
Contract Securities, when (if the Offered Securities are debt
securities) executed, authenticated, issued and delivered in the
manner provided in the Indenture and sold pursuant to Delayed
Delivery Contracts or (if the Offered Securities are preferred
stock) when issued, delivered and sold pursuant to Delayed
Delivery Contracts, will be convertible into Common Stock of the
Company in accordance with (if they are debt securities) the
Indenture or (if they are preferred stock) their terms; the
shares of Common Stock initially issuable upon conversion of the
Offered Securities have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable;
the outstanding shares of Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable and conform
to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with
respect to the Common Stock;
(vi) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the
Terms Agreement (including the provisions of this Agreement) in
connection with the issuance or sale of the Offered Securities by
the Company, except such as have been obtained and made under the
Act and, if the Offered Securities are debt securities, the Trust
Indenture Act and such as may be required under state securities
laws;
(vii) The execution, delivery and performance of the Indenture
(if the Offered Securities are debt securities), the Terms
Agreement (including the provisions of this Agreement) and, if
the Offered Securities are debt securities or preferred stock,
any Delayed Delivery Contracts and the issuance and sale of the
Offered Securities and, if the Offered Securities are debt
securities or preferred stock, compliance with the terms and
provisions thereof will not result in a material breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over
the Company or any subsidiary of the Company or any of their
properties, or any agreement or instrument to which the Company
or any such subsidiary is a party or by which the Company or any
such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or
Bylaws of the Company or any such subsidiary, and the Company has
full power and authority to authorize, issue and sell the Offered
Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement);
(viii) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified
11
<PAGE>
in such opinion on the date specified therein, and, to the best
of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and the
registration statement relating to the Registered Securities, as
of its effective date, the Registration Statement and the
Prospectus, as of the date of the Terms Agreement, and any
amendment or supplement thereto, as of its date, complied as to
form in all material respects with the requirements of the Act,
the Trust Indenture Act and the Rules and Regulations; such
counsel have no reason to believe that such registration
statement, as of its effective date, the Registration Statement,
as of the date of the Terms Agreement or as of the Closing Date,
or any amendment thereto, as of its date or as of the Closing
Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading or
that the Prospectus, as of the date of the Terms Agreement or as
of such Closing Date, or any amendment or supplement thereto, as
of its date or as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel do not know of
any legal or governmental proceedings required to be described in
the Prospectus which are not described as required or of any
contracts or documents of a character required to be described in
the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described
and filed as required; it being understood that such counsel need
express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus; and
(ix) The Terms Agreement (including the provisions of this
Agreement) and, if the Offered Securities are debt securities or
preferred stock, any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
(e) The Representatives shall have received from , counsel
for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the incorporation of the Company, the validity of the
Offered Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives may require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Representatives shall have received a certificate, dated
the Closing Date, of the President or any Vice-President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission and that, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other),
business, properties or results of
12
<PAGE>
operations of the Company and its subsidiaries taken as a whole except
as set forth in or contemplated by the Prospectus or as described in
such certificate.
(g) The Representatives shall have received a letter, dated the
Closing Date, of which meets the requirements
of subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than five days
prior to the Closing Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as the Representatives
reasonably request. The Lead Underwriter may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters under this Agreement and the Terms
Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter or through the
Representatives, if any, specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter
consists of the information described as such in the Terms Agreement.
Notwithstanding the foregoing, the Company shall not be liable to each
Underwriter, or through the Representatives or any other person, if any,
who controls such Underwriter within the meaning of the Act, in any such
case to the extent that any such claim arises out of such person's failure
to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the person asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Offered Securities to such person if
such statement or omission was corrected in such final prospectus.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter or through the Representatives, if any, specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement.
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<PAGE>
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person,
14
<PAGE>
if any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities under the Terms
Agreement and the aggregate principal amount (if debt securities) or number
of shares (if preferred stock or Common Stock) of Offered Securities that
such defaulting Underwriter or Underwriters agreed but failed to purchase
does not exceed 10% of the total principal amount (if debt securities) or
number of shares (if preferred stock or Common Stock) of Offered
Securities, the Lead Underwriter may make arrangements satisfactory to the
Company for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by
the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under the Terms
Agreement (including the provisions of this Agreement), to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount (if debt securities) or number of shares (if preferred
stock or Common Stock) of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total principal amount (if
debt securities) or number of shares (if preferred stock or Common Stock)
of Offered Securities and arrangements satisfactory to the Lead Underwriter
and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, the Terms
Agreement will terminate without liability on the part of any non-
defaulting Underwriter or the Company, except as provided in Section 8. As
used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default. If the
Offered Securities are debt securities or preferred stock, the respective
commitments of the several Underwriters for the purposes of this Section
shall be determined without regard to reduction in the respective
Underwriters' obligations to purchase the principal amounts (if debt
securities) or numbers of shares (if preferred stock) of the Offered
Securities set forth opposite their names in the Terms Agreement as a
result of Delayed Delivery Contracts entered into by the Company.
8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters
set forth in or made pursuant to the Terms Agreement (including the
provisions of this Agreement) will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their
respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered
Securities. If the Terms Agreement is terminated pursuant to Section 7 or
if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Section 4 and the
respective obligations of the Company and the Underwriters pursuant to
Section 6 shall remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely
because of the termination of the Terms Agreement pursuant to Section 7 or
the occurrence of any event specified in clause (iii), (iv) or (v) of
Section 5(c), the Company will reimburse the Underwriters for all out-of-
pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to them at their address furnished to the Company in writing for
the purpose of communications hereunder or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at Alexander &
Alexander Services Inc., 1185 Avenue of the Americas, NY, NY 10036,
Attention: General Counsel.
15
<PAGE>
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company and
such Underwriters as are identified in the Terms Agreement and their
respective successors and the officers and directors and controlling
persons referred to in Section 6, and no other person will have any right
or obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for
the several Underwriters in connection with the financing described in the
Terms Agreement, and any action under such Terms Agreement (including the
provisions of this Agreement) taken by the Representatives jointly or by
the Lead Underwriter will be binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
13. APPLICABLE LAW. THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to the Terms
Agreement (including the provisions of this Agreement) or the transactions
contemplated thereby.
16
<PAGE>
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed
and returned to the address shown below so as to arrive
not later than 9:00 A.M., New York time,
on ........ ........, 19...*.)
DELAYED DELIVERY CONTRACT
-------------------------
[Insert date of initial public offering]
[INSERT NAME OF ISSUER]
c/o CS FIRST BOSTON CORPORATION
Park Avenue Plaza
New York, N.Y. 10055
Attention:
Gentlemen:
The undersigned hereby agrees to purchase from Alexander & Alexander
Services Inc., a Maryland corporation ("Company"), and the Company agrees
to sell to the undersigned, as of the date hereof, for delivery on
, 19 ("Delivery Date"),]
[$]..............[shares]
principal amount of the Company's [Insert title of securities]
("Securities"), offered by the Company's Prospectus dated , 19
and a Prospectus Supplement dated , 19 relating
thereto, receipt of copies of which is hereby acknowledged, at % of the
principal amount thereof plus accrued interest, if any, $ per share
plus accrued dividends, if any, and on the further terms and conditions set
forth in this Delayed Delivery Contract ("Contract").
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in
the principal amounts set forth below:
Principal Amount
----------------
Number
Delivery Date of Shares
------------- ---------
................................. .............
................................. .............
- --------------------
* Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
17
<PAGE>
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on the each Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next
day) funds at the office of at .M.
on the such Delivery Date upon delivery to the undersigned of the
Securities to be purchased by the undersigned for delivery on such Delivery
Date in definitive [If debt issue, insert fully registered] form and in
such denominations and registered in such names as the undersigned may
designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to the such Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as
of the date of this Contract; that the obligation of the Company to make
delivery of and accept payment for, and the obligation of the undersigned
to take delivery of and make payment for, Securities on the each Delivery
Date shall be subject only to the conditions that (1) investment in the
Securities shall not at the such Delivery Date be prohibited under the laws
of any jurisdiction in the United States to which the undersigned is
subject and (2) the Company shall have sold to the Underwriters the
total principal amount number of shares of the Securities less
the principal amount -number of shares thereof covered by this and other
similar Contracts. The undersigned represents that its investment in the
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which governs such
investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy copies of the opinion[s] of
counsel for the Company delivered to the Underwriters in connection
therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
18
<PAGE>
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be
on a first-come, first-served basis. If this Contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at
its address set forth below. This will become a binding contract between
the Company and the undersigned when such counterpart is so mailed or
delivered.
Yours very truly,
....................................
(Name of Purchaser)
By
...............................
(Title of Signatory)
...............................
...............................
(Address of Purchaser)
Accepted, as of the above date.
ALEXANDER & ALEXANDER SERVICES INC.
By ....................................
Name:
Title:
19
Exhibit 4.1
ALEXANDER & ALEXANDER SERVICES INC.
TO
PNC BANK, N.A.,
TRUSTEE
PROPOSED FORM OF INDENTURE
Dated as of ______, 1996
Senior Debt Securities
<PAGE>
ALEXANDER & ALEXANDER SERVICES INC.
Reconciliation and tie between certain Sections
of this Indenture, dated as of _______, 1996, and
Sections 310 through 318, inclusive, of
the Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
----------------------------------------------------------
310(a)(1) . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . 608
. . . . . . . . . . . . . 610
311(a) . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . 613
312(a) . . . . . . . . . . . . . 701
. . . . . . . . . . . . . 702(a)
(b) . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . 702(c)
313(a) . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . 703(b)
314(a) . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . 101
. . . . . . . . . . . . . 1004
(b) . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . 102
315(a) . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . 514
316(a) . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . 502
. . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . 104(c)
317(a)(1) . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . 1003
318(a) . . . . . . . . . . . . . 107
__________________
NOTE:This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
2
<PAGE>
TABLE OF CONTENTS
Page
----
PARTIES 1
RECITALS OF THE COMPANY 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions 1
Act 2
Authenticating Agent 2
Board of Directors 2
Board Resolution 2
Business Day 2
Commission 3
Common Stock 3
Company 3
Company Request 3
Company Order 3
Consolidated Tangible Net Worth 3
Corporate Trust Office 4
corporation 4
Covenant Defeasance 4
Defaulted Interest 4
Defeasance 4
Depositary 4
Event of Default 4
Exchange Act 4
Floating or Adjustable Rate Provision 4
Floating or Adjustable Rate Security 5
Global Security 5
Holder 5
Indenture 5
interest 5
Interest Payment Date 5
Maturity 5
Notice of Default 5
Officers' Certificate 5
Opinion of Counsel 6
Original Issue Discount Security 6
Outstanding 6
Paying Agent 7
Person 7
Place of Payment 7
Predecessor Security 7
Principal Subsidiary 8
Redemption Date 8
Redemption Price 8
3
<PAGE>
Regular Record Date 8
Responsible Officer 8
Securities 9
Security Register 9
Security Registrar 9
Special Record Date 9
Stated Maturity 9
Subsidiary 9
Trustee 9
Trust Indenture Act 9
U.S. Government Obligations 9
Vice President 9
Section 102. Compliance Certificates and Opinions 10
Section 103. Form of Documents Delivered to Trustee 10
Section 104. Acts of Holders; Record Dates 11
Section 105. Notices, Etc., to Trustee and Company 13
Section 106. Notice to Holders; Waiver 13
Section 107. Conflict with Trust Indenture Act 14
Section 108. Effect of Headings and Table of Contents 14
Section 109. Successors and Assigns 14
Section 110. Separability Clause 15
Section 111. Benefits of Indenture 15
Section 112. Governing Law 15
Section 113. Legal Holidays 15
Section 114. Personal Immunity from Liability for Incorporators,
Stockholders, Etc. 15
ARTICLE TWO
Security Forms
Section 201. Forms Generally 16
Section 202. Form of Face of Security 16
Section 203. Form of Reverse Security 19
Section 204. Form of Legend for Global Securities 25
Section 205. Form of Trustee's Certificate of
Authentication 25
Section 206. Form of Conversion Notice 26
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series 27
Section 302. Denominations 30
Section 303. Execution, Authentication, Delivery and
Dating 30
Section 304. Temporary Securities 32
Section 305. Registration, Registration of Transfer and
Exchange 33
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities 35
Section 307. Payment of Interest; Interest Rights
Preserved 36
Section 308. Persons Deemed Owners 38
Section 309. Cancellation 38
Section 310. Computation of Interest 39
4
<PAGE>
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture 39
Section 402. Application of Trust Fund 41
ARTICLE FIVE
Remedies
Section 501. Events of Default 41
Section 502. Acceleration of Maturity; Rescission and
Annulment 44
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee 46
Section 504. Trustee May File Proofs of Claim 47
Section 505. Trustee May Enforce Claims Without
Possession of Securities 47
Section 506. Application of Money Collected 48
Section 507. Limitation on Suits 48
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert 49
Section 509. Restoration of Rights and Remedies 49
Section 510. Rights and Remedies Cumulative 50
Section 511. Delay or Omission Not Waiver 50
Section 512. Control by Holders 50
Section 513. Waiver of Past Defaults 51
Section 514. Undertaking for Costs 51
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities 52
Section 602. Notice of Defaults 53
Section 603. Certain Rights of Trustee 54
Section 604. Not Responsible for Recitals or Issuance of
Securities 55
Section 605. May Hold Securities 55
Section 606. Money Held in Trust 56
Section 607. Compensation and Reimbursement 56
Section 608. Disqualification; Conflicting Interests 57
Section 609. Corporate Trustee Required; Eligibility 57
Section 610. Resignation and Removal; Appointment of
Successor 57
Section 611. Acceptance of Appointment by Successor 59
Section 612. Merger, Conversion, Consolidation or Succession to
Business 61
Section 613. Preferential Collection of Claims Against
Company 61
Section 614. Appointment of Authenticating Agent 61
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of
Holders 64
Section 702. Preservation of Information; Communications
to Holders
64
5
<PAGE>
Section 703. Reports by Trustee 65
Section 704. Reports by Company 65
ARTICLE EIGHT
Consolidation, Merger, or Sale of Assets
Section 801. Company May Consolidate, Etc., Only on Certain Terms 65
Section 802. Successor Substituted 66
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Holders 67
Section 902. Supplemental Indentures With Consent of
Holders 68
Section 903. Execution of Supplemental Indentures 70
Section 904. Effect of Supplemental Indentures 70
Section 905. Revocation and Effect of Consents 70
Section 906. Conformity with Trust Indenture Act 71
Section 907. Reference in Securities to Supplemental
Indentures 71
Section 908. Waiver of Compliance by Holders 71
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest 71
Section 1002. Maintenance of Office or Agency 71
Section 1003. Money for Securities Payments to Be Held in
Trust 72
Section 1004. Statement by Officers as to Default 74
Section 1005. Limitations on Liens on Common Stock of Principal
Subsidiaries 74
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article 75
Section 1102. Election to Redeem; Notice to Trustee 75
Section 1103. Selection by Trustee of Securities to Be
Redeemed 76
Section 1104. Notice of Redemption 76
Section 1105. Deposit of Redemption Price 77
Section 1106. Securities Payable on Redemption Date 78
Section 1107. Securities Redeemed in Part 78
ARTICLE TWELVE
Conversion of Securities
Section 1201. Applicability of Article 79
Section 1202. Exercise of Conversion Privilege 79
Section 1203. No Fractional Shares 80
Section 1204. Adjustment of Conversion Price 81
6
<PAGE>
Section 1205. Notice of Certain Corporate Actions 82
Section 1206. Reservation of Shares of Common Stock 83
Section 1207. Payment of Certain Taxes Upon Conversion 83
Section 1208. Nonassessability 83
Section 1209. Effect of Consolidation or Merger on
Conversion Privilege 83
Section 1210. Duties of Trustee Regarding Conversion 85
Section 1211. Repayment of Certain Funds Upon
Conversion 85
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant
Defeasance 86
Section 1302. Defeasance and Discharge 86
Section 1303. Covenant Defeasance 87
Section 1304. Conditions to Defeasance or Covenant
Defeasance 87
Section 1305. Deposited Money and U.S. Government Obligations
to be Held In Trust; Other Miscellaneous
Provisions 89
Section 1306. Reinstatement 90
ARTICLE FOURTEEN
Sinking Funds
Section 1401. Applicability of Article 91
Section 1402. Satisfaction of Sinking Fund Payments with
Securities 91
Section 1403. Redemption of Securities for Sinking Fund 91
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture
7
<PAGE>
INDENTURE, dated as of ________, 1996, between ALEXANDER & ALEXANDER
SERVICES INC., a Maryland corporation (herein called the "Company"), having
its principal office at 1185 Avenue of the Americas, New York, New York
10036, and PNC BANK, N.A., a national banking association duly organized
and existing under the laws of the United States of America, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes or other evidences of indebtedness (herein called the "Securities"),
to be issued in one or more series as provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
1. ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions. For all purposes of this Indenture, except as
-----------
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act or the Securities Act of 1933, as amended, either
directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally accepted
at the date of such computation;
(4) the words "Article" and "Section" refer to an Article and
Section, respectively, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision unless context
otherwise requires.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
1
<PAGE>
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities
of one or more series.
"Board of Directors" means either (i) the board of directors of the
Company, the executive committee of such board of directors or any other
duly authorized committee of directors and/or officers appointed by such
board of directors or executive committee, or (ii) one or more duly
authorized officers of the Company to whom the board of directors of the
Company or a committee thereof has delegated the authority to act with
respect to the matters contemplated by this Indenture.
"Board Resolution" means (i) a copy of a resolution certified by the
Corporate Secretary or an Assistant Corporate Secretary of the Company to
have been duly adopted by the Board of Directors or a committee thereof and
to be in full force and effect on the date of such certification or (ii) a
certificate signed by the authorized officer or officers of the Company to
whom the board of directors of the Company or a committee thereof has
delegated its authority (as described in the definition of Board of
Directors), and in each case, delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated
by law or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Common Stock" means, with respect to the Company, its common capital
stock, par value $1.00 per share, and with respect to any Principal
Subsidiary, stock of any class, however designated, except stock which is
non-participating beyond fixed dividend and liquidation preferences and the
holders of which have either no voting rights or limited voting rights
entitling them, only in the case of certain contingencies, to elect less
than a majority of the directors (or persons performing similar functions)
of such Principal Subsidiary, and shall include securities of any class,
however designated, which are convertible into such Common Stock.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by (i) any two of the following
individuals: the Chairman, the Chief Financial Officer, the President or a
Vice President, or (ii) by one of the foregoing individuals and by any
other Vice President, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Corporate Secretary or an
Assistant Corporate Secretary or any other individual authorized by the
Board of Directors for such purpose, and delivered to the Trustee.
"Consolidated Tangible Net Worth" means, at any date, the total assets
appearing on the most recently prepared consolidated balance sheet of the
Company and its Subsidiaries at the end of a fiscal quarter of the Company,
prepared in accordance with generally accepted accounting principles
consistently applied (subject to normal year-end adjustments and except to
the extent
2
<PAGE>
an inconsistency results from compliance by the Company with new financial
accounting standards with which the Company's independent public
accountants concur), less (a) the total liabilities appearing on such
balance sheet and (b) intangible assets. For purposes hereof, "intangible
assets" means the value (net of any applicable reserves), as shown on or
reflected in such balance sheet, of (i) all trade names, trademarks,
licenses, patents, copyrights and goodwill; (ii) organizational and
development costs; and (iii) unamortized debt discount and expense, less
unamortized premium; but excludes deferred income tax assets.
"Corporate Trust Office" means the principal office of the Trustee located
at _________________, 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.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as
depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute thereto.
"Floating or Adjustable Rate Provision" means a formula or provision,
specified in or pursuant to a Board Resolution or an indenture supplemental
hereto, providing for the determination, whether pursuant to objective
factors or pursuant to the sole discretion of any Person (including the
Company), and periodic adjustment of the interest rate borne by a Floating
or Adjustable Rate Security.
"Floating or Adjustable Rate Security" means any Security which provides
for interest thereon at a periodic rate that may vary from time to time
over the term thereof in accordance with a Floating or Adjustable Rate
Provision.
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and
registered in the name of, the Depositary for such Securities or a nominee
thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument, and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term
3
<PAGE>
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
501(4) and Section 501(5).
"Officers' Certificate" means a certificate signed by (i) any two of the
following individuals: the Chairman, the Chief Financial Officer, the
President or a Vice President, or (ii) by one of the foregoing individuals
and by any other Vice President, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Corporate Secretary or an
Assistant Corporate Secretary, of the Company, or any other individual
authorized by the Board of Directors for such purpose, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel to the Company, or who may be other counsel
reasonably satisfactory to the Trustee.
"Original Issue Discount Security" means any Security 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
502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities as to which Defeasance has been effected pursuant
to Section 1302; and
4
<PAGE>
(iv) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there
shall have been presented to the Trustee proof satisfactory
to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, (A)
the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof pursuant to Section 502, and (B)
Securities owned by (i) the Company or any other obligor upon the
Securities or (ii) any Subsidiary of the Company or of such other obligor
upon the Securities shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Subsidiary of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Principal Subsidiary" means any Subsidiary of the Company which at the
time of determination has, (A) assets which, as of the date of the
Company's most recently prepared quarterly consolidated balance sheet,
constituted at least 15% of the Company's total assets on a consolidated
basis as of such date, or (B) revenues for the 12-month period ending on
the date of the Company's most recently prepared quarterly consolidated
statement of income which constituted at least 15% of the Company's total
revenues on a consolidated basis for such period or (C) net earnings for
the 12-month period ending on the date of the Company's most recently
prepared quarterly consolidated statement of income which constituted at
least 15% of the Company's total net earnings on a consolidated basis for
such period.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
5
<PAGE>
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or
any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer,
the cashier, any assistant cashier, any trust officer or assistant trust
officer, the controller or any assistant controller or any other officer of
the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the voting power of which
is controlled, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting power" means the power to vote
for the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee"
shall mean or include each Person who is then a Trustee hereunder, if at
any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended and
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, and except as
provided in Section 906.
"U.S. Government Obligations" has the meaning specified in Section 1304.
6
<PAGE>
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word
or words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions. Upon any application
------------------------------------
or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act.
Each such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements
of the Trust Indenture Act and any other requirements set forth in this
Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (excluding certificates provided
for in Section 1004) shall include
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such Person
has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee. In any case where
--------------------------------------
several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company 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 its 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.
Any certificate, statement or opinion of an officer of the Company or of
counsel may be based,
7
<PAGE>
insofar as it relates to accounting matters, upon a certificate, opinion or
representation by an accountant or firm of accountants in the employ of the
Company, unless such officer or counsel, as the case may be, knows, or in
the exercise of reasonable care should know, that the certificate, opinion
or representation with respect to such accounting matters upon which its
certificate, statement or opinion may be based is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
8
<PAGE>
Section 104. Acts of Holders; Record Dates.
-----------------------------
(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; and, except as herein
otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and
(subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary
public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him or
her the execution thereof. Where such execution is by a
signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall
also constitute sufficient proof of such signer's authority.
The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee
deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the
purpose of determining the Holders of Outstanding Securities
of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to
be given or taken by Holders of Outstanding Securities of
such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made
by any Person in respect of any such action, or, in the case
of any such vote, prior to such vote, the record date for
any such action or vote shall be the 30th day (or, if later,
the date of the most recent list of Holders required to be
provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to
any record date for action to be taken by the Holders of one
or more series of Securities, only the Holders of Securities
of such series on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the
relevant action.
(d) The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security Registrar.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same
9
<PAGE>
Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such
Security.
(f) Without limiting the foregoing, a Holder entitled hereunder
to give or take any action hereunder with regard to any
particular Security may do so with regard to all or any part
of the principal amount of such Security or by one or more
duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any different part of
such principal amount.
Section 105. Notices, Etc., to Trustee and Company. Any request, demand,
-------------------------------------
authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office;
provided, however, that the same shall be made, given, furnished
or filed only when received by a Responsible Officer of the
Trustee at its Corporate Trust Office, Attention: Corporate
Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid,
to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument;
provided, however, that the same shall be made, given, furnished
or filed only when received by the Company, Attention:
Treasurer, or at any other address previously furnished in
writing to the Trustee by the Company.
Section 106. Notice to Holders; Waiver. Where this Indenture provides for
-------------------------
notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at its
address as it appears in the Security Register, not later than the latest
date (if any), and not earlier than the earliest date (if any), prescribed
for the giving of such notice; provided, however, that the Company or the
Trustee, upon a good faith determination that mailing is in the
circumstances impractical, may give such notice by any other method which,
in the reasonable belief of the Company or, in the case of the Trustee, of
the Company and the Trustee, is likely to be received by the Holders. In
any case where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act. If any provision hereof
---------------------------------
limits, qualifies or conflicts with a provision of the Trust Indenture Act
that is required under such Act to be a part of and
10
<PAGE>
govern this Indenture, the required provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 109. Successors and Assigns. All covenants and agreements in this
----------------------
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability Clause. In case any provision in this Indenture
-------------------
or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 111. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
-------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 113. Legal Holidays. In any case where any Interest Payment Date,
--------------
Redemption Date or Stated Maturity of any Security or the last day on which
a Holder has the right to convert a Security at a particular conversion
price shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities 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) or conversion need not be made
at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date or Redemption Date, or at
the Stated Maturity, provided that no interest shall accrue with respect to
--------
such payment for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
Section 114. Personal Immunity from Liability for Incorporators,
---------------------------------------------------
Stockholders, Etc. No recourse shall be had for the payment of the
- -----------------
principal of or premium, if any, or interest, if any, on any Security, or
for any claim based thereon, or otherwise in respect of any Security, or
based on or in respect of this Indenture or any indenture supplemental
hereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company or of any
successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being expressly waived and released as a
condition of, and as consideration for, the execution of this Indenture and
the issue of the Securities.
11
<PAGE>
ARTICLE TWO
Security Forms
Section 201. Forms Generally. The Securities of each series shall be in
---------------
substantially the form set forth in this Article, or in such other form as
shall be established by or pursuant to a Board Resolution 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, consistent herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form
of Securities of any series is established by action taken pursuant to a
Board Resolution, a copy of an appropriate record of such action shall be
certified by the Corporate Secretary or an Assistant Corporate Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and
delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
------------------------
[Insert any legend required by the Internal Revenue Code and the
---------------------------------------------------------------
regulations thereunder.]
- ----------------------
ALEXANDER & ALEXANDER SERVICES INC.
No.____ $____
ALEXANDER & ALEXANDER SERVICES INC., a Maryland corporation (herein called
the "Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
________________________, or registered assigns, the principal sum of
______________ [Currency] [if the Security is to bear interest prior to
--------------------------------------------
Maturity, insert -- and to pay interest thereon from _________ or from the
- ----------------
most recent interest Payment Date to which interest has been paid or duly
provided for, [semi-annually on __________ and __________ in each year] [If
--
other than semi-annual payments, insert frequency of payments and payment
- -------------------------------
dates], commencing ________________, at [If the Security is to bear
--------------------------
interest at a fixed rate, insert -- the rate of ______% per annum, [If the
- ------------------------- ------ ------
Security is a Floating or Adjustable Rate Security, insert -- a rate per
- -------------------------------------------------- ------
annum [computed-determined] in accordance with the [insert defined name of
Floating or Adjustable Rate Provision] set forth below] [If the Security
---------------
is to bear interest at a rate determined with reference to an index, refer
- -------------------------------------------------------------------
to description of index below] until the principal hereof is paid or made
available for payment [if applicable, insert -- and (to the extent that the
-------------- ------
payment of such interest shall be legally enforceable) at the rate of ____%
per annum on any overdue principal and premium and on any overdue
installment of interest]. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the ___________ or
____________ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will
12
<PAGE>
forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of
this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture).
[If the Securities are Floating or Adjustable Rate Securities with respect
---------------------------------------------------
to which the principal of or any premium or interest may be determined with
- ---------------------------------------------------------------------------
reference to an index, insert the text of the Floating or Adjustable Rate
- ---------------------
Provision.]
[If the Security is not to bear interest prior to Maturity, insert -- The
-----------------------------------------------------------------
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at
Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue
principal shall be payable on demand. Any such interest on any overdue
principal that is not so paid on demand shall bear interest at the rate of
______% per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided
for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
--------------
insert -- any such] interest on this Security will be made at the office or
- ------
agency of the Company maintained for that purpose in ___________, in such
coin or currency of [Jurisdiction] as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at
-------- -------
the option of the Company payment of interest may be made by check mailed
to the address of the Person entitled thereto as such address shall appear
in the Security Register).
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
ALEXANDER & ALEXANDER SERVICES INC.
By
---------------------------------
Attest:
13
<PAGE>
Section 203. Form of Reverse Security.
------------------------
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of _____________ (herein called
the "Indenture"), between the Company and PNC Bank, N.A., as Trustee
(herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security
is one of the series designated on the face hereof [, limited in aggregate
principal amount to ____________].
[If applicable, insert -- The Securities of this series are subject to
---------------------
redemption upon not less than 30 days' nor more than 60 days' notice by
mail, [if applicable, insert -- (1) on __________ in any year ______
---------------------
commencing with the year and ending with the year through ________
operation of the sinking fund for this series at a Redemption Price equal
to 100% of the principal amount, and (2)] at any time [on or after
___________ 19__], as a whole or in part, at the election of the Company,
at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before _________, ___% and if
redeemed] during the 12-month period beginning of the years indicated,
Year Redemption Year Redemption
Price Price
and thereafter at a Redemption Price equal to __________ of the principal
- -- amount, together in the case of any such redemption [if applicable,
--------------
insert -- (whether through operation of the sinking fund or otherwise)]
- ------
with accrued interest to the Redemption Date, but interest installments
whose stated Maturity is on or prior to such Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series are subject to
---------------------
redemption upon not less than 30 days' nor more than 60 days' notice by
mail, (1) on ________ in any year commencing with the year __________ and
ending with the year __________ through operation of the sinking fund for
this series at the Redemption Prices for redemption through operation of
the sinking fund (expressed as percentages of the principal amount) set
forth in the table below, and (2) at any time [on or after _________], as a
whole or in part, at the election of the Company, at the Redemption Prices
for redemption otherwise than through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning __________ of the
years indicated,
Year Redemption Price For Redemption Price For Redemption
Redemption Through Otherwise
Operation of the Than through Operation of the
Sinking Fund Sinking Fund
and thereafter at a Redemption Price equal to ____% of the principal
amount, together in the
14
<PAGE>
case of any such redemption (whether through operation of the sinking fund
or otherwise) with accrued interest to the Redemption Date, but interest
installments whose Stated Maturity in on or prior to such Redemption Date
will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[The sinking fund for this series provides for the redemption on __________
in each year beginning with the year _____ and ending with the year of [not
less than __________ (Currency) ("mandatory sinking fund") and not more
than] __________ (Currency) aggregate principal amount of Securities of
this
series. Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory] sinking fund payments otherwise required to
be made [in the inverse order in which they become due).]
[If the Security is subject to redemption, insert -- In the event of
------------------------------------------------
redemption of this Security in part only, a new Security or Securities of
this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
The Indenture contains provisions for defeasance at any time of (1) the
entire indebtedness of this Security or (2) certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth in the Indenture.
[If the Security is convertible into Common Stock of the Company,
----------------------------------------------------------------
insert -- Subject to the provisions of the Indenture, the Holder of this
- ------
Security is entitled, at its option, at any time on or before [insert
------
date](except that, in case this Security or any portion hereof shall be
- ----
called for redemption, such right shall terminate with respect to this
Security or portion hereof, as the case may be, so called for redemption at
the close of business on the date fixed for redemption as provided in the
Indenture unless the Company defaults in making the payment due upon
redemption), to convert the principal amount of this Security (or any
portion hereof which is $1,000 or an integral multiple thereof), into fully
paid and non-assessable shares (calculated as to each conversion to the
nearest 1/100th of a share) of the Common Stock of the Company, as said
shares shall be constituted at the date of conversion, at the conversion
price of _______ (Currency) principal amount of Securities for each share
of Common Stock, or at the adjusted conversion price in effect at the date
of conversion determined as provided in the Indenture, upon surrender of
this Security, together with the conversion notice hereon duly executed, to
the Company at the designated office or agency of the Company in ________,
accompanied (if so required by the Company) by instruments of transfer, in
form satisfactory to the Company and to the Trustee, duly executed by the
Holder or by its duly authorized attorney in writing. Such surrendering
shall, if made during any period beginning at the close of business on a
Regular Record Date and ending at the opening of business on the Interest
Payment Date next following such Regular Record Date (unless this Security
or the portion being converted shall have been called for redemption on a
Redemption Date during such period), also be accompanied by payment in
funds acceptable to the Company of an amount equal to the Interest payable
on such Interest Payment Date on the principal amount of this Security then
being converted. Subject to the aforesaid requirement for payment and, in
the case of a conversion after the Regular Record Date next preceding any
Interest Payment Date and on or before such
15
<PAGE>
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest (with certain exceptions provided in the
Indenture), no adjustment is to be made on conversion for interest accrued
hereon or for dividends on shares of Common Stock issued on conversion.
The Company is not required to issue fractional shares upon any such
conversion, but shall make adjustment therefor in cash on the basis of the
current market value of such fractional interest as provided in the
Indenture. The conversion price is subject to adjustment as provided in
the Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the sale of
substantially all of the assets of the Company, the Indenture shall be
amended, without the consent of any Holders of Securities, so that this
Security, if then outstanding, will be convertible thereafter, during the
period this Security shall be convertible as specified above, only into the
kind and amount of securities, cash and other property receivable upon the
consolidation, merger or sale by a holder of the number of shares of Common
Stock into which this Security might have been converted immediately prior
to such consolidation, merger or sale (assuming such holder of Common Stock
failed to exercise any rights of election and received per share the kind
and amount received per share by a plurality of non-electing shares) [,
assuming if such consolidation, merger or sale is prior to _________,
19___, that this Security were convertible at the time of such
consolidation, merger or sale at the initial conversion price specified
above as adjusted from to such time pursuant to the Indenture]. In the
event of conversion of this Security in part only, a new Security or
Securities for the unconverted portion hereof shall be issued in the name
of the Holder hereof upon the cancellation hereof.]
[If the Security is convertible into other securities or property, specify
-------------------------------------------------------------------------
the conversion features and the form of conversion notice pursuant to
- ---------------------------------------------------------------------
Section 206 hereof.]
- ------------------
[If the Security is not an Original Issue Discount Security, insert -- If
------------------------------------------------------------------
an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue-Discount Security, insert -- If an
--------------------------------------------------------------
Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may
be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to [Insert formula for
determining the amount]. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such
interest shall be legally enforceable), all of the Company's obligations in
respect of the payment of the principal of and interest, if any, on the
Securities of this series shall terminate.]
The Indenture permits the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority
in principal amount of the Securities at the time outstanding of each
series to be affected, with certain exceptions as therein provided with
respect to certain modifications or amendments which may not be made
without the consent of each Holder of such Security affected thereby. The
Indenture also permits certain amendments and modifications thereto from
time to time by the Company and the Trustee without the consent of the
Holders of any series of the Securities to be affected thereby for certain
specified purposes, including curing ambiguities, defects or
inconsistencies and making any such change that does not adversely affect
the rights of any Holder of such series of the Securities, as provided
therein.
The Indenture contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
16
<PAGE>
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
Interest on this Security at the times, place and [rate(s)], and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at
the office or agency of the Company in any place where the principal of and
any premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of (and premium,
if any) or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto, against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or of
any successor corporation, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part
of the consideration for the issue hereof, expressly waived and released.
17
<PAGE>
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
Section 204. Form of Legend for Global Securities. Every Global Security
------------------------------------
authenticated and delivered hereunder shall bear a legend in substantially
the following form or such other legends as may be required:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than
the Depositary or a nominee thereof and no such transfer may be registered,
except in the limited circumstances described in the Indenture. Every
Security authenticated and delivered upon registration of transfer of, or
in exchange for or in lieu of, this Security shall be a Global Security
subject to the foregoing, except in such limited circumstances.
Section 205. Form of Trustee's Certificate of Authentication. The
------------------------------------------------
Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
- ------------------------------
As Trustee
By:__________________________
Authorized Officer
Section 206. Form of Conversion Notice.
-------------------------
To Alexander & Alexander Services Inc.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof (which is _______
(Currency) or an integral multiple thereof) below designated, into shares
of Common Stock of the Company in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares
issuable and deliverable upon the conversion, together with any check in
payment for fractional shares and any Securities representing any
unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below.
If this Notice is being delivered on a date after the close of business on
a Regular Record Date and prior to the opening of business on the related
Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date within such
period), this Notice is accompanied by payment, in funds acceptable to the
Company, of an amount equal to the interest payable on such Interest
Payment Date of the principal of this Security to be converted. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect hereto. Any
amount required to be paid by the undersigned on account of interest
accompanies this security.
18
<PAGE>
Principal Amount to be Converted
(in an integral multiple of
_______ (Currency), if less than all):
_________ (Currency)
Dated_____________
Signature
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a national stock exchange if shares
of Common Stock are to be delivered, or
Securities to be issued, other than to and in
the name of the registered owner.
Signature Guarantee
Fill in for registration of shares of Common Stock and Security if to be
issued otherwise than to the registered holder.
