As filed with the Securities and Exchange Commission on May 23, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
ENGELHARD CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 22-1586002
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
101 Wood Avenue
Iselin, New Jersey 08830
(908) 205-6000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
_________________________
Arthur A. Dornbusch, II
Vice President, General Counsel and Secretary
Engelhard Corporation
101 Wood Avenue
Iselin, New Jersey 08830
(908) 205-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_________________________
Copies to:
James J. Clark
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
_________________________
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
by market condi- tions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier effec-
tive registration Statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /_/
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
---------------
- ----------------------------------------------------------------------------------------
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered(1) Per Unit (2) Price (3) Fee (4)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities.............. $250,000,000 -- $250,000,000 $86,207
Common Stock (par value
$1.00 per share)........... -- -- -- --
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</TABLE>
(1) There is being registered hereunder up to $250,000,000 aggregate initial
offering price of Debt Securities or the equivalent thereof in one or
more foreign or composite currencies (which may be senior or
subordinated). There is also being registered hereunder an indeterminate
number of shares of Common Stock as may be issuable upon conversion or
redemption of certain Debt Securities registered hereby.
(2) The proposed maximum offering price per unit will be determined, from time
to time, by the Registrant in connection with the issuance by the
Registrant of the securities registered hereunder.
(3) Estimated solely for purposes of computing the registration fee. No
separate consideration will be received for shares of Common Stock issued
upon conversion or redemption of Debt Securities.
(4) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, as amended, and reflects the offering
price rather than the principal amount of any Debt Securities issued at a
discount.
<PAGE>
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
Pursuant to Rule 429 of the rules and regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended, the prospectus
included in this registration statement also relates to $100,000,000 principal
amount of unissued debt securities previously registered under Registrant's
registration statement on Form S-3 (File No. 33-58507), for which a registration
fee of $34,483 was previously paid.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 23, 1996
$350,000,000
ENGELHARD CORPORATION
Debt Securities
Engelhard Corporation ("Engelhard" or the "Company")
may offer, from time to time, in one or more series, its unse-
cured senior debt securities (the "Senior Debt Securities") and
its unsecured subordinated debt securities (the "Subordinated
Debt Securities" and, together with the Senior Debt Securities,
the "Debt Securities"). The Debt Securities may be redeemable
for, exchangeable or convertible into shares of Common Stock,
par value $1.00 per share ("Common Stock"), and, to the extent
applicable, references herein to the Debt Securities also
include a reference to Common Stock issuable upon any such
redemption, conversion or exchange. The Debt Securities will
have a maximum aggregate offering price of $350,000,000 (or the
equivalent thereof in one or more foreign or composite curren-
cies) and will be offered on terms to be determined by market
conditions at the time of sale. The Debt Securities may be
offered separately or together, in separate series, in amounts
and at prices and on terms to be set forth in an accompanying
prospectus supplement (a "Prospectus Supplement"). In addi-
tion, the specific terms of the Debt Securities in respect of
which this Prospectus is being delivered, and whether such Debt
Securities will be listed on a national securities exchange,
will be set forth in an accompanying Prospectus Supplement.
The Senior Debt Securities, if issued, will rank
equally and ratably with all other unsecured and unsubordinated
indebtedness of the Company, and the Subordinated Debt Securi-
ties, if issued, will be unsecured and subordinated to all pre-
sent and future Senior Indebtedness (as defined) of the Com-
pany. See "Description of Securities."
___________________
<PAGE>
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 Debt Securities may be sold directly, through
agents from time to time or through underwriters and/or deal-
ers. If any agent of the Company or any underwriter is
involved in the sale of the Debt Securities, the name of such
agent or underwriter and any applicable commission or discount
will be set forth in an accompanying Prospectus Supplement.
See "Plan of Distribution."
____________________
The date of this Prospectus is [ ], 1996.
<PAGE>
No dealer, salesman, or any other person has been
authorized to give any information or to make any representa-
tions other than those contained or incorporated by reference
in this Prospectus and, if given or made, such information or
representations must not be relied upon as having been autho-
rized by the Company or any underwriter, dealer, or agent.
This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy Debt Securities by anyone in
any jurisdiction in which the offer or solicitation is not
authorized or in which the person making the offer or solicita-
tion is not qualified to do so or to any person to whom it is
unlawful to make the offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational require-
ments of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in accordance therewith files reports and
other information with the Securities and Exchange Commission
(the "Commission") relating to its business, financial posi-
tion, results of operations and other matters. Such reports
and other information can be inspected and copied at the Public
Reference Section maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
its Regional Offices located at Citicorp Center, 500 West Madi-
son Street, Chicago, Illinois 60661, and 7 World Trade Center,
15th Floor, New York, New York 10048. Copies of such material
can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Common Stock of the Company is listed
on the New York Stock Exchange and such material can also be
inspected at the office of such exchange at 20 Broad Street,
New York, New York 10005.
The Company has filed with the Commission a registra-
tion statement (the "Registration Statement") under the Securi-
ties Act of 1933, as amended, with respect to the Debt Securi-
ties covered by this Prospectus. This Prospectus does not con-
tain all the information set forth in the Registration State-
ment, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. Reference is made to
the Registration Statement and to the exhibits relating thereto
for further information with respect to the Company and the
Debt Securities covered by this Prospectus.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein
its Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 and its Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996. All documents filed by the Com-
pany pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and before the
termination of the offering of the securities offered hereby
shall be deemed incorporated herein by reference, and such doc-
uments shall be deemed to be a part hereof from the date of
filing such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for pur-
poses of this Prospectus to the extent that a statement con-
tained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modi-
fied or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each per-
son to whom this Prospectus is delivered, on the written or
oral request of any such person, a copy of any or all of the
above documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifi-
cally incorporated by reference into such documents that this
Prospectus incorporates). Written or oral requests should be
directed to: Investor Relations, Engelhard Corporation, 101
Wood Avenue, Iselin N.J. 08830, telephone number
(908) 205-6000.
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THE COMPANY
Engelhard develops, manufactures and markets
technology-based specialty chemical products and engineered
materials for a wide spectrum of industrial customers, and pro-
vides services to precious and base metals customers and mar-
kets energy-related services. The Company operates on a world-
wide basis with corporate and operating headquarters and prin-
cipal manufacturing facilities and mineral reserves in the
United States with other operations conducted in the European
Community, the Russian Federation and the Asia-Pacific region.
The Company's businesses are organized into three
segments -- Catalysts and Chemicals, Pigments and Additives,
and Engineered Materials and Industrial Commodities Management
(formerly Precious Metals Management).
The Catalysts and Chemicals segment comprises three
principal product groups: the Environmental Technologies
Group, consisting of Automotive Emission Systems, Heavy Duty
Power Systems and Process Emission Systems, serving the automo-
tive, light and heavy duty truck, aircraft, off-road vehicle,
power generation and process industries; the Petroleum Cata-
lysts Group, serving the petroleum refining industries; and the
Chemical Catalysts Group, serving the chemical, petrochemical,
pharmaceutical and food processing industries. Environmental
technology catalysts are used in applications such as the
abatement of carbon monoxide, oxides of nitrogen and hydrocar-
bons from gasoline, diesel and alternate fueled vehicle exhaust
gases to meet emission control standards. These catalysts are
also used for the removal of odors, fumes and pollutants gener-
ated by a variety of process industries including but not lim-
ited to the painting of automobiles, appliances and other
equipment; printing processes; the manufacture of nitric acid
and tires, in the curing of polymers; and power generation
sources. The petroleum refining catalyst products consist of a
variety of catalysts and processes used in the petroleum refin-
ing industry. The principal products are zeolitic fluid crack-
ing catalysts which are widely used to provide economics in
petroleum processing. The chemical catalysts products consist
of catalysts and sorbents used in the production of a variety
of products or intermediates, including synthetic fibers, fra-
grances, antibiotics, vitamins, polymers, plastics, detergents,
fuels and lube oils, solvents, oleochemicals and edible
products.
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The Pigments and Additives segment comprises two
principal product groups: the Paper Pigments and Chemicals
Group, serving the paper industry and the Specialty Minerals
and Colors Group, serving the plastics, coatings, paint and
allied industries. Paper pigments and chemicals products con-
sist primarily of coating and extender pigments. Specialty
minerals and colors kaolin based products are used as pigments
and extenders for a variety of purposes in the manufacture of
plastic, rubber, ink, ceramic, adhesive products and in paint.
The Engineered Materials and Industrial Commodities
Management segment includes the Engineered Materials Group,
serving a broad spectrum of industries and the Industrial Com-
modities Management Group, which is responsible for precious
and base metals sourcing and dealing, for managing the precious
and base metals requirements of the Company and its customers,
and for power marketing. The products of the Engineered Mate-
rials Group consist primarily of metal-based materials such as
temperature-sensing devices, precious metals coating and elec-
troplating materials, conductive pastes and powders and brazing
alloys. In June 1995 the Company formed a 50/50 joint venture
with CLAL, a Paris-based precious metal fabricator. The joint
venture combined most of the assets of the Engineered Materials
business with CLAL. The Industrial Commodities Management
Group is responsible for procuring precious and base metals to
meet the requirements of the Company's operations and its cus-
tomers. The Industrial Commodities Management Group also
engages in precious and base metals dealing operations with
industrial consumers, dealers, central banks, miners and refin-
ers. It also participates in refining of precious metals and
marketing of energy-related services.
Engelhard was organized under the laws of the State
of Delaware in 1938. The Company's address is 101 Wood Avenue,
Iselin, New Jersey 08830, and its telephone number is (908)
205-6000. Unless otherwise indicated or the context otherwise
requires, all references to "Engelhard" or the "Company" herein
shall be deemed to refer to Engelhard Corporation and its con-
solidated subsidiaries.
USE OF PROCEEDS
Except as otherwise described in the accompanying
Prospectus Supplement, the net proceeds from the sale of the
Debt Securities will be used by the Company for general corpo-
rate purposes, which may include the reduction of outstanding
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indebtedness, working capital increases, capital expenditures
and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings
to fixed charges for the Company for the periods indicated. In
the calculation of the Company's ratio of earnings to fixed
charges, "earnings" consist of income from continuing opera-
tions before income taxes and fixed charges (excluding capital-
ized interest) and "fixed charges" consist of interest expense,
including the interest portion of rental obligations deemed
representative of the interest factor.
Three Months Year Ended December 31,
Ended -------------------------------------
March 31, 1996 1995 1994 1993 1992 1991
-------------- ---- ---- ---- ---- ----
5.28 6.05 6.79 (a) 7.26 5.45
(a) For fiscal 1993, earnings were insufficient to cover fixed
charges by approximately $8.3 million. Earnings in 1993
were negatively impacted by a charge of approximately $148
million for the realignment and consolidation of busi-
nesses and environmental matters. Without such charge,
the ratio of earnings to fixed charges for fiscal 1993
would have been 7.14.
DESCRIPTION OF SECURITIES
Senior Debt Securities may be issued from time to
time in one or more series under an indenture (the "Senior
Indenture"), between the Company and The Chase Manhattan Bank,
N.A. (the "Senior Trustee"). The Senior Indenture has been
filed as an exhibit to the Registration Statement of which this
Prospectus is a part. Subordinated Debt Securities may be
issued from time to time in one or more series under an inden-
ture (the "Subordinated Indenture") between the Company and a
trustee to be identified in the applicable Prospectus Supple-
ment (the "Subordinated Trustee"). The Subordinated Indenture
has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The Senior Indenture and the
Subordinated Indenture are sometimes referred to collectively
as the "Indentures," and the Senior Trustee and the Subordi-
nated Trustee are sometimes referred to collectively as the
"Trustees." The statements under this caption are brief
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<PAGE>
summaries of certain provisions contained in the Indentures, do
not purport to be complete and are qualified in their entirety
by reference to the Indentures, including the definitions
therein of certain terms, copies of which are included or
incorporated by reference as exhibits to the Registration
Statement of which this Prospectus is a part. Capitalized
terms used herein and not defined shall have the meanings
assigned to them in the relevant Indenture. The particular
terms of the Debt Securities and any variations from such gen-
eral provisions applicable to any series of Debt Securities
will be set forth in the Prospectus Supplement with respect to
such series.
General
Each Indenture provides for the issuance of Debt
Securities in one or more series with the same or various
maturities at par or at a discount. Any Debt Securities bear-
ing no interest or interest at a rate which at the time of
issuance is below market rates will be sold at a discount
(which may be substantial) from their stated principal amount.
Federal income tax consequences and other special consider-
ations applicable to any such discounted Debt Securities ("Dis-
counted Securities") will be described in the Prospectus Sup-
plement relating thereto. Neither Indenture limits the amount
of Debt Securities that can be issued thereunder. Reference is
made to the Prospectus Supplement for the following terms, if
applicable, of the Debt Securities offered thereby: (1) the
designation, aggregate principal amount, currency or composite
currency and denominations; (2) the price at which such Debt
Securities will be issued; (3) any index, formula or other
method used for determining amounts of principal or interest
payable on the Debt Securities; (4) the maturity date and other
dates, if any, on which principal will be payable; (5) the
interest rate or rates (which may be fixed or variable), if
any, and the date or dates from which interest will accrue and
on which interest will be payable, and the record dates for the
payment of interest; (6) the manner of paying principal or
interest; (7) the place or places where principal and interest
will be payable; (8) the terms of any mandatory or optional
redemption by the Company; (9) the terms of any repayment at
the option of holders; (10) whether such Debt Securities are to
be issuable as registered Debt Securities, bearer Debt Securi-
ties, or both, and whether and upon what terms registered Debt
Securities may be exchanged for bearer Debt Securities and vice
versa; (11) whether such Debt Securities are to be represented
in whole or in part by a Debt Security in global form and, if
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so, the identity of the depositary ("Depositary") for any glo-
bal Debt Security; (12) any tax indemnity provisions; (13) if
the Debt Securities provide that payments of principal or
interest may be made in a currency other than that in which
Debt Securities are denominated, the manner for determining
such payments; (14) the portion of principal payable upon
acceleration of a Discounted Security; (15) whether and upon
what terms Debt Securities may be defeased; (16) any events of
default or restrictive covenants in addition to or in lieu of
those set forth in the applicable Indenture; (17) provisions
for electronic issuance of Debt Securities or for Debt Securi-
ties in uncertificated form; (18) the terms, if any, upon which
the Debt Securities will be convertible into or exchangeable
for Common Stock of the Company; and (19) any additional provi-
sions or other terms not inconsistent with the provisions of
the applicable Indenture, including any terms that may be
required or advisable under United States or other applicable
laws or regulations or advisable in connection with the market-
ing of the Debt Securities.
Ranking of Debt Securities
The Senior Debt Securities will be unsecured and will
rank equally and ratably with other unsecured and
unsubordinated debt of the Company. The Subordinated Debt
Securities will be subordinate in right of payment to all
Senior Indebtedness of the Company. "Senior Indebtedness" of
the Company is defined to mean the principal of (and premium,
if any) and interest on (a) any and all indebtedness and obli-
gations of the Company (including indebtedness of others guar-
anteed by the Company), whether or not contingent and whether
outstanding on the date of the Subordinated Indenture or there-
after created, incurred or assumed, which (i) are for money
borrowed; (ii) are evidenced by any bond, note, debenture or
similar instrument; (iii) represent the unpaid balance on the
purchase price of any property, business, or asset of any kind;
(iv) are obligations of the Company as lessee under any and all
leases of property, equipment or other assets required to be
capitalized on the balance sheet of the lessee under generally
accepted accounting principles; (v) are reimbursement obliga-
tions of the Company with respect to letters of credit; and (b)
any deferrals, amendments, renewals, extensions, modifications
and refundings of any indebtedness or obligations of the types
referred to above; provided that Senior Indebtedness shall not
include (i) Subordinated Debt Securities; (ii) any indebtedness
or obligation of the Company which, by its express terms or the
express terms of the instrument creating or evidencing it, is
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not superior in right of payment to the Subordinated Debt Secu-
rities; or (iii) any indebtedness or obligation incurred by the
Company in connection with the purchase of assets, materials or
services in the ordinary course of business and which consti-
tutes a trade payable. The Subordinated Indenture does not
contain any limitation on the amount of Senior Indebtedness
which may be hereafter incurred by the Company. In the event
of any default in the payment of the principal of, or interest
on, any Senior Indebtedness in an aggregate principal amount of
at least $50,000,000 or any default permitting the acceleration
of Senior Indebtedness in an aggregate amount of at least
$50,000,000 where notice of such default has been given to the
Company, no payment with respect to the principal of or inter-
est on the Subordinated Debt Securities will be made by the
Company unless and until such default has been cured or waived.
Upon any payment or distribution of the Company's assets to
creditors of the Company in a liquidation or dissolution of the
Company, or in a reorganization, bankruptcy, insolvency,
receivership or similar proceeding relating to the Company or
its property, whether voluntary or involuntary, the holders of
Senior Indebtedness will first be entitled to receive payment
in full of all amounts due thereon 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
on the Subordinated Debt Securities. By reason of such subor-
dination, in the event of insolvency of the Company, holders of
Senior Indebtedness of the Company may receive more, ratably,
and holders of the Subordinated Debt Securities may receive
less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of
Default in respect of the Subordinated Debt Securities.
Covenants
The Senior Indenture contains, among others, the cov-
enants summarized below, which will be applicable (unless
waived or amended) so long as any of the Senior Debt Securities
are outstanding, unless stated otherwise in the Prospectus
Supplement.
Limitations on Liens and Encumbrances. The Company
covenants that it will not nor will it permit any Subsidiary,
directly or indirectly, to incur or create any Lien on any
property, assets or stock now owned or hereafter acquired by
the Company or any of its Subsidiaries without equally and rat-
ably securing all series of Senior Debt Securities then out-
standing with the indebtedness secured by such Lien, other
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than: (a) Liens for taxes or assessments and similar charges
either (i) not delinquent or (ii) being contested in good faith
by appropriate proceedings and as to which the Company or such
Subsidiary, as the case may be, shall have set aside on its
books adequate reserves; (b) Liens incurred or pledges and
deposits made in connection with workmen's compensation, unem-
ployment insurance, old-age pensions and social security bene-
fits or securing the performance of bids, tenders, leases, con-
tracts (other than for obligations incurred in connection with
the borrowing of money or the obtaining of advances or credit),
and statutory obligations of like nature, incurred as an inci-
dent to and in the ordinary course of business; (c)
materialmen's, mechanics', repairmen's, employees', operators'
or other similar Liens or charges arising in the ordinary
course of business incidental to construction, maintenance or
operation of any property of the Company or any Subsidiary
which have not at the time been filed pursuant to law and any
such Liens and charges incidental to construction, maintenance
or operation of any property of the Company or any Subsidiary,
which, although filed, relate to obligations not yet due or the
payment of which is being withheld as provided by law, or to
obligations the validity of which is being contested in good
faith by appropriate proceedings; (d) zoning restrictions,
easements, licenses, reservations, provisions, covenants, con-
ditions, waivers, restrictions on the use of property or minor
irregularities of title (and with respect to leasehold inter-
ests, mortgages, obligations, Liens and other encumbrances
incurred, created, assumed or permitted to exist and arising
by, through or under or asserted by a landlord or owner of the
leased property, with or without consent of the lessee), which
will not individually or in the aggregate interfere materially
with the use or operation by the Company or any Subsidiary of
the property affected thereby for the purposes for which such
property was acquired or is held by the Company or any Subsid-
iary; (e) Liens created by or resulting from any litigation or
proceeding which is being contested in good faith by appropri-
ate proceedings and as to which levy and execution have been
stayed and continue to be stayed; (f) Liens consisting of
repurchase agreements, swaps or other obligations entered into
in the ordinary course of business relating to precious metals
purchased, borrowed or otherwise held by the Company or any
Subsidiary; (g) Liens incidental to the conduct of its business
or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not in the aggre-
gate materially detract from the value of the property or
assets subject thereto or materially impair the use thereof in
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the operation of its business; (h) Liens on property or assets
of a Subsidiary to secure obligations of such Subsidiary to the
Company or another Subsidiary; (i) Liens arising in connection
with letter of credit trade transactions, provided that the
Company or its Subsidiary, as the case may be, discharges
within 60 days its obligation to pay the indebtedness to banks
arising from payments made by such banks under such letters of
credit; and (j) other Liens, provided that the aggregate of all
properties and assets of the Company and the Subsidiaries which
are subject to or affected by such Liens and which would prop-
erly be classified as assets on a consolidated balance sheet
prepared in accordance with generally accepted accounting prin-
ciples as in effect on the date of the Senior Indenture
(including all leases (other than leases of office space and
leases of research and development facilities, if any) that
would be required to be reflected as capital leases pursuant to
such principles) does not at any time have a value on the books
of the Company and its Subsidiaries in excess of 25% of the
Consolidated Tangible Net Worth of the Company and its Subsid-
iaries calculated for the quarter most recently ended.
Limitations on Sale and Leaseback Transactions. The
Company covenants that it will not, and will not permit any
Significant Subsidiary to, directly or indirectly, sell or
transfer (other than to the Company or a Significant Subsid-
iary) any Principal Property with the intention that the Com-
pany or any Significant Subsidiary take back a lease thereof
which (i) has a term of more than three years or (ii) is renew-
able at the option of the Company or such Significant Subsid-
iary for an aggregate period or periods of more than three
years from the date of commencement thereof unless (a) the Com-
pany promptly gives notice thereof to the Senior Trustee, and
either (b) the Principal Property owned by the Company or a
Significant Subsidiary immediately prior to such sale could
have been subjected to a Lien to secure indebtedness without
being required to equally and ratably secure Senior Debt Secu-
rities pursuant to the limitations described under "Limitations
on Liens and Encumbrances" or (c) the net proceeds of such sale
are applied within 270 days either before or after the effec-
tive date of any such transaction (i) to the retirement of
indebtedness of the Company or any Subsidiary (other than secu-
rities of any series at the time outstanding) or (ii) to the
redemption of Senior Debt Securities of any series at the time
outstanding, if permissible under the Indenture and the terms
of Securities of such series, at a redemption price equal to
the principal amount thereof plus the then applicable premium,
if any, together with accrued interest, if any, or (iii) to the
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purchase of property, securities or other assets having a value
at least equal to the net proceeds of such sale, or (d) the
Company shall deliver to the Senior Trustee for cancellation
Senior Debt Securities of any series at the time outstanding in
an aggregate principal amount at least equal to the net pro-
ceeds of such sale (less any amounts applied in accordance with
clause (c)).
Certain Definitions. The term "Consolidated Tangible
Net Worth" means the excess of (i) the consolidated net book
value of the assets of the Company and its Subsidiaries (other
than patents, patent rights, trademarks, trade names, fran-
chises, copyrights, licenses, permits, goodwill and other
intangible assets classified as such in accordance with gener-
ally accepted accounting principles as in effect on the date of
the Senior Indenture) after all appropriate deductions in
accordance with generally accepted accounting principles as in
effect on the date of the Senior Indenture (including, without
limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization) plus the amount, if any, by
which the market value of precious metals inventories and
investments exceeds the carrying value of those metals on the
consolidated books of account of the Company over (ii) the con-
solidated liabilities (including tax and other proper accruals
but excluding the accumulated postretirement benefit obligation
resulting from the application of the provisions of FAS No. 106
"Employers' Accounting for Postretirement Benefits Other Than
Pensions") of the Company and its Subsidiaries, in each case
computed and consolidated in accordance with generally accepted
accounting principles as in effect on the date of the Senior
Indenture. The term "Lien" means any mortgage, pledge, secu-
rity interest, encumbrance, lien or charge of any kind whatso-
ever (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction), but in no event shall
"Lien" include any defeasance pursuant to Article 8 of the
Senior Indenture. The term "Principal Property" means, with
certain exceptions, any manufacturing plant or warehouse owned
at the date hereof or hereafter acquired by the Company or any
Significant Subsidiary which is located within the United
States and the gross book value of which (before deduction of
any applicable depreciation reserves) is in excess of 5% of the
Company's Consolidated Tangible Net Worth. The term "Signifi-
cant Subsidiary" shall have the meaning assigned to such term
in Regulation S-X promulgated under the Securities Act of 1933,
as amended. The term "Subsidiary" means any corporation,
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association or other business entity, a majority (by number of
votes) of the voting stock or control of which is at the time
owned or controlled by the Company or another Subsidiary of the
Company.
Global Securities
The Debt Securities of a series may be issued in
whole or in part in the form of one or more global securities
("Global Securities") that will be deposited with, or on behalf
of, the Depositary identified in the Prospectus Supplement
relating to such series. Global Securities will be issued in
registered form and in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for Debt
Securities in permanent form, a Global Security may not be
transferred except as a whole by the Depositary for such Global
Security to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a suc-
cessor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with
respect to Debt Securities of a series will be described in the
Prospectus Supplement relating to such series. The Company
anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a Global Security, the Deposi-
tary for such Global Security will credit, on its book-entry
registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global Secu-
rity to the accounts of institutions that have accounts with
such Depositary ("Participants"). The accounts to be credited
shall be designated by the underwriters of such Debt Securi-
ties, by certain agents of the Company or by the Company, if
such Debt Securities are offered and sold directly by the Com-
pany. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold inter-
ests through Participants. Ownership of beneficial interests
in such Global Security will be shown on, and the transfer of
that ownership will be effected only through, records main-
tained by the Depositary with respect to Participants' benefi-
cial interests. The laws of some states require that certain
purchasers of securities take physical delivery of such securi-
ties in definitive form. Such ownership limits and such laws
may impair the ability to transfer beneficial interests in a
Global Security.
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So long as the Depositary for a Global Security, or
its nominee, is the holder of such Global Security, such
Depositary or such nominee, as the case may be, will be consid-
ered the sole owner or holder of the Debt Securities repre-
sented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as set forth
below, owners of beneficial interests in a Global Security will
not be entitled to have Debt Securities of the series repre-
sented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture
governing such Debt Securities.
Principal, premium, if any, and interest payments on
Debt Securities registered in the name of or held by a Deposi-
tary or its nominee will be made to the Depositary or its nomi-
nee, as the case may be, as the registered holder of the Global
Security representing such Debt Securities. The Company
expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium, if any, or
interest in respect of a Global Security, will immediately
credit Participants' accounts with payments in amounts propor-
tionate to their respective beneficial interest in the princi-
pal amount of such Global Security as shown on the records of
such Depositary. The Company also expects that payments by
Participants to owners of beneficial interests in such Global
Security held through such Participants will be governed by
standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the
responsibility of such Participants. None of the Company, the
Trustee for such Debt Securities or any paying agent or any
registrar for such Debt Securities will have any responsibility
or liability for any aspect of the records relating to or pay-
ments made on account of beneficial ownership interest in a
Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such benefi-
cial ownership interests.
If a Depositary for Debt Securities of a series is at
any time unwilling or unable to continue as a Depositary and a
successor Depositary is not appointed by the Company within 90
days, the Company will issue Debt Securities of such series in
definitive form in exchange for the Global Security or Debt
Securities representing the Debt Securities of such series rep-
resented by one or more Global Securities.
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Interest and Foreign Currency
Principal, premium, if any, and interest will be pay-
able, and the Debt Securities will be transferable, in the man-
ner described in the Prospectus Supplement relating to such
Debt Securities. If the principal of, or premium, if any, or
any interest on, any of the Debt Securities is payable in any
foreign or composite currency, the restrictions, elections, tax
consequences, specific terms and other information with respect
to such Debt Securities and such foreign or composite currency
will be specified in the applicable Prospectus Supplement.
Consolidation, Merger, Sale or Conveyance
The Indentures provide that the Company may not con-
solidate with or merge into any other person or transfer all or
substantially all of its assets to any person, unless (i) the
person is organized under the laws of the United States or a
State thereof, (ii) the person assumes by supplemental inden-
ture all obligations of the Company under the applicable Inden-
ture and the Debt Securities and any coupons issued under such
Indenture; (iii) immediately after giving effect to such trans-
action, no Event of Default, and no event which, after notice
or passage of time would become an Event of Default, exists;
and (iv) if, as a result of any such transaction, any property
or assets of the Company would become subject to a mortgage,
pledge, lien, security interest or other encumbrance which
would not be permitted by the Senior Indenture, then the Com-
pany or such person, as the case may be, secures the Senior
Debt Securities equally and ratably with or prior to all obli-
gations secured by such Lien. The successor shall be substi-
tuted for the Company and thereafter all obligations of the
Company under the applicable Indenture and the Debt Securities
issued under such Indenture shall terminate.