_____________________ Social Security or other Taxpayer
(Name)
Identifying Number_________________
(Address)
Please print Name and
Address (including zip
code number)
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered
under this Indenture is unlimited. The Securities may be issued in one or
more series. There shall be established in or pursuant to a Board
Resolution or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any
other series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Sections 304, 305,
306, 907 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and
delivered hereunder);
19
<PAGE>
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, or the Floating or Adjustable Rate
Provision pursuant to which such rates shall be determined, the
date or dates from which 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 Interest
Payment Date;
(6) whether the Securities of the series would be secured pursuant to
Section 901(6);
(7) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at which
(including premium, if any) and the terms and conditions upon
which Securities of the series shall be redeemed, in whole or in
part, at the option of the Company pursuant to a sinking fund or
otherwise;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and
the terms and conditions upon which Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(10) the terms of any right to convert Securities of the series into
shares of Common Stock of the Company or other securities or
property;
(11) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series
shall be issuable;
(12) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with
reference to one or more indices, the manner in which such
amounts shall be determined;
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502 or provable under any applicable federal
or state bankruptcy or similar law pursuant to Section 503;
(14) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary or Depositaries for
such Global Security or Global Securities and any circumstance
other than those set forth in Section 305 in which any such
Global Security may be transferred to, and registered and
exchanged for Securities registered in the name of, a Person
other than the Depositary for such Global Security or a nominee
thereof and in which any such transfer may be registered;
20
<PAGE>
(15) any other event or events of default applicable with respect to
the Securities of the series in addition to those provided in
Section 501(1) through (7);
(16) any other covenant or warranty included for the benefit of
Securities of the series in addition to (and not inconsistent
with) those included in this Indenture for the benefit of
Securities of all series, or any other covenant or warranty
included for the benefit of Securities of the series in lieu of
any covenant or warranty included in this Indenture for the
benefit of Securities of all series, or any provision that any
covenant or warranty included in this Indenture for the benefit
of Securities of all series shall not be for the benefit of
Securities of the series, or any combination of such covenants,
warranties or provisions;
(17) any restriction or condition on the transferability of the
Securities of the series;
(18) any authenticating or paying agents, registrars, conversion
agents or any other agents with respect to the Securities of the
series; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to
the Board Resolution referred to above or in any such indenture
supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of such action shall be delivered to the
Trustee.
Section 302. Denominations. The Securities of each series shall be
-------------
issuable in registered form without coupons in such denominations as shall
be specified as contemplated by Section 301. In the absence of any such
provisions with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating. The
----------------------------------------------
securities shall be executed on behalf of the Company by its Chairman, its
Chief Financial Officer, its President, any Vice President, its Treasurer
or Assistant Treasurer, its Controller or Assistant Controller under its
corporate seal reproduced thereon attested by its Corporate Secretary or
one of its Assistant Corporate Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
The seal of the Company may be in the form of a facsimile thereof and may
be impressed, affixed, imprinted or otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities. Minor
typographical and other minor errors in the text of any Security or minor
defects in the seal or facsimile signature on any Security shall not affect
the validity or enforceability of such Security if it has been duly
authenticated and delivered by the Trustee.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication,
21
<PAGE>
together with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities. If the form or terms of the
Securities of the series have been established in or pursuant to one or
more Board Resolutions or indentures supplemental hereto as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolutions or indentures supplemental
hereto as permitted by Section 201, that such form has been
established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolutions or indentures supplemental
hereto as permitted by Section 301, that such terms have
been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, 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 in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights generally and to general equity principles.
The Trustee shall have the right to decline to authenticate and deliver any
Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in
good faith by its board of directors, executive committee, or a trust
committee of directors or committee of Responsible Officers of the Trustee
shall determine that such action would expose the Trustee to personal
liability to existing Holders of Securities.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Board Resolution
otherwise required pursuant to Section 301 or the Company Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
22
<PAGE>
Section 304. Temporary Securities. Pending the preparation of definitive
--------------------
Securities of any series, the Company may execute, and upon Company Order
the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
of the Company executing such Securities may determine, as evidenced by
their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of
such series at the office or agency of the Company in a Place of Payment
for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Securities of the same series, of
any authorized denominations and of a like aggregate principal amount and
tenor. Until so exchanged the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange. The
---------------------------------------------------
Company shall cause to be kept at the Corporate Trust Office of the Trustee
a register (the register maintained in such office and in any other office
or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to
such reasonable regulations as it or the Trustee may prescribe, the Company
shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer,
exchange, redemption or payment shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the
23
<PAGE>
Security Registrar duly executed, by the Holder thereof or his attorney
duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 907 or 1107 not
involving any transfer.
Neither the Company nor the Trustee shall be required (i) to issue,
register the transfer of or exchange Securities of any series during a
period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Securities of that series selected for
redemption under Section 1103 and ending at the close of business on the
day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
Notwithstanding any other provision in this Indenture, no Global Security
may be transferred to, or registered or exchanged for Securities registered
in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered,
unless (1) such Depositary (A) notifies the Company and the Trustee that it
is unwilling or unable to continue as Depositary for such Global Security
or (B) ceases to be a clearing agency registered under the Exchange Act,
(2) the Company executes and delivers to the Trustee a Company Order that
such Global Security shall be so transferable, registrable and
exchangeable, and such transfers shall be registrable, (3) there shall have
occurred and be continuing an Event of Default with respect to the
Securities evidenced by such Global Security or (4) there shall exist such
other circumstances, if any, as have been specified for this purpose as
contemplated by Section 301. Notwithstanding any other provision in this
Indenture, a Global Security to which the restriction set forth in the
preceding sentence shall have ceased to apply may be transferred only to,
and may be registered and exchanged for Securities registered only in the
name or names of, such Person or Persons as the Depositary for such Global
Security shall have directed and no transfer thereof other than such a
transfer may be registered.
Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph
shall apply, whether pursuant to this Section, Section 304, 306, 907 or
1107 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If there
------------------------------------------------
shall be delivered to the Company and the Trustee (i) a mutilated Security,
or (ii) evidence to their satisfaction of the destruction, loss or theft of
any Security and in either case such security or indemnity as may be
required by either of them to save each of them and any agent of either of
them harmless, then, in the absence of notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company
shall execute and the Trustee shall authenticate and deliver, in lieu of
any such mutilated, destroyed, lost or stolen Security, a new Security of
the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
24
<PAGE>
Upon the issuance of any new Security under this Section, the Company or
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved. Except as
----------------------------------------------
otherwise provided as contemplated by Section 301 with respect to any
series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security
of such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate 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 15 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at its address as it appears
in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are
25
<PAGE>
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which such Securities may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such
other Security.
Subject to the provisions of Section 1202, in the case of any Security
which is converted after any Regular Record Date and on or prior to the
next succeeding Interest Payment Date (other than any Security the
principal of (or premium, if any, on)) which shall become due and payable,
whether at a Stated Maturity or by declaration of acceleration, call for
redemption, or otherwise, 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 Security (or any one or more
Predecessor Securities) is registered at the close of business on such
Regular Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion
of such Security shall not be payable.
Section 308. Persons Deemed Owners. Prior to due presentment of a
---------------------
Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and any premium and (subject to Section
307) any interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Section 309. Cancellation. All Securities surrendered for payment,
------------
redemption, registration of transfer or exchange or for credit against any
sinking fund payment or for conversion shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and
may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture.
All canceled Securities held by the Trustee shall be disposed of as
directed by a Company Order. Acquisition by the Company of any Security
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Security unless and until the same is delivered to the
Trustee for cancellation.
26
<PAGE>
Section 310. Computation of Interest. Except as otherwise
-----------------------
specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of
a 360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon Company Request cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities of a series herein expressly provided for) with respect to
Securities of any series, and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture with respect to a series, when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306 and (ii) Securities of such
series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities of such series not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee in trust irrevocably (A) money (in
United States dollars) in an amount, or (B) U.S. Government Obligations
that through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, sufficient, 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 the entire
indebtedness on such Securities of such series not theretofore delivered to
the Trustee for cancellation, for principal of (and premium, if any) and
interest to the date of such deposit (in the case of Securities of such
series which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
27
<PAGE>
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to such series have been
complied with.
In the event there are Securities of two or more series outstanding
hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if
requested to do so with respect to Securities of a particular series as to
which it is Trustee and if the other conditions thereto are met. In the
event that there are two or more Trustees hereunder, then the effectiveness
of any such instrument shall be conditioned upon receipt of such
instruments from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a particular series, the obligations of the Company to the
Trustee under Section 607, the obligations of the Trustee to any
Authenticating Agent under Section 614 and, if money shall have been
deposited with the Trustee pursuant to subclause (B) of Clause (1) of this
Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive until there are no Securities
Outstanding with respect to a particular series and the obligations of the
Company and the Trustee with respect to all other series of Securities
shall survive.
Section 402. Application of Trust Fund. Subject to provisions of the last
-------------------------
paragraph of Section 1003, all amounts deposited with the Trustee pursuant
to Section 401 shall be held in trust and applied by it, in accordance with
the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal and any premium and interest for whose payment
such funds have been deposited with the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default. "Event of Default" whenever used with
-----------------
respect to Securities of a series means any one of the following events and
such other events as may be established with respect to the Securities of
such series as contemplated by Section 301 hereof:
(1) Default in the payment of any installment of interest upon any of
the Securities of such series as and when the same shall become
due and payable, and continuance of such default for a period of
30 days; or
(2) Default in the payment of the principal of or premium, if any, on
any of the Securities of such series as and when the same shall
become due and payable either at maturity, upon redemption, by
declaration of acceleration or otherwise; or
(3) Default in the making of any sinking fund payment, whether
mandatory or optional, and when the same shall become due and
payable by the terms of the Securities of such series; or
(4) Failure on the part of the Company duly to observe or perform in
any material respect any other of the covenants or agreements on
the part of the Company contained in
28
<PAGE>
this Indenture (other than those set forth exclusively in the terms
of any other particular series of Securities established as
contemplated by this Indenture for the benefit of such other series)
and written notice of such failure, stating that such notice is a
"Notice of Default" hereunder, and requiring the Company to remedy
the same, shall have been given by registered or certified mail,
return receipt requested, to the Company by the Trustee, or to the
Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series, and
such failure shall have continued unremedied for a period of 90 days
after the date of the Company's receipt of such Notice of Default;
or
(5) An event of default, as defined in any indenture or instrument
evidencing or under which the Company or any Principal Subsidiary
shall have outstanding indebtedness for borrowed money in a
principal amount in excess of $__,000,000, shall happen and be
continuing and such indebtedness shall have been accelerated so
that the same shall be or become due and payable prior to the
date on which the same would otherwise have become due and
payable or (ii) the Company or any Principal Subsidiary shall
default in the payment at final maturity of outstanding
indebtedness for borrowed money in a principal amount in excess
of $__,000,000, and such acceleration or default at maturity
shall not be waived, rescinded or annulled within 30 days after
written notice thereof, stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by the
Trustee (if such event be known to it), or to the Company and the
Trustee by the holders of at least 25% in aggregate principal
amount of the Outstanding Securities of that series; provided,
--------
however, that if such acceleration under such indenture or
-------
instrument or default at maturity shall be remedied or cured by
the Company or Principal Subsidiary, or waived, rescinded or
annulled by the requisite holders of such indebtedness, then the
Event of Default hereunder by reason thereof shall be deemed
likewise to have been thereupon remedied, cured or waived without
further action upon the part of either the Trustee or any of the
Holders; or
(6) A decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of the
Company under any applicable Federal or State bankruptcy or
similar law, and such decree or order shall have continued
undischarged and unstayed for a period of 90 days; or a decree or
order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, trustee, assignee,
sequestrator or similar official in bankruptcy or insolvency of
the Company or of all or substantially all of its property, or
for the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have continued
undischarged and unstayed for a period of 90 days; or
(7) The Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization, arrangement, adjustment
or composition under any applicable Federal or State bankruptcy
or similar law, or shall consent to the filing of any such
petition, or shall consent to the appointment of a receiver,
liquidator, trustee, assignee, sequestrator or similar official
in bankruptcy or insolvency of the Company or of all or
substantially all of its property, or shall make an assignment
for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally
29
<PAGE>
as they become due and its willingness to be adjudged a bankrupt, or
corporate action shall be taken by the Company in furtherance of any
of the aforesaid purposes.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501 with respect to Securities of any series, a record date shall
automatically and without any other action by any Person be set for the
purpose of determining the holders of Outstanding Securities of such series
entitled to join in such Notice of Default, which record date shall be the
close of business on the day the Trustee receives such Notice of Default.
The Holders of Outstanding Securities of such series on such record date
(or their duly appointed agents), and only such Persons, shall be entitled
to join in such Notice of Default, whether or not such Holders remain
Holders after such record date; provided that, unless such Notice of
--------
Default shall have become effective by virtue of Holders of at least 25% in
principal amount of Outstanding Securities of such series on such record
date (or their duly appointed agents) having joined therein on or prior to
the 90th day after such record date, such Notice of Default shall
automatically and without any action by any Person be canceled and of no
further effect.
The Company shall deliver to the Trustee written notice of any Event of
Default or event which with the giving of notice or lapse of time or both
would become an Event of Default under clauses (4), (5), (6) and (7) hereof
within 30 days of the knowledge thereof by the Company, provided that in
the case of clause (4) no such notice will be required to be given by the
Company if such default shall be cured by the Company within such 30 day
period.
Subject to the provisions of Sections 601 and 602, the Trustee shall not be
charged with knowledge of any Event of Default unless written notice
thereof shall have been given to the Trustee by the Company, the Paying
Agent of that series (provided that no such notice shall be required to be
given if the Trustee acts as Paying Agent of such series), or with respect
to an Event of Default under clause (5) of this Section by the holder of
any such indebtedness or an agent of the holder of any such indebtedness or
by the trustee then acting under any such indenture or other instrument
under which such default shall have occurred, or by Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of that series.
Section 502. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of
the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
30
<PAGE>
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the
rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel except such
costs and expenses as are a result of negligence or bad
faith on the part of the Trustee;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of and interest, if
any, on the Securities of that series which have become due
solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section
502 with respect to Securities of any series, a record date shall
automatically and without any other action by any Person be set for the
purpose of determining the Holders of Outstanding Securities of such series
entitled to join in such declaration, or rescission and annulment, as the
case may be, which record date shall be the close of business on the day
the Trustee receives such declaration, or rescission and annulment, as the
case may be. The Holders of Outstanding Securities of such series on such
record date (or their duly appointed agents), and only such Persons, shall
be entitled to join in such declaration, or rescission and annulment, as
the case may be, whether or not such Holders remain Holders after such
record date; provided that, unless such declaration, or rescission and
--------
annulment, as the case may be, shall have become effective by virtue of
Holders of at least 25%, in the case of any declaration of acceleration, or
a majority, in the case of any rescission or annulment, in principal amount
of Outstanding Securities of such series on such record date (or their duly
appointed agents) having joined therein on or prior to the 90th day after
such record date, such declaration, or rescission and annulment, as the
case may be, shall automatically and without any action by any Person be
canceled and of no further effect.
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if
- -------
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon written demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and any premium and interest and,
to the extent that payment of such interest shall be legally
31
<PAGE>
enforceable, interest on any overdue principal and premium and on any
overdue interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel except such costs and expenses as are a
result of negligence or bad faith on the part of the Trustee. Until such
demand is made by the Trustee, the Company may pay the principal of and
premium, if any, and interest, if any, on the Securities of any series to
the registered holders, whether or not the Securities of such series are
overdue.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other
proper remedy.
Section 504. Trustee May File Proofs of Claim. In case of any judicial
--------------------------------
proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled
and empowered, by intervention in such proceeding or otherwise, to take any
and all actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any
moneys or other property payable or deliverable on any such claims and to
distribute the same, and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607 except such costs and expenses, as are a result of
negligence or bad faith on the part of the Trustee.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for
- -------- -------
the election of a trustee in bankruptcy or similar official and be a member
of a creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel except such costs and expenses, as are a result of
negligence or bad faith on the part of the Trustee, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment
has been recovered.
Section 506. Application of Money Collected. Any money collected by the
------------------------------
Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution
of such money on account of principal or any premium or interest, upon
32
<PAGE>
presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable an such Securities for principal and any
premium and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company
or any other Person lawfully entitled thereto.
Section 507. Limitation on Suits. No Holder of any Security of any series
-------------------
shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of
that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory in form and substance to the Trustee
against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of
any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
and Interest and to Convert. Notwithstanding any other provision in this
- ---------------------------
Indenture, the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal of and any
premium and (subject to Section 307) any interest on such Security on the
Stated Maturity or Maturities expressed in such Security (or, in the case
of redemption, on the Redemption Date) and to convert such Securities in
accordance with Article Twelve and to institute suit for the enforcement of
any such payment or such right of conversion, and such rights shall not be
impaired without the consent of such Holder.
33
<PAGE>
Section 509. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such
Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative. Except as otherwise provided
------------------------------
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.
Section 511. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence
therein. Subject to Section 507, every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
Section 512. Control by Holders. The Holders of not less than a majority
------------------
in principal amount of the Outstanding Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities of such series,
provided that
- --------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Upon receipt by the Trustee of any such direction with respect to
Securities of any series, a record date shall be set for determining the
Holders of Outstanding Securities of such series entitled to join in such
direction, which record date shall be the close of business on the day the
Trustee receives such direction. The Holders of Outstanding Securities of
such series on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to join in such direction, whether or not
such Holders remain Holders after such record date; provided that, unless
--------
such direction shall have become effective by virtue of Holders of at least
a majority in principal amount of Outstanding Securities of such series on
such record date (or their duly appointed agents) having joined therein on
or prior to the 90th day after such record date, such direction shall
automatically and without any action by any Person be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder (or a
duly appointed agent thereof) from giving, before or after the expiration
of such 90-day period, a direction contrary to or different from, or, after
the expiration of such period, identical to, a direction that has been
canceled
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pursuant to the proviso to the preceding sentence, in which event a new
record date in respect thereof shall be set pursuant to this paragraph.
Section 513. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding securities of any series
may on behalf of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its consequences,
except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs. In any suit for the enforcement of
---------------------
any right or remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay
the costs of such suit, and may assess costs against any such party
litigant, in the manner and to the extent provided in the Trust Indenture
Act.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities. The duties and
-----------------------------------
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act.
(a) If an Event of Default with respect to securities of any
Series at the time Outstanding has occurred and is
continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and
no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, in the absence of bad faith on its part, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. The
Trustee, however, shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture but need not verify the
accuracy of the contents thereof.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its
own wilful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 512.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to
it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be
segregated from other funds, except to the extent required
by law.
Notwithstanding the foregoing, 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. Whether or
not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this
Section.
Section 602. Notice of Defaults. If a default or an Event of Default
------------------
occurs and is continuing hereunder with respect to Securities of any
series, and if such default or Event of Default is known to a Responsible
Officer of the Trustee, the Trustee shall mail the Holders of Securities of
such series notice of such default within 90 days after it occurs;
provided, however, that in the case of any default of the character
- -------- -------
specified in Section 501(4) with respect to Securities of such series, no
such notice to Holders shall be given until at least 30 days after the
occurrence thereof. Except in the case of a default in payment on any
Security of any series or in the payment of any sinking fund installment,
the Trustee may withhold notice if and so long as a trust committee of
Responsible Officers of the Trustee in good faith determines that
withholding the notice is in the interest of Holders of securities of such
series. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee. Subject to the provisions of
-------------------------
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice,
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request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice
of such Counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory in
form and substance to the Trustee against the costs,
expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall upon
reasonable notice to the Company be entitled to examine the
books, records and premises of the Company, personally or by
agent or attorney at a time and place acceptable to the
Company;
(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 it takes or
omits to take in good faith which it reasonably believes to
be authorized or within its rights or powers.
Section 604. Not Responsible for Recitals or Issuance of Securities. The
------------------------------------------------------
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.
The Trustee or any Authenticating Agent shall
37
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not be accountable for the use or application by the Company of Securities
or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Authenticating Agent,
-------------------
any Paying Agent, any Security Registrar or any other agent of the Company,
in its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 608 and 613, may otherwise deal with
the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed with the
Company.
Section 607. Compensation and Reimbursement. The Company agrees
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its written request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation, and reasonable expenses and
disbursements of its agents and outside counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts and the
performance of its duties hereunder, including the reasonable
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.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property of the
Company held or collected by the Trustee in its capacity as Trustee or as
Paying Agent hereunder (but not in any other capacity), except that held in
trust to pay principal of (and premium, if any) or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 501(6) or (7) occurs with respect to any
series of Securities, the expenses and the compensation for the services
are intended to constitute expenses of administration under any Federal or
State bankruptcy law or similar law.
The Company's obligations under this Section 607 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article Four or Article
Thirteen hereof and the termination of this Indenture.
Section 608. Disqualification; Conflicting Interests. If the Trustee has
---------------------------------------
or shall acquire any conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either
38
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eliminate such interest or resign, to the extent and in the manner provided
by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
Section 609. Corporate Trustee Required; Eligibility. There shall at all
---------------------------------------
times be a Trustee hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000 or is a subsidiary of a
corporation which shall be a Person that has a combined capital and surplus
of at least $50,000,000 and which unconditionally guarantees the
obligations of the Trustee hereunder. 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 hereinafter specified in this
Article.
Section 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable
requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by
a successor Trustee required by Section 611 shall not have
been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such
series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee with respect to all Securities, or (ii) subject to Section 514,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of itself and all others similarly
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situated, petition any court of competent jurisdiction for the removal of
the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or be incapable of
acting, or if a vacancy shall occur in the office of Trustee
for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to
the Securities of one or more or all of such series and that
at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply
with the applicable requirements of Section 611. If, within
one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed
by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements
of Section 611, become the successor Trustee with respect to
the Securities of such series and to that extent supersede
the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any
Series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on
behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with
respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and
the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such
retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the
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Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the
Securities of such series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as
shall be necessary or desirable to transfer the rights, powers,
trust and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture
shall constitute such Trustee co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without
any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but,
on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor
Trustee all such rights, powers and trusts referred to in
paragraphs (a) and (b) of this Section, as the case may be.
(d) No successor shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified
and eligible under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall
have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
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Section 613. Preferential Collection of Claims Against Company. If and
-------------------------------------------------
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), 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 614. Appointment of Authenticating Agent. The Trustee may with
-----------------------------------
the consent of the Company appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to
act on behalf of the Trustee to authenticate Securities of such series
issued upon original issue and upon exchange, registration of transfer,
partial conversion or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Company and shall at all times be a
corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the pur- poses of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the execution or
filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee or the Company may
at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Company or
the Trustee, as the case may be. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall
mail written notice of such appointment by first-class mail, postage
prepaid, to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve, as their names and addresses appear
in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
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The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture. As Trustee
As Trustee
By____________________________
As Authenticating Agent
By____________________________
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than 10 days after each Regular
Record Date in each year, a list for each series of
Securities, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of
Securities of such series as of the preceding 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 Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee
as provided in Section 701 and the names and addresses of
Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it
as provided in Section 701 upon receipt of a new list so
furnished.
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(b) The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under
the Securities, and the corresponding rights and privileges
of the Trustee, shall be as provided by the Trust Indenture
Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither
the Company nor the Trustee nor any agent of either of them
shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant thereto. To
the extent that any such report is required by the Trust
Indenture Act with respect to any 12 month period, such
report shall cover the 12 month period ending July 15 and
shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each
stock exchange upon which any Securities are listed, with
the Commission and with the Company. The Company will
notify the Trustee when any Securities are listed on any
stock exchange.
Section 704. Reports by Company. The Company shall file with the Trustee
------------------
and the Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant
to such Act; provided that any such information, documents or reports
--------
required to be filed with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, or Sale of Assets
Section 801. Company May Consolidate, Etc., Only on Certain Terms. The
----------------------------------------------------
Company shall not consolidate with or merge into any other Person or sell
its properties and assets as, or substantially as, an entirety to any
Person, and the Company shall not permit any Person to consolidate with or
merge into the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or sell its properties and assets as, or substantially as,
an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person
which purchases the properties and assets of the Company as, or
substantially as, an entirety shall be a corporation, partnership
or trust, shall be organized and validly existing under the laws
of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of
the principal of and any premium and interest on all the
Securities and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or
observed and the conversion rights, if any, shall be
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provided for in accordance with Article Twelve, by supplemental
indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the Person (if other than the Company)
formed by such consolidation or into which the Company shall have
been merged or by the corporation which shall have acquired the
Company's assets;
(2) immediately after giving effect to such transaction, no Event of
Default shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation,
merger, or sale and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture
comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied
with.
Section 802. Successor Substituted. Upon any consolidation of the Company
---------------------
with, or merger of the Company into, any other Person or any sale of the
properties and assets of the Company as, or substantially as, an entirety
in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale is
made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders. Without
--------------------------------------------------
the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely
for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest
coupons, or to permit or facilitate the issuance of Securities in
uncertificated form; or
45
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(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (i) shall
--------
neither (A) apply to any Security of any series created prior to
the execution of such supplemental indenture and entitled to the
benefit of such provision nor (B) modify the rights of the Holder
of any such Security with re- spect to such provision or (ii)
shall become effective only when there is no such Security
Outstanding; or
(6) to secure the Securities pursuant to the requirements of Section
1005, or to otherwise secure the Securities of any series; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities
of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 611(b);
or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
--------
pursuant to this clause shall not adversely affect the interests
of the Holders of Securities of any series in any material
respect; or
(10) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article Twelve, including
providing for the conversion of the securities into any security
(other than the Common Stock of the Company) or property of the
Company; or
(11) to conform to any mandatory provisions of law.
Section 902. Supplemental Indentures With Consent of Holders. With the
-----------------------------------------------
consent of the Holders of not less than a majority of principal amount of
the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee,
the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of such series under this Indenture; provided,
--------
however, that no such supplemental indenture shall, without the consent of
- -------
the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the rate of interest
thereon (including any change in the Floating or Adjustable Rate
Provision pursuant to which such rate is determined that would
reduce such rate for any period) or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or
the coin or currency in which, any Security or any premium or
interest thereon is payable, or impair the right to institute
suit for the
46
<PAGE>
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture,
or
(3) if applicable, make any change that adversely affects the right
to convert any security to which the provisions of Article Twelve
are applicable or, except as provided in this Indenture, decrease
the conversion rate or increase the conversion price of any such
security, or
(4) modify any of the provisions of this Section, Section 513 or
Section 908, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby, provided, however, that
-------- -------
this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section and Section 908, or the
deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of any other
series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and, with respect to
supplemental indentures under Section 902 hereof, evidence of the consents
of Holders required in connection therewith. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Section 904. Effect of Supplemental Indentures. Upon the execution of any
---------------------------------
supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part
of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby.
Section 905. Revocation and Effect of Consents. Until an amendment or
---------------------------------
supplement under this Article or a waiver under this Article becomes
effective, a consent to it by a Holder of a Security is a continuing
consent by the Holder and every subsequent Holder of a Security or portion
of
47
<PAGE>
a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to
his Security or portion of a Security if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment or supplement becomes effective, it shall bind every
Holder.
Section 906. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
Section 907. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities 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 Securities of any series so modified as to conform,
in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such
series.
Section 908. Waiver of Compliance by Holders. Anything in this Indenture
-------------------------------
to the contrary notwithstanding, any of the acts which the Company is
required to do, or is prohibited from doing, by any of the provisions of
this Indenture may, to the extent that such provisions might be changed or
eliminated by a supplemental indenture pursuant to Section 902 upon consent
of Holders of not less than a majority in aggregate principal amount of the
then Outstanding Securities of the series affected, be omitted or done by
the Company, if there is obtained the prior consent or waiver of the
Holders of at least a majority in aggregate principal amount of the then
Outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest. The Company
------------------------------------------
covenants and agrees for the benefit of each series of Securities that it
will duly and punctually pay or cause to be paid the principal of and any
premium and interest on the Securities of that series in accordance with
the terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency. So long as any Securities
-------------------------------
are Outstanding, the Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series
may be presented or surrendered for payment, where Securities of that
series may be surrendered for registration of transfer or exchange, where
Securities of that series may be surrendered for conversion and where
notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presen- tations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to
receive all such presentations, surrenders, notices and demands.
48
<PAGE>
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or
-------- -------
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust. If the
-------------------------------------------------
Company shall at any time act as its own Paying Agent with respect to any
series of Securities, it will, on or before each due date of the principal
of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto
a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided
by the Trust Indenture Act, and (unless such Paying Agent is the Trustee)
the Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will (i) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent
and (ii) during the continuance of any default by the Company (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, and upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such
Paying Agent for payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by
Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two
years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
-------- -------
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the request and expense of the Company cause to be
published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in
the Borough
49
<PAGE>
of Manhattan, the City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 1004. 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, a certificate signed by the
Company's principal executive officer, principal financial officer or
principal accounting officer stating to the best knowledge of the signer
thereof whether or not the Company has complied during such immediately
preceding fiscal year with and is in compliance with all terms, conditions
and covenants of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and if the signer has obtained
knowledge of any continuing default by the Company in the performance,
observation or fulfillment of any such term, condition or covenant,
specifying each such default and the nature thereof.
Section 1005. Limitations on Liens on Common Stock of Principal
-------------------------------------------------
Subsidiaries. So long as any of the Securities remains Outstanding, the
- ------------
Company will not, and will not permit any Principal Subsidiary to, issue,
assume, incur or guarantee any indebtedness for borrowed money secured by a
mortgage, pledge, lien or other encumbrance in the nature of a lien
("Lien") on any of the Common Stock of a Principal Subsidiary, which Common
Stock is owned by the Company or by any Principal Subsidiary, without
effectively providing that the Securities of each series, and, if the
Company so elects, any other indebtedness of the Company ranking senior to
or on a parity with the Securities, shall be equally and ratably secured
with, or prior to, such secured indebtedness for borrowed money so long as
such secured indebtedness shall be so secured, unless after giving effect
thereto, the aggregate amount of all such secured indebtedness of the
Company and its Subsidiaries would not exceed 15% of Consolidated Tangible
Net Worth of the Company and its Subsidiaries as reflected on the Company's
most recently prepared quarterly balance sheet; provided, however, that
-------- -------
this covenant shall not apply to, and there shall be excluded from secured
indebtedness in any computation under this covenant, indebtedness secured
by: (i) Liens existing on the date hereof; (ii) Liens on any shares of
common stock of any corporation existing at the time such corporation
becomes a Principal Subsidiary or merges into or consolidates with the
Company or any Principal Subsidiary; (iii) Liens on shares of common stock
of any Person existing at the time of acquisition thereof by the Company or
any Principal Subsidiary; (iv) Liens to secure the financing of the
acquisition, construction or improvement of property, or the acquisition of
shares of stock, hereafter acquired, constructed or improved by the Company
or any Subsidiary, provided that such Liens are created prior to, at the
time of or within one year after such acquisition or, in the case of
property, completion of construction or commencement of commercial
operation, whichever is later; (v) Liens in favor of the Company or any
Subsidiary; (vi) Liens required by or in favor of governments or agencies
thereof including those to secure progress, advance or other payments
pursuant to any contract or provisions of any statute; (vii) Liens in the
nature of rights of set-off or statutory bankers' liens pursuant to any
contract or statute; and (viii) any extension, renewal or replacement (or
successive extensions, renewals or replacements), as a whole or in part, of
any Lien referred to in the foregoing clauses (i) to (vii), inclusive,
provided, further, that (a) such extension, renewal or replacement Lien
- -------- -------
shall be limited to all or a part of the same shares of stock that secured
the Lien extended, renewed or replaced and (b) the indebtedness secured by
such Lien at such time is not increased.
50
<PAGE>
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. Securities of any series which
------------------------
are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as
contemplated by Section 301 for Securities of any series) in accordance
with this Article.
Section 1102. Election to Redeem; Notice to Trustee. In case of any
-------------------------------------
redemption at the election of the Company of less than all the Securities
of any series, the Company shall, at least 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date, of the principal
amount of Securities of such series to be redeemed, the specific provision
of the Securities of such series pursuant to which such Securities being
called for redemption are being redeemed and, if applicable, of the tenor
of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed. If less
-------------------------------------------------
than all the Securities of any series are to be redeemed (unless all of the
Securities of such series and of a specified tenor are to be redeemed), the
particular Securities to be redeemed shall be selected not more than 45
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities
of that series. If less than all of the Securities of such series and of a
specified tenor are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 45 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of such series and
specified tenor not previously called for redemption in accordance with the
preceding sentence.
If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of
such selection.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in
the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to
be redeemed.
Section 1104. Notice of Redemption. Notice of redemption shall be given
--------------------
by first-class mail,
51
<PAGE>
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at its
address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial
redemption of any Securities, the principal amounts) of the
particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and
after said date,
(5) if applicable, the conversion price, and that the date on which
the right to convert the principal of the Securities or the
portions thereof to be redeemed will terminate will be the
Redemption Date and the place or places where such Securities may
be surrendered for conversion,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price. Prior to any Redemption Date,
---------------------------
the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust
as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on, all the Securities which are to
be redeemed on that date, other than any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
If any Security or portion thereof called for redemption is converted, any
money deposited with the Trustee or with any Paying Agent or so segregated
and held in trust for the redemption of such Security or portion thereof
shall (subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph
of Section 307) be paid to the Company upon Company Request or, if then
held by the Company, shall be discharged from such trust.
Section 1106. Securities Payable on Redemption Date. Notice of redemption
-------------------------------------
having been given as aforesaid, the Securities so to be redeemed shall, on
the Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption
52
<PAGE>
Price, together with accrued interest to the Redemption Date; provided,
--------
however, that, unless otherwise specified as contemplated by Section 301,
- -------
installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business
on the relevant Record Dates according to their terms and the provisions of
Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1107. Securities Redeemed in Part. Any Security which is to be
---------------------------
redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like
tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Conversion of Securities
Section 1201. Applicability of Article. The provisions of this Article
------------------------
shall be applicable to the Securities 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 such Securities, except as otherwise
specified as contemplated by Section 301 for the Securities of such series.
Section 1202. Exercise of Conversion Privilege. In order to exercise a
--------------------------------
conversion privilege, the Holder of a Security of a series with such a
privilege shall surrender such Security to the Company at the office or
agency maintained for that purpose pursuant to Section 1002, accompanied by
written notice to the Company that the Holder elects to convert such
Security 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.
Securities 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; and
Securities so surrendered for conversion during the period from the close
of business on any Regular Record Date to the opening of business on the
next succeeding Interest Payment Date (excluding Securities or portions
thereof called for redemption during such period) shall also be accompanied
by payment in funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of
such Security then being converted, and such interest shall be payable to
such registered Holder notwithstanding the conversion of such Security,
subject to the provisions of Section 307 relating to the payment of
Defaulted Interest by the Company. As promptly as practicable after the
receipt of such notice and of any payment required pursuant to a Board
Resolution and, subject to Section 303, set forth, or determined in the
manner provided, in an Officers' Certificate, or established in one or more
indentures supplemental hereto setting forth the terms of such series of
Security, and the surrender of such Security in accordance with such
reasonable regulations as the Company may prescribe, the Company shall
issue and shall deliver, at the office or
53
<PAGE>
agency at which such Security 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 Security (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 Security
shall have been surrendered as aforesaid (unless such Holder shall have so
surrendered such Security 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 Security 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 Security as such Security 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 307, no payment or adjustment shall be
made upon any conversion on account of any interest accrued on the
Securities surrendered for conversion or on account of any dividends on the
Common Stock of the Company issued upon such conversion.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the
Company, a new Security or Securities of the same series, of authorized
denominations, in aggregate principal amount equal to the unconverted
portion of such Security.
Section 1203. No Fractional Shares. No fractional share of Common Stock of
--------------------
the Company shall be issued upon conversions of Securities of any series.
If more than one Security 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 Securities (or specified portions thereof to the extent permitted
hereby) so surrendered. If, except for the provisions of this Section
1203, any Holder of a Security or Securities would be entitled to a
fractional share of Common Stock of the Company upon the conversion of such
Security or Securities, 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, (i) 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 (ii) if such Common Stock is not at the
time so listed or admitted to unlisted trading privileges on a national
securities exchange, 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 an 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.
54
<PAGE>
Section 1204. Adjustment of Conversion Price. The conversion price of
------------------------------
Securities 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 term of the supplemental indenture or Board Resolutions setting forth
the terms of the Securities 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 Securities pursuant to Section 1002 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 Securities of such series at its address
appearing on the Security Register and to any conversion agent other than
the Trustee.
Section 1205. 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 Securities 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.
55
<PAGE>
Section 1206. 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, for the purpose of effecting the
conversion of Securities, the full number of shares of Common stock of the
Company then issuable upon the conversion of all outstanding Securities of
any series that has conversion rights.
Section 1207. 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 Securities 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 Security or Securities 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.
Section 1208. Nonassessability. The Company covenants that all shares of
----------------
its Common Stock which may be issued upon conversion of Securities will
upon issue in accordance with the terms hereof be duly and validly issued
and fully paid and nonassessable.
Section 1209. Effect of Consolidation or Merger on Conversion Privilege.