Events of Default
The following shall constitute Events of Default with
respect to Debt Securities of any series: (i) default for a
period of 30 days in payment of any interest on the Debt Secu-
rities of that series when due; (ii) default in payment of
principal of (or premium, if any, on) the Debt Securities of
that series when due (whether at maturity, upon redemption or
otherwise or in the making of any required sinking fund pay-
ment); (iii) default in performance of any other covenant, con-
dition or agreement in the Debt Securities of that series or in
the applicable Indenture continued for 60 days after written
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notice as provided in the Indenture; (iv) a default under any
instrument or other evidence of indebtedness for money borrowed
by the Company (including a default with respect to Debt Secu-
rities of any series other than that series) or under any
instrument (including the applicable Indenture) under which
there may be issued or by which there may be evidenced or
secured any indebtedness for money borrowed by the Company,
which default shall involve an amount in excess of $50,000,000
and shall constitute a failure to pay such indebtedness when
due and payable after the expiration of any grace period and
shall have resulted in the acceleration of such indebtedness,
if such accelerated indebtedness is not discharged, or such
acceleration is not annulled, within 30 days after written
notice as provided in the Indenture; and (v) certain events of
bankruptcy, insolvency or reorganization.
If an Event of Default with respect to Debt Securi-
ties of any series at the time outstanding shall occur and be
continuing, the Trustee or the holders of at least 25% in prin-
cipal amount of the outstanding Debt Securities of that series
may declare the principal and accrued interest of all of the
Debt Securities of that series to be due and payable
immediately.
Each Indenture provides that the Trustee will, within
90 days after the occurrence of a default, give to holders of
the Debt Securities of the series with respect to which a
default has occurred notice of all uncured defaults known to
it; but, except in the case of a default in the payment of
principal or interest on Debt Securities of that series, the
Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in
the interest of the holders.
Each Indenture contains a provision entitling the
Trustee, subject to the duty of the Trustee during a default to
act with the required standard of care, to be indemnified by
the holders of Debt Securities of the series with respect to
which a default has occurred before proceeding to exercise any
right or power under such Indenture at the request of such
holders. Subject to such right of indemnification, each Inden-
ture provides that the holders of a majority in principal
amount of the outstanding Debt Securities of a series may
direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust
or power conferred upon the Trustee with respect to such
series.
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The Company will be required to furnish to the Trus-
tee annually a statement as to the fulfillment by the Company
of all of its obligations under the applicable Indenture.
Modification of Indentures
Unless the resolution establishing the terms of a
series otherwise provides, the applicable Indenture and the
Debt Securities of any series may be amended and any default
may be waived as follows: the Debt Securities and the appli-
cable Indenture may be amended with the consent of holders of a
majority in principal amount of the Debt Securities of all
series affected voting as one class. A default with respect to
the Debt Securities of a series may be waived with the consent
of the holders of a majority in principal amount of the Debt
Securities of such series. However, without the consent of
each holder affected, no amendment or waiver may (1) reduce the
amount of Debt Securities whose holders must consent to an
amendment or waiver, (2) reduce the interest on or change the
time for payment of interest on any Debt Security, (3) change
the fixed maturity of any Debt Security, (4) reduce the princi-
pal of any non-Discounted Security or reduce the amount of
principal of any Discounted Security that would be due on
acceleration thereof, (5) change the currency in which princi-
pal or interest on a Debt Security is payable, (6) waive any
default in payment of interest on or principal of a Debt Secu-
rity or (7) change certain provisions of the applicable Inden-
ture regarding waiver of past defaults and amendments with the
consent of holders other than to increase the principal amount
of Debt Securities required to consent. Without the consent of
any holder, the applicable Indenture or the Debt Securities may
be amended to cure any ambiguity, omission, defect or inconsis-
tency; to provide for the assumption of Company obligations to
holders in the event of a merger or consolidation requiring
such assumption; to provide that specific provisions in the
applicable Indenture not apply to a series of Debt Securities
not previously issued; to create a series and establish its
terms; to provide for a separate Trustee for one or more
series; or to make any change that does not materially
adversely affect the rights of any holder.
Defeasance
Debt Securities of a series may be defeased in accor-
dance with their terms and, unless the resolution establishing
the terms of the series otherwise provides, as set forth below.
The Company at any time may terminate as to a series all of its
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obligations (except for certain obligations with respect to the
defeasance trust, bearer securities, securityholder lists, com-
pensation and indemnity and replacement of the Trustee and
obligations to register the transfer or exchange of a Debt
Security, to replace destroyed, lost or stolen Debt Securities
and to maintain agencies in respect of the Debt Securities)
with respect to the Debt Securities of a series and the appli-
cable Indenture ("legal defeasance"). The Company at any time
may terminate its obligations with respect to the Debt Securi-
ties of a series under the covenants described under "Cove-
nants" ("covenant defeasance").
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its legal defeasance option,
the Debt Securities of a series may not be accelerated because
of an Event of Default. If the Company exercises its covenant
defeasance option, the Debt Securities of a series may not be
accelerated as a result of noncompliance with the covenants
described under "Covenants."
To exercise either option as to the Debt Securities
of a series, the Company must irrevocably deposit in the trust
(the "defeasance trust") with the applicable Trustee money or
U.S. Government Obligations for the payment of principal, pre-
mium, if any, and interest on the Debt Securities of the series
to redemption or maturity and must comply with certain other
conditions. In particular, if the defeasance occurs more than
twelve months prior to the earlier of the maturity or the date
fixed for redemption of the series to be defeased, the Company
must obtain an opinion of tax counsel that the defeasance will
not result in recognition for Federal income tax purposes of
any gain or loss to holders of the Debt Securities of the
series. "U.S. Government Obligations" are direct obligations
of the United States of America which have the full faith and
credit of the United States of America pledged for payment and
which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations.
Conversion Rights of Debt Securities
If so indicated in the applicable Prospectus Supple-
ment with respect to a particular series of Debt Securities,
holders of such series of Debt Securities will be entitled, at
any time prior to the date set forth in the Prospectus Supple-
ment relating to such series, subject to prior redemption, to
convert such Debt Securities or portions thereof (which are
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$1,000 or integral multiples thereof) into or for Common Stock
of the Company, at the conversion rate stated in the Prospectus
Supplement, subject to adjustment as described below or in the
applicable Prospectus Supplement. The right to convert Debt
Securities called for redemption will terminate at the close of
business on the redemption date, and will be lost if not exer-
cised prior to that time unless the Company defaults in making
the payments due upon redemption.
To convert a Debt Security, a holder must (i) com-
plete and manually sign the conversion notice (the "Conversion
Notice") on the back of the Debt Security (or complete and man-
ually sign a facsimile thereof) and deliver such notice to the
Conversion Agent or any other office or agency maintained for
such purpose, (ii) surrender the Debt Security to the Conver-
sion Agent or at such other office or agency by physical deliv-
ery, (iii) if required, furnish appropriate endorsements and
transfer documents, and (iv) if required, pay all transfer or
similar taxes. The date by which such notice shall have been
received and the Debt Security shall have been so surrendered
to the Conversion Agent is the Conversion Date. Such Conver-
sion Notice shall be irrevocable and may not be withdrawn by a
holder for any reason.
Unless otherwise provided in the applicable Prospec-
tus Supplement, the conversion rate is subject to adjustment
upon the occurrence of certain events, including the issuance
of Common Stock as a dividend or distribution on the Common
Stock; subdivisions, combinations and certain reclassifications
of Common Stock; the issuance to all holders of Common Stock of
shares or certain rights or warrants to subscribe for shares of
Common Stock at less than the then current market price per
share; and the distribution to all holders of Common Stock of
any assets (other than cash dividends paid out of retained
earnings) or debt securities or any rights or warrants to pur-
chase assets or debt securities. The Company may also increase
the conversion rate at any time, temporarily or otherwise, by
any amount so long as the conversion rate does not cause Common
Stock to be issued at less than its par value.
No adjustment in the conversion rate will be required
unless such adjustment would require a change of at least 1% of
the conversion rate then in effect; provided, however, that any
adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
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If any Debt Security is converted between the record
date for the payment of interest and the next succeeding inter-
est payment date, such Debt Security must be accompanied by
funds equal to the interest payable on such next succeeding
interest payment date on the principal amount so converted
(unless such Debt Security shall have been called for redemp-
tion during such period, in which case no such payment shall be
required), and the interest on the principal amount of the Debt
Security being converted will be paid on such next succeeding
interest payment date to the registered holder of such Debt
Security on the immediately preceding record date. A Debt
Security converted on an interest payment date need not be
accompanied by any payment, and the interest on the principal
amount of the Debt Security being converted will be paid on
such interest payment date to the registered holder of such
Debt Security on the immediately preceding record date, except
as otherwise provided above. Subject to the aforesaid right of
the registered holder to receive interest, no payment or
adjustment will be made on conversion for interest accrued on
the converted Debt Security or for dividends on the Common
Stock issued on conversion.
Governing Law
The Indentures and the Debt Securities will be gov-
erned by, and construed in accordance with, the laws of the
State of New York.
DESCRIPTION OF CAPITAL STOCK
General
The Company is authorized to issue 350,000,000 shares
of Common Stock, par value $1.00 per share, and 5,000,000
shares of Preferred Stock, without par value. All outstanding
shares of Common Stock are fully paid and non-assessable. As
of April 30, 1996, there were 143,718,424 shares of Common
Stock outstanding.
Common Stock
Subject to the rights of the holders of Preferred
Stock, the holders of the Common Stock of the Company are enti-
tled to receive dividends from funds legally available therefor
when, as and if declared by the Board of Directors, and are
entitled upon liquidation to share ratably in all assets of the
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Company after satisfaction in full of the prior rights of cred-
itors of the Company and holders of any Preferred Stock.
The holders of the Common Stock are entitled to one
vote for each share held on all matters as to which sharehold-
ers are entitled to vote. The holders of the Common Stock do
not have cumulative voting rights, any preferential or preemp-
tive right with respect to any securities of the Company, or
any conversion rights. The Common Stock is not subject to
redemption. The outstanding shares of Common Stock are fully
paid and non-assessable.
The Common Stock is listed on the following stock
exchanges: New York, Chicago (options), London, Zurich, Basel
and Geneva. The transfer agent for the Common Stock is Chemical
Mellon Shareholder Services L.L.C.
Preferred Stock
The Company is authorized to issue 5,000,000 shares
of Preferred Stock which may be issued from time to time in one
or more series with such rights, preferences and limitations as
are determined by the Company's Board of Directors. Satisfac-
tion of any dividend preferences of outstanding Preferred Stock
would reduce the amount of funds available for the payment of
dividends on Common Stock. Also, holders of Preferred Stock
would normally be entitled to receive a preference payment
before any payment is made to holders of Common Stock in the
event of any liquidation, dissolution or winding-up of the Com-
pany. As of the date of this Prospectus, no shares of Pre-
ferred Stock are issued or outstanding.
Supermajority Voting Requirements
and Classified Board of Directors
The Company's Restated Certificate of Incorporation
provides that, in order to approve a merger or consolidation
with or into, or a sale or other transfer of all or a portion
of the assets of the Company other than in the ordinary course
of business to, or the issuance or transfer of voting securi-
ties of the Company as part of an exchange or acquisition of
the securities or assets (including cash) of, any entity which
is the beneficial owner of 5% or more of the outstanding shares
of the Company entitled to vote in the election of Directors,
the affirmative vote of not less than 80% of the outstanding
shares of Common Stock (including at least 50% of the outstand-
ing shares of Common Stock held by stockholders other than such
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5% beneficial owner) is required. The foregoing provision
would not be applicable if the proposed transaction was
approved by a majority of the Board of Directors of the Company
who had been duly elected and acting as members of the Board
prior to the time such 5% beneficial owner became the benefi-
cial owner of 5% or more of the outstanding shares of Common
Stock.
The Company's Restated Certificate of Incorporation
also provides for a classified Board of Directors divided into
three classes. All classes shall be as nearly equal in number
as possible and no class shall include less than two Directors,
with one class of Directors to be elected each year for a
three-year term.
Neither provision described in the foregoing para-
graphs can be amended without the affirmative vote of the hold-
ers of at least 80% of the outstanding shares of Common Stock
(including at least 50% of the outstanding shares of Common
Stock held by stockholders other than a 5% beneficial owner).
The Company believes that the classified Board and
such 80% voting requirements are desirable to assure continuity
in Board membership and in policy formulated by the Board.
Such provisions will serve to moderate the pace of any change
in control of the Company by extending the time required to
elect a majority of the Directors and will better enable the
Board to protect the interests of shareholders in the event
that any person or corporation should attempt to obtain control
of the Company.
It is recognized, however, that the effect of such
provisions is to make it more difficult to change Directors
even should this be desired by a majority of the Company's
stockholders, and may be to render more difficult or to dis-
courage a merger, tender offer or proxy contest or the assump-
tion of control by a holder of a large block of Company
securities.
The aforementioned 80% voting requirement for
approval of specified transactions with 5% beneficial owners,
absent Board approval, provides the Board and minority stock-
holders with a veto power over such transactions. Such provi-
sion would be beneficial to Company management when confronted
with a hostile tender offer and may deter such offers, thus
depriving a stockholder of the opportunity to dispose of his or
her shares to a hostile tender offeror at a price substantially
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in excess of market value. The deterrence of such offers also
has the effect of supporting existing management in its present
position.
Directors' Liability
The Company's Restated Certificate of Incorporation,
as amended, provides that, to the fullest extent permitted by
Delaware law, no Director of the Company will be liable to the
Company or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except for liability (i) for any
breach of the Director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or
stock redemptions or repurchases, or (iv) for any transaction
from which the Director derived an improper personal benefit.