---------------------------------------------------------
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 Security then outstanding of
any series that is convertible into Common Stock of the Company 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 Security), to convert such Security 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 of the Company into which such Security might have been
converted immediately prior to such consolidation, merger or sale, subject
to compliance with the other provisions of this Indenture, such Security
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 Security. The above provisions of
this Section shall similarly apply to successive consolidations, mergers or
sales. 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 of the
Company 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 Securities shall not have the right to thereafter
convert their Securities 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 of the Company into which the Securities 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
1209. Anything in this Section 1209 to the contrary notwithstanding, the
provisions of this Section 1209 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
of the Company are not changed or converted into any other securities
56
<PAGE>
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 Securities 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 Securities for any provision in conformity
therewith or approved by such independent certified accountant which may be
contained in said supplemental indenture.
Section 1210. 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 Securities of any series that is
convertible into Common Stock of the Company 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, 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 of the Company, or of any securities or
property, which may at any time be issued or delivered upon the conversion
of any Securities and neither the Trustee nor any conversion agent makes
any representation with respect thereto. Subject to the provisions of
Section 601, neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver
any shares of its Common Stock or stock certificates or other securities or
property upon the surrender of any Security for the purpose of conversion
or to comply with any of the covenants of the Company contained in this
Article Twelve 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.
Section 1211. 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
Securities (including funds deposited for the sinking fund referred to in
Article Three hereof) and which shall not be required for such purposes
because of the conversion of such Securities as provided in this Article
Twelve shall after such conversion be repaid to the Company by the Trustee
upon the Company's written request by Company Request.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance. The Company may elect, at any time, to have either Section
- ----------
1302 or Section 1303 applied to the Outstanding Securities of any series,
upon compliance with the conditions set forth below in this Article
Thirteen.
57
<PAGE>
Section 1302. Defeasance and Discharge. Upon the Company's exercise of
------------------------
the option provided in Section 1301 to have this Section 1302 applied to
the Outstanding Securities of any series, the Company shall be deemed to
have been discharged from its obligations, with respect to the Outstanding
Securities of such series as provided in this Section on and after the date
the conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such series and to have
satisfied all its other obligations under the Securities of such series and
this Indenture insofar as the Securities of such series are concerned (and
the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights
of Holders of Securities of such series to receive, solely from the trust
fund described in Section 1304 and as more fully set forth in such Section,
payments in respect of the prin- cipal of and any premium and interest on
such Securities of such series when payments are due, (2) the Company's
obligations with respect to the Securities of such series under Sections
304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including, without limitation, its
rights under Section 607 and (4) this Article Thirteen. Subject to
compliance with this Article Thirteen, the Company may exercise its option
provided in Section 1301 to have this Section 1302 applied to the
Outstanding Securities of any series notwithstanding the prior exercise of
its option provided in Section 1301 to have Section 1303 applied to the
Outstanding Securities of such series.
Section 1303. Covenant Defeasance. Upon the Company's exercise of the
-------------------
option provided in Section 1301 to have this Section 1303 applied to the
Outstanding Securities of any series, (1) the Company shall be released
from its obligations under Section 1005 and Section 801 and (2) the
occurrence of any event specified in Sections 501(3), 501(4) (with respect
to Section 1005 and Section 801) and 501(5) shall be deemed not to be or
result in an Event of Default, in each case with respect to the Outstanding
Securities of such series as provided in this Section on and after the date
the conditions set forth in Section 1304 are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that 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
501(4)), 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 the Securities of such series shall be
unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of either Section 1302 or
Section 1303 to the Outstanding Securities of any series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the
requirements contemplated by Section 609 and agrees to comply
with the provisions of this Article Thirteen applicable to it) as
trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of Outstanding Securities
of such series, (i) money in an amount, or (ii) U.S. Government
Obligations that through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any
payment, money in an amount, or (iii) a combination thereof, in
each case sufficient, in the opinion of a nationally recognized
firm of independent public
58
<PAGE>
accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or any such other qualifying trustee) to pay and
discharge, the principal of and any premium and interest on the
Securities of such series on the respective Stated Maturities, in
accordance with the terms of this Indenture and the Securities of
such series. As used herein, "U.S. Government Obligation" means (x)
any security that is (i) a direct obligation of the United States of
America for the payment of which full faith and credit of the United
States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or
instrumentality for the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case
(i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any specific payment of
principal of or interest on any such U.S. Government Obligation
specified in Clause (x) and held by such custodian for the account
of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any such U.S.
Government Obligation, 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 depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.
(2) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published
by, the Internal Revenue Service, a ruling or (ii) since the date
hereof, there has been a change in the applicable Federal income
tax law, in case of either (i) or (ii) to the effect that, and
based thereon such opinion shall confirm that, the Holders of
such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to the Securities of such
series and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the
case if such deposit, Defeasance and discharge were not to occur.
(3) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect
that the Holder of the Outstanding Securities of such series will
not recognize gain or loss for Federal income tax purposes as
result of the deposit and Covenant Defeasance to be effected with
respect to the Securities of such series and will be subject to
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.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities of such series, if
then listed on any securities exchange, will not be delisted as a
result of such deposit.
(5) No Event of Default or event that (after notice or lapse of time
or both) would become an Event of Default shall have occurred and
be continuing at the time of such deposit or, with regard to any
Event of Default or any such event specified in Sections 501(6)
and 501(7), at any time on or prior to the 90th day after the
date of such deposit (it being understood that this condition
shall not be deemed satisfied until after such 90th day).
59
<PAGE>
(6) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
(7) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of 1940,
as amended, unless such trust shall be qualified under such Act
or exempt from regulation thereunder.
Section 1305. Deposited Money and U.S. Government Obligations to be Held
----------------------------------------------------------
In Trust; Other Miscellaneous Provisions. Subject to the provisions of the
- ----------------------------------------
last paragraph of Section 1003, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee or other
qualifying trustee (solely for purposes of this Section and Section 1306,
the Trustee and any such other trustee are referred to collectively as the
"Trustee") pursuant to Section 1304 in respect of the Securities of any
Defeasible Series shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Securities of such series and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and
to become due thereon in respect of principal and any premium and interest,
but money so held in trust need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received
in respect thereof other than any such tax, fee or other charge that by law
is for the account of the Holders of Outstanding Securities.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to Securities of any Defeasible Series that, 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 that would then be required to
be deposited to effect an equivalent Defeasance or Covenant Defeasance with
respect to the Securities of such series.
Section 1306. Reinstatement. If the Trustee or the Paying Agent is unable
-------------
to apply any money in accordance with this Article Thirteen with respect to
the Securities of any series by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Securities of such series shall be revived and reinstated
as though no deposit had occurred pursuant to this Article Thirteen with
respect to Securities of such series until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to
Section 1305 with respect to Securities of such series in accordance with
this Article Thirteen; provided, however, that if the Company makes any
-------- -------
payment of principal of or any premium or interest on any Security of such
series following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of Securities of such series to
receive such payment from the money so held in trust.
60
<PAGE>
ARTICLE FOURTEEN
Sinking Funds
Section 1401. Applicability of Article. The provisions of this Article
------------------------
shall be applicable to any sinking fund for the retirement of Securities of
a series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1211. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by
the terms of Securities of such series.
Section 1402. Satisfaction of Sinking Fund Payments with Securities. The
-----------------------------------------------------
Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (2) may apply as a credit Securities
of a series which have been converted pursuant to Article Twelve or
Securities of a series which have been acquired or redeemed either at the
election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities or otherwise, in each case in satisfaction of all
or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided that such Securities
--------
have not been previously so credited. Such Securities shall be received
and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1403. Redemption of Securities for Sinking Fund. Not less than 60
-----------------------------------------
days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers Certificate specifying
the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is
to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 nor more than 60 days
before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner
provided in Section 1104 and provide a copy thereof to the Company five (5)
days in advance of the mailing thereof. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
61
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
ALEXANDER & ALEXANDER SERVICES
INC.
By_______________________
Attest:
___________________
PNC BANK, N.A.,
as Trustee
By_______________________
Attest:
_____________________
62
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of ________, 1996, before me personally came
_____________________, to me known, who, being by me duly sworn, did depose
and say that (s)he is __________________ of ALEXANDER & ALEXANDER SERVICES
INC., one of the corporations described in and which executed the foregoing
instrument; that (s)he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that (s)he
signed her/his name thereto by like authority.
_____________________
63
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of _____________, 1996, before me personally came
________________, to me known, who, being by me duly sworn, did depose and
say that (s)he is ___________________ of PNC Bank, N.A., one of the
corporations described in and which executed the foregoing instrument; that
(s)he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that (s)he signed her/his
name thereto by like authority.
___________________
64
Exhibit 4.2
ALEXANDER & ALEXANDER SERVICES INC.
TO
PNC BANK, N.A.,
TRUSTEE
PROPOSED FORM OF INDENTURE
Dated as of ______, 1996
Subordinated Debt Securities
<PAGE>
ALEXANDER & ALEXANDER SERVICES INC.
Reconciliation and tie between certain Sections of
this Indenture, dated as of _____, 1996, and
Sections 310 through 318, inclusive, of
the Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture
Section
310(a)(1) ....................... 609
(a)(2) ................... 609
(a)(3) ................. Not Applicable
(a)(4) ................. Not Applicable
(b) .................... 608
610
311(a) 613
(b) ... 613
312(a) ....................... 701
702(a)
(b) ....................... 702(b)
(c) ....................... 702(c)
313(a) ....................... 703(a)
(b) ....................... 703(a)
(c) ....................... 703(a)
(d) ....................... 703(b)
314(a) ....................... 704
(a)(4) ....................... 101
1004
(b) ....................... Not Applicable
(c)(1) ....................... 102
(c)(2) ....................... 102
(c)(3) ....................... Not Applicable
(d) ....................... Not Applicable
(e) ....................... 102
315(a) ....................... 601
(b) ....................... 602
(c) ....................... 601
(d) ....................... 601
(e) ....................... 514
316(a) ....................... 101
(a)(1)(A) ....................... 502
512
(a)(1)(B) ....................... 513
(a)(2) ....................... Not Applicable
(b) ....................... 508
(c) ....................... 104(c)
317(a)(1) ............................ 503
(a)(2) ........................... 504
(b) ................................. 1003
318(a) ................................. 107
------------------
NOTE: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
RECITALS OF THE COMPANY 1
ARTICLE ONE
Definitions and Other Provisionsof General Application
Section 101. Definitions 1
Act 2
Authenticating Agent 2
Board of Directors 2
Board Resolution 2
Business Day 2
Commission 3
Common Stock 3
Company 3
Company Request 3
Company Order 3
Consolidated Tangible
Net Worth 3
Corporate Trust Office 4
corporation 4
Covenant Defeasance 4
Debt 4
Defaulted Interest 5
Defeasance 5
Depositary 5
Event of Default 5
Exchange Act 5
Floating or Adjustable
Rate Provision 5
Floating or Adjustable
Rate Security 5
Global Security 5
Holder 5
Indenture 5
interest 6
Interest Payment Date 6
Maturity 6
Notice of Default 6
Officers' Certificate 6
Opinion of Counsel 6
Original Issue Discount
Security 6
Outstanding 6
Paying Agent 8
Person 8
Place of Payment 8
Predecessor Security 8
Principal Subsidiary 8
Proceeding 8
<PAGE>
Redemption Date 8
Redemption Price 9
Regular Record Date 9
Responsible Officer 9
Securities 9
Security Register 9
Security Registrar 9
Senior Debt 9
Special Record Date 10
Stated Maturity 10
Subsidiary 10
Trustee 10
Trust Indenture Act 10
U.S. Government Obligations 10
Vice President 10
Section 102. Compliance Certificates
and Opinions 10
Section 103. Form of Documents Delivered
to Trustee 11
Section 104. Acts of Holders; Record
Dates 12
Section 105. Notices, Etc., to Trustee
and Company 14
Section 106. Notice to Holders; Waiver 14
Section 107. Conflict with Trust
Indenture Act 15
Section 108. Effect of Headings and
Table of Contents 15
Section 109. Successors and Assigns 15
Section 110. Separability Clause 15
Section 111. Benefits of Indenture 15
Section 112. Governing Law 16
Section 113. Legal Holidays 16
Section 114. Personal Immunity from
Liability for
Incorporators,
Stockholders, Etc. 16
<PAGE>
ARTICLE TWO
Security Forms
Section 201. Forms Generally 17
Section 202. Form of Face of Security 17
Section 203. Form of Reverse of Security 20
Section 204. Form of Legend for Global
Securities 26
Section 205. Form of Trustee's Certificate
of Authentication 26
Section 206. Form of Conversion Notice 27
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable
in Series 29
Section 302. Denominations 32
Section 303. Execution, Authentication,
Delivery and
Dating 32
Section 304. Temporary Securities 34
Section 305. Registration, Registration
of Transfer and Exchange 34
Section 306. Mutilated, Destroyed, Lost
and Stolen Securities 36
Section 307. Payment of Interest;
Interest Rights Preserved 37
Section 308. Persons Deemed Owners 39
Section 309. Cancellation 39
Section 310. Computation of Interest 40
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge
of Indenture 40
Section 402. Application of Trust Fund 42
<PAGE>
ARTICLE FIVE
Remedies
Section 501. Events of Default 42
Section 502. Acceleration of Maturity;
Rescission and Annulment 46
Section 503. Collection of Indebtedness
and Suits for Enforcement
by Trustee 47
Section 504. Trustee May File Proofs
of Claim 48
Section 505. Trustee May Enforce Claims
Without
Possession of Securities 49
Section 506. Application of Money
Collected 49
Section 507. Limitation on Suits 50
Section 508. Unconditional Right of
Holders to Receive
Principal, Premium and
Interest and to Convert 51
Section 509. Restoration of Rights and
Remedies 51
Section 510. Rights and Remedies
Cumulative 51
Section 511. Delay or Omission Not
Waiver 51
Section 512. Control by Holders 52
Section 513. Waiver of Past Defaults 52
Section 514. Undertaking for Costs 53
ARTICLE SIX
The Trustee
Section 601. Certain Duties and
Responsibilities 53
Section 602. Notice of Defaults 55
Section 603. Certain Rights of Trustee 55
Section 604. Not Responsible for
Recitals or
Issuance of Securities 57
Section 605. May Hold Securities 57
Section 606. Money Held in Trust 57
Section 607. Compensation and
Reimbursement 57
Section 608. Disqualification;
Conflicting Interests 58
Section 609. Corporate Trustee Required;
Eligibility 58
Section 610. Resignation and Removal;
Appointment of Successor 59
<PAGE>
Section 611. Acceptance of Appointment
by Successor 61
Section 612. Merger, Conversion,
Consolidation or
Succession to Business 62
Section 613. Preferential Collection of
Claims Against Company 63
Section 614. Appointment of
Authenticating Agent 63
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee
Names and Addresses of
Holders 65
Section 702. Preservation of Information;
Communications to Holders 65
Section 703. Reports by Trustee 66
Section 704. Reports by Company 66
ARTICLE EIGHT
Consolidation, Merger, or Sale of Assets
Section 801. Company May Consolidate,
Etc., Only on
Certain Terms 67
Section 802. Successor Substituted 68
<PAGE>
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures
Without Consent
of Holders 68
Section 902. Supplemental Indentures With
Consent of Holders 70
Section 903. Execution of Supplemental
Indentures 71
Section 904. Effect of Supplemental
Indentures 72
Section 905. Revocation and Effect of
Consents 72
Section 906. Conformity with Trust
Indenture Act 72
Section 907. Reference in Securities
to Supplemental
Indentures 72
Section 908. Waiver of Compliance
by Holders 73
Section 909. Subordination Unimpaired 73
<PAGE>
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium
and Interest 73
Section 1002. Maintenance of Office or
Agency 73
Section 1003. Money for Securities
Payments to Be Held in
Trust 74
Section 1004. Statement by Officers
as to Default 75
Section 1005. Limitations on Liens on
Common Stock
of Principal Subsidiaries 76
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article 77
Section 1102. Election to Redeem; Notice
to Trustee 77
Section 1103. Selection by Trustee of
Securities to Be Redeemed 77
Section 1104. Notice of Redemption 78
Section 1105. Deposit of Redemption Price 79
Section 1106. Securities Payable on
Redemption Date 80
Section 1107. Securities Redeemed in Part 80
ARTICLE TWELVE
Conversion of Securities
Section 1201. Applicability of Article 80
Section 1202. Exercise of Conversion
Privilege 81
Section 1203. No Fractional Shares 82
Section 1204. Adjustment of Conversion
Price 83
Section 1205. Notice of Certain
Corporate Actions 83
Section 1206. Reservation of Shares
of Common Stock 85
Section 1207. Payment of Certain
Taxes Upon Conversion 85
Section 1208. Nonassessability 85
Section 1209. Effect of Consolidation
or Merger on
Conversion Privilege 85
Section 1210. Duties of Trustee
Regarding Conversion 87
<PAGE>
Section 1211. Repayment of Certain Funds
Upon Conversion 87
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to
Effect Defeasance
or Covenant Defeasance 88
Section 1302. Defeasance and Discharge 88
Section 1303. Covenant Defeasance 88
Section 1304. Conditions to Defeasance
or Covenant
Defeasance 89
Section 1305. Deposited Money and
U.S. Government
Obligations to Be Held in
Trust; Other
Miscellaneous Provisions 92
Section 1306. Reinstatement 93
ARTICLE FOURTEEN
Sinking Funds
Section 1401. Applicability of Article 93
Section 1402. Satisfaction of Sinking
Fund Payments with
Securities 94
Section 1403. Redemption of Securities
for Sinking Fund 94
ARTICLE FIFTEEN
Subordination of Securities
Section 1501. Securities Subordinate
to Senior Debt 95
Section 1502. Payment Over of Proceeds Upon
Dissolution, Etc. 95
Section 1503. Prior Payment to Senior
Debt Upon Acceleration of
Securities 97
Section 1504. No Payment When Senior Debt
in Default 97
Section 1505. Payment Permitted If No
Default 98
Section 1506. Subrogation to Rights of
Holders of Senior Debt 99
Section 1507. Provisions Solely to
Define Relative Rights 99
<PAGE>
Section 1508. Trustee to Effectuate
Subordination 100
Section 1509. No Waiver of Subordination
Provisions 100
Section 1510. Notice to Trustee 101
Section 1511. Reliance on Judicial Order
or Certificate of
Liquidating Agent 102
Section 1512. Trustee Not Fiduciary
For Holders of
Senior Debt 102
Section 1513. Rights of Trustee
as Holder of
Senior Debt; Preservation
of Trustee's Rights 102
Section 1514. Article Applicable to
Paying Agents 103
Section 1515. Defeasance of This
Article Fifteen 103
Section 1516. Certain Conversions
Deemed Payment 103
------------------
NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
<PAGE>
INDENTURE, dated as of ______, 1996, between ALEXANDER & ALEXANDER SERVICES
INC., a Maryland corporation (herein called the "Company"), having its principal
office at 1185 Avenue of the Americas, New York, New York 10036, and PNC BANK,
N.A., a national banking association duly organized and existing under the laws
of the United States of America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its debentures, notes or other
evidences of indebtedness (herein called the "Securities"), to be issued in one
or more series as provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions. For all purposes of this Indenture, except as
-----------
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act or the Securities Act of 1933, as amended, either directly or by
reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;
(4) the words "Article" and "Section" refer to an Article and Section,
respectively, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision unless the context
otherwise requires.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to
Section 614 to act on behalf of the Trustee to authenticate Securities of one or
more series.
<PAGE>
"Board of Directors" means either (i) the board of directors of the Company, the
executive committee of such board of directors or any other duly authorized
committee of directors and/or officers appointed by such board of directors or
executive committee, or (ii) one or more duly authorized officers of the Company
to whom the board of directors of the Company or a committee thereof has
delegated the authority to act with respect to the matters contemplated by this
Indenture.
"Board Resolution" means (i) a copy of a resolution certified by the Corporate
Secretary or an Assistant Corporate Secretary of the Company to have been duly
adopted by the Board of Directors or a committee thereof and to be in full force
and effect on the date of such certification or (ii) a certificate signed by the
authorized officer or officers of the Company to whom the board of directors of
the Company or a committee thereof has delegated its authority (as described in
the definition of Board of Directors), and in each case, delivered to the
Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means, with respect to the Company, its common capital stock, par
value $1.00 per share, and with respect to any Principal Subsidiary, stock of
any class, however designated, except stock which is non-participating beyond
fixed dividend and liquidation preferences and the holders of which have either
no voting rights or limited voting rights entitling them, only in the case of
certain contingencies, to elect less than a majority of the directors (or
persons performing similar functions) of such Principal Subsidiary, and shall
include securities of any class, however designated, which are convertible into
such Common Stock.
"Company" means the Person named as the "Company" in the first paragraph of this
instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order signed in
the name of the Company by (i) any two of the following individuals: the
Chairman, the Chief Financial Officer, the President or a Vice President, or
(ii) by one of the foregoing individuals and by any other Vice President, the
Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the
Corporate Secretary or an Assistant Corporate Secretary or any other individual
authorized by the Board of Directors for such purpose, and delivered to the
Trustee.
"Consolidated Tangible Net Worth" means, at any date, the total assets appearing
on the most recently prepared consolidated balance sheet of the Company and its
Subsidiaries at the end of a fiscal quarter of the Company, prepared in
accordance with generally accepted accounting principles consistently applied
(subject to normal year end adjustments and except to the extent an
inconsistency results from compliance by the Company with new financial
accounting standards with which the Company's independent public accountants
concur), less (a) the total liabilities appearing on such balance sheet and (b)
intangible assets. For purposes hereof, "intangible assets" means the value
(net of any applicable reserves), as shown on or reflected in such balance
sheet, of (i) all trade names, trademarks, licenses, patents, copyrights and
goodwill; (ii) organizational and development costs; and (iii)
2
<PAGE>
unamortized debt discount and expense, less unamortized premium; but excludes
deferred income tax assets.
"Corporate Trust Office" means the principal office of the Trustee located at
__________________________, 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.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Debt" means (without duplication and without regard to any portion of principal
amount that has not accrued and to any interest component thereof (whether
accrued or imputed) that is not due and payable) with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business), (v) every capital lease
obligation of such Person, (vi) the maximum fixed redemption or repurchase price
of redeemable stock of such Person at the time of determination, and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in whole
or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as depositary for
such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute thereto.
"Floating or Adjustable Rate Provision" means a formula or provision, specified
in or pursuant to a Board Resolution or an indenture supplemental hereto,
providing for the determination, whether pursuant to objective factors or
pursuant to the sole discretion of any Person (including the Company), and
periodic adjustment of the interest rate borne by a Floating or Adjustable Rate
Security.
"Floating or Adjustable Rate Security" means any Security which provides for
interest thereon at a periodic rate that may vary from time to time over the
term thereof in accordance with a Floating or Adjustable Rate Provision.
"Global Security" means a Security that evidences all or part of the Securities
of any series and is authenticated and delivered to, and registered in the name
of, the Depositary for such Securities or a nominee thereof.
3
<PAGE>
"Holder" means a Person in whose name a Security is registered in the Security
Register.
"Indenture" means this instrument as originally executed or as it may from time
to time be supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, including, for all
purposes of this instrument, and any such supplemental indenture, the provisions
of the Trust Indenture Act that are deemed to be a part of and govern this
instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"Interest", when used with respect to an Original Issue Discount Security which
by its terms bears interest only after Maturity, means interest payable after
Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on which the
principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
501(4) and Section 501(5).
"Officers' Certificate" means a certificate signed by (i) any two of the
following individuals: the Chairman, the Chief Financial Officer, the President
or a Vice President, or (ii) by one of the foregoing individuals and by any
other Vice President, the Treasurer, an Assistant Treasurer, the Controller, an
Assistant Controller, the Corporate Secretary or an Assistant Corporate
Secretary, of the Company, or any other individual authorized by the Board of
Directors for such purpose, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be an employee
of or counsel to the Company, or who may be other counsel reasonably
satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a dec-
laration of acceleration of the maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
------
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities
--------
are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
4
<PAGE>
(iii) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(iv) Securities which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, and (B) Securities owned by (i) the Company or
any other obligor upon the Securities or (ii) any Subsidiary of the Company or
of such other obligor upon the Securities shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Subsidiary of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the principal
of or any premium or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous Security
evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Subsidiary" means any Subsidiary of the Company which at the time of
determination has, (A) assets which, as of the date of the Company's most
recently prepared quarterly consolidated balance sheet, constituted at least 15%
of the Company's total assets on a consolidated basis as of such date, or (B)
revenues for the 12-month period ending on the date of the Company's most
recently prepared quarterly consolidated statement of income which constituted
at least 15% of the Company's total revenues on a consolidated basis for such
period or (C) net earnings for the 12-month period ending on the date of the
Company's most recently prepared quarterly consolidated statement of income
which constituted at least 15% of the Company's total net earnings on a
consolidated basis for such period.
"Proceeding" has the meaning specified in Section 1502.
5
<PAGE>
"Redemption Date", when used with respect to any Security to be redeemed, means
the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed, means
the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date on
the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the chairman
or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this Indenture and
more particularly means any Securities authenticated and delivered under this
Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Debt" means the principal of (and premium, if any) and interest, if any
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent that such
claim for post-petition interest is allowed in such proceeding) on Debt, whether
incurred on or prior to the date of the Indenture or thereafter incurred,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are not superior
in right of payment to the securities or to other Debt which is pari passu with,
---- -----
or subordinated to the Securities; provided, however, that Senior Debt shall not
-------- -------
be deemed to include (1) the Securities or (2) the Debt referred to in clause
(vi) of the definition of Debt.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any installment of
principal thereof or interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the voting power of which is
controlled, directly or indirectly, by the Company or by one or more other Sub-
sidiaries, or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting power" means the power to vote for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this
instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, if at any time there is
more than one such Person, "Trustee" as used
6
<PAGE>
with respect to the Securities of any series shall mean the Trustee with respect
to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended and 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, and except as provided in Section
906.
"U.S. Government Obligations" has the meaning specified in Section 1304.
"Vice President", when used with respect to the Company or the Trustee, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions. Upon any application or
-------------------------------------
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act. Each such
certificate or opinion shall be given in the form of an Officers' Certificate,
if to be given by an officer of the Company, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the Trust Indenture
Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (excluding certificates provided for in
Section 1004) shall include
(1) a statement that each Person signing such certificate or opinion has
read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such Person has
made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such Person, such
condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee. In any case where several
---------------------------------------
matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as
it relates to legal matters, upon a certificate or opinion of, or repre-
sentations 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 its 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
7
<PAGE>
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.
Any certificate, statement or opinion of an officer of the Company or of counsel
may be based, insofar as it relates to accounting matters, upon a certificate,
opinion or representation by an accountant or firm of accountants in the employ
of the Company, unless such officer or counsel, as the case may be, knows, or in
the exercise of reasonable care should know, that the certificate, opinion or
representation with respect to such accounting matters upon which its
certificate, statement or opinion may be based is erroneous.
Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.
Section 104. Acts of Holders; Record Dates.
-----------------------------
(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;
and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him or her the execution thereof. Where such
execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall
also constitute sufficient proof of such signer's authority. The
fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series
entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by
Holders of Outstanding Securities of such series. If not set by
the Company prior to the first solicitation of a Holder of
Securities of such series made by any Person in respect of any
such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of
Holders
8
<PAGE>
(d) required to be provided pursuant to Section 701) prior to such
first solicitation or vote, as the case may be. With regard to
any record date for action to be taken by the Holders of one or
more series of Securities, only the Holders of Securities of such
series on such date (or their duly designated proxies) shall be
entitled to give or take, or vote on, the relevant action.
(e) The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security Registrar.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made
upon such Security.
(g) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular
Security may do so with regard to all or any part of the
principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such
principal amount.
Section 105. Notices, Etc., to Trustee and Company. Any request, demand,
----------------------------------------
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office; provided,
--------
however, that the same shall be made, given, furnished or filed only
-------
when received by a Responsible Officer of the Trustee at its Corporate
Trust Office, Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in
the first paragraph of this instrument; provided, however, that the
-------- -------
same shall be made, given, furnished or filed only when received by
the Company, Attention: Treasurer, or at any other address previously
furnished in writing to the Trustee by the Company.
Section 106. Notice to Holders; Waiver. Where this Indenture provides for
---------------------------
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at its address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice; provided, however, that the Company or the Trustee, upon a good faith
-------- -------
determination that mailing is in the circumstances impractical, may give such
notice by any other method which, in the reasonable belief of the Company or, in
the case of the Trustee, of the Company and the Trustee, is likely to be
received by the Holders. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice
9
<PAGE>
by Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act. If any provision hereof limits,
---------------------------------
qualifies or conflicts with a provision of the Trust Indenture Act that is
required under such Act to be a part of and govern this Indenture, the required
provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents. The Article and
--------------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 109. Successors and Assigns. All covenants and agreements in this
-----------------------
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability Clause. In case any provision in this Indenture or in
-------------------
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 111. Benefits of Indenture. Nothing in this Indenture or in the
----------------------
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED
-------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 113. Legal Holidays. In any case where any Interest Payment Date,
--------------
Redemption Date or Stated Maturity of any Security or the last day on which a
Holder has the right to convert a Security at a particular conversion price
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities (other than a provision
of the Securities 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) or conversion need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided that no interest shall
--------
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
Section 114. Personal Immunity from Liability for Incorporators, Stockholders,
-------------------------------------------------------------------
Etc. No recourse shall be had for the payment of the principal of or premium,
- ---
if any, or interest, if any, on any Security, or for any claim based thereon, or
otherwise in respect of any Security, or based on or in respect of this
Indenture or any indenture supplemental hereto, against any incorporator, or
against any past, present or future stockholder, director or officer, as such,
of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or
10
<PAGE>
otherwise, all such liability being expressly waived and released as a condition
of, and as consideration for, the execution of this Indenture and the issue of
the Securities.
ARTICLE TWO
Security Forms
Section 201. Forms Generally. The Securities of each series shall be in
----------------
substantially the form set forth in this Article, or in such other form as shall
be established by or pursuant to a Board Resolution 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, consistent herewith, be de-
termined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Corporate Secretary
or an Assistant Corporate Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 303 for
the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
Section 202. Form of Face of Security.
------------------------
[Insert any legend required by the Internal Revenue Code and the
---------------------------------------------------------------
regulations thereunder.]
- ----------------------
ALEXANDER & ALEXANDER SERVICES INC.
----------------------------------
No. ________ (Currency)_____
ALEXANDER & ALEXANDER SERVICES INC., a Maryland corporation (herein called
the "Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum of
___________[Currency] [if the Security is to bear interest prior to Maturity,
--------------------------------------------------------
insert -- and to pay interest thereon from or from the most recent Interest
Payment Date to which interest has been paid or duly provided for,
[semi-annually on _______ and _________ in each year] [If other than semi-annual
-------------------------
payments, insert frequency of payments and payment dates], commencing
- -------- ------
________________, at [If the Security is to bear interest at a fixed rate,
--------------------------------------------------------
insert -- the rate of ____% per annum, [If the Security is a Floating or
- ------ ------------------------------------
Adjustable Rate Security, insert -- a rate per annum [computed-determined] in
- ------------------------ ------
accordance with the [insert defined name of Floating or Adjustable Rate
Provision] set forth below] [If the Security is to bear interest at a rate de-
--------------------------------------------------
termined with reference to an index, refer to description of index below] until
- -----------------------------------
the principal hereof is paid or made available for payment [if applicable,
--------------
insert -- and (to the extent that the payment of such interest shall be legally
- ------
enforceable) at the rate of _____% per annum on any overdue installment of
interest]. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment
11
<PAGE>
Date will, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be the
______ or _______ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture).
The indebtedness evidenced by this Security is, to the extent provided in the
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Debt, and this Security is issued subject to the provisions
of the Indenture with respect thereto. Each Holder of this Security, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
[If the Securities are Floating or Adjustable Rate Securities with respect to
--------------------------------------------------------
which the principal of or any premium or interest may be determined with
- --------------------------------------------------------------------------------
reference to an index, insert the text of the Floating or Adjustable Rate
- -----------------------
Provision.]
[If the Security is not to bear interest prior to Maturity, insert -- The
------------------------------------------------------------------------
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ___% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert --
---------------------
any such] interest on this Security will be made at the office or agency of the
Company maintained for that purpose in __________, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
-------- -------------------------------
the Company payment of interest may be made by check mailed to the address of
- --------------------------------------------------------------------------------
the Person entitled thereto as such address shall appear in the Security
- --------------------------------------------------------------------------------
Register).
- ----------
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
12
<PAGE>
Unless the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal.
Dated:
- ------
ALEXANDER & ALEXANDER SERVICES
By:_________________________
Attest:
__________________________
Section 203. Form of Reverse of Security.
---------------------------
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of ______________ (herein called the "Indenture"),
between the Company and PNC Bank, N.A., as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which In-
denture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof [,
limited in aggregate principal amount to _________].
[If applicable, insert -- The Securities of this series are subject to
-----------------------
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
[if applicable, insert -- (1) on _____________ in any year commencing with the
year and ending with the year _____ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after __________ 19__], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before ________, ___%
and if redeemed] during the 12-month period beginning ________ of the years
indicated,
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to _____ of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
---------------------
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
13
<PAGE>
[If applicable, insert -- The Securities of this series are subject to
-----------------------
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
(1) on _____ in any year commencing with the year _____ and ending with the year
_____ through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after ______], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: If redeemed during the 12-month period beginning
_____ of the years indicated,
Year Redemption Price For Redemption Price For
----
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity in on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[The sinking fund for this series provides for the redemption on in each year
beginning with the year and ending with the year ____ and ending with the year
____ of [not less than ___________ ("mandatory sinking fund") and not more than]
___________ aggregate principal amount of Securities of this series. Securities
of this series acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made [in the inverse order in
which they become due).]
[If the Security is subject to redemption, insert -- In the event redemption of
----------------------------------------
this Security in part only, a new Security or Securities of this series and of
like tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.]
The Indenture contains provisions for defeasance at any time of (1) the entire
indebtedness of this Security or (2) certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.
[If the Security is convertible into Common Stock of the Company, insert --
-------------------------------------------------------------------
Subject to the provisions of the Indenture, the Holder of this _________________
Security is entitled, at its option, at any time on or before [insert date]
________________ (except that, in case this Security or any portion hereof shall
be called for redemption, such right shall terminate with respect to this
Security or portion hereof, as the case may be, so called for redemption at the
close of business on the date fixed for redemption as provided in the Indenture
unless the Company defaults in making the payment due upon redemption), to
convert the principal amount of this Security (or any portion hereof which is
$1,000 or an integral multiple thereof), into fully paid and non-assessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of
the Common Stock of the Company, as said shares shall be constituted at the date
of conversion, at the conversion price of __________ principal amount of
Securities for each share of Common Stock, or at the adjusted conversion price
in effect at the date of conversion determined as provided in the Indenture,
upon surrender of this Security, together with the conversion notice hereon duly
executed, to the Company at the designated office or agency of the Company in
___________, accompanied (if so required by the Company) by instruments of
transfer, in form satisfactory to the Company and to the Trustee, duly executed
by the Holder or by its duly authorized attorney in writing. Such
14
<PAGE>
surrendering shall, if made during any period beginning at the close of business
on a Regular Record Date and ending at the opening of business on the Interest
Payment Date next following such Regular Record Date (unless this Security or
the portion being converted shall have been called for redemption on a
Redemption Date during such period), also be accompanied by payment in funds
acceptable to the Company of an amount equal to the Interest payable on such
Interest Payment Date on the principal amount of this Security then being con-
verted. Subject to the aforesaid requirement for payment and, in the case of a
conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an installment of interest (with certain exceptions provided in
the Indenture), no adjustment is to be made on conversion for interest accrued
hereon or for dividends on shares of Common Stock issued on conversion. The
Company is not required to issue fractional shares upon any such conversion, but
shall make adjustment therefor in cash on the basis of the current market value
of such fractional interest as provided in the Indenture. The conversion price
is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the sale of substantially all of the assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon the consolidation, merger or sale by a holder of the number of
shares of Common Stock into which this Security might have been converted
immediately prior to such consolidation, merger or sale (assuming such holder of
Common Stock failed to exercise any rights of election and received per share
the kind and amount received per share by a plurality of non-electing shares) [,
assuming if such consolidation, merger or sale is prior to __________, 19__,
that this Security were convertible at the time of such consolidation, merger or
sale at the initial conversion price specified above as adjusted from to such
time pursuant to the Indenture]. In the event of conversion of this Security in
part only, a new Security or Securities for the unconverted portion hereof shall
be issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is convertible into other securities or property, specify the
- --------------------------------------------------------------------------------
conversion features and the form of conversion notice pursuant to Section 206
- --------------------------------------------------------------------------------
hereof.
- ------
[If the Security is not an Original Issue Discount Security, insert -- If an
---------------------------------------------------------------------
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue-Discount Security, insert -- If an Event
----------------------------------------------------------------
of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- Insert formula for determining the
-----------------------------------
amount. Upon payment (i) of the amount of principal so declared due and payable
- ------
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the Securities
of each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time outstanding of each series to be affected, with
certain exceptions as therein provided with respect to certain modifications or
amendments which may not be made without the
15
<PAGE>
consent of each Holder of such Security affected thereby. The Indenture also
permits certain amendments and modifications thereto from time to time by the
Company and the Trustee without the consent of the Holders of any series of the
Securities to be affected thereby for certain specified purposes, including
curing ambiguities, defects or inconsistencies and making any such change that
does not adversely affect the rights of any Holder of such series of the
Securities, as provided therein.
The Indenture contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and any premium and Interest on this
Security at the times, place and [rate(s)], and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of _____ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of (and premium, if
any) or interest on this Security, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
16
<PAGE>
All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
Section 204. Form of Legend for Global Securities. Every Global Security
---------------------------------------
authenticated and delivered hereunder shall bear a legend in substantially the
following form or such other legends as may be required:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than
the Depositary or a nominee thereof and no such transfer may be registered,
except in the limited circumstances described in the Indenture. Every
Security authenticated and delivered upon registration of transfer of, or
in exchange for or in lieu of, this Security shall be a Global Security
subject to the foregoing, except in such limited circumstances.
Section 205. Form of Trustee's Certificate of Authentication. The Trustee's
-------------------------------------------------
certificate of authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
____________________________
As Trustee
By____________________________
Authorized Officer
Section 206. Form of Conversion Notice.
-------------------------
To Alexander & Alexander Services Inc.
The undersigned owner of this Security hereby irrevocably exercises the option
to convert this Security, or portion hereof (which is $1,000 or an integral
multiple thereof) below designated, into shares of Common Stock of the Company
in accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for fractional shares and any Securities representing
any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
this Notice is being delivered on a date after the close of business on a
Regular Record Date and prior to the opening of business on the related Interest
Payment Date (unless this Security or the portion thereof being converted has
been called for redemption on a Redemption Date within such period), this Notice
is accompanied by payment, in funds acceptable to the Company, of an amount
equal to the interest payable on such Interest Payment Date of the principal of
this Security to be converted. If shares are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect hereto. Any amount required to be paid by the undersigned
on account of interest accompanies this security.
17
<PAGE>
Principal Amount to be Converted
(in an integral multiple of
______if less than all):
_________ (Currency)
Dated______________
__________________________
Signature
Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a
national stock exchange if shares of Common Stock
are to be delivered, or Securities to be issued,
other than to and in the name of the registered
owner.
__________________________
Signature Guarantee
Fill in for registration of shares of Common Stock and Security if to be issued
otherwise than to the registered holder.
____________________ Social Security or other Taxpayer
(Name) Identifying Number_____________
____________________
(Address)
____________________
Please print Name and
Address (including zip code
number)
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series. The aggregate principal
--------------------------------------
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited. The Securities may be issued in one or more series.
There shall be established in or pursuant to a Board Resolution or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from Securities of any other series);
18
<PAGE>
(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Sections 304, 305, 306, 907 or 1107 and except
for any Securities which, pursuant to Section 303, are deemed never to
have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one
or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the Floating or Adjustable Rate Provision
pursuant to which such rates shall be determined, the date or dates
from which 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 Interest Payment Date;
(6) whether the Securities of the series would be secured pursuant to
Section 901(6);
(7) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at which
(including premium, if any) and the terms and conditions upon which
Securities of the series shall be redeemed, in whole or in part, at
the option of the Company pursuant to a sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(10) the terms of any right to convert Securities of the series into shares
of Common Stock of the Company or other securities or property;
(11) if other than denominations of ______ (Currency) and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(12) if the amount of payments of principal of or any premium or interest
on any Securities of the series may be determined with reference to
one or more indices, the manner in which such amounts shall be de-
termined;
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502 or provable under any applicable federal or state
bankruptcy or similar law pursuant to Section 503;
(14) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary or Depositaries for such
Global Security or Global Securities and any circumstance other than
those set forth in Section 305 in which any such Global Security may
be transferred to, and registered and exchanged for Securities
registered in the name of, a Person other than the Depositary for such
Global Security or a nominee thereof and in which any such transfer
may be registered;
<PAGE>
(15) any other event or events of default applicable with respect to the
Securities of the series in addition to those provided in Section
501(1) through (7);
(16) any other covenant or warranty included for the benefit of Securities
of the series in addition to (and not inconsistent with) those
included in this Indenture for the benefit of Securities of all
series, or any other covenant or warranty included for the benefit of
Securities of the series in lieu of any covenant or warranty included
in this Indenture for the benefit of Securities of all series, or any
provision that any covenant or warranty included in this Indenture for
the benefit of Securities of all series shall not be for the benefit
of Securities of the series, or any combination of such covenants,
warranties or provisions;
(17) any restriction or condition on the transferability of the Securities
of the series;
(18) any authenticating or paying agents, registrars, conversion agents or
any other agents with respect to the Securities of the series; and
(19) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by
Section 901(5).
All Securities of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to the Board
Resolution referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a
Board Resolution, a copy of such action shall be delivered to the Trustee.
Section 302. Denominations. The Securities of each series shall be issuable in
-------------
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of _______ (Currency) and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating. The securities
------------------------------------------------
shall be executed on behalf of the Company by its Chairman, a Vice Chairman, its
President, any Vice President, its Treasurer or Assistant Treasurer, its
Controller or Assistant Controller under its corporate seal reproduced thereon
attested by its Corporate Secretary or one of its Assistant Corporate
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
The seal of the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who were at
any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. Minor typographical and other
minor errors in the text of any Security or minor defects in the seal or
facsimile signature on any Security shall not affect the validity or
enforceability of such Security if it has been duly authenticated and delivered
by the Trustee.
20
<PAGE>
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions or indentures supplemental hereto as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolutions or indentures supplemental hereto
as permitted by Section 201, that such form has been established
in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolutions or indentures supplemental hereto
as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture;
and
(c) that such Securities, 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 in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, mor-
atorium and similar laws of general applicability relating to or
affecting creditors' rights generally and to general equity
principles.
The Trustee shall have the right to decline to authenticate and deliver any
Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith by its board of directors, executive committee, or a trust committee of
directors or committee of Responsible Officers of the Trustee shall determine
that such action would expose the Trustee to personal liability to existing
Holders of Securities.
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if
all Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Board Resolution otherwise required pursuant to
Section 301 or the Company Order and Opinion of Counsel otherwise required
pursuant to such preceding paragraph at or prior to the time of authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly au-
thenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 309, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
21
<PAGE>
Section 304.Temporary Securities. Pending the preparation of definitive
---------------------
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers of the Company executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive Se-
curities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange. The Company
----------------------------------------------------
shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency of the
Company in a Place of Payment being herein sometimes collectively referred to as
the "Security Register") in which, subject to such reasonable regulations as it
or the Trustee may prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series at the
office or agency in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal amount
and tenor.
At the option of the Holder, Securities of any series may be exchanged for other
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer, exchange,
redemption or payment shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
22
<PAGE>
No service charge shall be made for any registration of transfer or exchange of
Securities, but the Company or the Trustee may require payment of a sum suf-
ficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 907 or 1107 not involving any transfer.
Neither the Company nor the Trustee shall be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding any other provision in this Indenture, no Global Security may be
transferred to, or registered or exchanged for Securities registered in the name
of, any Person other than the Depositary for such Global Security or any nominee
thereof, and no such transfer may be registered, unless (1) such Depositary (A)
notifies the Company and the Trustee that it is unwilling or unable to continue
as Depositary for such Global Security or (B) ceases to be a clearing agency
registered under the Exchange Act, (2) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so transferable,
registrable and exchangeable, and such transfers shall be registrable, (3) there
shall have occurred and be continuing an Event of Default with respect to the
Securities evidenced by such Global Security or (4) there shall exist such other
circumstances, if any, as have been specified for this purpose as contemplated
by Section 301. Notwithstanding any other provision in this Indenture, a Global
Security to which the restriction set forth in the preceding sentence shall have
ceased to apply may be transferred only to, and may be registered and exchanged
for Securities registered only in the name or names of, such Person or Persons
as the Depositary for such Global Security shall have directed and no transfer
thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration of transfer of, or
in exchange for or in lieu of, a Global Security to which the restriction set
forth in the first sentence of the preceding paragraph shall apply, whether
pursuant to this Section, Section 304, 306, 907 or 1107 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If there shall
-------------------------------------------------
be delivered to the Company and the Trustee (i) a mutilated Security, or (ii)
evidence to their satisfaction of the destruction, loss or theft of any Security
and in either case such security or indemnity as may be required by either of
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such mutilated, destroyed, lost
or stolen Security, a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company or the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
23
<PAGE>
Every new Security of any series issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved. Except as
--------------------------------------------------
otherwise provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
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 15
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such
series at its address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
24
<PAGE>
Subject to the foregoing provisions of this Section, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
Subject to the provisions of Section 1202, in the case of any Security which is
converted after any Regular Record Date and on or prior to the next succeeding
Interest Payment Date (other than any Security the principal of (or premium, if
any, on)) which shall become due and payable, whether at a Stated Maturity or by
declaration of acceleration, call for redemption, or otherwise, 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 Security (or any one or more
Predecessor Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Security which is converted, interest
whose Stated Maturity is after the date of conversion of such Security shall not
be payable.
Section 308. Persons Deemed Owners. Prior to due presentment of a Security for
---------------------
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
and any premium and (subject to Section 307) any interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 309. Cancellation. All Securities surrendered for payment, redemption,
------------
registration of transfer or exchange or for credit against any sinking fund
payment or for conversion shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of as
directed by a Company Order. Acquisition by the Company of any Security shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Security unless and until the same is delivered to the Trustee for
cancellation.
Section 310. Computation of Interest. Except as otherwise specified as
-------------------------
contemplated by Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture. This Indenture shall upon
---------------------------------------
Company Request cease to be of further effect (except as to any surviving rights
of conversion, registration of transfer or exchange of Securities of a series
herein expressly provided for)
25
<PAGE>
with respect to Securities of any series, and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to a series, when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered (other than (i) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided
in Section 306 and (ii) Securities of such series for whose
payment money has theretofore been deposited in trust or seg-
regated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities of such series not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee in trust
irrevocably (A) money (in United States dollars) in an amount, or
(B) U.S. Government Obligations that through the scheduled payment
of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due
date of any payment, money in an amount, or (C) a combination
thereof, sufficient, 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 the entire indebtedness on such Securities of such series
not theretofore delivered to the Trustee for cancellation, for
principal of (and premium, if any) and interest to the date of such
deposit (in the case of Securities of such series which have become
due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(1) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(2) 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 with respect to such series have been complied with.
In the event there are Securities of two or more series outstanding hereunder,
the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Securities of a particular series as to which it is Trustee and if
the other conditions thereto are met. In the event that there are two or more
Trustees hereunder, then the effectiveness of any such instrument shall be
conditioned upon receipt of such instruments from all Trustees hereunder.
26
<PAGE>
Notwithstanding the satisfaction and discharge of this Indenture with respect to
a particular series, the obligations of the Company to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under Section
614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive until
there are no Securities Outstanding with respect to a particular series and the
obligations of the Company and the Trustee with respect to all other series of
Securities shall survive.
Section 402. Application of Trust Fund. Subject to provisions of the last
--------------------------
paragraph of Section 1003, all amounts deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal and any premium and interest for whose payment such funds have been
deposited with the Trustee. Money deposited pursuant to this section not in
violation of this Indenture shall not be subject to claims of the holders of
Senior Debt under Article Fifteen.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
-----------------
"Event of Default" whenever used with respect to Securities of a series means
any one of the following events and such other events as may be established with
respect to the Securities of such series as contemplated by Section 301 hereof
(whether or not it shall be occasioned by the provisions of Article Fifteen):
(1) Default in the payment of any installment of interest upon any of the
Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(2) Default in the payment of the principal of or premium, if any, on any
of the Securities of such series as and when the same shall become due
and payable either at maturity, upon redemption, by declaration of
acceleration or otherwise; or
(3) Default in the making of any sinking fund payment, whether mandatory
or optional, and when the same shall become due and payable by the
terms of the Securities of such series; or
(4) Failure on the part of the Company duly to observe or perform in any
material respect any other of the covenants or agreements on the part
of the Company contained in this Indenture (other than those set forth
exclusively in the terms of any other particular series of Securities
established as contemplated by this Indenture for the benefit of such
other series) and written notice of such failure, stating that such
notice is a "Notice of Default" hereunder, and requiring the Company
to remedy the same, shall have been given by registered or certified
mail, return receipt requested, to the Company by the Trustee, or to
the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that
series, and such failure shall have continued unremedied for a period
of 90 days after the date of the Company's receipt of such Notice of
Default; or
27
<PAGE>
(5) An event of default, as defined in any indenture or instrument
evidencing or under which the Company or any Principal Subsidiary
shall have outstanding indebtedness for borrowed money in a principal
amount in excess of ___,000,000, shall happen and be continuing and
such indebtedness shall have been accelerated so that the same shall
be or become due and payable prior to the date on which the same would
otherwise have become due and payable or (ii) the Company or any
Principal Subsidiary shall default in the payment at final maturity of
outstanding indebtedness for borrowed money in a principal amount in
excess of ___,000,000, and such acceleration or default at maturity
shall not be waived, rescinded or annulled within 30 days after
written notice thereof, stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by the
Trustee (if such event be known to it), or to the Company and the
Trustee by the holders of at least 25% in aggregate principal amount
of the Outstanding Securities of that series; provided, however, that
-------- -------
if such acceleration under such indenture or instrument or default at
maturity shall be remedied or cured by the Company or Principal
Subsidiary, or waived, rescinded or annulled by the requisite holders
of such indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of either the
Trustee or any of the Holders; or
(6) A decree or order by a court having jurisdiction in the premises shall
have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of the Company under any
applicable Federal or State bankruptcy or similar law, and such decree
or order shall have continued undischarged and unstayed for a period
of 90 days; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, trustee,
assignee, sequestrator or similar official in bankruptcy or insolvency
of the Company or of all or substantially all of its property, or for
the winding up or liquidation of its affairs, shall have been entered,
and such decree or order shall have continued undischarged and
unstayed for a period of 90 days; or
(7) The Company shall institute proceedings to be adjudicated a voluntary
bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking
reorganization, arrangement, adjustment or composition under any
applicable Federal or State bankruptcy or similar law, or shall
consent to the filing of any such petition, or shall consent to the
appointment of a receiver, liquidator, trustee, assignee, sequestrator
or similar official in bankruptcy or insolvency of the Company or of
all or substantially all of its property, or shall make an assignment
for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due and its willingness to
be adjudged a bankrupt, or corporate action shall be taken by the
Company in furtherance of any of the aforesaid purposes.
Upon receipt by the Trustee of any Notice of Default pursuant to this Section
501 with respect to Securities of any series, a record date shall automatically
and without any other action by any Person be set for the purpose of determining
the holders of Outstanding Securities of such series entitled to join in such
Notice of Default, which record date shall be the close of business on the day
the Trustee receives such Notice of Default. The Holders of Outstanding
Securities of such series on such record date (or their duly appointed agents),
and only such Persons, shall be entitled to join in such Notice of Default,
whether or not such Holders remain Holders after such record date; provided
--------
that, unless such Notice of Default shall have become effective by virtue of
Holders of at least 25% in principal amount of Outstanding Securities of such
series on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date,
<PAGE>
such Notice of Default shall automatically and without any action by any Person
be cancelled and of no further effect.
The Company shall deliver to the Trustee written notice of any Event of Default
or event which with the giving of notice or lapse of time or both would become
an Event of Default under clauses (4), (5), (6) and (7) hereof within 30 days of
knowledge thereof by the Company, provided that in the case of clause (4) no
such notice will be required to be given by the Company if such default shall be
cured by the Company within such 30 day period.
Subject to the provisions of Sections 601 and 602, the Trustee shall not be
charged with knowledge of any Event of Default unless written notice thereof
shall have been given to the Trustee by the Company, the Paying Agent of that
series (provided that no such notice shall be required to be given if the
Trustee acts as Paying Agent of such series), or with respect to an Event of
Default under clause (5) of this Section by the holder of any such indebtedness
or an agent of the holder of any such indebtedness or by the trustee then acting
under any such indenture or other instrument under which such default shall have
occurred, or by any Holder of at least 25% in aggregate principal amount of the
Outstanding Securities of that series.
Section 502. Acceleration of Maturity; Rescission and Annulment. If an Event of
--------------------------------------------------
Default with respect to Securities of any series at the time Outstanding occurs
and is continuing, then in every such case the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of that series
may declare the principal amount (or, if any of the Securities of that series
are Original Issue Discount Securities, such portion of the principal amount of
such Securities as may be specified in the terms thereof) of all of the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to Securities
of any series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
Securities of that series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in
such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel except such costs and ex-
penses as are a result of negligence or bad faith on the part of
the Trustee; and
(2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of and interest, if any, on the
Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
29
<PAGE>
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section 502
with respect to Securities of any series, a record date shall automatically and
without any other action by any Person be set for the purpose of determining the
Holders of Outstanding Securities of such series entitled to join in such
declaration, or rescission and annulment, as the case may be, which record date
shall be the close of business on the day the Trustee receives such declaration,
or rescission and annulment, as the case may be. The Holders of Outstanding
Securities of such series on such record date (or their duly appointed agents),
and only such Persons, shall be entitled to join in such declaration, or
rescission and annulment, as the case may be, whether or not such Holders remain
Holders after such record date; provided that, unless such declaration, or
--------
rescission and annulment, as the case may be, shall have become effective by
virtue of Holders of at least 25%, in the case of any declaration of
acceleration, or a majority, in the case of any rescission or annulment, in
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to the 90th
day after such record date, such declaration, or rescission and annulment, as
the case may be, shall automatically and without any action by any Person be
cancelled and of no further effect.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
-----------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon written demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel except such costs and expenses, as are a
result of negligence or bad faith on the part of the Trustee. Until such demand
is made by the Trustee, the Company may pay the principal of and premium, if
any, and interest, if any, on the Securities of any series to the registered
holders, whether or not the Securities of such series are overdue.
If an Event of Default with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim. In case of any judicial
-----------------------------------
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys or other property payable
or
30
<PAGE>
deliverable on any such claims and to distribute the same, and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607 except such costs and expenses, as are a result of
negligence or bad faith on the part of the Trustee.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
-------- -------
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities. All
-------------------------------------------------------------
rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel except such costs and expenses,
as are a result of negligence or bad faith on the part of the Trustee, be for
the ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected. Subject to Article Fifteen, any
-------------------------------
money collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any premium or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable an such Securities for principal and any premium and interest,
respectively; and
THIRD: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
Section 507. Limitation on Suits. No Holder of any Security of any series shall
-------------------
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
31
<PAGE>
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory in form and substance to the Trustee against
the costs, expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
------------------------------------------------------------------
Interest and to Convert. Notwithstanding any other provision in this Indenture,
- -----------------------
the Holder of any Security shall have the right, which in absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) any interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to convert such Securities in accordance with Article
Twelve and to institute suit for the enforcement of any such payment or such
right of conversion, and such rights shall not be impaired without the consent
of such Holder.
Section 509. Restoration of Rights and Remedies. If the Trustee or any Holder
----------------------------------
has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative. Except as otherwise provided with
------------------------------
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities in the last paragraph of Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 511. Delay or Omission Not Waiver. No delay or omission of the Trustee
-----------------------------
or of any Holder of any Securities to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Subject to
Section 507, every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
32
<PAGE>
Section 512. Control by Holders. The Holders of not less than a majority in
------------------
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Upon receipt by the Trustee of any such direction with respect to Securities of
any series, a record date shall be set for determining the Holders of
Outstanding Securities of such series entitled to join in such direction, which
record date shall be the close of business on the day the Trustee receives such
direction. The Holders of Outstanding Securities of such series on such record
date (or their duly appointed agents), and only such Persons, shall be entitled
to join in such direction, whether or not such Holders remain Holders after such
record date; provided that, unless such direction shall have become effective by
--------
virtue of Holders of at least a majority in principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents)
having joined therein on or prior to the 90th day after such record date, such
direction shall automatically and without any action by any Person be cancelled
and of no further effect. Nothing in this paragraph shall prevent a Holder (or
a duly appointed agent thereof) from giving, before or after the expiration of
such 90-day period, a direction contrary to or different from, or, after the
expiration of such period, identical to, a direction that has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date in respect thereof shall be set pursuant to this paragraph.
Section 513. Waiver of Past Defaults. The Holders of not less than a majority
-----------------------
in principal amount of the Outstanding securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default.
(1) in the payment of the principal of or any premium or interest on any
Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Undertaking for Costs. In any suit for the enforcement of any
----------------------
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act.
33
<PAGE>
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities. The duties and
----------------------------------------
responsibilities of the Trustee shall be as provided by the Trust Indenture Act.
(a) If an Event of Default with respect to securities of any Series
at the time Outstanding has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
in the absence of bad faith on its part, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee, however, shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture but need not
verify the accuracy of the contents thereof.
(a) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own
wilful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 512.
(a) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(b) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(c) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company.
Money held in trust by the Trustee need not be segregated from
other funds, except to the extent required by law.
Notwithstanding the foregoing, 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
34
<PAGE>
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults. If a default or Event of Default occurs and is
------------------
continuing hereunder with respect to Securities of any series, and if such
default or Event of Default is known to a Responsible Officer of the Trustee,
the Trustee shall mail the Holders of Securities of such series notice of such
default within 90 days after it occurs; provided, however, that in the case of
-------- -------
any default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. Except in the case of a default in
payment on any Security of any series or in the payment of any sinking fund
installment, the Trustee may withhold notice if and so long as a trust committee
of Responsible Officers of the Trustee in good faith determines that withholding
the notice is in the interest of Holders of securities of such series. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
Section 603. Certain Rights of Trustee. Subject to the provisions of Section
--------------------------
601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party
or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such Counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory in form and substance to the
Trustee against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation
into such
35
<PAGE>
facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall
upon reasonable notice to the Company be entitled to examine the
books, records and premises of the Company, personally or by
agent or attorney at a time and place acceptable to the Company;
(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 it takes or omits
to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
Section 604. Not Responsible for Recitals or Issuance of Securities. The
-----------------------------------------------------------
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.
The Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Authenticating Agent, any
-------------------
Paying Agent, any Security Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 608 and 613, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust. Money held by the Trustee in trust hereunder
-------------------
need not be segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement. The Company agrees
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its written request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation, and reasonable expenses and disbursements of
its agents and outside counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts and the performance of its
duties hereunder, including the reasonable 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.
36
<PAGE>
To secure the Company's payment obligations in this Section, the Trustee shall
have a lien prior to the Securities on all money or property of the Company held
or collected by the Trustee in its capacity as Trustee or as Paying Agent
hereunder (but not in any other capacity), except that held in trust to pay
principal of (and premium, if any) or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of Default
specified in Section 501(6) or (7) occurs with respect to any series of
Securities, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Federal or State bankruptcy law
or similar law.
The Company's obligations under this Section 607 and any lien arising hereunder
shall survive the resignation or removal of the Trustee, the discharge of the
Company's obligations pursuant to Article Four or Article Thirteen hereof and
the termination of this Indenture.
Section 608. Disqualification; Conflicting Interests. If the Trustee has or
----------------------------------------
shall acquire any 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 609. Corporate Trustee Required; Eligibility. There shall at all times
---------------------------------------
be a Trustee hereunder which shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000 or is a subsidiary of a corporation which shall be a Person
that has a combined capital and surplus of at least $50,000,000 and which un-
conditionally guarantees the obligations of the Trustee hereunder. 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 pur-
poses of this Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
(d) If at any time:
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7
(1) the Trustee shall fail to comply with Section 608 after written
request thereof by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of itself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or be incapable of
acting, or if a vacancy shall occur in the office of Trustee
for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to
the Securities of one or more or all of such series and that
at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with
the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect
to the Securities of any series shall be appointed by Act of
the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611,
become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect
to the Securities of any Series shall have been so appointed
by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona
fide Holder of a Security of such series for at least six
months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the
Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with
respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
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Section 611. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such
retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor
Trustee with respect to the Securities of such series shall
execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be
necessary or desirable to transfer the rights, powers, trust
and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment
of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all Securities,
shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall
constitute such Trustee co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such
successor Trustee relates.
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(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraphs (a) and
(b) of this Section, as the case may be.
(d) No successor shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified
and eligible under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business. Any
-----------------------------------------------------------
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company. If and when the
-------------------------------------------------
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Securities), 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 614. Appointment of Authenticating Agent. The Trustee may with the
-----------------------------------
consent of the Company appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer, partial conversion or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party,
or any corporation succeeding to the corporate agency or corporate trust
business of an Authenticating Agent,
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shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof
to the Trustee and to the Company. The Trustee or the Company may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company or the Trustee, as the case may
be. Upon receiving such a notice of resignation or upon such a termination, or
in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall mail written notice of such appointment by first-class mail, postage
prepaid, to all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such series may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
As Trustee
By:
-----------------------------------
As Authenticating Agent
By:
-----------------------------------
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders. The
---------------------------------------------------------
Company will furnish or cause to be furnished to the Trustee
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(a) semi-annually, not later than 10 days after each Regular Record Date
in each year, a list for each series of Securities, in such form as
the Trustee may reasonably require, of the names and addresses of
the Holders of Securities of such series as of the preceding 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 Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701
and the names and addresses of Holders received by the Trustee in
its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new
list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the
Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names
and addresses of Holders made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. To the extent that any such report is
required by the Trust Indenture Act with respect to any 12 month
period, such report shall cover the 12 month period ending July 15
and shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any Securities are
listed on any stock exchange.
Section 704. Reports by Company. The Company shall file with the Trustee and the
------------------
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed
- --------
with the Commission pursuant to Section 13 or
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<PAGE>
15(d) of the Exchange Act shall be filed with the Trustee within 15 days after
the same is so required to be filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, or Sale of Assets
Section 801. Company May Consolidate, Etc., Only on Certain Terms. The Company
----------------------------------------------------
shall not consolidate with or merge into any other Person or sell its properties
and assets as, or substantially as, an entirety to any Person, and the Company
shall not permit any Person to consolidate with or merge into the Company,
unless:
(1) in case the Company shall consolidate with or merge into another Person
or sell its properties and assets as, or substantially as, an entirety
to any Person, the Person formed by such consolidation or into which the
Company is merged or the Person which purchases the properties and
assets of the Company as, or substantially as, an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed and the conversion
rights, if any, shall be provided for in accordance with Article Twelve,
by supplemental indenture satisfactory in form to the Trustee, executed
and delivered to the Trustee, by the Person (if other than the Company)
formed by such consolidation or into which the Company shall have been
merged or by the corporation which shall have acquired the Company's
assets;
(2) immediately after giving effect to such transaction, no Event of
Default shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, or
sale and, if a supplemental indenture is required in connection with
such transaction, such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
Section 802. Successor Substituted. Upon any consolidation of the Company with,
---------------------
or merger of the Company into, any other Person or any sale of the properties
and assets of the Company as, or substantially as, an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such sale is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, the predecessor Person shall be relieved
of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders. Without the
--------------------------------------------------
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any
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time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders of
all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons, or to permit or
facilitate the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities, including, without
limitation, with respect to any of the provisions set forth in Article
Fifteen, provided that any such addition, change or elimination (i)
--------
shall neither (A) apply to any Security of any series created prior to
the execution of such supplemental indenture and entitled to the benefit
of such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities pursuant to the requirements of Section 1005,
or to otherwise secure the Securities of any series; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more series
and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make
any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this clause shall
not adversely affect the interests of the Holders of Securities of any
series in any material respect; or
(10) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Article Twelve, including providing for
the conversion of the securities into any security (other than the
Common Stock of the Company) or property of the Company; or
(11) to conform to any mandatory provisions of law.
44
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Section 902. Supplemental Indentures With Consent of Holders. With the consent
-----------------------------------------------
of the Holders of not less than a majority of principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
-------- -------
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon (including any change in
the Floating or Adjustable Rate Provision pursuant to which such rate is
determined that would reduce such rate for any period) or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
modify the provisions of this Indenture with respect to the
subordination of the Securities of any series in a manner adverse to the
Holders, or
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) if applicable, make any change that adversely affects the right to
convert any security to which the provisions of Article Twelve are
applicable or, except as provided in this Indenture, decrease the
conversion rate or increase the conversion price of any such security,
or
(4) modify any of the provisions of this Section, Section 513 or Section
908, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby,
provided, however, that this clause shall not be deemed to require the
-------- -------
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 908, or the
deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures. In executing, or accepting
------------------------------------
the additional trusts created by, any supplemental indenture permitted by this
Article or the modifications
45
<PAGE>
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and, with respect to
supplemental indentures under Section 902 hereof, evidence of the consents of
Holders required in connection therewith. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures. Upon the execution of any
---------------------------------
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
Section 905. Revocation and Effect of Consents. Until an amendment or supplement
---------------------------------
under this Article or a waiver under this Article becomes effective, a consent
to it by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
becomes effective.
After an amendment or supplement becomes effective, it shall bind every Holder.
Section 906. Conformity with Trust Indenture Act. Every supplemental indenture
-----------------------------------
executed pursuant to this Article shall conform to the requirements of the Trust
Indenture Act.
Section 907. Reference in Securities to Supplemental Indentures. Securities 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 Securities
of any series so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
Section 908. Waiver of Compliance by Holders. Anything in this Indenture to the
-------------------------------
contrary notwithstanding, any of the acts which the Company is required to do,
or is prohibited from doing, by any of the provisions of this Indenture may, to
the extent that such provisions might be changed or eliminated by a supplemental
indenture pursuant to Section 902 upon consent of Holders of not less than a
majority in aggregate principal amount of the then Outstanding Securities of the
series affected, be omitted or done by the Company, if there is obtained the
prior consent or waiver of the Holders of at least a majority in aggregate
principal amount of the then Outstanding Securities of such series.
Section 909. Subordination Unimpaired. No provision in any supplemental
------------------------
indenture that affects the superior position of the holders of Senior Debt shall
be effective against holders of Senior Debt.
46
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ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest. The Company covenants
------------------------------------------
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of and any premium and interest
on the Securities of that series in accordance with the terms of the Securities
and this Indenture.
Section 1002. Maintenance of Office or Agency. So long as any Securities are
-------------------------------
Outstanding, the Company will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, where Securities of that
series may be surrendered for conversion and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
-------- -------
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
Section 1003. Money for Securities Payments to Be Held in Trust. If the Company
-------------------------------------------------
shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of or any
premium or interest on any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal and any premium and interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the Securities of that
series) in the making of any payment in respect of the Securities of that
series, and upon the written request of the Trustee, forthwith pay to the
Trustee all sums held in trust by such Paying Agent for payment in respect of
the Securities of that series.
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The Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of or any premium or interest
on any Security of any series and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
-------- -------
required to make any such repayment, may at the request and expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, the City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 1004. 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, a certificate signed by the Company's principal
executive officer, principal financial officer or principal accounting officer
stating to the best knowledge of the signer thereof whether or not the Company
has complied during such immediately preceding fiscal year with and is in
compliance with all terms, conditions and covenants of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder) and
if the signer has obtained knowledge of any continuing default by the Company in
the performance, observation or fulfillment of any such term, condition or
covenant, specifying each such default and the nature thereof.
Section 1005. Limitations on Liens on Common Stock of Principal Subsidiaries. So
--------------------------------------------------------------
long as any of the Securities remains Outstanding, the Company will not, and
will not permit any Principal Subsidiary to, issue, assume, incur or guarantee
any indebtedness for borrowed money secured by a mortgage, pledge, lien or other
encumbrance in the nature of a lien ("Lien") on any of the Common Stock of a
Principal Subsidiary, which Common Stock is owned by the Company or by any
Principal Subsidiary, without effectively providing that the Securities of each
series, and, if the Company so elects, any other indebtedness of the Company
ranking senior to or on a parity with the Securities, shall be equally and
ratably secured with, or prior to, such secured indebtedness for borrowed money
so long as such secured indebtedness shall be so secured, unless after giving
effect thereto, the aggregate amount of all such secured indebtedness of the
Company and its Subsidiaries would not exceed 15% of Consolidated Tangible Net
Worth of the Company and its Subsidiaries as reflected on the Company's most
recently prepared quarterly balance sheet; provided, however, that this covenant
-------- -------
shall not apply to, and there shall be excluded from secured indebtedness in any
computation under this covenant, indebtedness secured by: (i) Liens existing on
the date hereof; (ii) Liens on any shares of common stock of any corporation
existing at the time such corporation becomes a Principal Subsidiary or merges
into or consolidates with the Company or a Principal Subsidiary; (iii) Liens on
shares of common stock of any Person existing at the time of acquisition thereof
by the Company or any Principal Subsidiary, (iv) Liens to secure the financing
of the acquisition, construction or im-
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provement of property, or the acquisition of shares of stock, hereafter
acquired, constructed or improved by the Company or any Subsidiary, provided
that such Liens are created prior to, at the time of or within one year after
such acquisition or, in the case of property, completion of construction or
commencement of commercial operation, whichever is later; (v) Liens in favor of
the Company or any Subsidiary; (vi) Liens required by or in favor of governments
or agencies thereof including those to secure progress, advance or other
payments pursuant to any contract or provisions of any statute; or (vii) Liens
in the nature of rights of set-off or bankers' liens pursuant to any contract or
statute; and (viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any Lien
referred to in the foregoing clauses (i) to (vii), inclusive, provided, further,
-------- -------
that (a) such extension, renewal or replacement Lien shall be limited to all or
a part of the same shares of stock that secured the Lien extended, renewed or
replaced and (b) the indebtedness secured by such Lien at such time is not
increased.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. Securities of any series which are
------------------------
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 301
for Securities of any series) in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee. In case of any redemption
-------------------------------------
at the election of the Company of less than all the Securities of any series,
the Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date, of the principal amount of Securities of
such series to be redeemed, the specific provision of the Securities of such
series pursuant to which such Securities being called for redemption are being
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed. If less than
-------------------------------------------------
all the Securities of any series are to be redeemed (unless all of the
Securities of such series and of a specified tenor are to be redeemed), the
particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series. If less than all of the
Securities of such series and of a specified tenor are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series and specified tenor not previously called for redemption in
accordance with the preceding sentence.
If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Securities which have been
converted during a selection of Securities to be redeemed shall be treated by
the Trustee as Outstanding for the purpose of such selection.
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The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such Securities which has been or is to be redeemed.
Section 1104. Notice of Redemption. Notice of redemption shall be given by
--------------------
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Securities to be redeemed, at
its address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to
be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) if applicable, the conversion price, and that the date on which the
right to convert the principal of the Securities or the portions thereof
to be redeemed will terminate will be the Redemption Date and the place
or places where such Securities may be surrendered for conversion,
(6) the place or places where such Securities are to be surrendered for
payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the Company
shall be given by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price. Prior to any Redemption Date, the
---------------------------
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date,
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit.
If any Security or portion thereof called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security or portion thereof shall (subject to
any right of the Holder of such Security or any Predecessor Security to receive
interest as provided in the last
50
<PAGE>
paragraph of Section 307) be paid to the Company upon Company Request or, if
then held by the Company, shall be discharged from such trust.
Section 1106. Securities Payable on Redemption Date. Notice of redemption having
-------------------------------------
been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that, unless otherwise specified as contemplated by Section
- -------- -------
301, installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
Section 1107. Securities Redeemed in Part. Any Security which is to be redeemed
---------------------------
only in part shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Conversion of Securities
Section 1201. Applicability of Article. The provisions of this Article shall be
------------------------
applicable to the Securities 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 such Securities, except as otherwise specified as
contemplated by Section 301 for the Securities of such series.
Section 1202. Exercise of Conversion Privilege.
--------------------------------
In order to exercise a conversion privilege, the Holder of a Security of a
series with such a privilege shall surrender such Security to the Company at the
office or agency maintained for that purpose pursuant to Section 1002,
accompanied by written notice to the Company that the Holder elects to convert
such Security 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. Securities
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; and Securities so surrendered
for conversion during the period from the close of business on any Regular
Record Date to the opening of business on the next succeeding Interest Payment
Date (excluding Securities or portions thereof called for redemption during such
period) shall also be accompanied by payment in funds acceptable to the Company
of an amount equal to the
51
<PAGE>
interest payable on such Interest Payment Date on the principal amount of such
Security then being converted, and such interest shall be payable to such
registered Holder notwithstanding the conversion of such Security, subject to
the provisions of Section 307 relating to the payment of Defaulted Interest by
the Company. As promptly as practicable after the receipt of such notice and
of any payment required pursuant to a Board Resolution and, subject to Section
303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto
setting forth the terms of such series of Security, and the surrender of such
Security 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 Security 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 Security (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 Security shall have been surrendered as aforesaid (unless such Holder
shall have so surrendered such Security 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 Security 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
Security as such Security 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 307, no payment or
adjustment shall be made upon any conversion on account of any interest accrued
on the Securities surrendered for conversion or on account of any dividends on
the Common Stock of the Company issued upon such conversion.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the Company,
a new Security or Securities of the same series, of authorized denominations, in
aggregate principal amount equal to the unconverted portion of such Security.
Section 1203. No Fractional Shares. No fractional share of Common Stock of the
--------------------
Company shall be issued upon conversions of Securities of any series. If more
than one Security 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 Securities (or
specified portions thereof to the extent permitted hereby) so surrendered. If,
except for the provisions of this Section 1203, any Holder of a Security or
Securities would be entitled to a fractional share of Common Stock of the
Company upon the conversion of such Security or Securities, 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, (i) 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 (ii) if such Common Stock is not at the
time so listed or admitted to unlisted trading privileges on a national
securities exchange, 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
52
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Section, "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday other than any day an 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 1204. Adjustment of Conversion Price. The conversion price of Securities
------------------------------
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 term of the supplemental
indenture or Board Resolutions setting forth the terms of the Securities 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
Securities pursuant to Section 1002 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 Securities of
such series at its address appearing on the Security Register and to any
conversion agent other than the Trustee.