The effect of such provisions in the Restated Certificate of
Incorporation will be to eliminate the rights of the Company
and its stockholders (including through stockholders' deriva-
tive suits on behalf of the Company) to recover monetary dam-
ages against a Director for breach of fiduciary duty as a
Director (including breaches resulting from negligent or
grossly negligent behavior) except in the situations described
in clauses (i) through (iv) above.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through
underwriters or dealers; (ii) through agents; (iii) directly to
purchasers; or (iv) through a combination of any such methods
of sale. Any such underwriter, dealer or agent may be deemed
to be an underwriter within the meaning of the Securities Act
of 1933, as amended. The Prospectus Supplement relating to any
offering of Debt Securities will set forth their offering
terms, including the name or names of any underwriters, the
purchase price of the Debt Securities and the proceeds to the
Company from such sale, any underwriting discounts, commissions
and other items constituting underwriters' compensation, any
initial public offering price, and any underwriting discounts,
commissions and other items allowed or reallowed or paid to
dealers and any securities exchanges on which the Debt Securi-
ties may be listed.
If underwriters are used in the sale, the Debt Secu-
rities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
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transactions, at fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, or at
prices related to such prevailing market prices, or at negoti-
ated prices. The Debt Securities may be offered to the public
either through underwriting syndicates represented by one or
more managing underwriters or directly by one or more of such
firms. Unless otherwise set forth in the Prospectus Supple-
ment, the obligations of the underwriters to purchase the Debt
Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all the offered
Debt Securities, if any 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.
Debt Securities may be sold directly by the Company
or through agents designated by the Company from time to time.
Any agent involved in the offer or sale of the Debt Securities
in respect of which this Prospectus is delivered will be named,
and any commissions payable by the Company to such agent will
be set forth, in the accompanying Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, any
such agent will be acting on a reasonable efforts basis for the
period of its appointment.
If so indicated in the Prospectus Supplement, the
Company will authorize underwriters, dealers or agents to
solicit offers by certain specified institutions to purchase
Debt Securities from the Company at the public offering price
set forth in the accompanying Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery
on a specified date in the future. Such contracts will be sub-
ject to any conditions set forth in the accompanying Prospectus
Supplement and such Prospectus Supplement will set forth the
commission payable for solicitation of such contracts. The
underwriters and other persons soliciting such contracts will
have no responsibility for the validity or performance of any
such contracts.
Underwriters, dealers and agents may be entitled,
under agreements entered into with the Company, to indemnifica-
tion by the Company against certain civil liabilities, includ-
ing liabilities under the Securities Act of 1933, as amended,
or to contribution by the Company to payments they may be
required to make in respect thereof.
Certain of the underwriters, agents or dealers and
their associates may be customers of, or engage in transactions
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with and perform services for, the Company in the ordinary
course of business.
LEGAL MATTERS
Certain legal matters in connection with the Debt
Securities will be passed upon for the Company by Cahill Gordon
& Reindel (a partnership including a professional corporation),
New York, New York.
EXPERTS
The consolidated balance sheets as of December 31,
1995 and 1994 and the consolidated statements of earnings,
shareholders' equity and cash flows for each of the three years
in the period ended December 31, 1995, incorporated by refer-
ence in this Prospectus and elsewhere in the Registration
Statement, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm 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.
Securities and Exchange Commission
Registration Fee ......................................... $ 86,207
Cost of Printing ........................................... 50,000
Rating Agency Fees ......................................... 110,000
Independent Auditors' Services and Expenses ................ 25,000
Legal Services and Expenses (including
Blue Sky fees and expenses) .............................. 90,000
Trustees' Fees and Expenses ................................ 10,000
Miscellaneous .............................................. 8,793
Total ........................... $380,000
========
Other than the Securities and Exchange Commission
Registration Fee, all amounts set forth above are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law
provides for indemnification of directors and officers against
any legal liability (other than liability arising from deriva-
tive suits) if the officer or director acted in good faith and
in a manner that he or she reasonably believed to be in or not
opposed to the best interests of the corporation. In criminal
actions, the officer or director must also have no reasonable
cause to believe that his or her conduct was unlawful. A cor-
poration may indemnify an officer or director in a derivative
suit if the officer or director acted in good faith and in a
manner that he or she reasonably believed to be in or not
opposed to the best interests of the corporation unless the
officer or director is found liable to the corporation. How-
ever, if the Court of Chancery or the court in which the offi-
cer or director was found liable determines that the officer or
director is fairly and reasonably entitled to indemnity, then
the Court of Chancery or such other court may permit indemnity
for such officer or director to the extent it deems proper.
The Registrant's Certificate of Incorporation pro-
vides that a director of the Registrant shall not be personally
liable to the Registrant or its stockholders for monetary
II-1
<PAGE>
damages for breach of fiduciary duty as a director, except for
liability for (i) any breach of the director's duty of loyalty
to the Registrant or its stockholders, (ii) acts or omissions
not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) payment of an improper dividend
or for an improper repurchase or redemption of the stock of the
Corporation in violation of Section 174 of the Delaware General
Corporation Law or (iv) transactions in which the director
derives any improper personal benefit.
Item 16. EXHIBITS.
1.1 -- Form of Underwriting Agreement.
1.2 -- Form of Distribution Agreement (incorpo-
rated by reference to Registration
Statement No. 33-58507 filed with the
Securities and Exchange Commission on
April 10, 1995).
4.1 -- Form of Senior Indenture (including form
of Senior Debt Security).
4.2 -- Form of Subordinated Indenture (includ-
ing form of Subordinated Debt Security).
4.3 -- Certificate of Incorporation (incorpo-
rated by reference to Form 10, as
amended on Form 8-K filed with the Secu-
rities and Exchange Commission on
May 19, 1981).
4.4 -- By-laws of the Company as amended
September 17, 1981 (incorporated by ref-
erence to Form 10-Q for the quarter
ended September 30, 1981).
4.5 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Com-
pany (incorporated by reference to Form
10-K for the year ended December 31,
1987).
4.6 -- Article XVII of the Registrant's By-laws
as amended on May 2, 1988 (incorporated
by reference to Form 8-K filed with the
Securities and Exchange Commission on
May 21, 1988).
4.7 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Com-
pany (incorporated by reference to Form
10-Q for the quarter ended March 31,
1993).
II-2
<PAGE>
4.8 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Com-
pany (incorporated by reference to
Form 10-Q for the quarter ended
March 31,1996).
5.1 -- Opinion of Cahill Gordon & Reindel.
12.1 -- Statement of Computation of Ratio of
Earnings to Fixed Charges.
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Cahill Gordon & Reindel
(included as part of Exhibit 5.1).
24.1 -- Power of Attorney.
25.1 -- Form T-1 Statement of Eligibility and
Qualification of the Senior Trustee
under the Trust Indenture Act of 1939,
as amended.
25.2 -- Form T-1 Statement of Eligibility and
Qualification of the Subordinated Trus-
tee under the Trust Indenture Act of
1939, as amended (to be filed by amend-
ment when the Subordinated Trustee is
selected).
_______________
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this Regis-
tration Statement:
(i) To include any prospectus required by Sec-
tion 10(a)(3) of the Securities Act of 1933;
(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 fundamen-
tal 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
II-3
<PAGE>
the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that the undertakings set forth in clauses
(i) and (ii) of this paragraph shall not apply if the informa-
tion required to be included in such post-effective amendment
is contained in periodic reports filed by the Registrant pursu-
ant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in this Regis-
tration Statement.
(2) That, for the purpose of determining any lia-
bility under the Securities Act of 1933, each such post-effec-
tive amendment shall be deemed to be a new registration state-
ment relating to the securities offered therein, and the offer-
ing of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
herein which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pur-
suant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Com-
mission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Regis-
trant 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 direc-
tor, officer or controlling person in connection with the secu-
rities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by
II-4
<PAGE>
controlling precedent, submit to a court of appropriate juris-
diction the question of whether such indemnification by it is
against public policy, as expressed in the Securities Act of
1933 and will be governed by the final adjudication of such
issue.
(d) The undersigned Registrant hereby undertakes to file
an application for the purpose of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act (the "Act") in accordance with the
rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reason-
able grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Registration
Statement or amendment thereto to be signed on its behalf by
the undersigned thereunto duly authorized in the City of
Iselin, State of New Jersey, on the 23rd day of May, 1996.
ENGELHARD CORPORATION
By: /s/ Orin R. Smith
------------------------------
Orin R. Smith
Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of
1933, as amended, this Registration Statement has been signed
by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
/s/ Orin R. Smith Chairman, Chief May 23, 1996
- -------------------------- Executive Officer and
Orin R. Smith Director (Principal
Executive Officer)
/s/ William E. Nettles Vice President May 23, 1996
- -------------------------- and Chief Financial
William E. Nettles Officer (Principal
Financial Officer)
/s/ Martin J. Connor, Jr. Controller (Principal May 23, 1996
- -------------------------- Accounting Officer)
Martin J. Connor, Jr.
* Director May 23, 1996
- --------------------------
Linda G. Alvarado
* Director May 23, 1996
- --------------------------
Marion H. Antonini
II-6
<PAGE>
* Director May 23, 1996
- --------------------------
L. Donald LaTorre
* Director May 23, 1996
--------------------------
Anthony W. Lea
* Director May 23, 1996
- --------------------------
William R. Loomis, Jr.
* Director May 23, 1996
- --------------------------
James V. Napier
* Director May 23, 1996
- --------------------------
Norma T. Pace
* Director May 23, 1996
- --------------------------
Reuben F. Richards
* Director May 23, 1996
- --------------------------
Henry R. Slack
* Director May 23, 1996
- --------------------------
Douglas G. Watson
*By: /s/ Arthur A. Dornbusch, II
----------------------------
Arthur A. Dornbusch, II
Attorney-in-Fact
II-7
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
EXHIBITS
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
ENGELHARD CORPORATION
(Exact name of Registrant as specified in its charter)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1.1 -- Form of Underwriting Agreement.
1.2 -- Form of Distribution Agreement (incorpo-
rated by reference to Registration
Statement No. 33-58507 filed with the
Securities and Exchange Commission on
April 10, 1995).
4.1 -- Form of Indenture (including form of
Senior Debt Security).
4.2 -- Form of Subordinated Indenture (includ-
ing form of Subordinated Debt Security).
4.3 -- Certificate of Incorporation (incorpo-
rated by reference to Form 10, as
amended on Form 8-K filed with the Secu-
rities and Exchange Commission on
May 19, 1981).
4.4 -- By-laws of the Company as amended
September 17, 1981 (incorporated by ref-
erence to Form 10-Q for the quarter
ended September 30, 1981).
4.5 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Com-
pany (incorporated by reference to Form
10-K for the year ended December 31,
1987).
4.6 -- Article XVII of the Registrant's By-laws
as amended on May 2, 1988 (incorporated
by reference to Form 8-K filed with the
Securities and Exchange Commission on
May 21, 1988).
4.7 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the Com-
pany (incorporated by reference to Form
10-Q for the quarter ended March 31,
1993).
4.8 -- Certificate of Amendment to the Restated
Certificate of Incorporation of the
<PAGE>
Company (incorporated by reference to
Form 10-Q for the quarter ended March
31, 1996).
5.1 -- Opinion of Cahill Gordon & Reindel.
12.1 -- Statement of Computation of Ratio of
Earnings to Fixed Charges.
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Cahill Gordon & Reindel
(included as part of Exhibit 5.1).
24.1 -- Powers of Attorney.
25.1 -- Form T-1 Statement of Eligibility and
Qualification of Chase Manhattan Bank,
N.A., as senior trustee, under the Trust
Indenture Act of 1939, as amended.
25.2 -- Form T-1 Statement of Eligibility and
Qualification of the Subordinated Trus-
tee under the Trust Indenture Act of
1939, as amended (to be filed by amend-
ment when the Subordinated Trustee is
selected).
-2-
Exhibit 1.1
ENGELHARD CORPORATION
Debt Securities
________, 1996
UNDERWRITING AGREEMENT BASIC PROVISIONS
Engelhard Corporation, a Delaware corporation (the
"Company"), may issue and sell from time to time its debt secu-
rities consisting of senior debt securities ("Senior Debt Secu-
rities") and subordinated debt securities ("Subordinated Debt
Securities" and, together with the Senior Debt Securities, the
"Securities").
The Securities may be issued in one or more series
and may have varying designations, denominations, interest
rates or formulas and payment dates, maturity, redemption pro-
visions and sinking fund requirements. The Senior Debt Securi-
ties will be issued under an indenture, dated as of July 26,
1995 (the "Senior Indenture"), between the Company and The
Chase Manhattan Bank, N.A. (the "Senior Trustee"), and the Sub-
ordinated Debt Securities will be issued under an indenture
(the "Subordinated Indenture" and, together with the Senior
Indenture, the "Indentures") between the Company and
[ ] (the "Subordinated Trustee" and, together with
the Senior Trustee, the "Trustees"). The Securities may be
convertible, as described in the applicable Indenture, into
shares of common stock, par value $1.00 per share (the "Common
Stock") of the Company and, where applicable, references to the
Securities also shall include the Common Stock which is issu-
able upon such conversion.
This Underwriting Agreement Basic Provisions shall
not be construed as an obligation on the part of the Company to
sell any of the Offered Securities (as defined herein) or as an
obligation of any of the Underwriters (as defined herein) to
purchase the Offered Securities. The basic provisions set
forth herein are intended to be incorporated by reference in a
terms agreement of the type referred to in Section 1 hereof
relating to the type, designation and series of Securities to
be issued and sold by the Company pursuant thereto (the
"Offered Securities") to the underwriters named therein (the
"Underwriters"). The terms agreement relating to the Offered
<PAGE>
-2-
Securities (the "Terms Agreement"), together with the provi-
sions hereof incorporated therein by reference (which provi-
sions shall not become effective until so incorporated by ref-
erence), is herein referred to as this "Agreement." If the
Underwriters consist only of the firm or firms referred to in
the Terms Agreement as Representative or Representatives, then
the terms "Underwriters" and "Representatives," as used herein,
shall each be deemed to refer to such firm or firms.