Section 1205. 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
Securities 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
53
<PAGE>
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 1206. 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, for the purpose of effecting the
conversion of Securities, the full number of shares of Common stock of the
Company then issuable upon the conversion of all outstanding Securities of any
series that has conversion rights.
Section 1207. 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 Securities 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 Security or Securities 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.
Section 1208. Nonassessability. The Company covenants that all shares of its
----------------
Common Stock which may be issued upon conversion of Securities will upon issue
in accordance with the terms hereof be duly and validly issued and fully paid
and nonassessable.
Section 1209. Effect of Consolidation or Merger on Conversion Privilege. 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
Security then outstanding of any series that is convertible into Common Stock of
the Company 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 Security), to convert such Security 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 of the Company into which such Security might have been
converted immediately prior to such consolidation, merger or sale, subject to
compliance with the other provisions of this Indenture, such Security 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 Security. The above provisions of this Section
shall similarly apply to successive consolidations, mergers or sales. 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 of the Company 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 Securities shall not have
the right to thereafter convert their Securities 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 of the Company into which the Securities 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 1209.
Anything in this Section 1209 to the contrary notwithstanding, the provisions of
this Section 1209 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 of the Company are
54
<PAGE>
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 Securities 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
Securities for any provision in conformity therewith or approved by such
independent certified accountant which may be contained in said supplemental
indenture.
Section 1210. 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 Securities of any series that is convertible into Common Stock of
the Company 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, 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 of the Company, or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any Securities and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Subject to the provisions of
Section 601, neither the Trustee nor any conversion agent shall be responsible
for any failure of the Company to issue, transfer or deliver any shares of its
Common Stock or stock certificates or other securities or property upon the
surrender of any Security for the purpose of conversion or to comply with any of
the covenants of the Company contained in this Article Twelve 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.
Section 1211. 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 Securities (including funds
deposited for the sinking fund referred to in Article Three hereof) and which
shall not be required for such purposes because of the conversion of such
Securities as provided in this Article Twelve shall after such conversion be
repaid to the Company by the Trustee upon the Company's written request by
Company Request.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance. The
------------------------------------------------------------
Company may elect, at any time, to have either Section 1302 or Section 1303
applied to the Outstanding Securities of any series, upon compliance with the
conditions set forth below in this Article Thirteen.
Section 1302. Defeasance and Discharge. Upon the Company's exercise of the
------------------------
option provided in Section 1301 to have this Section 1302 applied to the
Outstanding Securities of any series, the Company shall be deemed to have been
discharged from its obligations, and the provisions of Article Fifteen shall
cease to be effective, with respect to the Outstanding
55
<PAGE>
Securities of such series as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
Outstanding Securities of such series and to have satisfied all its other
obligations under the Securities of such series and this Indenture insofar as
the Securities of such series are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), subject
to the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of Securities of such series to receive,
solely from the trust fund described in Section 1304 and as more fully set forth
in such Section, payments in respect of the principal of and any premium and
interest on such Securities of such series when payments are due, (2) the
Company's obligations with respect to the Securities of such series under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, including, without limitation, its
rights under Section 607 and (4) this Article Thirteen. Subject to compliance
with this Article Thirteen, the Company may exercise its option provided in
Section 1301 to have this Section 1302 applied to the Outstanding Securities of
any series notwithstanding the prior exercise of its option provided in Section
1301 to have Section 1303 applied to the Outstanding Securities of such series.
Section 1303. Covenant Defeasance. Upon the Company's exercise of the option
-------------------
provided in Section 1301 to have this Section 1303 applied to the Outstanding
Securities of any series, (1) the Company shall be released from its obligations
under Section 1005 and Section 801 and (2) the occurrence of any event specified
in Sections 501(3), 501(4) (with respect to Section 1005 and Section 801) and
501(5) shall be deemed not to be or result in an Event of Default, and (3) the
provisions of Article Fifteen shall cease to be effective, in each case with
respect to the Outstanding Securities of such series as provided in this Section
on and after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that 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 501(4)),
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 the Securities of such series shall be unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance. The following
-----------------------------------------------
shall be the conditions to application of either Section 1302 or Section 1303 to
the Outstanding Securities of any series:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee that satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions of
this Article Thirteen applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
Outstanding Securities of such series, (i) money in an amount, or (ii)
U.S. Government Obligations that through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination thereof, in each case
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, and which shall
be applied by the Trustee (or any such other qualifying trustee) to pay
and discharge, the principal of and any premium and interest on the
Securities of such series on the respective Stated Maturities, in
accordance with the terms of this Indenture and the Securities of such
series. As used herein, "U.S. Government
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<PAGE>
Obligation" means (x) any security that is (i) a direct obligation of
the United States of America for the payment of which full faith and
credit of the United States of America is pledged or (ii) an obligation
of a Person controlled or supervised by and acting as an agency or
instrumentality for the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any
specific payment of principal of or interest on any such U.S. Government
Obligation specified in Clause (x) and held by such custodian for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any such U.S. Government
Obligation, 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 depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.
(2) In the case of an election under Section 1302, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service, a ruling or (ii) since the date hereof, there has been
a change in the applicable Federal income tax law, in case of either (i)
or (ii) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of such deposit and Defeasance
and discharge to be effected with respect to the Securities of such
series and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the case of an election under Section 1303, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the
Holder of the Outstanding Securities of such series will not recognize
gain or loss for Federal income tax purposes as result of the deposit
and Covenant Defeasance to be effected with respect to the Securities of
such series and will be subject to 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.
(4) The Company shall have delivered to the Trustee an Officers' Certificate
to the effect that the Securities of such series, if then listed on any
securities exchange, will not be delisted as a result of such deposit.
(5) No Event of Default or event that (after notice or lapse of time or
both) would become an Event of Default shall have occurred and be
continuing at the time of such deposit or, with regard to any Event of
Default or any such event specified in Sections 501(6) and 501(7), at
any time on or prior to the 90th day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until
after such 90th day).
(6) The Company shall have delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
with respect to such Defeasance or Covenant Defeasance have been
complied with.
(7) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the
meaning of the
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Investment Company Act of 1940, as amended, unless such trust shall be
qualified under such Act or exempt from regulation thereunder.
(8) At the time of such deposit: (A) no default in the payment of principal
of (or premium, if any) or interest on any Senior Debt shall have
occurred and be continuing or (B) no other event of default with respect
to any Senior Debt shall have occurred and be continuing and shall have
resulted in such Senior Debt becoming or being declared due and payable
prior to the date on which it would otherwise have become due and
payable, or, in the case of either Clause (A) or Clause (B) above, each
such default or event of default shall have been cured or waived or
shall have ceased to exist.
Section 1305. Deposited Money and U.S. Government Obligations to Be Held in
-------------------------------------------------------------
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- -------------------------------------
paragraph of Section 1003, all money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 1306, the Trustee and any such
other trustee are referred to collectively as the "Trustee") pursuant to Section
1304 in respect of the Securities of any Defeasible Series shall be held in
trust and applied by the Trustee, in accordance with the provisions of the
Securities of such series and this Indenture, to the payment, either directly or
through any such Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of Securities of such
series, of all sums due and to become due thereon in respect of principal and
any premium and interest, but money so held in trust need not be segregated from
other funds except to the extent required by law. Money so held in trust shall
not be subject to the provisions of Article Fifteen.
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 Section 1304 or the principal and interest received in respect
thereof other than any such tax, fee or other charge that by law is for the
account of the Holders of Outstanding Securities.
Anything in this Article Thirteen to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304 with
respect to Securities of any Defeasible Series that, 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 that would then be required to be deposited to effect an
equivalent Defeasance or Covenant Defeasance with respect to the Securities of
such series.
Section 1306. Reinstatement. If the Trustee or the Paying Agent is unable to
-------------
apply any money in accordance with this Article Thirteen with respect to the
Securities of any series by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to this Article Thirteen with respect to Securities of
such series until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to Securities of
such series in accordance with this Article Thirteen; provided, however, that if
-------- -------
the Company makes any payment of principal of or any premium or interest on any
Security of such series following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of Securities of such
series to receive such payment from the money so held in trust.
ARTICLE FOURTEEN
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Sinking Funds
Section 1401. Applicability of Article. The provisions of this Article shall be
------------------------
applicable to any sinking fund for the retirement of Securities of a series
except as otherwise specified as contemplated by Section 301 for Securities of
such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1211. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
Section 1402. Satisfaction of Sinking Fund Payments with Securities. The Company
-----------------------------------------------------
(1) may deliver Outstanding Securities of a series (other than any previously
called for redemption) and (2) may apply as a credit Securities of a series
which have been converted pursuant to Article Twelve or Securities of a series
which have been acquired or redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities or
otherwise, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1403. Redemption of Securities for Sinking Fund. Not less than 60 days
-----------------------------------------
prior to each sinking fund payment date for any series of Securities, the
Company will deliver to the Trustee an Officers Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 1202 and
will also deliver to the Trustee any Securities to be so delivered. Not less
than 30 nor more than 60 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104 and provide a copy thereof to the Company
five (5) days in advance of the mailing thereof. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
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ARTICLE FIFTEEN
Subordination of Securities
Section 1501. Securities Subordinate to Senior Debt. The Company covenants and
-------------------------------------
agrees, and each Holder of a Security, by its acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set
forth in this Article (subject to the provisions of Article Four and Article
Thirteen), the payment of the principal of (and premium, if any) and interest on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all amounts then due and
payable in respect of all Senior Debt.
Section 1502. Payment Over of Proceeds Upon Dissolution, Etc. In the event of
----------------------------------------------
(a) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, arrangement, reorganization, debt restructuring or other similar
case or proceeding in connection with any insolvency or bankruptcy proceeding,
relative to the Company or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshaling of assets and liabilities of the Company, then
and in any such event specified in (a), (b) or (c) above (each such event, if
any, herein sometimes referred to as a "Proceeding") the holders of Senior Debt
shall be entitled to receive payment in full of all amounts due or to become due
on or in respect of all Senior Debt, or provision shall be made for such payment
in cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Senior Debt, before the Holders of the Securities are entitled to receive any
payment or distribution of any kind or character, whether in cash, property or
securities (including any payment or distribution which may be payable or
deliverable by reason of the payment of any other Debt of the Company
subordinated to the payment of the Securities, such payment or distribution
being hereinafter referred to as "Junior Subordinated Payment"), on account of
principal of (or premium, if any) or interest on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any Subsidiary
and to that end the holders of Senior Debt shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any Junior
Subordinated Payment, which may be payable or deliverable in respect of the
Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this Section, the
Trustee or the Holder of any Security shall have received any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, including any Junior Subordinated Payment, before all
Senior Debt is paid in full or payment thereof is provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior Debt,
and if such fact shall, at or prior to the time of such payment or distribution,
have been made known to the Trustee or, as the case may be, such Holder, then
and in such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in full, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt. Any taxes that have been withheld or deducted from any payment or
distribution in respect of the Securities, or any taxes that ought to have been
withheld or deducted from any such payment or distribution that have been
remitted to the relevant taxing authority, shall not be considered to be an
amount that the Trustee or the Holder of any Security receives for purposes of
this Section.
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<PAGE>
For purposes of this Article only, the words "any payment or distribution of any
kind or character, whether in 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 securities are subordinated in right of
payment to all then outstanding Senior Debt to substantially the same extent as
the Securities 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 sale of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a Proceeding 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 sale such properties and assets as an entirety, as the case may be,
shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article Eight.
Section 1503. Prior Payment to Senior Debt Upon Acceleration of Securities. In
------------------------------------------------------------
the event that any Securities are declared due and payable before their Stated
Maturity, then and in such event the holders of the Senior Debt outstanding at
the time such Securities so become due and payable shall be entitled to receive
payment in full of all amounts due on or in respect of such Senior Debt, or
provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Securities 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 Securities) by the
Company on account of the principal of (or premium, if any) or interest on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary; provided, however, that nothing in this Section
-------- -------
shall prevent the satisfaction of any sinking fund payment in accordance with
Article Fourteen by delivering and crediting pursuant to Section 1402 Securities
which have been acquired (upon redemption or otherwise) prior to such
declaration of acceleration or which have been converted pursuant to Article
Twelve.
In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or the Holder of any Security 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 1502 would be applicable.
Section 1504. No Payment When Senior Debt in Default. (a) In the event and
--------------------------------------
during the continuation of any default in the payment of principal of (or
premium, if any) or interest on any Senior Debt, or in the event that any event
of default with respect to any Senior Debt shall have occurred and be continuing
and shall have resulted in such Senior Debt becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured or waived
or shall have ceased to exist and such acceleration shall have been rescinded or
annulled, or (b) in the event any judicial proceeding shall be pending with
respect to any such default in payment or such event of default, then no 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
Securities) shall be made by the Company on account of principal of (or premium,
if any) or interest on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary; provided, however,
-------- -------
that nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with Article Fourteen by delivering and crediting pursuant
to Section
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<PAGE>
1402 Securities which have been acquired (upon redemption or otherwise) prior to
such default in payment or event of default or which have been converted
pursuant to Article Twelve.
In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or the Holder of any Security 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 1502 would be applicable.
Section 1505. Payment Permitted If No Default. Nothing contained in this Article
-------------------------------
or elsewhere in this Indenture or in any of the Securities shall prevent (a) the
Company, at any time except during the pendency of any Proceeding referred to in
Section 1502 or under the conditions described in Sections 1503 and 1504, from
making payments at any time of principal of (and premium, if any) or interest on
the Securities, 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 (and
premium, if any) or interest on the Securities 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 1506. Subrogation to Rights of Holders of Senior Debt. Subject to the
-----------------------------------------------
payment in full of all Senior Debt, or the provision for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Debt, the Holders of the Securities shall be subrogated to the extent of the
payments or distributions made to the holders of such Senior Debt pursuant to
the provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Securities
are subordinated to the Senior Debt and is entitled to like rights of
subrogation by reason of any payments or distributions made to holders of such
Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. If the Trustee or the Holders of the
Securities are not for any reason entitled to be subrogated to the rights of
holders of Senior Debt in respect of such payment or distribution, then the
Trustee or the Holders of the Securities may require each holder of Senior Debt
to whom any such payment or distribution is made as a condition to such payment
or distribution to assign its Senior Debt to the extent of such payment or
distribution and all rights with respect thereto to the Trustee on behalf of the
Holders. Such assignment shall not be effective until such time as all Senior
Debt has been paid in full or payment thereof provided for. For purposes of such
subrogation or assignment, no payments or distributions to the holders of the
Senior Debt of any cash, property or securities to which the Holders of the
Securities 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 the
holders of Senior Debt by Holders of the Securities or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt, and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Debt.
Section 1507. 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 the Securities on the one hand and the holders
of Senior Debt on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or shall (a) impair, as
among the Company, its creditors other than holders of Senior Debt, and the
Holders of the Securities, the obligations of the Company, which are absolute
and
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<PAGE>
unconditional (and which, subject to the rights under this Article of the
holders of Senior Debt, are intended to rank equally with all other general
unsecured obligations of the Company), to pay to the Holders of the Securities
the principal of (and premium, if any) and interest on the Securities 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 the
Securities and creditors of the Company other than the holders of Senior Debt;
or (c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this Indenture
including, without limitation, filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article of the holders of Senior Debt
to receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
Section 1508. Trustee to Effectuate Subordination. Each Holder of a Security by
-----------------------------------
his or her acceptance thereof authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination provided in this Article and appoints the Trustee
his or her attorney-in-fact for any and all such purposes.
Section 1509. No Waiver of Subordination Provisions. No right of any present or
-------------------------------------
future holder of any Senior Debt 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
that 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 Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities, and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter or increase, Senior Debt, or
otherwise amend or supplement in any manner Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (iii) release any Person liable in
any manner for the collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
Section 1510. Notice to Trustee. The Company shall give prompt written notice to
-----------------
the Trustee of any fact known to the Company which would prohibit the making of
any payment to or by the Trustee in respect of the Securities. 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
Securities, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Debt or from any trustee, agent
or representative therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 601, shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
-------- -------
the Trustee shall not have received the notice provided for in this Section at
least two 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 (and premium, if any) or interest on any Security),
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 purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it within two Business Days
prior to such date.
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Subject to the provisions of Section 601, the Trustee shall be entitled to rely
on the delivery to it of a written notice by a Person representing himself or
herself to be a holder of Senior Debt (or a trustee, agent or representative
therefor) to establish that such notice has been given by a holder of Senior
Debt (or a trustee, agent or representative 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 Debt 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 Debt 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 1511. 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 601, and the Holders
of the Securities shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such 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
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Debt and other
indebtedness of the Company, 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 1512. Trustee Not Fiduciary For Holders of Senior Debt. The Trustee, in
------------------------------------------------
its capacity as trustee under this Indenture, shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and shall not be liable to any such
holders if it shall in good faith mistakenly pay over or distribute to Holders
of Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article or otherwise.
Section 1513. Rights of Trustee as Holder of Senior Debt; 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 Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 607.
Section 1514. 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.
Section 1515. Defeasance of This Article Fifteen. The subordination of the
----------------------------------
Securities provided by this Article Fifteen is expressly made subject to the
provisions for defeasance or covenant defeasance in Article Thirteen and,
anything herein to the contrary notwithstanding, upon the effectiveness of any
such defeasance or covenant defeasance, the Securities then outstanding shall
thereupon cease to be subordinated pursuant to this Article Fifteen.
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Section 1516. Certain Conversions Deemed Payment. For the purposes of this
----------------------------------
Article only, (1) the issuance and delivery of junior securities upon conversion
of Securities in accordance with Article Twelve shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Securities or on account of the purchase or other
acquisition of Securities, and (2) the payment, issuance or delivery of cash,
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such security. For the purposes of this Section, the term "junior securities"
means (a) shares of any stock of any class of the Company and (b) securities of
the Company which are subordinated in right of payment to all Senior Debt 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 Securities
are so subordinated as provided in this Article. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other than holders of Senior
Debt and the Holders of the Securities, the right, which is absolute and
unconditional, of the Holder of any Security to convert such Security in
accordance with Article Twelve.
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, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ALEXANDER & ALEXANDER SERVICES INC.
By:
-------------------------------
Attest:
-----------------------
PNC BANK, N.A., as Trustee
By:
-------------------------------
Attest:
-----------------------
65
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of , 1996, before me personally came
--- -------
, to me known, who, being by me duly sworn, did depose and
- --------------------
say that (s)he is of ALEXANDER & ALEXANDER SERVICES INC., one
------------------
of the corporations described in and which executed the foregoing instrument;
that (s)he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that (s)he signed her/his name
thereto by like authority.
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of , 1996, before me personally came , to me
------- ----------------
known, who, being by me duly sworn, did depose and say that (s)he is
of PNC Bank, N.A., one of the corporations described in and
- -------------------
which executed the foregoing instrument; that (s)he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that (s)he signed her/his name thereto by like authority.
EXHIBIT 4.3
ALEXANDER & ALEXANDER SERVICES INC.
Form of Warrant Agreement
[for warrants sold attached to equity securities]
THIS WARRANT AGREEMENT is dated as of ___________ between Alexander & Alexander
Services Inc., a Maryland corporation (hereinafter called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to) and, as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company proposes to sell [title of Equity Securities being offered]
(the "Offered Securities") with warrant certificates evidencing one or more
warrants (the "Warrants" or, individually a "Warrant") representing the right to
purchase [title of Equity Securities purchasable through exercise of Warrants]
(the "Warrant Securities"), such warrant certificates and other warrant
certificates issued pursuant to this Agreement being herein called the "Warrant
Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company
in connection with the issuance, exchange, exercise and replacement of the
Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced:
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution and
Delivery of Warrant Certificates.
Section 1.1. Issuance of Warrants. Warrants shall be initially issued in
connection with the issuance of the Offered Securities [but shall be separately
transferable on and after _________, 19__ (the "Detachable Date")] [and shall
not be separately transferable] and each Warrant Certificate shall evidence one
or more Warrants. Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase Warrant
Securities. Warrant Certificates shall be initially issued in units with the
Offered Securities and each Warrant Certificate included in such a unit shall
evidence _____ Warrants for Offered Securities included in such unit.
Section 1.2. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be in [bearer] [registered] form
substantially in the form set forth in Exhibit A hereto, shall be dated ________
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or to
conform to usage. The Warrant Certificates shall be signed on behalf of the
Company by its Chairman of the Board, its President, one of its Vice Presidents,
its Treasurer or one of its Assistant Treasurers under its corporate seal and
attested by its Secretary or one of its Assistant Secretaries. Such signatures
may be manual or facsimile signatures of such authorized officers and may be
imprinted or otherwise reproduced on the Warrant Certificates. The seal of the
Company
<PAGE>
may be in the form of a facsimile thereof an may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be such
officer before the Warrant Certificates so signed shall have been countersigned
and delivered by the Warrant Agent, such Warrant Certificates may be
countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
[If bearer Warrants -- The term "holder" or "holder of a Warrant Certificate" as
used herein shall mean [If Offered Securities with Warrants which are not
immediately detachable - prior to the Detachable Date, the registered owner of
the Offered Security to which such Warrant Certificate was initially attached,
and after such Detachable Date] the bearer of such Warrant Certificate.] [If
registered Warrants -- The term "holder" or "holder of a Warrant Certificate" as
used herein shall mean any person in whose name at the time any Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose. [If Offered Securities with Warrants which are not
immediately detachable - or upon the register of the Offered Securities prior to
the Detachable Date. The Company will or will cause the registrar of the Offered
Securities to make available at all times to the Warrant Agent such information
as to holders of the Offered Securities with Warrants as may be necessary to
keep the Warrant Agent's records up to date.]]
Section 1.3. Issuance of Warrant Certificates. Warrant Certificates evidencing
the right to purchase Warrant Securities (except as provided in Sections 2.3(c),
3.2 and 4.1) may be executed by the Company and delivered to the Warrant Agent
upon the execution of this Warrant Agreement or from time to time thereafter.
The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on
behalf of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to ____________ Warrant Securities and
shall deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate is
issued in exchange or substitution for one or more previously countersigned
Warrant Certificates [If registered Warrants -- or in connection with their
transfer], as hereinafter provided or as provided in Section 2.3(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants.
Section 2.1. Warrant Price. On_______, 19___, the exercise price of each Warrant
is ________ (currency). During the period from _________, 19__, through and
including _________, 19__, the exercise price of each Warrant will be ________
(currency). On ___________, 19__, the exercise price of each Warrant will be
________ (currency). Such purchase price of Warrant Securities is referred to in
this Agreement as the "Warrant Price." The Warrant Price and the numbers and
kind of shares of capital stock for which a Warrant may be exercised is subject
to adjustment from time to time as set forth in Article V hereof.
2
<PAGE>
Section 2.2. Duration of Warrants. Each Warrant may be exercised in whole at any
time, as specified herein, on or after [the date thereof] [ , 19__,] and at or
before 5 p.m. New York time on ____________, 19__, (the "Expiration Date"). Each
Warrant not exercised at or before 5 p.m. New York time on the Expiration Date
shall become void, and all rights of the holder of the Warrant Certificate
evidencing such Warrant under this Agreement shall cease.
Section 2.3. Exercise of Warrants.
(a) During the period specified in Section 2.2, any whole number of
Warrants may be exercised by providing certain information set forth
on the reverse side of the Warrant Certificate and by paying in
full, [in lawful money of the United States of America] [in cash or
by certified check or official bank check or by bank wire transfer,
in each case] [by bank wire transfer], in immediately available
funds, the Warrant Price for each Warrant exercised, to the Warrant
Agent at its corporate trust office [or at ________], provided that
such exercise is subject to receipt, within five business days of
such [payment] [wire transfer] by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities
set forth on the reverse side of the Warrant Certificate properly
completed and duly executed. The date on which payment in full of
the Warrant Price is received by the Warrant Agent shall, subject to
receipt of the Warrant Certificate as aforesaid, be deemed to be the
date on which the Warrant is exercised. The Warrant Agent shall
deposit all funds received by it in payment of the Warrant Price in
an account of the Company maintained with it and shall advise the
Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the
amount so deposited to its account. The Warrant Agent shall promptly
confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants
exercised, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of
the Warrant Securities to which such holder is entitled upon such
exercise, (iii) delivery of Warrant Certificates evidencing the
balance, if any, of the Warrants remaining after such exercise, and
(iv) such other information as the Company shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue to or upon the order of the holder of the
Warrant Certificate evidencing such Warrant, the Warrant Securities
to which such holder is entitled in fully registered form,
registered in such name or names as may be directed by such holder.
Such certificate or certificates evidencing the Common Stock shall
be deemed to have been issued and any persons who are designated to
be named therein shall be deemed to have become the holder of record
of such Warrant Securities as of the close of business on the
exercise date. No fractional shares of Warrant Securities will be
issued upon exercise of any Warrant. For each fractional share that
would otherwise be issued, the Company will pay by company check in
an amount equal to such fraction multiplied by the closing sales
price of the Warrant Securities on the New York Stock Exchange (or
if not so listed, another equivalent means reasonably determined by
the Company) on the business day immediately preceding the exercise
date. If fewer than all of the Warrants evidenced by such Warrant
Certificate are exercised, the Company shall execute, and an
authorized officer of the Warrant Agent shall manually countersign
3
<PAGE>
and deliver, a new Warrant Certificate evidencing the number of such
Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any
transfer involved in the issue of the Warrant Securities; and in the
event that any such transfer is involved, the Company shall not be
required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it has been established to the
Company's satisfaction that no such tax or other charge is due.
ARTICLE III
Other Provisions Relating to Rights of
Holders of Warrant Certificates.
Section 3.1. No Rights as Stockholder Conferred by Warrants or Warrant
Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle
the holder thereof to any of the rights of a holder of Warrant Securities,
including, without limitation, the right to receive the payment of principal of,
premium, if any, or interest on Warrant Securities or to enforce any of the
covenants in the Indenture or the right to receive dividends, vote, receive
notice of any meeting of stockholders or otherwise have any right as stockholder
of the Company.
Section 3.2. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it, and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for cancellation, then,
in the absence of notice to the Company or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and evidencing a like number of Warrants. Upon the issuance of any
new Warrant Certificate under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Warrant Agent) in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost,
stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
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
of mutilated, lost, stolen or destroyed Warrant Certificates.
Section 3.3. Holder of Warrant Certificate May Enforce Rights. Notwithstanding
any of the provisions of this Agreement, any holder of a Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Warrant Securities
or the holder of any other Warrant Certificate, may in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce or otherwise in respect of,
his right to exercise the Warrants evidenced by his Warrant Certificate in the
manner provided in his Warrant Certificate and in this Agreement.
4
<PAGE>
ARTICLE IV
Exchange and Transfer of Warrant Certificates.
Section 4.1. Exchange and Transfer of Warrant Certificates. [If Offered
Securities with Warrants which are immediately detachable - Upon] [If Offered
Securities with Warrants which are not immediately detachable - Prior to the
Detachable Date, a Warrant Certificate may be exchanged or transferred only
together with the Offered Securities to which the Warrant Certificate was
initially attached and only for the purpose of effecting or in conjunction with
an exchange or transfer of such Offered Securities. Prior to the Detachable
Date, each transfer of the Offered Securities [on the register of the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date upon] surrender at the corporate trust office of the
Warrant Agent [or ], Warrant Certificates evidencing Warrants may be exchanged
for Warrant Certificates in other denominations evidencing such Warrants [If
registered Warrants -- or the transfer thereof may be registered in whole or in
part]; provided that such other Warrant Certificates evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. [If registered
Warrants -- The Warrant Agent shall keep, at its corporate trust office [and
at] books in which, subject to such reasonable regulations as it may prescribe,
it shall register Warrant Certificates and exchanges and transfers of
outstanding Warrant Certificates, upon surrender of the Warrant Certificates to
the Warrant Agent at its corporate trust office [or ] for exchange [or
registration of transfer], properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company and the Warrant Agent.] No service
charge shall be made for any exchange [or registration of transfer] of Warrant
Certificates but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange [or registration of transfer]. Whenever any
Warrant Certificates are so surrendered for exchange [or registration of
transfer] an authorized officer of the Warrant Agent shall manually countersign
and deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange [or
registration of transfer] which will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or
registration of transfer] of Warrant Certificates shall be the valid obligations
of the Company, evidencing the same obligations, and entitled to the same
benefits under this Agreement, as the Warrant Certificates surrendered for such
exchange [or registration of transfer].
Section 4.2. Treatment of Holders of Warrant Certificates. [If Offered
Securities with bearer Warrants which are not immediately detachable - Subject
to Section 4.01, each] [If Offered Securities with bearer Warrants which are
immediately detachable - Each] Warrant Certificate shall be transferable by
delivery and shall be deemed negotiable and the bearer of each Warrant
Certificate may be treated by the Company, the Warrant Agent and all other
persons dealing with such bearer as the absolute owner thereof for any purpose
and as the person entitled to exercise the rights represented by the Warrants
evidenced thereby, any notice to the contrary notwithstanding.] [If registered
Warrants which are not immediately detachable - Every holder of a Warrant
Certificate, by accepting the same, consents and agrees with the Company, the
Warrant Agent and with every subsequent holder of such Warrant Certificate that
until the transfer of the Warrant Certificate is registered on the books of the
Warrant Agent [or the registrar of the Offered Securities prior to the
Detachable Date], the Company and the Warrant Agent [or the registrar of the
Offered Securities prior to the Detachable Date] may treat the registered holder
as the absolute owner thereof for any purpose and as the person entitled to
exercise the rights represented by the Warrants evidenced thereby, any notice to
the contrary notwithstanding.]
5
<PAGE>
Section 4.3. Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange [registration of transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Company, be delivered to the
Warrant Agent and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be
reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V
Adjustments.
Section 5.1. Adjustment of Warrant Price. The Warrant Price shall be subject to
adjustment from time to time upon the happening of certain events as hereinafter
described.
Section 5.2. Mandatory Adjustments. The Warrant Securities shall be subject
to adjustment as follows:
(a) If the Company shall (i) declare or pay a dividend on its
outstanding Warrant Securities in shares of Warrant Securities or
make a distribution to holders of its Warrant Securities in shares
of Warrant Securities, (ii) subdivide its outstanding shares of
Warrant Securities into a greater number of shares of Warrant
Securities, (iii) combine its outstanding shares of Warrant
Securities into a smaller number of shares of Warrant Securities, or
(iv) issue by reclassification of its shares of Warrant Securities
other securities of the Company, then the Warrant Securities in
effect immediately prior thereto shall be adjusted so that the
holder of any Warrants thereafter exercised shall be entitled to
receive the number and kind of shares of Warrant Securities or other
securities that the holder would have owned or been entitled to
receive after the happening of any of the events described above had
such Warrants been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph 5.1(a) shall become effective on the
date of the dividend payment, subdivision, combination or issuance
retroactive to the record date with respect thereto, if any, for
such event. Such adjustment shall be made successively.
(b) If the Company shall issue to all holders of its Warrant Securities
rights, options, warrants or convertible or exchangeable securities
expiring within 60 days containing the right to subscribe for or
purchase shares of Warrant Securities at a price per share that is
lower than the then Quoted Price per share (as hereinafter defined)
of Warrant Securities, then the Warrant Securities shall be adjusted
in accordance with the following formula:
(N X P)
AE = E x O + ( M )
O + N
where
AE = the adjusted Warrant Price. E = the current Warrant Price.
O = the number of shares of Warrant Securities outstanding on
the record date.
6
<PAGE>
N = the number of additional shares of Warrant Securities offered.
P = the offering price per share of the additional shares.
M = the Quoted Price per share of Warrant Securities on the record
date.
The adjustment shall be made successively whenever any such rights, options,
warrants or convertible or exchangeable securities are issued and shall become
effective immediately after the record date for the determination of
shareholders entitled to receive the rights, options, warrants or convertible or
exchangeable securities. Upon the expiration of any such rights, options,
warrants or convertible or exchangeable securities, if any thereof shall not
have been exercised, the Warrant Price shall be increased by the amount of the
initial adjustment of the Warrant Price made pursuant to this Section 5.1(b) in
respect of such expired rights, options, warrants or convertible or exchangeable
securities. For the purposes of this Section 5.1, the "Quoted Price" per share
of Warrant Securities at any date shall be deemed to be the average of the daily
closing prices for the 20 consecutive trading days commencing on the 30th
trading day prior to the date in question. The closing price for each day shall
be (i) if the Warrant Securities are listed or admitted to trading on a national
securities exchange, the closing price on the New York Stock Exchange
Consolidated Tape (or any successor composite tape reporting transactions on
national securities exchanges) or, if such a composite tape shall not be in use
or shall not report transactions in the Warrant Securities, the last reported
sales price regular way on the principal national securities exchange on which
the Warrant Securities are listed or admitted to trading (which shall be the
national securities exchange on which the greatest number of shares of Warrant
Securities has been traded during such 20 consecutive trading days), or, if
there is no transaction on any such day in any such situation, the mean of the
bid and asked prices on such day, or (ii) if the Warrant Securities are not
listed or admitted to trading on any such exchange, the closing price, if
reported, or, if the closing price is not reported, the average of the closing
bid and asked prices as reported by NASDAQ, or (iii) if bid and asked prices for
the Warrant Securities on each such day shall not have been reported through
NASDAQ, the average of the bid and asked prices for such date as furnished by
any three New York Stock Exchange member firms regularly making a market in the
Warrant Securities and not affiliated with the Company selected for such purpose
by the Board of Directors of the Company, or (iv) if no such quotations are
available, the fair market value of the Warrant Securities as determined by a
New York Stock Exchange member firm regularly making a market in the Warrant
Securities selected for such purpose by such Board.
(c) If the Company shall distribute to all holders of its outstanding
Warrant Securities any shares of capital stock of the Company (other
than Warrant Securities) or evidences of indebtedness or assets
(excluding ordinary cash dividends, other cash distributions from
current or retained earnings and dividends or distributions referred
to in Sections 5.1(a) and (b)) or rights or warrants to subscribe
for or purchase any of its securities (excluding those referred to
in Section 5.1(b) above) (any of the foregoing being hereinafter in
this Section 5.1(c) called the "Securities or Assets"), then in each
such case, unless the Company elects to reserve shares or other
units of such Securities or Assets for distribution to each holder
of a Warrant upon the exercise of the Warrants so that such holder
will receive upon such exercise, in addition to the shares of the
Warrant Securities to which such holder is entitled, the amount and
kind of such Securities or Assets which such holder would have
received if such holder had, immediately prior to the record date
for the distribution of the Securities or Assets, exercised the
Warrants and received Warrant Securities, the Warrant Price shall be
adjusted so that the same shall equal the price determined by
multiplying the Warrant Price in effect immediately prior to the
date of such distribution by a fraction, the numerator of which
shall be the Quoted Price per share of the Warrant Securities on the
record date mentioned below less the then fair market
7
<PAGE>
value (as determined in good faith by the Board of Directors of
the Company), of the portion of the Securities or Assets so
distributed or of such rights or warrants applicable to one share of
Warrant Securities, and the denominator of which shall be the Quoted
Price per share of the Warrant Securities on such record date;
provided, however, that if the then fair market value (as so
determined) of the portion of the Securities or Assets so
distributed applicable to one Warrant Security equals or exceeds the
Quoted Price per Warrant Security on the record date mentioned
above, in lieu of the foregoing adjustment, adequate provision shall
be made so that the holder of the Warrants shall have the right to
receive the amount and kind of Securities and Assets such holder
would have received had such holder exercised each such Warrant
immediately prior to the record date for the distribution of the
Securities or Assets. Such adjustment shall become effective
immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(d) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of
such price. All calculations under this Section 5.1 shall be made to
the nearest one-hundredth of a cent or to the nearest one-hundredth
of a share, as the case may be.
(e) If the Company shall be a party to any transaction, including
without limitation a merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation or
recapitalization of the Warrant Securities (each of the foregoing
being referred to as a "Transaction"), in each case [Insert for
Common Stock: (except in the case of a Warrant Securities
Fundamental Change (as hereinafter defined))] as a result of which
shares of Warrant Securities shall be converted into the right to
receive stock, securities or other property (including cash or any
combination thereof), each Warrant shall thereafter be exercisable
into the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such
Transaction by a holder of that number of shares of Warrant
Securities issuable upon the exercise of one Warrant immediately
prior to such Transaction. The Company shall not be a party to any
Transaction unless the terms of such Transaction are consistent with
the provisions of this Section 5.1(e) and it shall not consent or
agree to the occurrence of any Transaction until the Company has
entered into an agreement with the successor or purchasing entity,
as the case may be, for the benefit of the holders of the Warrants,
which shall contain provisions enabling the holders of the Warrants
to exercise such Warrants for the consideration received by holders
of Warrant Securities at the Warrant Price immediately after such
Transaction. The provisions of this Section 5.1(e) shall similarly
apply to successive Transactions.
[Insert for Common Stock]:
(f) In the event of a common stock Fundamental Change, each Warrant
shall be exercisable into Common Stock of the kind received by
holders of Common Stock as the result of such Common Stock
Fundamental Change. The Warrant Price immediately following such
Common Stock Fundamental Change shall be the Warrant Price in effect
immediately prior to such Common Stock
8
<PAGE>
Fundamental Change multiplied
by a fraction, the numerator of which is the Purchaser Stock Price
(as hereinafter defined) and the denominator of which is the
Applicable Price (as hereinafter defined). The Company shall not
consent or agree to the occurrence of any Common Stock Fundamental
Change until the Company has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit
of the holders of the Warrants which shall contain provisions
enabling the holders of the Warrants to exercise such Warrants for
the consideration received by holders of Common Stock at the Warrant
Price immediately after such Common Stock Fundamental Change. The
provisions of this Section 5.1(f) shall similarly apply to
successive Common Stock Fundamental Changes.