1. Terms Agreement. The obligation of the Under-
writers to purchase, and the Company to sell, the Offered Secu-
rities is evidenced by the Terms Agreement, substantially in
the form of Exhibit A hereto, delivered at the time the Company
determines to sell the Offered Securities. The Terms Agreement
specifies the firm or firms which will be Underwriters, the
amount of the Offered Securities to be purchased by each Under-
writer, the purchase price to be paid by the Underwriters for
the Offered Securities, the public offering price, if any, of
the Offered Securities, whether the Underwriters are authorized
to solicit institutional investors to purchase Offered Securi-
ties pursuant to Delayed Delivery Contracts (as defined), cer-
tain terms thereof and the Underwriters' compensation therefor
and certain terms of the Offered Securities not otherwise spec-
ified in the applicable Indenture (including, but not limited
to, designations, denominations, conversion provisions, cove-
nants, interest rates or formulas and payment dates, maturity,
redemption provisions and sinking fund requirements).
2. Representations and Warranties of the Company.
The Company represents and warrants to and agrees with each
Underwriter that:
(a) The Company meets the requirements for use of
Form S-3 under the Securities Act of 1933, as amended (the
"1933 Act"), and has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 33-58507) with respect to the
Securities and another registration statement on Form S-3
(No. 333-____) with respect to additional Securities,
which (i) have been prepared by the Company in conformity
with the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder (collectively,
the "Act") and (ii) have become effective. Such registra-
tion statements (including the prospectus contained
therein) may have been amended from time to time prior to
the date of this Agreement; and any such amendment has
been so prepared and filed and has become effective. A
<PAGE>
-3-
prospectus supplement relating to the Offered Securities
(the "Prospectus Supplement") has been so prepared or will
be prepared promptly after the execution of the Terms
Agreement related thereto. The Prospectus Supplement and,
if not previously filed, the basic prospectus (the "Basic
Prospectus") will be filed pursuant to Rule 424 under the
Act. Copies of such registration statements, any such
amendment thereto, the Basic Prospectus, the Prospectus
Supplement and all documents incorporated by reference
therein which were filed with the Commission on or prior
to the date of the Terms Agreement have been, or promptly
after the execution of the Terms Agreement will be, deliv-
ered to the Representatives. Such registration statements
(including the prospectus contained therein), as amended
to the date of the Terms Agreement are herein referred to
collectively as the "Registration Statement"; provided,
however, that all references herein to "Registration
Statements" shall also be deemed to include any registra-
tion statement filed with the Commission by the Company
pursuant to Rule 462(b) under the Act. The final Basic
Prospectus and the final Prospectus Supplement, in the
form first furnished to the Underwriters by the Company
for use in connection with the offering of the Offered
Securities, are herein referred to collectively as the
"Prospectus." Any reference herein to the Registration
Statement, the Prospectus or any preliminary prospectus or
prospectus supplement shall be deemed to refer to and
include the documents incorporated by reference therein
which were filed with the Commission on or prior to the
date of the Terms Agreement and any reference to the terms
"amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed
to refer to and include the filing of any document with
the Commission deemed to be incorporated by reference
therein after the date of the Terms Agreement and on or
prior to the Closing Date (as defined).
(b) The Registration Statement, any post-effective
amendment thereto and the Prospectus, complied or will
comply, in all material respects, with the requirements of
the Act and the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission thereunder
(the "Trust Indenture Act"); and no such document included
or will include an untrue statement of a material fact or
omitted or will omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading; provided, that the Company makes
<PAGE>
-4-
no representation or warranty as to information contained
in or omitted from the Registration Statement or the Pro-
spectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of
any Underwriter specifically for inclusion therein. In
addition, each preliminary prospectus and prospectus sup-
plement, when filed as part of the Registration Statement
as originally filed or when filed pursuant to Rule 424
under the Act, complied in all material respects with the
Act.
(c) The documents incorporated by reference in the
Registration Statement or the Prospectus, when they became
effective or were filed with the Commission, as the case
may be, under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act"), complied,
and any further documents so filed and incorporated by
reference will, when they are filed with the Commission,
comply, in all material respects with the requirements of
the Act and the Exchange Act, as applicable.
(d) The Company and each of its "significant subsid-
iaries" within the meaning of Regulation S-X under the Act
("Significant Subsidiaries") have been duly incorporated,
are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incor-
poration and have the corporate power and authority to
carry on their respective businesses as currently con-
ducted and to own, lease and operate properties, and the
Company is duly qualified and is in good standing as a
foreign corporation authorized to do business in each
jurisdiction, except where the failure to be so qualified
would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and all of the
issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(e) The execution, delivery and performance of this
Agreement, the Indentures and the Offered Securities, and
compliance by the Company with all the provisions hereof
and thereof, and the consummation of the transactions con-
templated hereby and thereby, (i) will not require any
<PAGE>
-5-
consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other
governmental body (except as such may be required under
the securities or Blue Sky laws of the various states),
(ii) will not conflict with or constitute a breach of the
terms or provisions of the charter or by-laws of the Com-
pany, (iii) will not conflict in any material respect with
or constitute a material breach of any of the terms or
provisions of, or a material default under, the charter or
by-laws of any of the Company's subsidiaries or any agree-
ment, indenture or other instrument to which the Company
or any of its subsidiaries or their respective property is
bound, or (iv) will not violate or conflict in any mate-
rial respect with any laws, administrative regulations or
rulings or court orders or decrees applicable to the Com-
pany, any of its subsidiaries or their respective
properties.
(f) This Agreement has been duly authorized, exe-
cuted and delivered by the Company and is a valid and
binding agreement of the Company enforceable in accordance
with its terms, except as (i) the enforceability hereof
may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws now or
hereafter in effect relating to creditors' rights gener-
ally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicabil-
ity and (iii) rights to indemnity and contribution hereun-
der may be limited by applicable law.
(g) The applicable Indenture has been duly qualified
under the Trust Indenture Act and has been duly authorized
by the Company and constitutes a valid and binding agree-
ment of the Company enforceable against the Company in
accordance with its terms, except as (i) the enforceabil-
ity thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or simi-
lar laws now or hereafter in effect relating to creditors'
rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equi-
table principles of general applicability.
(h) The Securities, when executed by the Company and
authenticated by the applicable Trustee in accordance with
the terms of the applicable Indenture, and delivered to
and paid for by the Representatives in accordance with the
terms of this Agreement (and, in the case of any Contract
<PAGE>
-6-
Securities (as hereinafter defined), as contemplated by
the Delayed Delivery Contracts with respect thereto), will
constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their
terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudu-
lent conveyance, moratorium or similar laws now or here-
after in effect relating to creditors' rights generally
and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles
of general applicability.
(i) If the Offered Securities are convertible into
shares of Common Stock, the shares of Common Stock ini-
tially issuable upon conversion of such Offered Securities
have been duly authorized and reserved for issuance upon
conversion and, when issued upon conversion in accordance
with the terms of the Offered Securities, will have been
validly issued and will be fully paid and non-assessable,
and the issuance of such shares is not subject to any pre-
emptive or similar rights.
(j) All the outstanding shares of capital stock of
the Company have been duly authorized and validly issued
and are fully paid and non-assessable and are not subject
to any preemptive or similar rights.
(k) The Offered Securities and, if the Offered Secu-
rities are convertible into shares of Common Stock, such
shares of Common Stock will conform in all material
respects to the descriptions thereof in the Prospectus.
(l) Immediately after any sale of Offered Securi-
ties, the aggregate amount of securities which shall have
been issued and sold by the Company that shall have been
issued and sold pursuant to the Registration Statement
will not exceed the amount of securities registered under
the Registration Statement.
(m) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings
(including without limitation environmental proceedings)
pending against the Company or any of its subsidiaries
which the Company believes is likely to have a material
adverse effect on the business, prospects, financial posi-
tion, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole.
<PAGE>
-7-
(n) Since the respective dates as of which informa-
tion is given in the Registration Statement and the Pro-
spectus, except as may otherwise be stated therein or con-
templated thereby, there has been no material adverse
change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole, whether or
not arising in the ordinary course of business.
3. Purchase, Sale and Delivery of Securities. The
Offered Securities to be purchased by the Underwriters will be
delivered by the Company to the Representatives for the
accounts of the Underwriters at the office specified in the
Terms Agreement against payment of the purchase price therefor
in immediately available funds on the date and at the times
specified in the Terms Agreement as the Representatives and the
Company determine, such time being herein referred to as the
"Closing Date." The Offered Securities will be prepared in
definitive registered form unless otherwise specified in the
Terms Agreement and in such authorized amounts or denominations
and registered in such names as the Representatives may require
upon at least two business days' prior notice to the Company,
and will be made available for checking and packaging at the
office at which they are to be delivered on the Closing Date
(as specified for that purpose in the Terms Agreement) at least
one business day prior to the Closing Date.
It is understood that the Representatives, acting
individually and not in a representative capacity, may (but
shall not be obligated to) make payment to the Company on
behalf of any other Underwriter for the Offered Securities to
be purchased by such Underwriter. Any such payment by the Rep-
resentatives shall not relieve any such Underwriter of any of
its obligations hereunder.
If so authorized in the Terms Agreement, the Under-
writers may solicit offers from investors of the types set
forth in the Prospectus to purchase Offered Securities from the
Company pursuant to delayed delivery contracts ("Delayed Deliv-
ery Contracts"). Such contracts shall be substantially in the
form of Exhibit B hereto but with such changes therein as the
Company may approve. Offered Securities to be purchased pursu-
ant to Delayed Delivery Contracts are herein called "Contract
Securities." When Delayed Delivery Contracts are authorized in
the Terms Agreement, the Company will enter into a Delayed
Delivery Contract in each case where a sale of Contract Securi-
ties arranged through the Representatives has been approved by
<PAGE>
-8-
the Company but, except as the Company may otherwise agree,
such Delayed Delivery Contracts must be for at least the mini-
mum amount of Contract Securities set forth in the Terms Agree-
ment, and the aggregate amount of Contract Securities may not
exceed the amount set forth in the Terms Agreement. You will
advise the Company of the proposed sales of the Contract Secu-
rities not later than 10:00 A.M., New York City time, on the
third full business day preceding the Closing Date (or at such
later time as the Company may otherwise agree). The Company
will advise the Representatives not later than 10:00 A.M., New
York City time, the second full business day preceding the
Closing Date (or at such later time as the Representatives may
otherwise agree) of the sales of the Contract Securities which
have been so approved. The Representatives and the other
Underwriters will not have any responsibility in respect of the
validity or performance of Delayed Delivery Contracts.
The amount of Offered Securities to be purchased by
each Underwriter as set forth in the Terms Agreement shall be
reduced by an amount which shall bear the same proportion to
the total amount of Contract Securities as the amount of
Offered Securities set forth opposite the name of such Under-
writer bears to the total amount of Offered Securities set
forth in the Terms Agreement, except to the extent that the
Representatives determine that such reduction shall be other-
wise than in such proportion and so advise the Company; pro-
vided, however, that the total amount of Offered Securities to
be purchased by all Underwriters shall be the total amount of
Offered Securities set forth in the Terms Agreement less the
aggregate amount of Contract Securities.
4. Certain Agreements of the Company. The Company
agrees with each Underwriter that it will furnish to counsel
for the Underwriters, without charge, one conformed copy of the
Registration Statement, including all exhibits, in the form it
became effective and of all amendments thereto and that, in
connection with each offering of Securities:
(a) At any time when a prospectus relating to the
Securities is required to be delivered under the Act,
before amending or supplementing the Registration State-
ment or the Prospectus with respect to the Securities, the
Company will furnish to the Representatives a copy of such
proposed amendment or supplement (other than any document
required to be filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and
incorporated by reference in the Prospectus) a reasonable
<PAGE>
-9-
amount of time prior to the filing thereof and will not
file any such proposed amendment or supplement to which
the Representatives reasonably object. The Company will
promptly advise the Representatives of (i) the filing of
any amendment or supplement to the Prospectus or any
amendment to the Registration Statement and of the effec-
tiveness of any such amendment to the Registration State-
ment, (ii) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of
any prospectus relating to the Securities or the initia-
tion or threatening of any proceeding for that purpose, or
of any request by the Commission for any amendment or sup-
plement of the Registration Statement or Prospectus or for
additional information and (iii) the receipt by the Com-
pany of any notification with respect to any suspension of
the qualification of the Securities for offering or sale
in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose. The Company agrees
to use its best efforts to prevent the issuance of any
such stop order or of any such order preventing or sus-
pending the use of any such prospectus or of any notifica-
tion suspending any such qualification and, if issued, to
use promptly its best efforts to obtain withdrawal thereof
as soon as possible.
(b) If, at any time when a prospectus relating to
the Securities is required to be delivered under the Act,
any event occurs or a condition exists 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 when the Prospectus is delivered, not mis-
leading, or if, in the opinion of the Representatives or
the Company, it is necessary at any time to amend or sup-
plement the Prospectus to comply with the Act, the Company
immediately will notify the Representatives and promptly
will prepare and file with the Commission an amendment or
supplement which will correct such statement or omission
or effect such compliance.
(c) As soon as reasonably practicable after the date
of each Terms Agreement, the Company will make generally
available to its security holders an earnings statement
that satisfies the provisions of Section 11(a) of the Act
and Rule 158 under the Act.
<PAGE>
-10-
(d) The Company will furnish to the Representatives
copies of the Registration Statement, including all exhib-
its and documents incorporated by reference therein, 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 are reasonably
requested.
(e) The Company will arrange for the qualification
of the Securities for sale and the determination of their
eligibility for investment under the laws of such juris-
dictions as the Representatives may reasonably request and
will continue such qualifications in effect so long as
required for the distribution of the Securities; provided
that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now qualified
or to file a general consent to service of process in any
jurisdiction.