(g) As used herein:
(i) The term "Applicable Price" means the Quoted Price for one
share of the Common Stock on the record date for the
determination of the holders of Common Stock entitled to
receive Common Stock in connection with such Common Stock
Fundamental Change, or, if there is no such record date, on
the date upon which the holders of Common Stock shall have
the right to receive such Common Stock.
(ii) The term "Common Stock Fundamental Change" shall mean the
occurrence of any transaction or event in connection with
which all or substantially all the Common Stock shall be
exchanged for, converted into, acquired for or shall
constitute solely the right to receive Common Stock that, for
the ten consecutive trading days immediately prior to such
Common Stock Fundamental Change, has been admitted for
listing on a national securities exchange or quoted on the
National Market System of NASDAQ (whether by means of an
exchange offer, liquidation, tender offer, consolidation,
merger, combination, reclassification, recapitalization or
otherwise).
(iii) The term "Purchaser Stock Price" shall mean, with respect to
any Common Stock Fundamental Change, the Quoted Price for one
share of the Common Stock received by holders of Common Stock
in such Common Stock Fundamental Change (determined as if the
definition of Quoted Price contained in this Agreement were
applicable to such Common Stock) on the record date for the
determination of the holders of Common Stock entitled to
receive such common stock or, if there is no such record
date, on the date upon which the holders of Common Stock
shall have the right to receive such Common Stock.]
(h) For the purposes of this Section 5.1, the term "shares of Warrant
Securities" shall mean (i) the class of stock designated as the
Warrant Securities of the Company at the date hereof or (ii) any
other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value, or from no par value to par value. If at any time, as a
result of an adjustment made pursuant to Sections 5.1(a), (c), (e)
or (f) the Holder shall become entitled to receive any securities
other than shares of Warrant Securities, thereafter the number of
such other securities so issuable upon the exercise of the Warrants
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the rights contained in this Section 5.1.
(i) Notwithstanding the foregoing, in any case which this Section 5.1
provides that an adjustment shall become effective immediately after
a record date for an event, the Company may defer until the
occurrence of such event (i) issuing to the holder of any Warrant
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<PAGE>
exercised after such record date and before the occurrence of such
event the additional shares of Warrant Securities issuable upon such
conversion before giving effect to such adjustment and (ii) paying
to such holder any amount in cash by company check in lieu of any
fraction pursuant to Section 2.3.
(j) If the Company shall take any action affecting the Warrant
Securities, other than action described in this Section 5.1, which
in the opinion of the Board of Directors of the Company would
materially adversely affect the exercise rights of the holders of
the Warrants, the Warrant Price for the Warrants may be adjusted, to
the extent permitted by law, in such manner, if any, and at such
time, as such Board may determine in good faith to be equitable in
the circumstances. Failure of the Board of Directors of the Company
to provide for any such adjustment prior to the effective date of
any such action by the Company affecting the Warrant Securities
shall be evidence that the Board of Directors of the Company has
determined that it is equitable to make no adjustments in the
circumstances.
Section 5.3. Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Warrant
Price to any amount deemed appropriate by the Board of Directors of the Company;
provided, that, if the Company elects so to reduce the then current Warrant
Price, such reduction shall remain in effect for at least 20 Business Days,
after which time the Company may, at its option, reinstate the Warrant Price in
effect prior to such reduction.
Section 5.4. Notice of Adjustment. Whenever the Warrant Price is adjusted as
herein provided, the Chief Financial Officer of the Company shall compute the
adjusted Warrant Price in accordance with the foregoing provisions and shall
prepare a certificate setting forth such adjusted Warrant Price and showing in
reasonable detail the facts upon which such adjustment is based. A copy of such
certificate shall be filed promptly with the Warrant Agent. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Warrant Price setting forth the adjusted Warrant Price and the
date on which such adjustment becomes effective and shall mail, or cause the
Warrant Agent to mail at the Company's expense, such notice of such adjustment
of the Warrant Price to each holder of a Warrant at his last address as shown on
the Warrants Register.
Section 5.5. No Adjustment for Dividends. Except as provided in Section 5.1
hereof, no adjustment in respect of any dividends or other payments or
distributions made to holders of securities issuable upon exercise of Warrants
shall be made during the term of a Warrant or upon the exercise of a Warrant.
Section 5.6. Statement on Warrants Certificate. Irrespective of any adjustments
in the number or kind of securities purchasable upon the exercise of the
Warrants or the Warrant Securities, any Warrant Certificate theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrant Certificate initially issuable pursuant to
this Agreement.
Section 5.7. Warrant Agent's Adjustment Disclaimer. The Warrant Agent has no
duty to determine when an adjustment under this Article V should be made, how it
should be made or what it should be. The Warrant Agent shall not be accountable
for and makes no representation as to the validity or value of any securities or
assets issued upon exercise of Warrants. The Warrant Agent shall not be
responsible for the Company's failure to comply with this Article V.
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ARTICLE VI
Concerning the Warrant Agent
Section 6.1. Warrant Agent. The Company hereby appoints __________, as Warrant
Agent of the Company in respect of the Warrants and the Warrant Certificates
upon the terms and subject to the conditions herein set forth; and _________
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 6.2. Conditions of Warrant Agent's Obligations. The Warrant Agent
accepts its obligations herein set forth upon the terms and conditions hereof,
including the following, to all of which the Company agrees and to all of which
the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services
rendered by the Warrant Agent and to reimburse the Warrant Agent for
reasonable out-of-pocket expenses (including counsel fees) incurred
by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify
the Warrant Agent for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the
part of the Warrant Agent, arising out of or in connection with its
acting as Warrant Agent hereunder, as well as the costs and expenses
of defending against any claim of such liability.
(b) In acting under this Warrant Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of
the Company and does not assume any obligation or relationship of
agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to it, and
the advice of such 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 accordance with the advice of
such counsel.
(d) The Warrant Agent shall be protected and shall incur no liability
for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented
or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors and employees, may
become the owner of, or acquire any interest in, Warrants, with the
same rights that it or they would have if it were not the Warrant
Agent hereunder, and, to the extent permitted by applicable law, it
or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary,
trustee or agent for, any committee or body of holders of Warrant
Securities or other obligations of the Company as freely as if it
were not the Warrant Agent hereunder.
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(f) The Warrant Agent shall have no liability for interest on any monies
at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) The Warrant Agent shall have no liability with respect to any
invalidity of this Agreement or any of the Warrant Certificates.
(h) The Warrant Agent shall not be responsible for any of the recitals
or representations herein or in the Warrant Certificates (except as
to the Warrant Agent's countersignature thereon), all of which are
made solely by the Company.
(i) The Warrant Agent shall be obligated to perform only such duties as
are herein and in the Warrant Certificates specifically set forth
and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability,
the payment of which within a reasonable time is not, in its
reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates authenticated by the
Warrant Agent and delivered by it to the Company pursuant to this
Agreement or for the application by the Company of the proceeds of
the Warrant Certificates. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in
the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect
to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or, except as provided
in Section 6.2, to make any demand upon the Company.
(j) The Warrant Agent is hereby authorized to obtain from time to time
from the present transfer agent for the Warrant Securities (the
"Transfer Agent"), and any successor Transfer Agent, stock
certificates required to honor outstanding Warrants. The Company
hereby authorizes its present and any successor Transfer Agent to
comply with all such requests. The Company will supply such Transfer
Agent with duly executed stock certificates for such purpose and
will provide or otherwise make available any cash which may be
payable as provided in Section 2.3 hereof, and the Warrant Agent
shall not be responsible for any delay or failure by such Transfer
Agent in supplying such stock certificates.
Section 6.3. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders of the Warrant
Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become
effective; provided that such date shall not be less than three
months after the date on which such notice is given unless the
Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an instrument in writing signed
by or on behalf of the Company and specifying such removal and the
12
<PAGE>
date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (which shall be a
bank or trust company authorized under the laws of the jurisdiction
of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The
obligation of the Company under Section 6(a) shall continue to the
extent set forth therein notwithstanding the resignation or removal
of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under
the Federal Bankruptcy Code, as now constituted or hereafter
amended, or under any other applicable Federal or State bankruptcy
law or similar law or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver or custodian
of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if
a receiver or custodian of it or of all or any substantial part of
its property shall be appointed, or if an order of any court shall
be entered for relief against it under the provisions of the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under
any other applicable Federal or State bankruptcy or similar law, or
if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of
rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by
an instrument in writing, filed with the successor Warrant Agent.
Upon the appointment as aforesaid of a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the
Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent
shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant
Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be merged
or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business
of the Warrant Agent, provided that it shall be qualified as
aforesaid, shall be the successor Warrant Agent under this Agreement
without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
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ARTICLE VII
Miscellaneous.
Section 7.1. Amendment. This Agreement may be amended by the parties hereto,
without the consent of the holder of any Warrant Certificate, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided, that such action
shall not materially and adversely affect the interests of the holders of the
Warrant Certificates.
Section 7.2. Notices and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 7.3. Addresses. Any communication from the Company to the Warrant Agent
with respect to this Agreement shall be addressed to _________, and any
communication from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Alexander & Alexander Services Inc., 1185 Avenue
of the Americas, New York, N.Y. 10036, Attention: _______________ (or such other
address as shall be specified in writing by the Warrant Agent or by the
Company).
Section 7.4. Applicable Law. The validity, interpretation and performance of
this Agreement and each Warrant Certificate issued hereunder and of the
respective terms and provisions thereof shall be governed by and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
Section 7.5. Delivery of Prospectus. The Company will furnish to the Warrant
Agent sufficient copies of a prospectus relating to the Warrant Securities
deliverable upon exercise of Warrants (the "Prospectus"), and the Warrant Agent
agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to
the holder of the Warrant Certificate evidencing such Warrant, prior to or
concurrently with, the delivery of the Warrant Securities issued upon such
exercise, a Prospectus.
Section 7.6. Obtaining of Governmental Approvals. The Company will from time to
time take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and authorities and
securities acts filings under United States Federal and State laws (including,
without limitation, a registration statement in respect of the Warrants and
Warrant Securities under the Securities Act of 1933, as amended), which may be
or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer, and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
Section 7.7. Persons Having Rights under Warrant Agreement. Nothing in this
Agreement shall give to any person other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement.
Section 7.8. Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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<PAGE>
Section 7.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 7.10. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificates for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be affixed hereunto, and the
same to be attested, all as of the day and year first above written.
ALEXANDER & ALEXANDER
SERVICES INC.
By ________________________
Attest:
- -------------------------
[Name of Warrant Agent], as Warrant Agent
Attest: By ___________________________
- -------------------------
<PAGE>
Exhibit A
Note: Format Change incl. Header A(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
[Form of Legend of Prior to ___________,
Equity Securities with this Warrant Certificate
Warrants which are not cannot be transferred or
immediately detachable: exchanged unless attached to a [Title of Offered
Securities].]
Exercisable Only if Countersigned by the
Warrant Agent as Provided Herein
ALEXANDER & ALEXANDER SERVICES INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on _________, 19
[No.] Warrants
This certifies that [the bearer is the ][or registered assigns is the
registered] owner of the above indicated number of Warrants, each Warrant
entitling such [bearer] [owner] to purchase, at any time [after 5 p.m. New York
time on ________, 19__, and] on or before 5 p.m. New York time on ________,
19__,___________[Title of Warrant Securities] (the "Warrant Securities"), of
Alexander & Alexander Services Inc., (the "Company"), on the following basis:
[on____________, 19__, the exercise price of each Warrant is ________
(currency); during the period from _____________, 19__, through and
including________, 19__, the exercise price of each Warrant will be _________
(currency). The holder may exercise the Warrants evidenced hereby by providing
certain information set forth on the back hereof and by paying in full, [in
lawful money of the United States of America] [in cash or by certified check or
official bank check or by bank wire transfer, in each case] [by bank wire
transfer], in immediately available funds, the Warrant Price for each Warrant
exercised to the Warrant Agent (as hereinafter defined) and by surrendering this
Warrant Certificate, with the purchase form on the back hereof duly executed, at
the corporate trust office of [name of Warrant Agent], or its successors as
warrant agent (the "Warrant Agent"), [or ] currently at the address specified on
the reverse hereof, and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement (as hereinafter defined).
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form. Upon any exercise
of fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
The Company will not be required to issue fractional shares of Warrant
Securities upon exercise of the Warrants or distribute stock certificates that
evidence fractional shares of Warrant Securities. In lieu of fractional shares
of Warrant Securities, there shall be paid by the Company to the registered
holder of this Warrant Certificate at the time such Warrant Certificate is
exercised an amount in cash payable by company check equal to the closing sales
price of the Warrant Securities on the New York Stock Exchange (or if not so
listed, another equivalent means reasonably determined by the Company) on the
business day immediately preceding the exercise date, multiplied by such
fraction.
1
<PAGE>
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of ___________, 19__, (the "Warrant Agreement") between the
Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement and the form of Warrant Securities are on file at the
above-mentioned office of the Warrant Agent [and at ].
[If Offered Securities with bearer Warrants which are not immediately detachable
- - Prior to ________, 19__, this Warrant Certificate may be exchanged or
transferred only together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially attached, and only
for the purpose of effecting, or in conjunction with, an exchange or transfer of
such Offered Securities. After such date, this [If Offered Securities with
bearer Warrants which are immediately detachable - This] Warrant Certificate,
and all rights hereunder, may be transferred by delivery and the Company and the
Warrant Agent may treat the bearer hereof as the owner for all purposes.]
[If Offered Securities with registered Warrants which are not immediately
detachable - Prior to __________, 19__, this Warrant Certificate may be
exchanged or transferred only together with the [Title of Offered Securities]
("Offered Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Securities. After such date, this [If Offered
Securities with registered Warrants which are immediately detachable - Transfer
of this] Warrant Certificate may be registered when this Warrant Certificate is
surrendered at the corporate trust office of the Warrant Agent [or _____] by the
registered owner or his assigns, in person or by an attorney duly authorized in
writing, in the manner and subject to the limitations provided in the Warrant
Agreement.]
[If Offered Securities with Warrants which are not immediately detachable Except
as provided in the immediately preceding paragraph, after] [If Offered
Securities with Warrants which are immediately detachable -
After]countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of Warrant Securities, including, without limitation, the
right to receive dividends, vote, receive notice of any meeting of stockholders
or otherwise have any right as a stockholder of the Company.
2
<PAGE>
This Warrant Certificate shall not be valid or obligatory for any purpose until
countersigned by the Warrant Agent.
Dated as of _________, 19__.
ALEXANDER & ALEXANDER
SERVICES INC.
By ___________________________
Attest:
- ------------------------------
Countersigned
- ------------------------------
As Warrant Agent
By ______________________________
Authorized Signature
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash or by
certified check or official bank check or by bank wire transfer] [by bank wire
transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn:__________[or __________], which
[payment] [wire transfer] must specify the name of the holder and the number of
Warrants exercised by such holder. In addition, the holder must complete the
information required below and present this Warrant Certificate in person or by
mail (registered mail is recommended) to the Warrant Agent at the addresses set
forth below. This Warrant Certificate, completed and duly executed, must be
received by the Warrant Agent within five business days of the [payment] [wire
transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants evidenced by this
Warrant Certificate, to purchase _________ [Title of Warrant Securities] (the
"Warrant Securities") of Alexander & Alexander Services Inc. and represents that
he has tendered payment for such Warrant Securities [in cash or by certified
check or official bank check or by bank wire transfer, in each case] [by bank
wire transfer], in immediately available funds, to the order of Alexander &
Alexander Services Inc., c/o [insert name and address of Warrant Agent], in the
amount of ________ (currency) in accordance with the terms hereof. The
undersigned requests that said principal amount of Warrant Securities be in
fully registered form and in the authorized denominations, registered in such
names and delivered, all as specified in accordance with the instructions set
forth below.
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<PAGE>
If the number of Warrants exercised is less than all of the Warrants evidenced
hereby, the undersigned requests that a new Warrant Certificate representing the
remaining Warrants evidenced hereby be issued and delivered to the undersigned
unless otherwise specified in the instructions below.
Dated: Name ________________________
(Please Print)
_________________________ Address ______________________
Social Security Number or ______________________
Other Identifying Number of ______________________
Holder
Signature _____________________
The Warrants evidenced hereby may be exercised at the following addresses:
By hand at ____________________________________________
--------------------------------------------
--------------------------------------------
By mail at ____________________________________________
--------------------------------------------
--------------------------------------------
[Instructions as to form and delivery of Warrant Securities and, if applicable,
Warrant Certificates evidencing unexercised Warrants -- complete as
appropriate.]
4
<PAGE>
*Certificate for Delivery of Bearer Warrant Securities
ALEXANDER & ALEXANDER SERVICES INC.
Warrant Securities
TO: Alexander & Alexander Services Inc.
c/o
as Trustee
This certificate is submitted in connection with our request that you deliver to
us Warrant Securities in bearer form upon exercise of Warrants. We hereby
certify that either (a) none of such Warrant Securities will be held by or on
behalf of a United States Person or (b) if a United States Person will have a
beneficial interest in such Warrant Securities, such person is described in
Section 165(j)(3)(A), (B) of (C) of the United States Internal Revenue Code of
1954, as amended and the regulations thereunder. As used herein, "United States
Person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or resident under the laws
or the United States or any political subdivision thereof or an estate or trust
whose income from sources without the United States is includible in gross
income for Unites States Federal income tax purpose regardless of its connection
with the conduct of a trade or business within the United States.
We understand that this certificate is required in connection with certain tax
legislation in the United States. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant we irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.
Dated: __________________________
(Please print name)
5
<PAGE>
[If Registered Warrant]
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received hereby sells, assigns and transfers unto
__________________________________ ___________________ (Please print name and
address Social Security
of assignee, including zip code) Number or other identifying number
- -----------------------------------------------------------
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _______________ Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
-------------------------------
Signature
(Signature must conform in all respect to name of
holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee of
a commercial bank, trust company, or member broker
of the New York, American, Midwest or Pacific
Stock Exchange.)
Signature Guaranteed:
- -----------------------------
EXHIBIT 4.4
ALEXANDER & ALEXANDER SERVICES INC.
Form of Warrant Agreement
[for warrants sold alone]
THIS WARRANT AGREEMENT is dated as of ___________ between Alexander & Alexander
Services Inc., a Maryland corporation (hereinafter called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to) and __________, as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company proposes to sell warrant certificates evidencing one or
more warrants (the "Warrants" or individually a "Warrant") representing the
right to purchase [title of Equity Securities purchasable through exercise of
Warrants] (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company
in connection with the issuance, exchange, exercise and replacement of the
Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution and
Delivery of Warrant Certificates.
Section 1.1. Issuance of Warrants. Each Warrant Certificate shall evidence one
or more Warrants. Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase Warrant
Securities.
Section 1.2. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be in [bearer] [registered] form
substantially in the form set forth in Exhibit A hereto, shall be dated
________, 19___, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board, its President,
one of its Vice Presidents, its Treasurer or one of its Assistant Treasurers
under its corporate seal and attested by its Secretary or one of its Assistant
Secretaries. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of the Company may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
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In case any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be such
officer before the Warrant Certificates so signed shall have been countersigned
and delivered by the Warrant Agent, such Warrant Certificates may be
countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
[If bearer Warrants -- The term "holder" or "holder of a Warrant Certificate" as
used herein shall mean the bearer of such Warrant Certificate.]
[If registered Warrants -- The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose.]
Section 1.3. Issuance of Warrant Certificates. Warrant Certificates evidencing
the right to purchase Warrant Securities (except as provided in Sections 2.3(c),
3.2 and 4.1) may be executed by the Company and delivered to the Warrant Agent
upon the execution of this Warrant Agreement or from time to time thereafter.
The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on
behalf of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to ____________ Warrant Securities and
shall deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate is
issued in exchange or substitution for one or more previously countersigned
Warrant Certificates [If registered Warrants -- or in connection with their
transfer], as hereinafter provided or as provided in Section 2.3(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants.
Section 2.1. Warrant Price. On __________, 19___, the exercise price of each
Warrant is ________ (currency). During the period from _________, 19__, through
and including _________, 19__, the exercise price of each Warrant will be
__________ (currency). On ___________, 19__, the exercise price of each Warrant
will be _________ (currecy). Such purchase price of Warrant Securities is
referred to in this Agreement as the "Warrant Price." The Warrant Price and the
number and kind of shares of capital stock for which a Warrant may be exercised
is subject to adjustment from time to time as set forth in Article V hereof.
Section 2.2. Duration of Warrants. Each Warrant may be exercised in whole at any
time, as specified herein, on or after [the date thereof] [_________, 19__,] and
at or before 5 p.m. New York time on ____________, 19__, (the "Expiration
Date"). Each Warrant not exercised at or before 5 p.m. New York time on the
Expiration Date shall become void, and all rights of the holder of the Warrant
Certificate evidencing such Warrant under this Agreement shall cease.
Section 2.3. Exercise of Warrants.
(a) During the period specified in Section 2.2, any whole number of
Warrants may be exercised by providing certain information set forth
on the reverse side of the Warrant Certificate and by paying in
full, [in lawful money of the United States of America] [in cash or
by certified check or official bank check or by bank wire transfer,
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in each case] [by bank wire transfer], in immediately available
funds, the Warrant Price for each Warrant exercised, to the Warrant
Agent at its corporate trust office [or at ________], provided that
such exercise is subject to receipt, within five business days of
such [payment] [wire transfer] by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities
set forth on the reverse side of the Warrant Certificate properly
completed and duly executed. The date on which payment in full of
the Warrant Price is received by the Warrant Agent shall, subject to
receipt of the Warrant Certificate as aforesaid, be deemed to be the
date on which the Warrant is exercised. The Warrant Agent shall
deposit all funds received by it in payment of the Warrant Price in
an account of the Company maintained with it and shall advise the
Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the
amount so deposited to its account. The Warrant Agent shall promptly
confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants
exercised, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of
the Warrant Securities to which such holder is entitled upon such
exercise, (iii) delivery of Warrant Certificates evidencing the
balance, if any, of the Warrants remaining after such exercise, and
(iv) such other information as the Company shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue to or upon the order of the holder of the
Warrant Certificate evidencing such Warrant, the Warrant Securities
to which such holder is entitled in fully registered form,
registered in such name or names as may be directed by such holder.
Such certificate or certificates evidencing the Common Stock shall
be deemed to have been issued and any persons who are designated to
be named therein shall be deemed to have become the holder of record
of such Warrant Securities as of the close of business on the
exercise date. No fractional shares of Warrant Securities will be
issued upon exercise of any Warrant. For each fractional share that
would otherwise be issued, the Company will pay by company check in
an amount equal to such fraction multiplied by the closing sales
price of the Warrant Securities on the New York Stock Exchange (or
if not so listed, another equivalent means reasonably determined by
the Company) on the business day immediately preceding the exercise
date. If fewer than all of the Warrants evidenced by such Warrant
Certificate are exercised, the Company shall execute, and an
authorized officer of the Warrant Agent shall manually countersign
and deliver, a new Warrant Certificate evidencing the number of such
Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any
transfer involved in the issue of the Warrant Securities; and in the
event that any such transfer is involved, the Company shall not be
required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it has been established to the
Company's satisfaction that no such tax or other charge is due.
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ARTICLE III
Other Provisions Relating to Rights of
Holders of Warrant Certificates.
Section 3.1. No Rights as Stockholder Conferred by Warrants or Warrant
Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle
the holder thereof to any of the rights of a holder of Warrant Securities,
including, without limitation, the right to receive the payment of principal of,
premium, if any, or interest on Warrant Securities or to enforce any of the
covenants in the Indenture.
Section 3.2. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it, and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for cancellation, then,
in the absence of notice to the Company or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and evidencing a like number of Warrants. Upon the issuance of any
new Warrant Certificate under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Warrant Agent) in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost,
stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
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
of mutilated, lost, stolen or destroyed Warrant Certificates.
Section 3.3. Holder of Warrant Certificate May Enforce Rights. Notwithstanding
any of the provisions of this Agreement, any holder of a Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Warrant Securities
or the holder of any other Warrant Certificate, may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce or otherwise in respect of,
his right to exercise the Warrants evidenced by his Warrant Certificate in the
manner provided in his Warrant Certificate and in this Agreement.
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ARTICLE IV
Exchange and Transfer of Warrant Certificates.
Section 4.1 Exchange and Transfer of Warrant Certificates. Upon surrender at the
corporate trust office of the Warrant Agent [or at ], Warrant Certificates
evidencing Warrants may be exchanged for Warrant Certificates in other
denominations evidencing such Warrants [If registered Warrants -- or the
transfer thereof may be registered in whole or in part]; provided that such
other Warrant Certificates evidence the same aggregate number of Warrants as the
Warrant Certificates so surrendered. [If registered Warrants -- The Warrant
Agent shall keep, at its corporate trust office [and at ] books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at
its corporate trust office [or at ] for exchange [or registration of transfer],
properly endorsed or accompanied by appropriate instruments of registration of
transfer and written instructions for transfer, all in form satisfactory to the
Company and the Warrant Agent.] No service charge shall be made for any exchange
[or registration of transfer] of Warrant Certificates but the Company may
require payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange [or
registration of transfer]. Whenever any Warrant Certificates are so surrendered
for exchange [or registration of transfer] an authorized officer of the Warrant
Agent shall manually countersign and deliver to the person or persons entitled
thereto a Warrant Certificate or Warrant Certificates duly authorized and
executed by the Company, as so requested. The Warrant Agent shall not be
required to effect any exchange [or registration of transfer] which will result
in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a
number of full Warrants and a fraction of a Warrant. All Warrant Certificates
issued upon any exchange [or registration of transfer] of Warrant Certificates
shall be the valid obligations of the Company, evidencing the same obligations,
and entitled to the same benefits under this Agreement, as the Warrant
Certificates surrendered for such exchange [or registration of transfer].
Section 4.2. Treatment of Holders of Warrant Certificates. [Bearer warrants Each
Warrant Certificate shall be transferable by delivery and shall be deemed
negotiable and the bearer of each Warrant Certificate may be treated by the
Company, the Warrant Agent and all other persons dealing with such bearer as the
absolute owner thereof for any purpose and as the person entitled to exercise
the rights represented by the Warrants evidenced thereby, any notice to the
contrary notwithstanding.] [Registered Warrants - The Company and the Warrant
Agent may treat the registered holder as the absolute owner thereof for any
purpose and as the person entitled to exercise the rights represented by the
Warrants evidenced thereby, any notice to the contrary notwithstanding.]
Section 4.3. Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange [registration of transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Company, be delivered to the
Warrant Agent and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be
reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
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ARTICLE V
Adjustments.
Section 5.1. Adjustment of Warrant Price. The Warrant Price shall be subject to
adjustment from time to time upon the happening of certain events as hereinafter
described.
Section 5.2. Mandatory Adjustments. The Warrant Securities shall be subject
to adjustment as follows:
(a) If the Company shall (i) declare or pay a dividend on its
outstanding Warrant Securities in shares of Warrant Securities or
make a distribution to holders of its Warrant Securities in shares
of Warrant Securities, (ii) subdivide its outstanding shares of
Warrant Securities into a greater number of shares of Warrant
Securities, (iii) combine its outstanding shares of Warrant
Securities into a smaller number of shares of Warrant Securities, or
(iv) issue by reclassification of its shares of Warrant Securities
other securities of the Company, then the Warrant Securities in
effect immediately prior thereto shall be adjusted so that the
holder of any Warrants thereafter exercised shall be entitled to
receive the number and kind of shares of Warrant Securities or other
securities that the holder would have owned or been entitled to
receive after the happening of any of the events described above had
such Warrants been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph 5.1(a) shall become effective on the
date of the dividend payment, subdivision, combination or issuance
retroactive to the record date with respect thereto, if any, for
such event. Such adjustment shall be made successively.
(b) If the Company shall issue to all holders of its Warrant Securities
rights, options, warrants or convertible or exchangeable securities
expiring within 60 days containing the right to subscribe for or
purchase shares of Warrant Securities at a price per share that is
lower than the then Quoted Price per share (as hereinafter defined)
of Warrant Securities, then the Warrant Securities shall be adjusted
in accordance with the following formula:
(N X P)
AE = E x O + ( M )
O + N
where
AE = the adjusted Warrant Price.
E = the current Warrant Price.
O = the number of shares of Warrant Securities outstanding
on the record date.
N = the number of additional shares of Warrant Securities
offered.
P = the offering price per share of the additional shares.
M = the Quoted Price per share of Warrant Securities on the
record date.
The adjustment shall be made successively whenever any such rights, options,
warrants or convertible or exchangeable securities are issued and shall become
effective immediately after the record date for the determination of
shareholders entitled to receive the rights, options, warrants or convertible or
exchangeable securities. Upon the expiration of any such rights, options,
warrants or convertible or exchangeable securities, if any thereof shall not
have been exercised, the Warrant Price shall be increased by the amount of the
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initial adjustment of the Warrant Price made pursuant to this Section 5.1(b) in
respect of such expired rights, options, warrants or convertible or exchangeable
securities. For the purposes of this Section 5.1, the "Quoted Price" per share
of Warrant Securities at any date shall be deemed to be the average of the daily
closing prices for the 20 consecutive trading days commencing on the 30th
trading day prior to the date in question. The closing price for each day shall
be (i) if the Warrant Securities are listed or admitted to trading on a national
securities exchange, the closing price on the New York Stock Exchange
Consolidated Tape (or any successor composite tape reporting transactions on
national securities exchanges) or, if such a composite tape shall not be in use
or shall not report transactions in the Warrant Securities, the last reported
sales price regular way on the principal national securities exchange on which
the Warrant Securities are listed or admitted to trading (which shall be the
national securities exchange on which the greatest number of shares of Warrant
Securities has been traded during such 20 consecutive trading days), or, if
there is no transaction on any such day in any such situation, the mean of the
bid and asked prices on such day, or (ii) if the Warrant Securities are not
listed or admitted to trading on any such exchange, the closing price, if
reported, or, if the closing price is not reported, the average of the closing
bid and asked prices as reported by NASDAQ, or (iii) if bid and asked prices for
the Warrant Securities on each such day shall not have been reported through
NASDAQ, the average of the bid and asked prices for such date as furnished by
any three New York Stock Exchange member firms regularly making a market in the
Warrant Securities and not affiliated with the Company selected for such purpose
by the Board of Directors of the Company, or (iv) if no such quotations are
available, the fair market value of the Warrant Securities as determined by a
New York Stock Exchange member firm regularly making a market in the Warrant
Securities selected for such purpose by such Board.
(c) If the Company shall distribute to all holders of its outstanding
Warrant Securities any shares of capital stock of the Company (other
than Warrant Securities) or evidences of indebtedness or assets
(excluding ordinary cash dividends, other cash distributions from
current or retained earnings and dividends or distributions referred
to in Sections 5.1(a) and (b)) or rights or warrants to subscribe
for or purchase any of its securities (excluding those referred to
in Section 5.1(b) above) (any of the foregoing being hereinafter in
this Section 5.1(c) called the "Securities or Assets"), then in each
such case, unless the Company elects to reserve shares or other
units of such Securities or Assets for distribution to each holder
of a Warrant upon the exercise of the Warrants so that such holder
will receive upon such exercise, in addition to the shares of the
Warrant Securities to which such holder is entitled, the amount and
kind of such Securities or Assets which such holder would have
received if such holder had, immediately prior to the record date
for the distribution of the Securities or Assets, exercised the
Warrants and received Warrant Securities, the Warrant Price shall be
adjusted so that the same shall equal the price determined by
multiplying the Warrant Price in effect immediately prior to the
date of such distribution by a fraction, the numerator of which
shall be the Quoted Price per share of the Warrant Securities on the
record date mentioned below less the then fair market value (as
determined in good faith by the Board of Directors of the Company),
of the portion of the Securities or Assets so distributed or of such
rights or warrants applicable to one share of Warrant Securities,
and the denominator of which shall be the Quoted Price per share of
the Warrant Securities on such record date; provided, however, that
if the then fair market value (as so determined) of the portion of
the Securities or Assets so distributed applicable to one Warrant
Security equals or exceeds the Quoted Price per Warrant Security on
the record date mentioned above, in lieu of the foregoing
adjustment, adequate provision shall be made so that the holder of
the Warrants shall have the right to receive the amount and kind of
Securities and Assets such holder would have received had such
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holder exercised each such Warrant immediately prior to the record
date for the distribution of the Securities or Assets. Such
adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive such
distribution.
(d) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of
such price. All calculations under this Section 5.1 shall be made to
the nearest one-hundredth of a cent or to the nearest one-hundredth
of a share, as the case may be.
(e) If the Company shall be a party to any transaction, including
without limitation a merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation or
recapitalization of the Warrant Securities (each of the foregoing
being referred to as a "Transaction"), in each case [Insert for
Common Stock: (except in the case of a Warrant Securities
Fundamental Change (as hereinafter defined))] as a result of which
shares of Warrant Securities shall be converted into the right to
receive stock, securities or other property (including cash or any
combination thereof), each Warrant shall thereafter be exercisable
into the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such
Transaction by a holder of that number of shares of Warrant
Securities issuable upon the exercise of one Warrant immediately
prior to such Transaction. The Company shall not be a party to any
Transaction unless the terms of such Transaction are consistent with
the provisions of this Section 5.1(e) and it shall not consent or
agree to the occurrence of any Transaction until the Company has
entered into an agreement with the successor or purchasing entity,
as the case may be, for the benefit of the holders of the Warrants,
which shall contain provisions enabling the holders of the Warrants
to exercise such Warrants for the consideration received by holders
of Warrant Securities at the Warrant Price immediately after such
Transaction. The provisions of this Section 5.1(e) shall similarly
apply to successive Transactions.
[Insert for Common Stock]:
(f) In the event of a common stock Fundamental Change, each Warrant
shall be exercisable into Common Stock of the kind received by
holders of Common Stock as the result of such Common Stock
Fundamental Change. The Warrant Price immediately following such
Common Stock Fundamental Change shall be the Warrant Price in effect
immediately prior to such Common Stock Fundamental Change multiplied
by a fraction, the numerator of which is the Purchaser Stock Price
(as hereinafter defined) and the denominator of which is the
Applicable Price (as hereinafter defined). The Company shall not
consent or agree to the occurrence of any Common Stock Fundamental
Change until the Company has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit
of the holders of the Warrants which shall contain provisions
enabling the holders of the Warrants to exercise such Warrants for
the consideration received by holders of Common Stock at the Warrant
Price immediately after such Common Stock Fundamental Change. The
provisions of this Section 5.1(f) shall similarly apply to
successive Common Stock Fundamental Changes.
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(g) As used herein:
(i) The term "Applicable Price" means the Quoted Price for
one share of the Common Stock on the record date for the
determination of the holders of Common Stock entitled to
receive Common Stock in connection with such Common Stock
Fundamental Change, or, if there is no such record date, on
the date upon which the holders of Common Stock shall have
the right to receive such Common Stock.
(ii) The term "Common Stock Fundamental Change" shall mean the
occurrence of any transaction or event in connection with
which all or substantially all the Common Stock shall be
exchanged for, converted into, acquired for or shall
constitute solely the right to receive Common Stock that, for
the ten consecutive trading days immediately prior to such
Common Stock Fundamental Change, has been admitted for
listing on a national securities exchange or quoted on the
National Market System of NASDAQ (whether by means of an
exchange offer, liquidation, tender offer, consolidation,
merger, combination, reclassification, recapitalization or
otherwise).
(iii) The term "Purchaser Stock Price" shall mean, with respect to
any Common Stock Fundamental Change, the Quoted Price for one
share of the Common Stock received by holders of Common Stock
in such Common Stock Fundamental Change (determined as if the
definition of Quoted Price contained in this Agreement were
applicable to such Common Stock) on the record date for the
determination of the holders of Common Stock entitled to
receive such common stock or, if there is no such record
date, on the date upon which the holders of Common Stock
shall have the right to receive such Common Stock.]
(h) For the purposes of this Section 5.1, the term "shares of Warrant
Securities" shall mean (i) the class of stock designated as the
Warrant Securities of the Company at the date hereof or (ii) any
other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value, or from no par value to par value. If at any time, as a
result of an adjustment made pursuant to Sections 5.1(a), (c), (e)
or (f) the Holder shall become entitled to receive any securities
other than shares of Warrant Securities, thereafter the number of
such other securities so issuable upon the exercise of the Warrants
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the rights contained in this Section 5.1.
(i) Notwithstanding the foregoing, in any case which this Section 5.1
provides that an adjustment shall become effective immediately after
a record date for an event, the Company may defer until the
occurrence of such event (i) issuing to the holder of any Warrant
exercised after such record date and before the occurrence of such
event the additional shares of Warrant Securities issuable upon such
conversion before giving effect to such adjustment and (ii) paying
to such holder any amount in cash by company check in lieu of any
fraction pursuant to Section 2.3.
(j) If the Company shall take any action affecting the Warrant
Securities, other than action described in this Section 5.1, which
in the opinion of the Board of Directors of the Company would
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materially adversely affect the exercise rights of the holders of
the Warrants, the Warrant Price for the Warrants may be adjusted, to
the extent permitted by law, in such manner, if any, and at such
time, as such Board may determine in good faith to be equitable in
the circumstances. Failure of the Board of Directors of the Company
to provide for any such adjustment prior to the effective date of
any such action by the Company affecting the Warrant Securities
shall be evidence that the Board of Directors of the Company has
determined that it is equitable to make no adjustments in the
circumstances.
Section 5.3. Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of the Warrants, reduce the then current Warrant
Price to any amount deemed appropriate by the Board of Directors of the Company;
provided, that, if the Company elects so to reduce the then current Warrant
Price, such reduction shall remain in effect for at least 20 Business Days,
after which time the Company may, at its option, reinstate the Warrant Price in
effect prior to such reduction.
Section 5.4. Notice of Adjustment. Whenever the Warrant Price is adjusted as
herein provided, the Chief Financial Officer of the Company shall compute the
adjusted Warrant Price in accordance with the foregoing provisions and shall
prepare a certificate setting forth such adjusted Warrant Price and showing in
reasonable detail the facts upon which such adjustment is based. A copy of such
certificate shall be filed promptly with the Warrant Agent. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Warrant Price setting forth the adjusted Warrant Price and the
date on which such adjustment becomes effective and shall mail, or cause the
Warrant Agent to mail at the Company's expense, such notice of such adjustment
of the Warrant Price to each holder of a Warrant at his last address as shown on
the Warrants Register.
Section 5.5. No Adjustment for Dividends. Except as provided in Section 5.1
hereof, no adjustment in respect of any dividends or other payments or
distributions made to holders of securities issuable upon exercise of Warrants
shall be made during the term of a Warrant or upon the exercise of a Warrant.
Section 5.5. Statement on Warrants Certificate. Irrespective of any adjustments
in the number or kind of securities purchasable upon the exercise of the
Warrants or the Warrant Securities, any Warrant Certificate theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrant Certificate initially issuable pursuant to
this Agreement.
Section 5.7. Warrant Agent's Adjustment Disclaimer. The Warrant Agent has no
duty to determine when an adjustment under this Article V should be made, how it
should be made or what it should be. The Warrant Agent shall not be accountable
for and makes no representation as to the validity or value of any securities or
assets issued upon exercise of Warrants. The Warrant Agent shall not be
responsible for the Company's failure to comply with this Article V.
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ARTICLE VI
Concerning the Warrant Agent
Section 6.1. Warrant Agent. The Company hereby appoints __________, as Warrant
Agent of the Company in respect of the Warrants and the Warrant Certificates
upon the terms and subject to the conditions herein set forth; and ________
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 6.2. Conditions of Warrant Agent's Obligations. The Warrant Agent
accepts its obligations herein set forth upon the terms and conditions hereof,
including the following, to all of which the Company agrees and to all of which
the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services
rendered by the Warrant Agent and to reimburse the Warrant Agent for
reasonable out-of-pocket expenses (including counsel fees) incurred
by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify
the Warrant Agent, for and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the
part of the Warrant Agent, arising out of or in connection with its
acting as Warrant Agent hereunder, as well as the costs and expenses
of defending against any claim of such liability.
(b) In acting under this Warrant Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of
the Company and does not assume any obligation or relationship of
agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to it, and
the advice of such 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 accordance with the advice of
such counsel.
(d) The Warrant Agent shall be protected and shall incur no liability
for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented
or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors and employees, may
become the owner of, or acquire any interest in Warrants, with the
same rights that it or they would have if it were not the Warrant
Agent hereunder, and, to the extent permitted by applicable law, it
or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary,
trustee or agent for, any committee or body of holders of Warrant
Securities or other obligations of the Company as freely as if it
were not the Warrant Agent hereunder.
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(f) The Warrant Agent shall have no liability for interest on any monies
at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) The Warrant Agent shall have no liability with respect to any
invalidity of this Agreement or any of the Warrant Certificates.
(h) The Warrant Agent shall not be responsible for any of the recitals
or representations herein or in the Warrant Certificates (except as
to the Warrant Agent's countersignature thereon), all of which are
made solely by the Company.
(i) The Warrant Agent shall be obligated to perform only such duties as
are herein and in the Warrant Certificates specifically set forth
and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability,
the payment of which within a reasonable time is not in its
reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates authenticated by the
Warrant Agent and delivered by it to the Company pursuant to this
Agreement or for the application by the Company of the proceeds of
the Warrant Certificates. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in
the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect
to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or, except as provided
in Section 6.2, to make any demand upon the Company.
(j) The Warrant Agent is hereby authorized to obtain from time to time
from the present transfer agent for the Warrant Securities (the
"Transfer Agent"), and any successor Transfer Agent, stock
certificates required to honor outstanding Warrants. The Company
hereby authorizes its present and any successor Transfer Agent to
comply with all such requests. The Company will supply such Transfer
Agent with duly executed stock certificates for such purpose and
will provide or otherwise make available any cash which may be
payable as provided in Section 2.3 hereof, and the Warrant Agent
shall not be responsible for any delay or failure by such Transfer
Agent in supplying such stock certificates.
Section 6.3. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders of the Warrant
Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become
effective; provided that such date shall not be less than three
months after the date on which such notice is given unless the
Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an instrument in writing signed
by or on behalf of the Company and specifying such removal and the
date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as
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<PAGE>
hereinafter provided, of a successor Warrant Agent (which shall be a
bank or trust company authorized under the laws of the jurisdiction
of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The
obligation of the Company under Section 6(a) shall continue to the
extent set forth therein notwithstanding the resignation or removal
of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under
the Federal Bankruptcy Code, as now constituted or hereafter
amended, or under any other applicable Federal or State bankruptcy
law or similar law or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver or custodian
of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if
a receiver or custodian of it or of all or any substantial part of
its property shall be appointed, or if an order of any court shall
be entered for relief against it under the provisions of the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under
any other applicable Federal or State bankruptcy or similar law, or
if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of
rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company, by
an instrument in writing, filed with the successor Warrant Agent.
Upon the appointment as aforesaid of a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the
Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent
shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant
Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be merged
or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business
of the Warrant Agent, provided that it shall be qualified as
aforesaid, shall be the successor Warrant Agent under this Agreement
without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
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ARTICLE VII
Miscellaneous.
Section 7.1. Amendment. This Agreement may be amended by the parties hereto,
without the consent of the holder of any Warrant Certificate for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided, that such action
shall not materially and adversely affect the interests of the holders of the
Warrant Certificates.
Section 7.2. Notices and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 7.3. Addresses. Any communication from the Company to the Warrant Agent
with respect to this Agreement shall be addressed to _________, and any
communication from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Alexander & Alexander Services Inc., 1185 Avenue
of the Americas, New York, N.Y. 10036, Attention: _______________ (or such other
address as shall be specified in writing by the Warrant Agent or by the
Company).
Section 7.4. Applicable Law. The validity, interpretation and performance of
this Agreement and each Warrant Certificate issued hereunder and of the
respective terms and provisions thereof shall be governed by and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
Section 7.5. Delivery of Prospectus. The Company will furnish to the Warrant
Agent sufficient copies of a prospectus relating to the Warrant Securities
deliverable upon exercise of Warrants (the "Prospectus"), and the Warrant Agent
agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to
the holder of the Warrant Certificate evidencing such Warrant, prior to or
concurrently with, the delivery of the Warrant Securities issued upon such
exercise, a Prospectus.
Section 7.6. Obtaining of Governmental Approvals. The Company will from time to
time take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and authorities and
securities acts filings under United States Federal and State laws (including,
without limitation, a registration statement in respect of the Warrants and
Warrant Securities under the Securities Act of 1933, as amended), which may be
or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer, and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
Section 7.7. Persons Having Rights under Warrant Agreement. Nothing in this
Agreement shall give to any person other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement.
Section 7.8. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
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<PAGE>
Section 7.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
Section 7.10. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificates for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be affixed hereunto, and the
same to be attested, all as of the day and year first above written.
ALEXANDER & ALEXANDER
SERVICES INC.
By ________________________
Attest:
[Name of Warrant Agent], as Warrant Agent
- -------------------------
Attest: By ___________________________
- -------------------------
15
<PAGE>
Exhibit A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
Exercisable Only if Countersigned by the
Warrant
Agent as Provided Herein
ALEXANDER & ALEXANDER SERVICES INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on ________, 19___.
[No.] Warrants
This certifies that [the bearer is the ] [ or registered assigns is the
registered] owner of the above indicated number of Warrants, each Warrant
entitling such [bearer] [owner] to purchase, at any time [after 5 p.m. New York
time on __________, 19___, and] on or before 5 p.m. New York time on __________,
19___, ___________ [Title of Warrant Securities] (the "Warrant Securities"), of
Alexander & Alexander Services Inc., (the "Company"), issued and to be issued on
the following basis: [on __________, 19___, the exercise price of each Warrant
will be ________ (currency); during the period from __________, 19___, through
and including ___________, 19___, the exercise price of each Warrant will be
__________ (currency). The holder may exercise the Warrants evidenced hereby by
providing certain information set forth on the back hereof and by paying in
full, [in lawful money of the United States of America] [in cash or by certified
check or official bank check or by bank wire transfer, in each case] [by bank
wire transfer], in immediately available funds, the Warrant Price for each
Warrant exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back hereof
duly executed, at the corporate trust office of [name of Warrant Agent], or its
successors as warrant agent (the "Warrant Agent"), [or ] currently at the
address specified on the reverse hereof, and upon compliance with and subject to
the conditions set forth herein and in the Warrant Agreement (as hereinafter
defined).
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form. Upon any exercise
of fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
The Company will not be required to issue fractional shares of Warrant
Securities upon exercise of the Warrants or distribute stock certificates that
evidence fractional shares of Warrant Securities. In lieu of fractional shares
of Warrant Securities, there shall be paid by the Company to the registered
holder of this Warrant Certificate at the time such Warrant Certificate is
exercised an amount in cash payable by company check equal to the closing sales
price of the Warrant Securities on the New York Stock Exchange (or if not so
listed, another equivalent means reasonably determined by the Company) on the
business day immediately preceding the exercise date, multiplied by such
fraction.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of ___________, 19__, (the "Warrant Agreement") between the
Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement and the form of Warrant Securities are on file at the
above-mentioned office of the Warrant Agent [and at].
<PAGE>
[Bearer Warrants -- This Warrant Certificate, and all rights hereunder, may be
transferred by delivery and the Company and the Warrant Agent may treat the
bearer hereof as the owner for all purposes.]
[Registered Warrants -- This Warrant Certificate may be transferred when
surrendered at the corporate trust office of the Warrant Agent [or ] by the
registered owner or his appointed person or by an attorney duly authorized in
writing, in the manner and subject to the terms provided in the Warrant
Agreement.]
After countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of Warrant Securities, including, without limitation, the
right to receive dividends, vote, receive notice of any meeting of stockholders
or otherwise have any right as a stockholder of the Company.
This Warrant Certificate shall not be valid for any purpose until countersigned
by the Warrant Agent.
Dated as of _________, 19___.
ALEXANDER & ALEXANDER
SERVICES INC.
By ___________________________
Attest:
- ------------------------------
Countersigned
- ------------------------------
As Warrant Agent
By ______________________________
Authorized Signature
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash or by
certified check or official bank check or by bank wire transfer] [by bank wire
transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn:____________ [or ________], which
[payment] [wire transfer] must specify the name of the holder and the number of
Warrants exercised by such holder. In addition, the holder must complete the
information required below and present this Warrant Certificate in person or by
mail (registered mail is recommended) to the Warrant Agent at the addresses set
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<PAGE>
forth below. This Warrant Certificate, completed and duly executed, must be
received by the Warrant Agent within five business days of the [payment] [wire
transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants evidenced by this
Warrant Certificate, to purchase _________ [Title of Warrant Securities] (the
"Warrant Securities") of Alexander & Alexander Services Inc. and represents that
he has tendered payment for such Warrant Securities [in cash or by certified
check or official bank check or by bank wire transfer, in each case] [by bank
wire transfer], in immediately available funds, to the order of Alexander &
Alexander Services Inc., c/o [insert name and address of Warrant Agent], in the
amount of ________ (currency) in accordance with the terms hereof. The
undersigned requests that said principal amount of Warrant Securities be in
fully registered form and in the authorized denominations, registered in such
names and delivered, all as specified in accordance with the instructions set
forth below.
If the number of Warrants exercised is less than all of the Warrants evidenced
hereby, the undersigned requests that a new Warrant Certificate representing the
remaining Warrants evidenced hereby be issued and delivered to the undersigned
unless otherwise specified in the instructions below.
Dated: Name ________________________
(Please Print)
_________________________ Address _____________________
Social Security Number or ______________________
Other Identifying Number of ______________________
Holder
Signature ___________________
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at ____________________________________________
--------------------------------------------
--------------------------------------------
By mail at ____________________________________________
--------------------------------------------
--------------------------------------------
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants -- complete as
appropriate.]
3
<PAGE>
*Certificate for Delivery of Bearer Warrant Securities
ALEXANDER & ALEXANDER SERVICES INC.
Warrant Securities
TO: Alexander & Alexander Services Inc.
c/o
as Trustee
This certificate is submitted in connection with our request that you deliver to
us _________ Warrant Securities in bearer form upon exercise of Warrants. We
hereby certify that either (a) none of such Warrant Securities will be held by
or on behalf of a United States Person or (b) if a United States Person will
have a beneficial interest in such Warrant Securities, such person is described
in Section 165(j)(3)(A), (B) of (C) of the United States Internal Revenue Code
of 1954, as amended and the regulations thereunder. As used herein, "United
States Person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or resident under the laws
or the United States or any political subdivision thereof or an estate or trust
whose income from sources without the United States is includible in gross
income for Unites States Federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
We understand that this certificate is required in connection with certain tax
legislation in the United States. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.
Dated: __________________________
(Please print name)
* Subject to changes in accordance with changes in tax laws and regulations.
4
<PAGE>
[If Registered Warrant]
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received _________________ hereby sells, assigns and transfers unto
- ---------------------------------- -------------------
(Please print name and address Social Security
of assignee, including zip code) Number or other identifying number
- -----------------------------------------------------------
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint __________ Attorney, to transfer said Warrant
Certificate on the books of the Warrant Agent with full power of substitution in
the premises.
Dated:
-------------------------------
Signature
(Signature must conform in all respect to name of
holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee of
a commercial bank, trust company, or member broker
of the New York, American, Midwest or Pacific
Stock Exchange.)
Signature Guaranteed:
- -----------------------------
1
EXHIBIT 4.5
ALEXANDER & ALEXANDER SERVICES INC.
Form of Warrant Agreement
[for warrants sold attached to debt securities]
THIS WARRANT AGREEMENT is dated as of ___________ between Alexander & Alexander
Services Inc., a Maryland corporation (hereinafter called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to) and , as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an Indenture dated as of __________, 1996
(the "Indenture"), with PNC Bank, N.A., as trustee (the "Trustee"), providing
for the issuance from time to time of its unsecured debentures, notes or other
evidences of indebtedness (the "Debt Securities"), to be issued in one or more
series, as provided in the Indenture; and
WHEREAS, the Company proposes to sell [title of Debt Securities being offered]
(the "Offered Securities") with warrant certificates evidencing one or more
warrants (the "Warrants" or, individually a "Warrant") representing the right to
purchase [title of Debt Securities purchasable through exercise of Warrants]
(the "Warrant Securities"), such warrant certificates and other warrant
certificates issued pursuant to this Agreement being herein called the "Warrant
Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company
in connection with the issuance, exchange, exercise and replacement of the
Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced:
NOW, THEREFORE, in consideration of the promises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution and
Delivery of Warrant Certificates.
Section 1.1. Issuance of Warrants. Warrants shall be initially issued in
connection with the issuance of the Offered Securities [but shall be separately
transferable on and after _________, 19__ (the "Detachable Date")] [and shall
not be separately transferable] and each Warrant Certificate shall evidence one
or more Warrants. Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase a Warrant
Security in the principal amount of _______ (currency). Warrant Certificates
shall be initially issued in units with the Offered Securities and each Warrant
Certificate included in such a unit shall evidence ____ Warrants for each
_______ (currency) principal amount of Offered Securities included in such unit.
Section 1.2. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be in [bearer] [registered] form
substantially in the form set forth in Exhibit A hereto, shall be dated ________
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or to
conform to usage. The Warrant Certificates shall be signed on behalf of the
Company by its Chairman of the Board, its President, one of its Vice Presidents,
its Treasurer or one of its Assistant Treasurers under its corporate seal and
attested by its Secretary or one of its Assistant Secretaries. Such signatures
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<PAGE>
may be manual or facsimile signatures of such authorized officers and may be
imprinted or otherwise reproduced on the Warrant Certificates. The seal of the
Company may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates. No Warrant
Certificate shall be valid for any purpose, and no Warrant evidenced thereby
shall be exercisable, until such Warrant Certificate has been countersigned by
the manual signature of the Warrant Agent. Such signature by the Warrant Agent
upon any Warrant Certificate executed by the Company shall be conclusive
evidence that the Warrant Certificate so countersigned has been duly issued
hereunder In case any officer of the Company who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to be
such officer before the Warrant Certificates so signed shall have been
countersigned and delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer. [If bearer Warrants -- The term "holder"
or "holder of a Warrant Certificate" as used herein shall mean [If Offered
Securities with Warrants which are not immediately detachable - prior to the
Detachable Date, the registered owner of the Offered Security to which such
Warrant Certificate was initially attached, and after such Detachable Date] the
bearer of such Warrant Certificate.] [If registered Warrants -- The term
"holder" or "holder of a Warrant Certificate" as used herein shall mean any
person in whose name at the time any Warrant Certificate shall be registered
upon the books to be maintained by the Warrant Agent for that purpose. [If
Offered Securities with Warrants which are not immediately detachable - or upon
the register of the Offered Securities prior to the Detachable Date. The Company
will or will cause the registrar of the Offered Securities to make available at
all times to the Warrant Agent such information as to holders of the Offered
Securities with Warrants as may be necessary to keep the Warrant Agent's records
up to date.]]
Section 1.3. Issuance of Warrant Certificates. Warrant Certificates evidencing
the right to purchase an aggregate principal amount not exceeding ______
(currency) aggregate principal amount of Warrant Securities (except as provided
in Sections 2.3(c), 3.2 and 4.1) may be executed by the Company and delivered to
the Warrant Agent upon the execution of this Warrant Agreement or from time to
time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates
duly executed on behalf of the Company, countersign Warrant Certificates
evidencing Warrants representing the right to purchase up to ______ (currency)
aggregate principal amount of Warrant Securities and shall deliver such Warrant
Certificates to or upon the order of the Company. Subsequent to such original
issuance of the Warrant Certificates, the Warrant Agent shall countersign a
Warrant Certificate only if the Warrant Certificate is issued in exchange or
substitution for one or more previously countersigned Warrant Certificates [If
registered Warrants -- or in connection with their transfer], as hereinafter
provided or as provided in Section 2.3(c).
2
<PAGE>
ARTICLE II
Warrant Price, Duration and Exercise of Warrants.
Section 2.1. Warrant Price. On ________, 19___, the exercise price of each
Warrant is (currency). During the period from _________, 19__, through and
including _________, 19__, the exercise price of each Warrant will be _______
(currency), plus [accrued amortization of the original issue discount] [accrued
interest] from _______, 19__. On ___________, 19__, the exercise price of each
Warrant will be ________ (currency). During the period from _________, 19__,
through and including _________, 19__, the exercise price of each Warrant will
be _________ (currency), plus [accrued amortization of the original issue
discount] [accrued interest] from _________, 19__. [In each case, the original
issue discount will be amortized at a ___% annual rate, computed on an annual
basis using a 360-day year consisting of twelve 30-day months]. Such purchase
price of Warrant Securities is referred to in this Agreement as the "Warrant
Price." [The original issued discount for each ________ (currency) principal
amount of Warrant Securities is ______ (currency).]
Section 2.2. Duration of Warrants. Each Warrant may be exercised in whole at any
time, as specified herein, on or after [the date thereof] [ , 19__,] and at or
before 5 p.m. New York time on ____________, 19__, (the "Expiration Date"). Each
Warrant not exercised at or before 5 p.m. New York time on the Expiration Date
shall become void, and all rights of the holder of the Warrant Certificate
evidencing such Warrant under this Agreement shall cease.
Section 2.3. Exercise of Warrants.
(a) During the period specified in Section 2.2, any whole number of
Warrants may be exercised by providing certain information set forth
on the reverse side of the Warrant Certificate and by paying in
full, [in lawful money of the United States of America] [in cash or
by certified check or official bank check or by bank wire transfer,
in each case] [by bank wire transfer], in immediately available
funds, the Warrant Price for each Warrant exercised, to the Warrant
Agent at its corporate trust office [or at ________], provided that
such exercise is subject to receipt, within five business days of
such [payment] [wire transfer] by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities
set forth on the reverse side of the Warrant Certificate properly
completed and duly executed. The date on which payment in full of
the Warrant Price is received by the Warrant Agent shall, subject to
receipt of the Warrant Certificate as aforesaid, be deemed to be the
date on which the Warrant is exercised. The Warrant Agent shall
deposit all funds received by it in payment of the Warrant Price in
an account of the Company maintained with it and shall advise the
Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the
amount so deposited to its account. The Warrant Agent shall promptly
confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company and the Trustee under the Indenture
of (i) the number of Warrants exercised, (ii) the instructions of
each holder of the Warrant Certificates evidencing such Warrants
with respect to delivery of the Warrant Securities to which such
holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants
remaining after such exercise, and (iv) such other information as
the Company shall reasonably require.
3
<PAGE>
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue, pursuant to the Indenture, in authorized
denominations to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled in fully registered form, registered in such
name or names as may be directed by such holder. If fewer than all
of the Warrants evidenced by such Warrant Certificate are exercised,
the Company shall execute, and an authorized officer of the Warrant
Agent shall manually countersign and deliver, a new Warrant
Certificate evidencing the number of such Warrants remaining
unexercised.
(d) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any
transfer involved in the issue of the Warrant Securities; and in the
event that any such transfer is involved, the Company shall not be
required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it has been established to the
Company's satisfaction that no such tax or other charge is due.
ARTICLE III
Other Provisions Relating to Rights of
Holders of Warrant Certificates.
Section 3.1. No Rights as Warrant Security holder Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall
entitle the holder thereof to any of the rights of a holder of Warrant
Securities, including, without limitation, the right to receive the payment of
principal of, premium, if any, or interest on Warrant Securities or to enforce
any of the covenants in the Indenture.
Section 3.2. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it, and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for cancellation, then,
in the absence of notice to the Company or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and evidencing a like number of Warrants. Upon the issuance of any
new Warrant Certificate under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Warrant Agent) in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost,
stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
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
of mutilated, lost, stolen or destroyed Warrant Certificates.
Section 3.3. Holder of Warrant Certificate May Enforce Rights. Notwithstanding
any of the provisions of this Agreement, any holder of a Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Warrant Securities
or the holder of any other Warrant Certificate, may in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce or otherwise in respect of,
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his right to exercise the Warrants evidenced by his Warrant Certificate in the
manner provided in his Warrant Certificate and in this Agreement.
ARTICLE IV
Exchange and Transfer of Warrant Certificates.
Section 4.1. Exchange and Transfer of Warrant Certificates. [If Offered
Securities with Warrants which are immediately detachable - Upon] [If Offered
Securities with Warrants which are not immediately detachable - Prior to the
Detachable Date, a Warrant Certificate may be exchanged or transferred only
together with the Offered Securities to which the Warrant Certificate was
initially attached and only for the purpose of effecting or in conjunction with
an exchange or transfer of such Offered Securities. Prior to the Detachable
Date, each transfer of the Offered Securities [on the register of the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date upon] surrender at the corporate trust office of the
Warrant Agent [or ], Warrant Certificates evidencing Warrants may be exchanged
for Warrant Certificates in other denominations evidencing such Warrants [If
registered Warrants -- or the transfer thereof may be registered in whole or in
part]; provided that such other Warrant Certificates evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. [If registered
Warrants -- The Warrant Agent shall keep, at its corporate trust office [and at
] books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and exchanges and transfers of outstanding
Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant
Agent at its corporate trust office [or
] for exchange [or registration of transfer], properly endorsed or
accompanied by appropriate instruments of registration of transfer and written
instructions for transfer, all in form satisfactory to the Company and the
Warrant Agent.] No service charge shall be made for any exchange [or
registration of transfer] of Warrant Certificates but the Company may require
payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange [or
registration of transfer]. Whenever any Warrant Certificates are so surrendered
for exchange [or registration of transfer] an authorized officer of the Warrant
Agent shall manually countersign and deliver to the person or persons entitled
thereto a Warrant Certificate or Warrant Certificates duly authorized and
executed by the Company, as so requested. The Warrant Agent shall not be
required to effect any exchange [or registration of transfer] which will result
in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a
number of full Warrants and a fraction of a Warrant. All Warrant Certificates
issued upon any exchange [or registration of transfer] of Warrant Certificates
shall be the valid obligations of the Company, evidencing the same obligations,
and entitled to the same benefits under this Agreement, as the Warrant
Certificates surrendered for such exchange [or registration of transfer].
Section 4.2. Treatment of Holders of Warrant Certificates. [If Offered
Securities with bearer Warrants which are not immediately detachable - Subject
to Section 4.01, each] [If Offered Securities with bearer Warrants which are
immediately detachable - Each] Warrant Certificate shall be transferable by
delivery and shall be deemed negotiable and the bearer of each Warrant
Certificate may be treated by the Company, the Warrant Agent and all other
persons dealing with such bearer as the absolute owner thereof for any purpose
and as the person entitled to exercise the rights represented by the Warrants
evidenced thereby, any notice to the contrary notwithstanding.] [If registered
Warrants which are not immediately detachable - Every holder of a Warrant
Certificate, by accepting the same, consents and agrees with the Company, the
Warrant Agent and with every subsequent holder of such Warrant Certificate that
until the transfer of the Warrant Certificate is registered on the books of the
Warrant Agent [or the registrar of the Offered Securities prior to the
Detachable Date], the Company and the Warrant Agent [or the registrar of the
Offered Securities prior to the Detachable Date] may treat the registered holder
as the absolute owner thereof for any purpose and as the person entitled to
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exercise the rights represented by the Warrants evidenced thereby, any notice to
the contrary notwithstanding.]
Section 4.3. Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange [registration of transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Company, be delivered to the
Warrant Agent and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be
reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V
Concerning the Warrant Agent
Section 5.1. Warrant Agent. The Company hereby appoints __________, as Warrant
Agent of the Company in respect of the Warrants and the Warrant Certificates
upon the terms and subject to the conditions herein set forth; and __________
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 5.2. Conditions of Warrant Agent's Obligations. The Warrant Agent
accepts its obligations herein set forth upon the terms and conditions hereof,
including the following, to all of which the Company agrees and to all of which
the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to pay
the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to
reimburse the Warrant Agent for reasonable out-of-pocket expenses
(including counsel fees) incurred by the Warrant Agent in connection
with the services rendered hereunder by the Warrant Agent. The
Company also agrees to indemnify the Warrant Agent for, and to hold
it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Warrant Agent, arising
out of or in connection with its acting as Warrant Agent hereunder,
as well as the costs and expenses of defending against any claim of
such liability.
(b) Agent for the Company. In acting under this Warrant Agreement and in
connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any
obligation or relationship of agency or trust for or with any of the
holders of Warrant Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory to
it, and the advice of such 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 accordance
with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or
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<PAGE>
document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers, directors
and employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were
not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any
financial or other transaction with the Company and may act on, or
as depositary, trustee or agent for, any committee or body of
holders of Warrant Securities or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder. Nothing in
this Warrant Agreement shall be deemed to prevent the Warrant Agent
from acting as trustee for any series of Debt Securities under the
Indenture.
(f) No Liability for Interest. The Warrant Agent shall have
no liability for interest on any monies at any time received
by it pursuant to any of the provisions of this Agreement
or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have
no liability with respect to any invalidity of this Agreement or
any of the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent shall not
be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's
countersignature thereon), all of which are made solely by the
Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or
obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not
be under any obligation to take any action hereunder which may tend
to involve it in any expense or liability, the payment of which
within a reasonable time is not, in its reasonable opinion, assured
to it. The Warrant Agent shall not be accountable or under any duty
or responsibility for the use by the Company of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it
to the Company pursuant to this Agreement or for the application by
the Company of the proceeds of the Warrant Certificates. The Warrant
Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements
contained herein or in the Warrant Certificates or in the case of
the receipt of any written demand from a holder of a Warrant
Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility
to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 6.2, to make any demand
upon the Company.
Section 5.3. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders of the Warrant
Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become
effective; provided that such date shall not be less than three
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months after the date on which such notice is given unless the
Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an instrument in writing signed
by or on behalf of the Company and specifying such removal and the
date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (which shall be a
bank or trust company authorized under the laws of the jurisdiction
of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The
obligation of the Company under Section 5.2(a) shall continue to the
extent set forth therein notwithstanding the resignation or removal
of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under
the Federal Bankruptcy Code, as now constituted or hereafter
amended, or under any other applicable Federal or State bankruptcy
law or similar law or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver or custodian
of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if
a receiver or custodian of it or of all or any substantial part of
its property shall be appointed, or if an order of any court shall
be entered for relief against it under the provisions of the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under
any other applicable Federal or State bankruptcy or similar law, or
if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of
rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by
an instrument in writing, filed with the successor Warrant Agent.
Upon the appointment as aforesaid of a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the
Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent
shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant
Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be merged
or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business
of the Warrant Agent, provided that it shall be qualified as
aforesaid, shall be the successor Warrant Agent under this Agreement
without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
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ARTICLE VI
Miscellaneous.
Section 6.1. Amendment. This Agreement may be amended by the parties hereto,
without the consent of the holder of any Warrant Certificate, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided, that such action
shall not materially and adversely affect the interests of the holders of the
Warrant Certificates.
Section 6.2. Notices and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 6.3. Addresses. Any communication from the Company to the Warrant Agent
with respect to this Agreement shall be addressed to____________, and any
communication from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Alexander & Alexander Services Inc., 1185 Avenue
of the Americas, New York, N.Y. 10036, Attention: _______________ (or such other
address as shall be specified in writing by the Warrant Agent or by the
Company).
Section 6.4. Applicable Law. The validity, interpretation and performance of
this Agreement and each Warrant Certificate issued hereunder and of the
respective terms and provisions thereof shall be governed by and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
Section 6.5. Delivery of Prospectus. The Company will furnish to the Warrant
Agent sufficient copies of a prospectus relating to the Warrant Securities
deliverable upon exercise of Warrants (the "Prospectus"), and the Warrant Agent
agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to
the holder of the Warrant Certificate evidencing such Warrant, prior to or
concurrently with, the delivery of the Warrant Securities issued upon such
exercise, a Prospectus.
Section 6.6. Obtaining of Governmental Approvals. The Company will from time to
time take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and authorities and
securities acts filings under United States Federal and State laws (including,
without limitation, a registration statement in respect of the Warrants and
Warrant Securities under the Securities Act of 1933, as amended), which may be
or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer, and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
Section 6.7. Persons Having Rights under Warrant Agreement. Nothing in this
Agreement shall give to any person other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement.
Section 6.8. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
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Section 6.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
Section 6.10. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificates for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be affixed hereunto, and the
same to be attested, all as of the day and year first above written.
ALEXANDER & ALEXANDER
SERVICES INC.
By ________________________
Attest:
[Name of Warrant Agent], as
Warrant Agent
- ------------------------
Attest: By ___________________________
- -------------------------
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Exhibit A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
[Form of Legend of Prior to ___________,
Debt Securities with this Warrant Certificate
Warrants which are not cannot be transferred or
immediately detachable: exchanged unless attached
to a [Title of Offered Securities].]
Exercisable Only if Countersigned by the
Warrant Agent as Provided Herein
ALEXANDER & ALEXANDER SERVICES INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on _______, 19___.
[No.] Warrants
This certifies that [the bearer is the ] [ or registered assigns is the
registered] owner of the above indicated number of Warrants, each Warrant
entitling such [bearer] [owner] to purchase, at any time [after 5 p.m. New York
time on ________, 19___, and] on or before 5 p.m. New York time on ________,
19___, ________ (currency) principal amount of [Title of Warrant Securities]
(the "Warrant Securities"), of Alexander & Alexander Services Inc., (the
"Company"), issued and to be issued under the Indenture (as hereinafter
defined), on the following basis: [on _________, 19___, the exercise price of
each Warrant is ________ (currency); during the period from ___________, 19___,
through and including ___________, 19___, the exercise price of each Warrant
will be _________ (currency), plus [accrued amortization of the original issue
discount] [accrued interest] from __________, 19___; on_________, 19___, the
exercise price of each Warrant will be _______ (currency); during the period
from _________, 19___, through and including __________, 19___, the exercise
price of each Warrant will be ________ (currency), plus [accrued amortization of
the original issue discount] [accrued interest] from ___________, 19___; [in
each case, the original issue discount will be amortized at a % annual rate,
computed on an annual basis using a 360-day year consisting of twelve 30-day
months](the "Warrant Price"). [The original issued discount for each ________
(currency) principal amount of Warrant Securities is _______ (currency)]. The
holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full, [in lawful money
of the United States of America] [in cash or by certified check or official bank
check or by bank wire transfer, in each case] [by bank wire transfer], in
immediately available funds, the Warrant Price for each Warrant exercised to the
Warrant Agent (as hereinafter defined) and by surrendering this Warrant
Certificate, with the purchase form on the back hereof duly executed, at the
corporate trust office of [name of Warrant Agent], or its successors as warrant
agent (the "Warrant Agent"), [or ] currently at the address specified on the
reverse hereof, and upon compliance with and subject to the conditions set forth
herein and in the Warrant Agreement (as hereinafter defined).
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form in denominations of
________ (currency) and any integral multiples thereof. Upon any exercise of
fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
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This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of ___________, 19__, (the "Warrant Agreement") between the
Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent
[and at ].
The Warrant Securities to be issued and delivered upon the exercise of the
Warrants evidenced by this Warrant Certificate will be issued under and in
accordance with an Indenture dated as of _________, 19__ (the "Indenture")
between the Company and PNC Bank, N.A., as trustee, and will be subject to the
terms and provisions contained in the Indenture. Copies of the Indenture and the
form of Warrant Securities are on file at the corporate trust office of the
trustee [and at ____].
[If Offered Securities with bearer Warrants which are not immediately detachable
- - Prior to _________, 19___, this Warrant Certificate may be exchanged or
transferred only together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially attached, and only
for the purpose of effecting, or in conjunction with, an exchange or transfer of
such Offered Securities. After such date, this [If Offered Securities with
bearer Warrants which are immediately detachable - This] Warrant Certificate,
and all rights hereunder, may be transferred by delivery and the Company and the
Warrant Agent may treat the bearer hereof as the owner for all purposes.]
[If Offered Securities with registered Warrants which are not immediately
detachable - Prior to _________, 19___, this Warrant Certificate may be
exchanged or transferred only together with the [Title of Offered Securities]
("Offered Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Securities. After such date, this [If Offered
Securities with registered Warrants which are immediately detachable - Transfer
of this] Warrant Certificate may be registered when this Warrant Certificate is
surrendered at the corporate trust office of the Warrant Agent [or _____] by the
registered owner or his assigns, in person or by an attorney duly authorized in
writing, in the manner and subject to the limitations provided in the Warrant
Agreement.]
[If Offered Securities with Warrants which are not immediately detachable Except
as provided in the immediately preceding paragraph, after] [If Offered
Securities with Warrants which are immediately detachable - After]
countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of Warrant Securities, including, without limitation, the
right to receive payments of principal of, premium, if any, or interest, if any,
on the Warrant Securities or to enforce any of the covenants of the Indenture.
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<PAGE>
This Warrant Certificate shall not be valid or obligatory for any purpose until
countersigned by the Warrant Agent.
Dated as of __________, 19___.
ALEXANDER & ALEXANDER
SERVICES INC.
By ___________________________
Attest:
- ------------------------------
Countersigned
- ------------------------------
As Warrant Agent
By ______________________________
Authorized Signature
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<PAGE>
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash or by
certified check or official bank check or by bank wire transfer] [by bank wire
transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn: __________ [or ________], which
[payment] [wire transfer] must specify the name of the holder and the number of
Warrants exercised by such holder. In addition, the holder must complete the
information required below and present this Warrant Certificate in person or by
mail (registered mail is recommended) to the Warrant Agent at the addresses set
forth below. This Warrant Certificate, completed and duly executed, must be
received by the Warrant Agent within five business days of the [payment] [wire
transfer].To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants evidenced by this
Warrant Certificate, to purchase ________ (currency) principal amount of the
[Title of Warrant Securities] (the "Warrant Securities") of Alexander &
Alexander Services Inc. and represents that he has tendered payment for such
Warrant Securities [in cash or by certified check or official bank check or by
bank wire transfer, in each case] [by bank wire transfer], in immediately
available funds, to the order of Alexander & Alexander Services Inc., c/o
[insert name and address of Warrant Agent], in the amount of _________
(currency) in accordance with the terms hereof. The undersigned requests that
said principal amount of Warrant Securities be in fully registered form and in
the authorized denominations, registered in such names and delivered, all as
specified in accordance with the instructions set forth below. If the number of
Warrants exercised is less than all of the Warrants evidenced hereby, the
undersigned requests that a new Warrant Certificate representing the remaining
Warrants evidenced hereby be issued and delivered to the undersigned unless
otherwise specified in the instructions below.