(f) The Company will pay all costs, expenses, fees
and taxes incident to (i) the preparation, printing, fil-
ing and distribution under the Act of the Registration
Statement (including financial statements and exhibits),
each preliminary prospectus and prospectus supplement and
all amendments and supplements to any of them prior to or
during the period specified in paragraph (b), (ii) the
printing and delivery of the Prospectus and all amendments
or supplements to it during the period specified in para-
graph (b), (iii) the preparation, issuance, execution,
authentication and delivery of the Securities, including
any expenses of the Trustees and their counsel, (iv) the
printing and delivery of this Agreement, any Preliminary
and Supplemental Blue Sky Memoranda and all other docu-
ments printed and delivered in connection with the offer-
ing of the Offered Securities, (v) the registration or
qualification of the Offered Securities for offer and sale
under the securities or Blue Sky laws of the several
states (including the reasonable fees and disbursements of
counsel relating to such registration or qualification
relating thereto), (vi) filings and clearance, if
required, with the National Association of Securities
Dealers, Inc. in connection with the offering of the
Offered Securities, (vii) if provided in any applicable
Terms Agreement, the listing of the Offered Securities on
a securities exchange, (viii) the rating of the Securi-
ties, (ix) establishing any depositary arrangement for the
<PAGE>
-11-
Securities and/or providing any CUSIP or other identifica-
tion numbers for the Securities and (x) furnishing such
copies of the Registration Statement, the Prospectus and
all amendments and supplements thereto as may be requested
for use in connection with the offering or sale of the
Offered Securities by the Underwriters or by dealers to
whom the Offered Securities may be sold.
(g) The Company will notify the Representatives
promptly in writing of any downgrading, or on its receipt
of any notice of (i) any intended or potential downgrading
or (ii) any review or possible change that does not indi-
cate an improvement in the rating accorded any of the
securities of, or guaranteed by, the Company by any
"nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2)
under the Act.
(h) The Company agrees that, from the date of the
Terms Agreement and continuing to and including the busi-
ness day following the Closing Date, it will not offer,
sell, contract to sell or otherwise dispose of any debt
securities of or guaranteed by the Company which are sub-
stantially similar to the Offered Securities, without the
prior written consent of the Representatives.
5. Conditions of the Underwriters' Obligations.
The several obligations of the Underwriters to purchase and pay
for the Offered Securities as provided herein are subject to
the satisfaction of each of the following conditions:
(a) All representations and warranties of the Com-
pany contained in this Agreement and all statements of
officers of the Company made in any certificate furnished
pursuant to the provisions hereof shall be true and cor-
rect in all material respects on the date of the Terms
Agreement and on the Closing Date with the same force and
effect as if made on and as of each such date.
(b) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not
have occurred (i) any downgrading, nor shall any notice
have been given of any intended or potential downgrading
or of any review or a possible change that does not indi-
cate an improvement, in the rating accorded any of the
securities of, or guaranteed by, the Company by any
"nationally recognized statistical rating organization,"
<PAGE>
-12-
as such term is defined for purposes of Rule 436(g)(2)
under the Act; (ii) any material adverse change in or
affecting the business, prospects, financial position,
stockholders' equity or results of operation of the Com-
pany and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus,
which, in the judgment of the Representatives, makes it
impracticable or inadvisable to market the Offered Securi-
ties on the terms and in the manner contemplated in the
Prospectus; (iii) any suspension or limitation of trading
in securities generally on or by the New York Stock
Exchange, or any suspension of trading of any securities
of or guaranteed by the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium
declared by Federal or New York authorities; or (v) any
outbreak or escalation of hostilities or any change in the
financial markets or any calamity or emergency that, in
the judgment of the Representatives, is material and
adverse and makes it impracticable or inadvisable to mar-
ket the Offered Securities on the terms and in the manner
contemplated in the Prospectus.
(c) You shall have received on the Closing Date an
opinion, dated the Closing Date, of counsel for the Com-
pany to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation
and has the corporate power and authority required to
carry on its business as it is currently being con-
ducted and to own its properties;
(ii) this Agreement has been duly authorized,
executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in
accordance with its terms except as (a) the enforce-
ability hereof may be limited by bankruptcy, insol-
vency, reorganization, fraudulent conveyance, morato-
rium or similar laws now or hereafter in effect
relating to creditors' rights generally, (b) the
availability of equitable remedies may be limited by
equitable principles of general applicability and
(c) rights to indemnity and contribution hereunder
may be limited by applicable law;
<PAGE>
-13-
(iii) the applicable Indenture has been duly
qualified under the Trust Indenture Act and has been
duly authorized, executed and delivered by the Com-
pany and (assuming the due authorization, execution
and delivery by the applicable Trustee) is a valid
and binding agreement of the Company, enforceable in
accordance with its terms except as (a) the enforce-
ability thereof may be limited by bankruptcy, insol-
vency, reorganization, fraudulent conveyance, morato-
rium or similar laws now or hereafter in effect
relating to creditors' rights generally and
(b) rights of acceleration and the availability of
equitable remedies may be limited by equitable prin-
ciples of general applicability;
(iv) the Securities have been duly authorized
and, when executed and authenticated in accordance
with the provisions of the applicable Indenture and
delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be
entitled to the benefits of the applicable Indenture
and will be valid and binding obligations of the Com-
pany enforceable in accordance with their terms
except as (a) the enforceability thereof may be lim-
ited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws now
or hereafter in effect relating to creditors' rights
generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by
equitable principles of general applicability;
(v) if the Offered Securities are convertible
into Common Stock, the shares of Common Stock ini-
tially issuable upon conversion of such Offered Secu-
rities have been duly and validly authorized and
reserved for issuance upon such conversion by all
necessary corporate action and such shares, when
issued upon such conversion, will be duly authorized
and validly issued, fully paid and non-assessable,
and the issuance of such shares upon such conversion
will not be subject to preemptive or other similar
rights;
(vi) the Registration Statement has become
effective under the Act, and, to the knowledge of
such counsel, no stop order suspending its effective-
ness has been issued and no proceedings for that
<PAGE>
-14-
purpose are pending before or threatened by the
Commission;
(vii) the statements under the captions "Descrip-
tion of Securities" and "Description of Capital
Stock" and, if applicable, "Certain Federal Income
Tax Considerations" in the Prospectus, as amended or
supplemented, insofar as such statements constitute a
summary of legal matters or documents, are accurate
in all material respects;
(viii) the execution, delivery, and performance of
this Agreement, the applicable Indenture and the
issuance and sale of the Offered Securities and com-
pliance by the Company with all the provisions hereof
and thereof and the consummation of the transactions
contemplated hereby and thereby (a) will not require
any consent, approval, authorization or other order
of any court, regulatory body, administrative agency
or other governmental body (except as such may be
required under the securities or Blue Sky laws of the
various states) or (b) will not conflict with or con-
stitute a breach of any of the terms or provisions of
the charter or by-laws of the Company;
(ix) the Company is not an "investment company"
within the meaning of the Investment Company Act of
1940, as amended; and
(x) the Registration Statement and the Prospec-
tus and any supplement or amendment thereto (except
for financial statements, related schedules and sta-
tistical information of a financial nature as to
which no opinion need be expressed) comply as to form
in all material respects with the Act and the Trust
Indenture Act.
Such counsel shall additionally state that such
counsel has participated in conferences with officers
and other representatives of the Company, representa-
tives of the independent public accountants for the
Company and representatives of the Underwriters and
their counsel, at which the contents of the Registra-
tion Statement and the Prospectus and related matters
were discussed, and although such counsel is not
passing upon and does not assume responsibility for
the accuracy, completeness or fairness of the
<PAGE>
-15-
statements contained in the Registration Statement
and the Prospectus (except as set forth in clause
(vii) above), on the basis of the foregoing (relying
as to materiality to a large extent upon the opinions
of officers and other representatives of the Com-
pany), no facts have come to the attention of such
counsel which would lead such counsel to believe
that, at the time the Registration Statement became
effective or, if an amendment to the Registration
Statement or an Annual Report on Form 10-K has been
filed by the Company with the Commission subsequent
to the effectiveness of the Registration Statement,
then at the time such amendment became effective or
at the time of the most recent such filing, as the
case may be, either the Registration Statement or any
amendment thereto contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading or that the
Prospectus as amended or supplemented, as of the date
of the Terms Agreement or as of the Closing Date,
included or includes an untrue statement of a mate-
rial fact or omitted or omits to state a material
fact necessary in order to make the statements
therein, in the light of the circumstances under
which they were made, not misleading (except that no
statement need be made as to the financial statements
or financial or statistical data contained or incor-
porated therein).
In rendering such opinions, such counsel may
state that they have examined the originals, photo-
copies or conformed copies of all such records of the
Company and its subsidiaries and all such agreements,
certificates of public officials, certificates of
officers and representatives of the Company and its
subsidiaries and such other documents as they have
deemed relevant and necessary as a basis for the
opinions expressed therein. Such counsel may assume
the genuineness of all signatures on original docu-
ments and the conformity to the originals of all cop-
ies submitted to them as conformed or photocopies.
As to various questions of fact material to their
opinion, such counsel may rely upon representations,
statements or certificates of public officials,
officers and representatives of the Company and its
subsidiaries and others. Such counsel may also state
<PAGE>
-16-
that they are admitted to practice in the State of
New York and do not express any opinion on any laws
other than the laws of the State of New York, the
General Corporation Law of the State of Delaware and
federal law.
(d) You shall have received on the Closing Date an
opinion, dated the Closing Date, of the General Counsel of
the Company to the effect that:
(i) the Company is duly qualified and is in
good standing as a foreign corporation and is autho-
rized to do business in each jurisdiction in which
the nature of its business or its ownership or leas-
ing of property requires such qualification, except
where the failure to be so qualified or to be in good
standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(ii) each Significant Subsidiary has been duly
incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of
its incorporation and has the corporate power and
authority required to carry on its business as it is
currently being conducted and to own its properties;
each Significant Subsidiary is duly qualified and is
in good standing as a foreign corporation and is
authorized to do business in each jurisdiction in
which the nature of its business or its ownership or
leasing of its property requires such qualification,
except where the failure to be so qualified or to be
in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as
a whole; and all of the issued and outstanding capi-
tal stock of each Significant Subsidiary has been
duly authorized and validly issued, is fully paid and
non-assessable, and is owned by the Company, free and
clear of any mortgage, pledge, lien, encumbrance,
claim or equity;
(iii) such counsel does not know of any legal or
governmental proceeding pending or threatened to
which the Company or any of its subsidiaries is a
party or to which any of their respective property is
subject which is required to be described in the Reg-
istration Statement or the Prospectus and is not so
described, or of any contract or other document which
<PAGE>
-17-
is required to be described in the Registration
Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement
which is not described or filed as required;
(iv) the execution, delivery and performance of
this Agreement, the applicable Indenture and the
issuance and sale of the Offered Securities and com-
pliance by the Company with all the provisions hereof
and thereof and the consummation of the transactions
contemplated hereby and thereby (a) to such counsel's
knowledge, will not conflict in any material respect
with or constitute a material breach of any of the
terms or provisions of, or a material default under,
the charter or by-laws of any of the Company's sub-
sidiaries or any agreement, indenture or other
instrument to which the Company or any of its subsid-
iaries is a party or by which the Company or any of
its subsidiaries or their respective properties is
bound, and which is material to the Company and its
subsidiaries, taken as a whole, or (b) to such coun-
sel's knowledge, will not violate or conflict in any
material respect with any laws, administrative regu-
lations or rulings or court decrees applicable to the
Company or any of its subsidiaries or their respec-
tive properties (other than Blue Sky or state securi-
ties laws as to which such counsel need express no
opinion); and
(v) to the knowledge of such counsel, each doc-
ument filed pursuant to the Exchange Act and incorpo-
rated by reference in the Registration Statement and
the Prospectus (except for financial statements,
related schedules and statistical information of a
financial nature contained or incorporated therein as
to which such counsel need not express any opinion)
complied when so filed as to form in all material
respects with the Exchange Act.
Such counsel shall additionally state that no
facts have come to the attention of such counsel
which would lead such counsel to believe that at the
time the Registration Statement became effective or,
if an amendment to the Registration Statement or an
Annual Report on Form 10-K has been filed by the Com-
pany with the Commission subsequent to the effective-
ness of the Registration Statement, then at the time
<PAGE>
-18-
such amendment became effective or at the time of the
most recent such filing, as the case may be, either
the Registration Statement or any amendment thereto
contained an untrue statement of a material fact or
omitted or omits to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as
amended or supplemented, as of the date of the Terms
Agreement or as of the Closing Date, included or
includes an untrue statement of a material fact or
omits to state a material fact necessary in order to
make the statements therein, in the light of the cir-
cumstances under which they were made, not misleading
(except that no statement need be made as to the
financial statements or financial or statistical data
contained or incorporated therein).
(e) You shall have received on the Closing Date an
opinion, dated the Closing Date, of counsel for the Under-
writers, as to the matters referred to in clauses
(ii)-(vii) and clause (x) of the foregoing paragraph (c)
and with respect to the matters referred to in the penul-
timate subparagraph of paragraph (c). In giving such
opinion with respect to the matters covered by clause (x)
and such penultimate subparagraph such counsel may state
that their opinion and belief are based upon their par-
ticipation in the preparation of the Registration State-
ment and Prospectus and any amendments or supplements
thereto (other than documents incorporated by reference)
and review and discussion of the contents thereof (includ-
ing documents incorporated by reference), but are without
independent check or verification except as specified.
(f) You shall have received a letter on and as of
the Closing Date, in form and substance satisfactory to
the Representatives, from Coopers & Lybrand L.L.P., inde-
pendent public accountants, containing statements and
information of the type ordinarily included in the accoun-
tants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information
contained in or incorporated by reference into the Regis-
tration Statement and the Prospectus.
(g) The Company shall not have failed at or prior to
the Closing Date to perform or comply in any material
respect with any of the agreements herein contained and
<PAGE>
-19-
required to be performed or complied with by the Company
at or prior to the Closing Date.
(h) The Prospectus with respect to the Offered Secu-
rities shall have been filed with the Commission pursuant
to Rule 424 under the Act within the applicable time
period prescribed for such filing by the Act; no stop
order suspending the effectiveness of the Registration
Statement shall be in effect and no proceeding for that
purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on
the part of the Commission shall have been complied with
to the reasonable satisfaction of the Representatives.
(i) On the Closing Date, the Representatives shall
have received a certificate or certificates signed by an
executive officer of the Company on behalf of the Company,
dated the Closing Date, to the effect that (1) the repre-
sentations and warranties of the company contained herein
are true and correct in all material respects on and as of
the Closing Date, as if made on and as of such date,
(2) the Company has complied in all material respects with
all agreements and all conditions on its part to be per-
formed or satisfied under this Agreement at or prior to
the Closing Date and (3) there has not occurred any mate-
rial adverse change in or affecting the business, pros-
pects, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as
a whole from that set forth in or contemplated by the Reg-
istration Statement or the Prospectus.
(j) The Offered Securities shall be rated "invest-
ment grade" by two "nationally recognized statistical rat-
ing organizations."
6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities
(including, without limitation, the legal fees and other
expenses incurred in connection with any suit, action or pro-
ceeding or any claim asserted or caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof or the Prospec-
tus (as amended or supplemented if the Company shall have fur-
nished any amendments or supplements thereto) or any
<PAGE>
-20-
preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not mislead-
ing; provided, however, that the foregoing indemnity with
respect to any Prospectus or preliminary prospectus shall not
inure to the benefit of any Underwriter if a copy of the Pro-
spectus (excluding documents incorporated by reference therein)
as amended or supplemented had been provided to such Under-
writer on a timely basis but not been sent or given by or on
behalf of such Underwriter to the person asserting such losses,
claims, damages or liabilities at or prior to the written con-
firmation of the sale of Offered Securities to such person and
the untrue statement or alleged untrue statement of a material
fact or the omission or alleged omission to state a material
fact that is found to be or is alleged to be the basis of lia-
bility in such Prospectus or such preliminary prospectus was
corrected in the Prospectus as amended or supplemented; and
provided, further, however, that the Company shall not be lia-
ble in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter
expressly for use in the Registration Statement, Prospectus,
any amendment or supplement thereto, or any preliminary
prospectus.
(b) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its direc-
tors, its officers who sign the Registration Statement and any
person controlling the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each
Underwriter but only with reference to information furnished in
writing by or on behalf of such Underwriter to the Representa-
tives expressly for use in the Registration Statement, the Pro-
spectus or any preliminary prospectus.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand
shall be brought or asserted against any person in respect of
which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person")
shall promptly notify the person against whom such indemnity
may be sought (the "Indemnifying Person") in writing, and the
Indemnifying Person, upon request of the Indemnified Person,
<PAGE>
-21-
shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall
pay the fees and expenses of such counsel related to such pro-
ceeding. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indem-
nified Person unless (i) the Indemnifying Person and the Indem-
nified Person shall have mutually agreed to the contrary,
(ii) the Indemnifying Person has failed within a reasonable
time to retain counsel reasonably satisfactory to the Indem-
nified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connec-
tion with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. The Indemnifying Person
shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person
from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party
and indemnity could have been sought hereunder by such Indem-
nified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in this
Section 6 is unavailable to an Indemnified Person in respect of
any losses, claims, damages or liabilities referred to herein
in connection with the Offered Securities, then each Indemnify-
ing Person, in lieu of indemnifying such Indemnified Person,
shall contribute to the amount paid or payable by such Indem-
nified Person as a result of such losses, claims, damages or
liabilities (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 hand from the offering of the
Offered Securities or (ii) if the allocation provided by clause
<PAGE>
-22-
(i) above is not permitted by applicable law, in such propor-
tion as is appropriate to reflect not only the relative bene-
fits referred to in clause (i) above but also the relative
fault of the Company and the Underwriters 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 and the Underwriters shall be deemed to be in the
same proportion as the total net proceeds from the offering of
the Offered Securities (before deducting expenses) received by
the Company and the total underwriting discounts and commis-
sions received by the Underwriters in respect thereof bear to
the total price to the public of the Offered Securities, in
each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Under-
writers 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 statement or omission.
The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this
Section 6(d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose)
or by any other method of allocation which does not take
account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by
an Indemnified Person as a result of the losses, claims, dam-
ages or liabilities referred to in this Section 6 shall be
deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such Indem-
nified Person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at
which the Offered 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 Under-
writers' obligations to contribute pursuant to this
<PAGE>
-23-
Section 6(d) are several in proportion to the respective number
of Offered Securities purchased by each of the Underwriters
hereunder and not joint.
(e) The indemnity and contribution agreements con-
tained in this Section 6 are in addition to any liability which
the Indemnifying Persons may otherwise have to the Indemnified
Persons referred to above.
7. Substitution of Underwriters.
(a) The Company shall not be obligated to deliver
any Offered Securities except upon payment for all the
Offered Securities to be purchased hereunder or as herein-
after provided.
(b) If on the Closing Date any one or more of the
Underwriters shall fail or refuse to purchase the Offered
Securities which it or they have agreed to purchase pursu-
ant to this Agreement on such date and the aggregate num-
ber of Offered Securities which such defaulting Under-
writer or Underwriters, as the case may be, agreed but
failed or refused to purchase is not more than one-tenth
of the total number of Offered Securities to be purchased
on such date by all Underwriters, each non-defaulting
Underwriter shall be obligated severally, in the propor-
tion which the number of Offered Securities set forth
opposite its name in Schedule I to the Terms Agreement
bears to the total number of Offered Securities which all
the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as the
Representatives may specify, to purchase the Offered Secu-
rities which such defaulting Underwriter or Underwriters,
as the case may be, agreed but failed or refused to pur-
chase on such date; provided that in no event shall the
number of Offered Securities which any Underwriter has
agreed to purchase be increased pursuant to this Section 7
by an amount in excess of one-ninth of such number of
Offered Securities without the written consent of such
Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Offered
Securities and the aggregate number of Offered Securities
with respect to which such default occurs is more than
one-tenth of the aggregate number of Offered Securities to
be purchased on such date by all Underwriters and arrange-
ments satisfactory to the Representatives and the Company
for purchase of such Offered Securities are not made
<PAGE>
-24-
within 48 hours after such default, this Agreement will
terminate without liability on the part of any
non-defaulting Underwriter and the Company. In any such
case which does not result in termination of this Agree-
ment, either the Representatives or the Company shall have
the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liabilities in
respect of any default of any such Underwriter under this
Agreement.
8. Termination. (a) The Representatives may ter-
minate the Terms Agreement, by notice to the Company, at any
time at or prior to the Closing Date, upon the occurrence of
any of the events specified in Section 5(b).
(b) If the Terms Agreement is terminated pursuant to
Section 7 or 8 or if for any reason the purchase of the Offered
Securities by the Underwriters under the Terms Agreement is not
consummated, the provisions contained in Sections 4(c), 4(f),
6, 9, 11 and 12 shall remain in full force and effect.
(c) If the purchase of the Offered Securities by the
Underwriters is not consummated because of any failure or
refusal of the Company to comply with the terms of, or to ful-
fill any of the conditions of, this Agreement or if for any
reason the Company shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Underwrit-
ers for all out-of-pocket expenses (including the fees and dis-
bursements of their counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
9. Survival of Certain Representations and Obliga-
tions. The respective indemnities and contribution agreements,
representations, warranties and other statements of the Com-
pany, its officers and directors and of the several Underwrit-
ers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive
delivery of and payment for the Offered Securities, regardless
of (i) any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter or by or on
behalf of the Company, the officers or directors of the Company
or any controlling person of the Company, (ii) acceptance of
<PAGE>
-25-
the Offered Securities and payment for them hereunder and
(iii) termination of this Agreement.
10. Notices. All communications hereunder will be
in writing and, if sent to the Underwriters, will be mailed,
delivered or sent by facsimile and confirmed to them at their
addresses furnished to the Company in writing for the purpose
of communications hereunder or, if sent to the Company, will be
mailed, delivered or sent by facsimile and confirmed to it at
Engelhard Corporation, 101 Wood Avenue, Iselin, NJ 08830,
attention: General Counsel.
11. Successors. This Agreement will inure to the
benefit of and be binding upon the Company and the Underwriters
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.
12. Applicable Law. This Agreement shall be gov-
erned by, and construed in accordance with, the laws of the
State of New York, without giving effect to the conflict of
laws provisions thereof.
<PAGE>
EXHIBIT A
TERMS AGREEMENT
__________, 199_
ENGELHARD CORPORATION
101 Wood Avenue
Iselin, NJ 08830
Attention: [ ]
Ladies and Gentlemen:
We (the "Representative(s)") understand that
Engelhard Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell $______________ [aggregate principal
amount] of its [title of securities] (the "Offered Securi-
ties"). Subject to the terms and conditions set forth or
incorporated by reference herein, the Underwriters named in
Schedule I attached hereto offer to purchase, severally and not
jointly, the principal amount of Offered Securities set forth
opposite their names. The Closing Date shall be ________,
199_, at ______ A.M. at the offices of ______________________.
All the provisions contained in the Underwriting
Agreement Basic Provisions dated ______ 1996 (the "Basic Provi-
sions"), a copy of which is attached as an Exhibit hereto, are
herein incorporated by reference in their entirety and shall be
deemed to be a part of this Terms Agreement to the same extent
as if the Basic Provisions had been set forth in full herein.
Terms defined in the Basic Provisions are used herein as
therein defined.
The Offered Securities shall have the following
terms:
DEBT SECURITIES
Title:
Aggregate Principal Amount:
Maturity Date:
<PAGE>
Interest Rate or Formula:
Interest Payment Dates:
Redemption Provisions:
Conversion Provisions:
Public Offering Price: ___% of the principal amount
thereof, plus accrued
interest, if any,
from _______________
Purchase Price: ___% of the principal amount
thereof, plus accrued interest,
if any, from ________
Additional Terms:
Please accept this offer no later than ______ o'clock
_.M. on __________, 199_, by signing a copy of this Terms
Agreement in the space set forth below and returning the signed
copy to us.
Very truly yours,
[UNDERWRITER[S]]
By_______________________
Name:
Title:
Accepted:
ENGELHARD CORPORATION
By_____________________________
Name:
Title:
<PAGE>
SCHEDULE I
Principal Amount of Offered
Underwriter[s] Securities to Be Purchased_
____________
Total:
<PAGE>
Exhibit to
Terms Agreement
[Attach copy of Underwriting Agreement Basic Provisions]
<PAGE>
EXHIBIT B
[ENGELHARD CORPORATION]
[Insert specific title of securities*]
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]*
ENGELHARD CORPORATION
101 Wood Avenue
Iselin, NJ 08830
Gentlemen:
The undersigned hereby agrees to purchase from
[Engelhard Corporation (the "Company")] and the Company agrees
to sell to the undersigned [If one delayed closing, insert --
as of the date hereof, for delivery on , 19
("Delivery Date")]
[$___________ aggregate principal amount of the Company's
[title of Securities] (the "Securities"), offered by the Compa-
ny's Prospectus relating thereto, receipt of a copy of which is
hereby acknowledged, at a purchase price of % of the princi-
pal amount thereof plus accrued interest, if any, and on the
further terms and conditions set forth in this contract.]
[If two or more delayed closings, insert the
following:
The undersigned will purchase from the Company as of
the date hereof, for delivery on the dates set forth below,
Securities in the amounts set forth below:
Delivery Date Amount
_____________________ _______________________
_____________________ _______________________
___________________
* To be completed when the Terms Agreement is executed by the parties
thereto.
<PAGE>
-2-
Each of such delivery dates is hereinafter referred to as a
Delivery Date.]
Payment for the Securities which 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 offi-
cial bank check in New York Clearing House funds (or as other-
wise specified in the Terms Agreement) at the office of
at .M., time, on such Delivery Date
upon delivery to the undersigned of the Securities to be pur-
chased by the undersigned for delivery on such Delivery Date in
definitive form and in such denominations and registered in
such names as the undersigned may designate by written or fac-
simile communication addressed to the Company not less than
five full business days prior to such Delivery Date. If no des-
ignation is received, the Securities will be registered in the
name of the undersigned and issued in a denomination equal to
the aggregate amount of Securities to be purchased by the
undersigned on such Delivery Date.
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) invest-
ment in the Securities shall not at such Delivery Date be pro-
hibited under the laws of any jurisdiction in the United States
to which the undersigned is subject, which investment the
undersigned represents is not prohibited on the date hereof and
(2) the Company shall have delivered to the Underwriters the
amount of the Securities to be purchased by them pursuant to
the Underwriting Agreement referred to in the Prospectus men-
tioned above and received payment therefor. The obligation of
the undersigned to take delivery of and make payment for Secu-
rities hereunder, and the obligation of the Company to sell and
deliver Securities hereunder, shall not be affected by the
failure of any purchaser to take delivery of and make payment
for Securities pursuant to other contracts similar to this con-
tract. As a material inducement to the acceptance of this
offer by the Company, the undersigned represents and warrants
to the Representatives that its investment in the Securities
which the undersigned hereby offers to purchase is not, as of
the date hereof, prohibited under the laws of any jurisdiction
to which the undersigned is subject and which govern such
investment, and the undersigned will, if the Securities are
being purchased by the undersigned under a "basket" clause or
similar authorization, use its best efforts to reserve an
amount thereunder sufficient to permit such purchase on the
Delivery Date.
<PAGE>
-3-
Promptly after completion of the sale to the Under-
writers, the Company will mail or deliver to the undersigned at
its address set forth below notice to such effect, accompanied
by a copy of the opinion of counsel for the Company delivered
to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents
and warrants to the Company that all necessary corporate action
for the due execution and delivery of this contract and the
payment for and purchase of the Securities which the under-
signed hereby offers to purchase has been taken by it and no
further authorization or approval of any governmental or other
regulatory authority is required for such execution, delivery,
payment or purchase, and that, upon acceptance hereof by the
Company and mailing or delivery of a copy as provided below,
this contract will constitute a valid and binding agreement of
the undersigned in accordance with its terms.
This contract will inure to the benefit of and be
binding upon the parties hereto and their respective succes-
sors, but will not be assignable by either party hereto without
the written consent of the other.
It is understood that the acceptance of this contract
and any other similar contracts is in the Company's sole dis-
cretion 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 mailed or delivered.
<PAGE>
-4-
THIS CONTRACT 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 PROVISIONS THEREOF.
Very truly yours,
______________________________
(Name of Purchaser)
By____________________________
______________________________
(Title of Signatory)
______________________________
______________________________
(Address of Purchaser)
Accepted, as of the above date.