Dated: Name ________________________
(Please Print)
_________________________ Address ________________________
Social Security Number or ________________________
Other Identifying ________________________
Number of Holder
Signature ______________________
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at ____________________________________________
--------------------------------------------
--------------------------------------------
By mail at ____________________________________________
--------------------------------------------
--------------------------------------------
[Instructions as to form and delivery of Warrant Securities and, if applicable,
Warrant Certificates evidencing unexercised Warrants -- complete as
appropriate.]
<PAGE>
Certificate for Delivery of Bearer Warrant Securities
ALEXANDER & ALEXANDER SERVICES INC.
Warrant Securities
TO: Alexander & Alexander Services Inc.
c/o
as Trustee
This certificate is submitted in connection with our request that you deliver to
us _______ (currency) principal amount of Warrant Securities in bearer form upon
exercise of Warrants. We hereby certify that either (a) none of such Warrant
Securities will be held by or on behalf of a United States Person or (b) if a
United States Person will have a beneficial interest in such Warrant Securities,
such person is described in Section 165(j)(3)(A), (B) of (C) of the United
States Internal Revenue Code of 1954, as amended and the regulations thereunder.
As used herein, "United States Person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws or the United States or any political subdivision thereof or an
estate or trust whose income from sources without the United States is
includible in gross income for Unites States Federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
We understand that this certificate is required in connection with certain tax
legislation in the United States. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.
Dated: __________________________
(Please print name)
<PAGE>
[If Registered Warrant]
Assignment
(Form of Assignment to be Executed if Holder Desires to Transfer Warrants
Evidenced Hereby)
For value received hereby sells, assigns
and transfer unto
- ----------------------------- -----------------------
(Please print name and address Social Security
of assignee, including zip code) Number or other
identifying number
- ------------------------------------------------------------
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _____________ Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
----------------------------
Signature
(Signature must confirm in all respect to
name of holder as specified on the face of
this Warrant Certificate and must bear a
signature guarantee of a commercial bank,
trust company, or member broker of the New
York, American, Midwest or pacific Stock
Exchange.)
Signature Guaranteed:
- --------------------------------
1
EXHIBIT 4.6
ALEXANDER & ALEXANDER SERVICES INC.
Form of Warrant Agreement
[for warrants sold alone]
THIS WARRANT AGREEMENT is dated as of ___________ between Alexander & Alexander
Services Inc., a Maryland corporation (hereinafter called the "Company" which
term includes any successor corporation under the Indenture hereinafter referred
to) and , as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an Indenture dated as of __________, 1996
(the "Indenture"), with PNC Bank, N.A., as trustee (the "Trustee"), providing
for the issuance from time to time of its unsecured debentures, notes or other
evidences of indebtedness (the "Debt Securities"), to be issued in one or more
series, as provided in the Indenture; and
WHEREAS, the Company proposes to sell warrant certificates evidencing one or
more warrants (the "Warrants" or, individually a "Warrant") representing the
right to purchase [title of Debt Securities purchasable through exercise of
Warrants] (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company
in connection with the issuance, exchange, exercise and replacement of the
Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced:
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution and
Delivery of Warrant Certificates.
Section 1.1. Issuance of Warrants. Each Warrant Certificate shall evidence one
or more Warrants. Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase a Warrant
Security in the principal amount of _______ (currency) to be issued pursuant to
the Indenture with the Trustee, as Trustee for such series of Debt Securities
thereunder.
Section 1.2. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be in [bearer] [registered] form
substantially in the form set forth in Exhibit A hereto, shall be dated ________
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or to
conform to usage. The Warrant Certificates shall be signed on behalf of the
Company by its Chairman of the Board, its President, one of its Vice Presidents,
its Treasurer or one of its Assistant Treasurers under its corporate seal and
attested by its Secretary or one of its Assistant Secretaries. Such signatures
may be manual or facsimile signatures of such authorized officers and may be
imprinted or otherwise reproduced on the Warrant Certificates. The seal of the
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Company may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be such
officer before the Warrant Certificates so signed shall have been countersigned
and delivered by the Warrant Agent, such Warrant Certificates may be
countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
[If bearer Warrants -- The term "holder" or "holder of a Warrant Certificate" as
used herein shall mean the bearer of such Warrant Certificate.]
[If registered Warrants -- The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose.]
Section 1.3. Issuance of Warrant Certificates. Warrant Certificates evidencing
the right to purchase an aggregate principal amount not exceeding ______
(currency) aggregate principal amount of Warrant Securities (except as provided
in Section 2.3(c), 3.2 and 4.1) may be executed by the Company and delivered to
the Warrant Agent upon the execution of this Warrant Agreement or from time to
time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates
duly executed on behalf of the Company, countersign Warrant Certificates
evidencing Warrants representing the right to purchase up to _________ currency)
aggregate principal amount of Warrant Securities and shall deliver such Warrant
Certificates to or upon the order of the Company. Subsequent to such original
issuance of the Warrant Certificates, the Warrant Agent shall countersign a
Warrant Certificate only if the Warrant Certificate is issued in exchange or
substitution for one or more previously countersigned Warrant Certificates [If
registered Warrants -- or in connection with their transfer], as hereinafter
provided or as provided in Section 2.3(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants.
Section 2.1. Warrant Price. On______, 19__, the exercise price of each Warrant
is (currency). During the period from ________, 19__, through and including
_________, 19__, the exercise price of each Warrant will be _________
(currency), plus [accrued amortization of the original issue discount] [accrued
interest] from _________, 19__. On _________, 19__, the exercise price of each
Warrant will be ________ (currency). During the period from _________, 19__,
through and including _________, 19__, the exercise price of each Warrant will
be _________ (currency), plus [accrued amortization of the original issue
2
<PAGE>
discount] [accrued interest] from _________, 19__. [In each case, the original
issue discount will be amortized at a ___% annual rate, computed on an annual
basis using a 360-day year consisting of twelve 30-day months]. Such purchase
price of Warrant Securities is referred to in this Agreement as the "Warrant
Price." [The original issued discount for each _______ (currency) principal
amount of Warrant Securities is _____ (currency)] Section 2.2. Duration of
Warrants. Each Warrant may be exercised in whole at any time, as specified
herein, on or after [the date thereof] [ , 19__,] and at or before 5 p.m. New
York time on ____________, 19__, (the "Expiration Date"). Each Warrant not
exercised at or before 5 p.m. New York time on the Expiration Date shall become
void, and all rights of the holder of the Warrant Certificate evidencing such
Warrant under this Agreement shall cease.
Section 2.3. Exercise of Warrants.
(a) During the period specified in Section 2.2, any whole number of
Warrants may be exercised by providing certain information set forth
on the reverse side of the Warrant Certificate and by paying in
full, [in lawful money of the United States of America] [in cash or
by certified check or official bank check or by bank wire transfer,
in each case] [by bank wire transfer] in immediately available
funds, the Warrant Price for each Warrant exercised, to the Warrant
Agent at its corporate trust office [or at ________], provided that
such exercise is subject to receipt within five business days of
such [payment] [wire transfer] by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities
set forth on the reverse side of the Warrant Certificate properly
completed and duly executed. The date on which payment in full of
the Warrant Price is received by the Warrant Agent shall, subject to
receipt of the Warrant Certificate as aforesaid, be deemed to be the
date on which the Warrant is exercised. The Warrant Agent shall
deposit all funds received by it in payment of the Warrant Price in
account of the Company maintained with it and shall advise the
Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the
amount so deposited to its account. The Warrant Agent shall promptly
confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company and the Trustee under the Indenture
of (i) the number of Warrants exercised, (ii) the instructions of
each holder of the Warrant Certificates evidencing such Warrants
with respect to delivery of the Warrant Securities to which such
holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants
remaining after such exercise, and (iv) such other information as
the Company or the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue, pursuant to the Indenture, in authorized
denominations to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled in fully registered form, registered in such
name or names as may be directed by such holder. If fewer than all
of the Warrants evidenced by such Warrant Certificate are exercised,
the Company shall execute and an authorized officer of the Warrant
Agent shall manually countersign and deliver, a new Warrant
Certificate evidencing the number of such Warrants remaining
unexercised.
(d) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any
transfer involved in the issue of the Warrant Securities; and in the
event that any such transfer is involved, the Company shall not be
required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it has been established to the
Company's satisfaction that no such tax or other charge is due.
3
<PAGE>
ARTICLE III
Other Provisions Relating to Rights of
Holders of Warrant Certificates.
Section 3.1. No Rights as Warrant Security holder Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall
entitle the holder thereof to any of the rights of a holder of Warrant
Securities, including, without limitation, the right to receive the payment of
principal of, premium, if any, or interest on Warrant Securities or to enforce
any of the covenants in the Indenture.
Section 3.2. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it, and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for cancellation, then,
in the absence of notice to the Company or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and evidencing a like number of Warrants. Upon the issuance of any
new Warrant Certificate under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Warrant Agent) in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost,
stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
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
of mutilated, lost, stolen or destroyed Warrant Certificates.
Section 3.3 Holder of Warrant Certificate May Enforce Rights. Notwithstanding
any of the provisions of this Agreement, any holder of a Warrant Certificate,
without the consent of the Warrant Agent, the Trustee, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may in his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company suitable to enforce or otherwise in
respect of his right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate and in this
Agreement.
ARTICLE IV
Exchange and Transfer of Warrant Certificates.
Section 4.1. Exchange and Transfer of Warrant Certificates. Upon surrender at
the corporate trust office of the Warrant Agent [or ], Warrant Certificates
evidencing Warrants may be exchanged for Warrant Certificates in other
denominations evidencing such Warrants [If registered Warrants -- or the
transfer thereof may be registered in whole or in part]; provided that such
other Warrant Certificates evidence the same aggregate number of Warrants as the
Warrant Certificates so surrendered. [If registered Warrants -- The Warrant
Agent shall keep, at its corporate trust office [and at ] books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at
its corporate trust office [or ] for exchange [or registration of transfer],
properly endorsed or accompanied by appropriate instruments of registration of
4
<PAGE>
transfer and written instructions for transfer, all in form satisfactory to the
Company and the Warrant Agent.] No service charge shall be made for any exchange
[or registration of transfer] of Warrant Certificates but the Company may
require payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange [or
registration of transfer]. Whenever any Warrant Certificates are so surrendered
for exchange [or registration of transfer] an authorized officer of the Warrant
Agent shall manually countersign and deliver to the person or persons entitled
thereto a Warrant Certificate or Warrant Certificates duly authorized and
executed by the Company, as so requested. The Warrant Agent shall not be
required to effect any exchange [or registration of transfer] which will result
in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a
number of full Warrants and a fraction of a Warrant. All Warrant Certificates
issued upon any exchange [or registration of transfer] of Warrant Certificates
shall be the valid obligations of the Company, evidencing the same obligations,
and entitled to the same benefits under this Agreement, as the Warrant
Certificates surrendered for such exchange [or registration of transfer].
Section 4.2. Treatment of Holders of Warrant Certificates. [Bearer warrants Each
Warrant Certificate shall be transferable by delivery and shall be deemed
negotiable and the bearer of each Warrant Certificate may be treated by the
Company, the Warrant Agent and all other persons dealing with such bearer as the
absolute owner thereof for any purpose and as the person entitled to exercise
the rights represented by the Warrants evidenced thereby, any notice to the
contrary notwithstanding.] [Registered Warrants - The Company and the Warrant
Agent may treat the registered holder as the absolute owner thereof for any
purpose and as the person entitled to exercise the rights represented by the
Warrants evidenced thereby any notice to the contrary notwithstanding.]
Section 4.3. Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange [registration of transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Company, be delivered to the
Warrant Agent and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be
reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V
Concerning the Warrant Agent
Section 5.1. Warrant Agent. The Company hereby appoints __________, as Warrant
Agent of the Company in respect of the Warrants and the Warrant Certificates
upon the terms and subject to the conditions herein set forth; and _________
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 5.2. Conditions of Warrant Agent's Obligations. The Warrant Agent
accepts its obligations herein set forth upon the terms and conditions hereof,
including the following, to all of which the Company agrees and to all of which
the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to pay
the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to
reimburse the Warrant Agent for reasonable out-of-pocket expenses
5
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(including counsel fees) incurred by the Warrant Agent in connection
with the services rendered hereunder by the Warrant Agent. The
Company also agrees to indemnify the Warrant Agent for, and to hold
it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Warrant Agent, arising
out of or in connection with its acting as Warrant Agent hereunder,
as well as the costs and expenses of defending against any claim of
such liability.
(b) Agent for the Company. In acting under this Warrant Agreement and in
connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any
obligation or relationship of agency or trust for or with any of the
holders of Warrant Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory to
it, and the advice of such 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 accordance
with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or
document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers, directors
and employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were
not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any
financial or other transaction with the Company and may act on, or
as depositary, trustee or agent for, any committee or body of
holders of Warrant Securities or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder. Nothing in
this Warrant Agreement shall be deemed to prevent the Warrant Agent
from acting as trustee for any series of Debt Securities under the
Indenture.
(f) No Liability for Interest. The Warrant Agent shall have
no liability for interest on any monies at any time received
by it pursuant to any of the provisions of this Agreement
or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have
no liability with respect to any invalidity of this Agreement or
any of the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent shall not
be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's
countersignature thereon), all of which are made solely by the
Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or
obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not
be under any obligation to take any action hereunder which may tend
to involve it in any expense or liability, the payment of which
within a reasonable time is not, in its reasonable opinion, assured
6
<PAGE>
to it. The Warrant Agent shall not be accountable or under any duty
or responsibility for the use by the Company of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it
to the Company pursuant to this Agreement or for the application by
the Company of the proceeds of the Warrant Certificates. The Warrant
Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements
contained herein or in the Warrant Certificates or in the case of
the receipt of any written demand from a holder of a Warrant
Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility
to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 6.2, to make any demand
upon the Company.
Section 5.3. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders of the Warrant
Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become
effective; provided that such date shall not be less than three
months after the date on which such notice is given unless the
Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an instrument in writing signed
by or on behalf of the Company and specifying such removal and the
date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (which shall be a
bank or trust company authorized under the laws of the jurisdiction
of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The
obligation of the Company under Section 5.2(a) shall continue to the
extent set forth therein notwithstanding the resignation or removal
of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under
the Federal Bankruptcy Code, as now constituted or hereafter
amended, or under any other applicable Federal or State bankruptcy
law or similar law or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver or custodian
of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if
a receiver or custodian of it or of all or any substantial part of
its property shall be appointed, or if an order of any court shall
be entered for relief against it under the provisions of the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under
any other applicable Federal or State bankruptcy or similar law, or
if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of
rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by
an instrument in writing, filed with the successor Warrant Agent.
Upon the appointment as aforesaid of a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment the
Warrant Agent shall cease to be Warrant Agent hereunder.
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(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent
shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant
Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be merged
or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business
of the Warrant Agent, provided that it shall be qualified as
aforesaid, shall be the successor Warrant Agent under this Agreement
without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
ARTICLE VI
Miscellaneous.
Section 6.1. Amendment. This Agreement may be amended by the parties hereto,
without the consent of the holder of any Warrant Certificate, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided that such action
shall not materially and adversely affect the interests of the holders of the
Warrant Certificates.
Section 6.2. Notices and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 6.3. Addresses. Any communication from the Company to the Warrant Agent
with respect to this Agreement shall be addressed to , and any communication
from the Warrant Agent to the Company with respect to this Agreement shall be
addressed to Alexander & Alexander Services Inc., 1185 Avenue of the Americas,
New York, N.Y. 10036, Attention: _______________ (or such other address as shall
be specified in writing by the Warrant Agent or by the Company).
Section 6.4. Applicable Law. The validity, interpretation and performance of
this Agreement and each Warrant Certificate issued hereunder and of the
respective terms and provisions thereof shall be governed by and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
Section 6.5. Delivery of Prospectus. The Company will furnish to the Warrant
Agent sufficient copies of a prospectus relating to the Warrant Securities
deliverable upon exercise of Warrants (the "Prospectus"), and the Warrant Agent
agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to
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the holder of the Warrant Certificate evidencing such Warrant, prior to or
concurrently with, the delivery of the Warrant Securities issued upon such
exercise, a Prospectus.
Section 6.6. Obtaining of Governmental Approvals. The Company will from time to
time take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and authorities and
securities acts filings under United States Federal and State laws (including,
without limitation, a registration statement in respect of the Warrants and
Warrant Securities under the Securities Act of 1933, as amended), which may be
or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer, and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
Section 6.7. Persons Having Rights under Warrant Agreement. Nothing in this
Agreement shall give to any person other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement.
Section 6.8. Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 6.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
Section 6.10. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificate for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be affixed hereunto, and the
same to be attested, all as of the day and year first above written.
ALEXANDER & ALEXANDER
SERVICES INC.
By ________________________
Attest:
- -------------------------
[Name of Warrant Agent], as Warrant Agent
Attest: By ___________________________
- -------------------------
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Exhibit A
Note: Format Change incl. Header A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
Exercisable Only if Countersigned by the
Warrant Agent as Provided Herein
ALEXANDER & ALEXANDER SERVICES INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on _________, 19__
[No.] Warrants
This certifies that [the bearer is the ] [ or registered assigns is the
registered] owner of the above indicated number of Warrants, each Warrant
entitling such [bearer] [owner] to purchase, at any time [after 5 p.m. New York
time on _________, 19__, and] on or before 5 p.m. New York time on _________,
19__, ______ (currency) principal amount of [Title of Warrant Securities] (the
"Warrant Securities"), of Alexander & Alexander Services Inc., (the "Company"),
issued and to be issued under the Indenture (as hereinafter defined), on the
following basis: on_______, 19___, the exercise price of each Warrant is
________ (currency); during the period from_________, 19__, through and
including _________, 19__, the exercise price of each Warrant will be ________
(currency), plus [accrued amortization of the original issue discount] [accrued
interest] from ________, 19___; on_______, 19__, the exercise price of each
Warrant will be _______ (currency); during the period from , 19 , through and
including ______, 19___, the exercise price of each Warrant will be ________
(currency), plus [accrued amortization of the original issue discount] [accrued
interest] from , 19 ; [in each case, the original issue discount will be
amortized at a % annual rate, computed on an annual basis using a 360-day year
consisting of twelve 30-day months](the "Warrant Price"). [The original issued
discount for each ________ (currency) principal amount of Warrant Securities is
________ (currency).] The holder may exercise the Warrants evidenced hereby by
providing certain information set forth on the back hereof and by paying in
full, [in lawful money of the United States of America] [in cash or by certified
check or official bank check or by bank wire transfer, in each case] [by bank
wire transfer], in immediately available funds, the Warrant Price of each
Warrant exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back hereof
duly executed, at the corporate trust office of [name of Warrant Agent], or its
successor as warrant agent (the "Warrant Agent"), [or ] currently at the address
specified on the reverse hereof, and upon compliance with and subject to the
conditions set forth herein and in the Warrant Agreement (as hereinafter
defined).
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form in denominations of
________ (currency) and any integral multiples thereof. Upon any exercise of
fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of ___________, 19__, (the "Warrant Agreement") between the
Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent
[and at ].
10
<PAGE>
The Warrant Securities to be issued and delivered upon the exercise
of the Warrants evidenced by this Warrant Certificate will be issued under and
in accordance with an Indenture dated as of _________, 19___ (the "Indenture")
between the Company and PNC Bank, N.A., as trustee, and will be subject to the
terms and provisions contained in the Indenture. Copies of the Indenture and the
form of Warrant Securities are on file at the corporate trust office of the
trustee [and at ].
[Bearer Warrants -- This Warrant Certificate, and all rights hereunder, may be
transferred by delivery and the Company and the Warrant Agent may treat the
bearer hereof as the owner for all purposes.]
[Registered Warrants -- This Warrant Certificate may be transferred when
surrendered at the corporate trust office of the Warrant Agent [or ] by the
registered owner or his appointed person or by an attorney duly authorized in
writing, in the manner and subject to the terms provided in the Warrant
Agreement.]
After countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of Warrant Securities, including, without limitation, the
right to receive payments of principal of, premium, if any, or interest, if any,
on the Warrant Securities or to enforce any of the covenants of the Indenture.
This Warrant Certificate shall not be valid or obligatory for any purpose until
countersigned by the Warrant Agent.
Dated as of _________, 19___.
ALEXANDER & ALEXANDER
SERVICES INC.
By ___________________________
Attest:
- ------------------------------
Countersigned
- ------------------------------
As Warrant Agent
By ______________________________
Authorized Signature
<PAGE>
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash or by
certified check or official bank check or by bank wire transfer] [by bank wire
transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn:_______________ [or_________], which
[payment] [wire transfer] must specify the name of the holder and the number of
Warrants exercised by such holder. In addition, the holder must complete the
information required below and present this Warrant Certificate in person or by
mail (registered mail is recommended) to the Warrant Agent at the addresses set
forth below. This Warrant Certificate, completed and duly executed, must be
received by the Warrant Agent within five business days of the [payment] [wire
transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants evidenced by this
Warrant Certificate, to purchase _________ (currency) principal amount of the
[Title of Warrant Securities] (the "Warrant Securities") of Alexander &
Alexander Services Inc. and represents that he has tendered payment for such
Warrant Securities [in cash or by certified check or official bank check or by
bank wire transfer, in each case] [by bank wire transfer], in immediately
available funds, to the order of Alexander & Alexander Services Inc., c/o
[insert name and address of Warrant Agent], in the amount of _________
(currency) in accordance with the terms hereof. The undersigned requests that
said principal amount of Warrant Securities be in fully registered form and in
the authorized denominations, registered in such names and delivered, all as
specified in accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants evidenced
hereby, the undersigned requests that a new Warrant Certificate representing the
remaining Warrants evidenced hereby be issued and delivered to the undersigned
unless otherwise specified in the instructions below.
Dated: Name ________________________
(Please Print)
_________________________ Address ______________________
Social Security Number or ______________________
Other Identifying Number of ______________________
Holder
Signature _____________________
The Warrants evidenced hereby may be exercised at the following addresses:
By hand at ____________________________________________
--------------------------------------------
--------------------------------------------
By mail at ____________________________________________
--------------------------------------------
--------------------------------------------
[Instructions as to form and delivery of Warrant Securities and, if applicable,
Warrant Certificates evidencing unexercised Warrants -- complete as
appropriate.]
<PAGE>
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received hereby sells, assigns and transfers unto
- ---------------------------------- -------------------
(Please print name and address Social Security
of assignee, including zip code) Number or other identifying number
- -----------------------------------------------------------
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to transfer said Warrant
Certificate on the books of the Warrant Agent with full power of substitution in
the premises.
Dated:
-------------------------------
Signature
(Signature must conform in all respect to name of
holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee of
a commercial bank, trust company, or member broker
of the New York, American, Midwest or Pacific
Stock Exchange.)
Signature Guaranteed:
- -----------------------------
2
Exhibit 5.1
Alexander & Alexander Services Inc.
1185 Avenue of the Americas
New York, New York 10036
Telephone 212-444-4532
Facsimile 212-444-4696
Albert A. Skwiertz, Jr.
Senior Vice President & General Counsel
March 29, 1996
Board of Directors
Alexander & Alexander Services Inc.
1185 Avenue of the Americas
New York, NY 10036
Re: Alexander & Alexander Services Inc.
Registration Statement on Form S-3
Gentlemen:
I am General Counsel of Alexander & Alexander Services Inc., a Maryland
corporation (the "Company"), and have acted as counsel for the Company in
connection with the Registration Statement on Form S-3 ("Registration
Statement") to be filed under the Securities Act of 1933, as amended, in
connection with the proposed offering and sale, from time to time, of up to
$250,000,000 of the Company's securities (the "Securities").
In connection with the foregoing, I have examined the originals or copies of
such corporate records, documents, certificates and other instruments as I have
deemed necessary or appropriate for the purposes of rendering this opinion.
Based on the foregoing, it is my opinion that the Securities when and if issued
and delivered as contemplated by the Registration Statement, will be validly
issued, fully paid and non-assessable and, in the case of any debt securities
offered thereunder, will be binding obligations of the Company.
The foregoing opinions are limited to the laws of the state of Maryland and I do
not express any opinion herein concerning any other law. I hereby consent to the
filing of this opinion as an exhibit to the Registration Statement. In giving
this consent, I do not thereby admit that I am within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
Albert A. Skwiertz, Jr.
Senior Vice President
and General Counsel
Exhibit 12.1
<TABLE><CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES
For the years ended December 31, 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings
- --------
Pre-tax Earnings (Loss) $156.0 $ (146.8) $31.9 $102.9 $ (6.4)
Less: Minority Interest (5.7) (3.0) (1.9) (1.8) (2.4)
----- ----- ----- ----- -----
Adjusted Pre-Tax Earnings (Loss) 150.3 (149.8) 30.0 101.1 (8.8)
----- ------- ---- ----- -----
Plus Fixed Charges 46.5 46.2 44.6 49.8 50.5
----- ---- ---- ---- ----
Total Earnings (Loss) $196.8 $ (103.6) $74.6 $150.9 $41.7
------ --------- ----- ------ -----
Fixed Charges
- -------------
Interest Expense $16.8 $15.6 $13.6 $17.3 $21.6
Amortization of debt discount 1.8 0.4 0.8 0.7 0.6
Interest factor in rental expense 27.9 30.2 30.2 31.8 28.3
Total Fixed Charges $46.5 $46.2 $44.6 $49.8 $50.5
----- ----- ----- ----- -----
Ratio Earnings/Fixed Charges 4.2 (2.2) 1.7 3.0 0,8
Coverage Deficiency (Dollars) N/A 149.8 N/A N/A 8.8
- --------------------
</TABLE>
(1) Earnings to fixed charges have been determined based on continuing
operations and have been computed by dividing earnings before income
taxes and fixed charges by fixed charges. Fixed charges are considered
to be interest on indebtedness, amortization of debt discount and one-
third of rentals, which the Company believes is representative of the
interest factor of such rentals.
(2) Earnings for 1991 and 1994 were insufficient to cover fixed charges;
the amount of the coverage deficiency was $8.8 million in 1991 and
$149.8 million in 1994.
Exhibit 12.2
<TABLE><CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
For the years ended December 31, 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings
- --------
Pre-tax Earnings (Loss) $156.0 ($146.8) $31.9 $102.9 ($6.4)
Less: Minority Interest (5.7) (3.0) (1.9) (1.8) (2.4)
----- ----- ----- ----- -----
Adjusted Pre-Tax Earnings (Loss) 150.3 (149.8) 30.0 101.1 (8.8)
----- ------- ---- ----- -----
Plus Fixed Charges 46.5 46.2 44.6 49.8 50.5
----- ---- ---- ---- ----
Total Earnings (Loss) $196.8 ($103.6) $74.6 $150.9 $41.7
------ -------- ----- ------ -----
Fixed Charges + Preferred Stock Dividends
- -----------------------------------------
Fixed Charges
Interest Expense $16.8 $15.6 $13.6 $17.3 $21.6
Amortization of debt discount 1.8 0.4 0.8 0.7 0.6
Interest factor in rental expense 27.9 30.2 30.2 31.8 28.3
Total 46.5 46.2 44.6 49.8 50.5
---- ---- ---- ---- ----
Preferred Dividends 25.4 15.1 6.2 0.0 0.0
Adj. Pref Stock Dividend (Utilized 35% tax rate) 39.1 23.2 9.5 0.0 0.0
Total Fixed Charges + Adj. Pref Stock Dividend $85.6 $69.4 $54.1 $49.8 $50.5
---- ----- ----- ----- ------
Ratio Earnings (Loss)/Fixed Charges + Adjusted
Preferred Stock Dividend 2.3 (1.5) 1.4 3.0 0.8
Coverage Deficiency (Dollars) N/A 173.0 N/A N/A 8.8
</TABLE>
- -----------------------------------
(1) Earnings to fixed charges and adjusted preferred stock dividends have
been determined based on continuing operations and have been computed
by dividing earnings before income taxes and fixed charges by fixed
charges plus adjusted preferred stock dividends. Fixed charges are
considered to be interest on indebtedness, amortization of debt
discount and one-third of rentals, which the Company believes is
representative of the interest factor of such rentals.
(2) Earnings for 1991 and 1994 were insufficient to cover fixed charges;
the amount of the coverage deficiency was $173.0 million in 1994 and
$8.8 million in 1991.
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Alexander & Alexander Services Inc. on Form S-3 of our reports dated
February 14, 1996, appearing in and incorporated by reference in the Annual
Report on Form 10-K of Alexander & Alexander & Alexander Services Inc. for the
year ended December 31, 1995 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Baltimore, Maryland
March 29, 1996
Exhibit 23.3
LETTERHEAD OF
WHITE & CASE
March 27, 1996
Peter K. Lathrop, Esq.
Vice President and Director of Tax
Alexander & Alexander Services Inc.
1185 Avenue of the Americas
New York, New York 10036
Re: Form S-3 Registration Statement
Dear Mr. Lathrop:
We hereby consent to the reference to our Firm under the heading "Risk Factors"
in Alexander & Alexander Services Inc.'s Form S-3 Registration Statement to be
filed on March 29, 1996 (Registration Number not yet assigned) in connection
with the registration of securities up to an aggregated amount of $250,000,000.
Very truly yours
WHITE & CASE
Exhibit 25.1
________________________________________________________________________________
________________________________________________________________________________
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) x
----
PNC BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)
NOT APPLICABLE
(Jurisdiction of incorporation or
organization if not a U.S. national bank)
25-1197336
(I.R.S. Employer Identification No.)
One PNC Plaza
Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices - Zip code)
F. J. Deramo, Vice President, PNC Bank, National Association
27th Floor, One Oliver Plaza, Pittsburgh, Pennsylvania 15222
(412) 762-3666
(Name, address and telephone number of agent for service)
ALEXANDER & ALEXANDER SERVICES INC.
(Exact name of obligor as specified in its charter)
Maryland
(State or other jurisdiction of incorporation or organization)
52-0969822
(I.R.S. Employer Identification No.)
1185 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices - Zip code)
DEBT SECURITIES
(Title of the indenture securities)
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of Cleveland Cleveland, Ohio
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes. (See Exhibit T-1-3)
Item 2. Affiliations with obligor and underwriters.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
Neither the obligor nor any underwriter for the obligor is an
affiliate of the trustee.
Item 3 through Item 14.
PNC Bank, National Association is not presently the trustee for any
outstanding securities of the obligor. Consequently, the obligor currently
is not in default under any of its outstanding securities for which PNC
Bank, National Association is trustee. Accordingly, responses to Items 3
through 14 of Form T-1 are not required pursuant to Form T-1 General
Instructions B.
Item 15. Foreign trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under the indentures qualified or to be
qualified under the Act.
Not applicable (trustee is not a foreign trustee).
Item 16. List of exhibits.
List below all exhibits filed as part of this statement of eligibility.
Exhibit T-1-1 - Articles of Association of the trustee, with all
amendments thereto, as presently in effect, filed as
Exhibit 1 to Trustee's Statement of Eligibility and
Qualification, Registration No. 33-58107 and
incorporated herein by reference.
<PAGE>
Exhibit T-1-2 - Copy of Certificate of the Authority of the Trustee to
Commence Business, filed as Exhibit 2 to Trustee's
Statement of Eligibility and Qualification,
Registration No. 2-58789 and incorporated herein by
reference.
Exhibit T-1-3 - Copy of Certificate as to Authority of the Trustee to
Exercise Trust Powers, filed as Exhibit 3 to Trustee's
Statement of Eligibility and Qualification,
Registration No. 2-58789, and incorporated herein by
reference.
Exhibit T-1-4 - The By-Laws of the trustee, as presently in effect,
filed as Exhibit 4 to Trustee's Statement of
Eligibility and Qualification, Registration No. 33-
58107 and incorporated herein by reference.
Exhibit T-1-5 - The consent of the trustee required by Section 321(b)
of the Act.
Exhibit T-1-6 - The copy of the Balance Sheet taken from the latest
Report of Condition of the trustee published in
response to call made by Comptroller of the Currency
under Section 5211 U.S. Revised Statutes.
NOTE
The answers to this statement, insofar as such answers relate to (a) what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or are owners of 10% or more
of the voting securities of the obligor, or are affiliates or directors or
executive officers of the obligor, and (b) the voting securities of the trustee
owned beneficially by the obligor and each director and executive officer of the
obligor, are based upon information furnished to the trustee by the obligor and
also, in the case of (b) above, upon an examination of the trustee's records.
While the trustee has no reason to doubt the accuracy of any such information
furnished by the obligor, it cannot accept any responsibility therefor.
---------------------------------------------------
Signature appears on next page
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee,
PNC Bank, National Association, a corporation organized and existing under the
laws of the United States of America, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Pittsburgh, and Commonwealth of Pennsylvania on
_______, 1996.
PNC BANK, NATIONAL ASSOCIATION
(Trustee)
By /s/ F. J. Deramo
___________________________________
F. J. Deramo
Vice President
<PAGE>
EXHIBIT T-1-5
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act of 1990, in connection
with the proposed issuance by SunTrust Banks, Inc. of Debt Securities, we hereby
consent that reports of examination by Federal, State, Territorial, or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
PNC BANK, NATIONAL ASSOCIATION
(Trustee)
By /s/ F. J. Deramo
___________________________________
F. J. Deramo
Vice President
Dated: ________, 1996
<PAGE>
EXHIBIT T-1-6
SCHEDULE RC - BALANCE SHEET
FROM
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of
PNC BANK, NATIONAL ASSOCIATION
of PITTSBURGH in the state of PENNSYLVANIA
at the close of business on
December 31, 1995
filed in response to call made by
Comptroller of the Currency,
under title 12, United States Code, Section 161
Charter Number 540
Comptroller of the Currency Northeastern District
BALANCE SHEET
Thousands
of Dollars
----------
ASSETS
Cash and balances due from depository institutions
Noninterest-bearing balances and currency and coin . . . .
$ 2,019,599
Interest-Bearing Balances . . . . . . . . . . . . . . . . 22,485
Securities
Held-to-maturity securities . . . . . . . . . . . . . . . 0
Available-for-sale securities . . . . . . . . . . . . . . 9,164,163
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold . . . . . . . . . . . . . . . . . . . . 901,850
Securities purchased under agreements to resell . . . . . 0
Loans and lease financing receivables:
Loans and leases, net of unearned income $28,171,241
LESS: Allowance for loan and lease losses 619,314
-----------
Loans and leases, net of unearned income,
allowance and reserve . . . . . . . . . . . . . . . . 27,551,927
Trading assets ......................... . . . . . . . . . . . 18,119
Premises and fixed assets (including capitalized leases) . . . 541,132
Other real estate owned . . . . . . . . . . . . . . . . . . . 53,572
Investments in unconsolidated subsidiaries and
associated companies . . . . . . . . . . . . . . . . . . 25,744
Customers' liability to this bank on acceptances
outstanding 46,283
Intangible assets . . . . . . . . . . . . . . . . . 904,829
Other assets 655,756
-----------
Total Assets $ 41,905,459
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . $24,542,031
Noninterest-bearing $ 6,153,961
Interest-bearing 18,388,070
In foreign offices, Edge and Agreement subsidiaries,
and IBFs . . . . . . . . . . . . . . . . . 951,828
Noninterest-bearing $ 659
Interest-bearing 951,169
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased . . . . . . . . . . . . . . . 2,200,847
Securities sold under agreements to repurchase . . . 1,340,116
Demand notes issued to U.S. Treasury . . . . . . . . . . . . .
500,820
Trading Liabilities . . . . . . . . . . . . . . . . . . . . . . 59
Other borrowed money
With original maturity of one year or less . . . . . . . . 7,012,404
With original maturity of more than one year . . . . . . . 789,299
Mortgage indebtedness and obligations under
capitalized leases . . . . . . . . . . . . . . . . . . . . 4,868
Bank's liability on acceptances executed and outstanding . . . 46,283
Subordinated notes and debentures . . . . . . . . . . . . . . 500,014
Other liabilities 545,612
------------
Total liabilities 38,433,999
EQUITY CAPITAL
Common Stock 30,950
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,527,094
Undivided profits and capital reserves . . . . . . . . . . . .
1,927,929
Net unrealized holding gains (losses) on
available-for-sale securities . . . . . . . . . . . . . . (14,513)
Total equity capital . . . . . . . . . . . . . . . . . . . . .
3,471,460
-----------
Total liabilities and equity capital . . . . . . . . . . . . .
$ 41,905,459
===========
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 738
<SECURITIES> 0
<RECEIVABLES> 1,293
<ALLOWANCES> 22
<INVENTORY> 0
<CURRENT-ASSETS> 2,372
<PP&E> 397
<DEPRECIATION> 270
<TOTAL-ASSETS> 2,942
<CURRENT-LIABILITIES> 2,120
<BONDS> 0
0
7
<COMMON> 43
<OTHER-SE> 353
<TOTAL-LIABILITY-AND-EQUITY> 2,942
<SALES> 0
<TOTAL-REVENUES> 1,282
<CGS> 0
<TOTAL-COSTS> 1,160
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19
<INCOME-PRETAX> 156
<INCOME-TAX> 161
<INCOME-CONTINUING> 89
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89
<EPS-PRIMARY> $1.44
<EPS-DILUTED> $1.42
</TABLE>