ENGELHARD CORPORATION
By_______________________________
(Title of Signatory)
Exhibit 4.1
_____________________________________________________________
_____________________________________________________________
ENGELHARD CORPORATION
SENIOR DEBT SECURITIES
INDENTURE
Dated as of [ ], 1996
THE CHASE MANHATTAN BANK, N.A., Trustee
_____________________________________________________________
_____________________________________________________________
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section_
310(a)(1)........................................... 7.08; 7.10
(a)(2).......................................... 7.08; 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.08
(b)............................................. 7.08; 7.10;
11.02
(c)............................................. N.A.
311(a).............................................. 7.11
(b)............................................. 7.11
(c)............................................. N.A.
312(a).............................................. 2.06
(b)............................................. 11.03
(c)............................................. 11.03
313(a).............................................. 7.06
(b)(1).......................................... N.A.
(b)(2).......................................... 7.05
(c)............................................. 7.06; 11.02
(d)............................................. 7.06
314(a).............................................. 4.05; 4.06;
11.02
(b)............................................. N.A.
(c)(1).......................................... 11.04
(c)(2).......................................... 11.04
(c)(3).......................................... N.A.
(d)............................................. N.A.
(e)............................................. 11.05
(f)............................................. N.A.
315(a).............................................. 7.01(2)
(b)............................................. 7.05; 11.02
(c)............................................. 7.01(1)
(d)............................................. 7.01(3)
(e)............................................. 6.11
316(a)(last sentence)............................... 2.11
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07
(c)............................................. 10.04
317(a)(1)........................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.05
318(a).............................................. 11.01
(b)............................................. N.A.
(c)............................................. 11.01
______________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
SECTION 1.01 Definitions ...................................... 1
SECTION 1.02 Other Definitions ................................ 5
SECTION 1.03 Rules of Construction ............................ 5
ARTICLE TWO
THE SECURITIES
SECTION 2.01 Issuable in Series ............................... 6
SECTION 2.02 Execution and Authentication...................... 8
SECTION 2.03 Bond Agents ...................................... 9
SECTION 2.04 Bearer Securities ................................ 9
SECTION 2.05 Paying Agent to Hold Money in Trust .............. 10
SECTION 2.06 Securityholder Lists ............................. 11
SECTION 2.07 Transfer and Exchange ............................ 11
SECTION 2.08 Replacement Securities ........................... 12
SECTION 2.09 Outstanding Securities ........................... 12
SECTION 2.10 Discounted Securities ............................ 13
SECTION 2.11 Treasury Securities .............................. 13
SECTION 2.12 Global Securities ................................ 13
SECTION 2.13 Temporary Securities ............................. 14
SECTION 2.14 Cancellation ..................................... 14
SECTION 2.15 Defaulted Interest ............................... 14
ARTICLE THREE
REDEMPTION
SECTION 3.01 Notices to Trustee ............................... 15
SECTION 3.02 Selection of Securities to Be
Redeemed ......................................... 15
SECTION 3.03 Notice of Redemption ............................. 16
SECTION 3.04 Effect of Notice of Redemption ................... 17
SECTION 3.05 Payment of Redemption Price ...................... 17
SECTION 3.06 Securities Redeemed in Part ...................... 17
ARTICLE FOUR
COVENANTS
-i-
<PAGE>
Page
SECTION 4.01 Payment of Securities ............................ 18
SECTION 4.02 Corporate Existence .............................. 18
SECTION 4.03 Limitations on Liens and Encumbrances ............ 18
SECTION 4.04 Limitations on Sale and Leaseback
Transactions...................................... 20
SECTION 4.05 SEC Reports ...................................... 21
SECTION 4.06 Annual Review Certificate ........................ 21
SECTION 4.07 Notice to Trustee of Certain Defaults ............ 22
SECTION 4.08 Further Assurances to Trustee .................... 22
ARTICLE FIVE
SUCCESSORS
SECTION 5.01 When Company May Merge, etc. ..................... 22
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default ................................ 23
SECTION 6.02 Acceleration ..................................... 25
SECTION 6.03 Other Remedies ................................... 25
SECTION 6.04 Waiver of Past Defaults .......................... 26
SECTION 6.05 Control by Majority .............................. 26
SECTION 6.06 Limitations on Suits ............................. 26
SECTION 6.07 Rights of Holders to Receive Payment ............. 27
SECTION 6.08 Collection Suit by Trustee ....................... 27
SECTION 6.09 Trustee May File Proofs of Claims ................ 27
SECTION 6.10 Priorities ....................................... 27
SECTION 6.11 Undertaking for Costs ............................ 28
SECTION 6.12 Restoration of Rights and Remedies ............... 29
SECTION 6.13 Rights and Remedies Cumulative ................... 29
SECTION 6.14 Delay or Omission Not Waiver ..................... 29
SECTION 6.15 Waiver of Stay or Extension Laws ................. 29
ARTICLE SEVEN
TRUSTEE
SECTION 7.01 Duties of Trustee ................................ 30
SECTION 7.02 Rights of Trustee ................................ 31
SECTION 7.03 Individual Rights of Trustee ..................... 32
SECTION 7.04 Trustee's Disclaimer ............................. 32
SECTION 7.05 Notice of Defaults ............................... 32
SECTION 7.06 Reports by Trustee to Holders .................... 32
SECTION 7.07 Compensation and Indemnity ....................... 33
-ii-
<PAGE>
Page
SECTION 7.08 Replacement of Trustee ........................... 33
SECTION 7.09 Successor Trustee by Merger, etc. ................ 35
SECTION 7.10 Eligibility; Disqualification .................... 35
SECTION 7.11 Preferential Collection of Claims
Against Company .................................. 35
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01 Defeasance ....................................... 35
SECTION 8.02 Conditions to Defeasance ......................... 36
SECTION 8.03 Application of Trust Money ....................... 37
SECTION 8.04 Repayment to Company ............................. 37
ARTICLE NINE
CONVERSION
SECTION 9.01 Conversion Privilege ............................. 38
SECTION 9.02 Conversion Procedure ............................. 38
SECTION 9.03 Taxes on Conversion .............................. 39
SECTION 9.04 Company Determination Final ...................... 39
SECTION 9.05 Trustee's and Conversion Agent's
Disclaimer ....................................... 40
SECTION 9.06 Company to Provide Conversion
Securities ....................................... 40
SECTION 9.07 Cash Settlement Option ........................... 40
SECTION 9.08 Adjustment in Conversion Rate for
Change in Capital Stock .......................... 41
SECTION 9.09 Adjustment in Conversion Rate for Com-
mon Stock Issued Below Market Price .............. 42
SECTION 9.10 Adjustment for Other Distributions ............... 44
SECTION 9.11 Voluntary Adjustment ............................. 45
SECTION 9.12 When Adjustment May Be Deferred .................. 45
SECTION 9.13 When No Adjustment Required ...................... 46
SECTION 9.14 Notice of Adjustment ............................. 46
SECTION 9.15 Notice of Certain Transactions ................... 46
SECTION 9.16 Reorganization of the Company .................... 47
ARTICLE TEN
AMENDMENTS
SECTION 10.01 Without Consent of Holders ....................... 47
SECTION 10.02 With Consent of Holders .......................... 48
SECTION 10.03 Compliance with Trust Indenture Act .............. 49
-iii-
<PAGE>
Page
SECTION 10.04 Effect of Consents ............................... 49
SECTION 10.05 Notation on or Exchange of Securities ............ 49
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act .............................. 50
SECTION 11.02 Notices .......................................... 50
SECTION 11.03 Communications by Holders with Other
Holders .......................................... 51
SECTION 11.04 Certificate and Opinion as to
Conditions Precedent ............................. 51
SECTION 11.05 Statements Required in
Certificate or Opinion ........................... 52
SECTION 11.06 Rules by Company and Agents ...................... 52
SECTION 11.07 Legal Holidays ................................... 52
SECTION 11.08 No Recourse Against Others ....................... 52
SECTION 11.09 Duplicate Originals .............................. 53
SECTION 11.10 Governing Law .................................... 53
SIGNATURES ....................................... 54
Exhibit A: A Form of Registered
Security .......................... A-1
Exhibit B: A Form of Bearer Security
Notes to Exhibits A and B ......... B-1
Exhibit C: A Form of Assignment ................. C-1
Exhibit D: A Form of Conversion
Notice ............................ D-1
-iv-
<PAGE>
INDENTURE dated as of [ ], 1996 between
ENGELHARD CORPORATION, a Delaware corporation ("Company"), and
THE CHASE MANHATTAN BANK, N.A., a national banking association
("Trustee").
Each party agrees as follows for the benefit of the
Holders of the Company's debt securities issued under this
Indenture:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions.
"Affiliate" means any person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company.
"Agent" means any Registrar, Transfer Agent or Paying
Agent.
"Authorized Newspaper" means a newspaper that is:
(1) printed in the English language or in an offi-
cial language of the country of publication;
(2) customarily published on each business day in
the place of publication; and
(3) of general circulation in the relevant place or
in the financial community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business
days and in the same or different Authorized Newspapers.
"Bearer Security" means a Security payable to bearer.
"Board" or "Board of Directors" means the Board of
Directors of the Company or any authorized committee of the
Board.
"Bond Resolution" means a resolution adopted by the
Board or by an Officer or committee of Officers pursuant to
Board delegation authorizing a series of Securities.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of
<PAGE>
capital stock of any person and all warrants or options to
acquire such capital stock.
"Common Stock" means the Common Stock, par value
$1.00 per share, of the Company or any security into which the
Common Stock may be converted.
"Company" means the party named as such above until a
successor replaces it and thereafter means the successor.
"Consolidated Tangible Net Worth" means the excess of
(i) the consolidated net book value of the assets of the Com-
pany and its Subsidiaries (other than patents, patent rights,
trademarks, trade names, franchises, copyrights, licenses, per-
mits, goodwill and other intangible assets classified as such
in accordance with GAAP) after all appropriate deductions in
accordance with GAAP (including, without limitation, reserves
for doubtful receivables, obsolescence, depreciation and amor-
tization) plus the amount, if any, by which the market value of
precious metals inventories and investments exceeds the carry-
ing value of those metals on the consolidated books of account
of the Company over (ii) the consolidated liabilities (includ-
ing tax and other proper accruals but excluding the accumulated
postretirement benefit obligation resulting from the applica-
tion of the provisions of FAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions") of the Com-
pany and its Subsidiaries, in each case computed and consoli-
dated in accordance with GAAP.
"Conversion Rate" means such number of shares of Com-
mon Stock for which $1,000 aggregate principal amount of Secu-
rities of any series is convertible, initially as stated in the
Bond Resolution authorizing the series and as adjusted pursuant
to the terms of this Indenture and the Bond Resolution.
"coupon" means an interest coupon for a Bearer
Security.
"Default" with respect to a series of the Securities
or to all series of the Securities, as the case may be, means
any event which is, or after notice or passage of time would
be, an Event of Default with respect to such series or to all
series of the Securities, as the case may be.
"Discounted Security" means a Security where the
amount of principal due upon acceleration is less than the
stated principal amount.
"GAAP" shall mean generally accepted accounting prin-
ciples set forth in the opinions and pronouncements of the
-2-
<PAGE>
Accounting Principles Board of the American Institute of Certi-
fied Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a sig-
nificant segment of the accounting profession, which are appli-
cable to the circumstances as in effect on the date of this
Indenture.
"Holder" or "Securityholder" means the person in
whose name a Registered Security is registered and the bearer
of a Bearer Security or coupon.
"Indenture" means this Indenture and any Bond Resolu-
tion as amended from time to time.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including
any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code
of any jurisdiction) but in no event shall "Lien" include any
defeasance pursuant to Article 8 hereof.
"NASDAQ" means the National Association of Securities
Dealers Automated Quotation System.
"Officer" means the Chairman of the Board, the Presi-
dent, any Vice President (including any Executive Vice Presi-
dent or Senior Vice President), the Treasurer, any Assistant
Treasurer, the Secretary, or the Controller of the Company.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Secretary or
Assistant Controller of the Company.
"Opinion of Counsel" means a written opinion from
legal counsel who is acceptable to the Trustee. The counsel
may be an employee of or counsel to the Company or the Trustee.
"principal" of a debt security means the principal of
the security plus the premium, if and when applicable, on the
security.
"Principal Property" means any manufacturing plant or
warehouse owned at the date hereof or hereafter acquired by the
Company or any Significant Subsidiary which is located within
the United States and which is carried on the books of the Com-
pany or such Significant Subsidiary in accordance with GAAP
(before deduction of any applicable depreciation reserves) at a
value in excess of 5.0% of the Company's Consolidated Tangible
-3-
<PAGE>
Net Worth, other than (A) any such property which the Company
or a Significant Subsidiary shall sell or convey to an indus-
trial development corporation, a governmental subdivision or
instrumentality or similar entity on terms contemplating the
lease or sale of such property back to the Company or a Sig-
nificant Subsidiary and contemplating the direct or indirect
application of rental or installment payments under such lease
or sales contract to service the bonds or other evidences of
indebtedness issued by such entity to finance the acquisition
of or construction upon such property or (B) any property which
in the opinion of the Board of Directors is not of material
importance to the total business conducted by the Company and
its Significant Subsidiaries as an entirety or (C) any portion
of a particular property which in the opinion of the Board of
Directors is not of material importance to the use or operation
of such property.
"Registered Security" means a Security registered as
to principal and interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debt securities issued under
this Indenture.
"series" means a series of Securities or the Securi-
ties of the series.
"Significant Subsidiary" shall have the meaning
assigned to such term in Regulation S-X promulgated under the
Securities Act of 1933, as amended.
"Stock Trading Day" means each day on which the secu-
rities exchange or quotation system which is used to determine
the Market Price is open for trading or quotation.
"Subsidiary" means any corporation, association or
other business entity, a majority (by number of votes) of the
Voting Stock or control of which is at the time owned or con-
trolled by the Company or another Subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code Section 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Treasury Regulations" means regulations of the U.S.
Treasury Department under the Internal Revenue Code of 1986, as
amended.
-4-
<PAGE>
"Trustee" means the party named as such above until a
successor replaces it and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate
trust matters.
"United States" means the United States of America,
its territories and possessions and other areas subject to its
jurisdiction.
"Voting Stock" means stock of any class or classes
(however designated) having ordinary voting power for the elec-
tion of a majority of the members of the board of directors (or
governing body) of such corporation, association or other busi-
ness entity, other than stock having such power only by reason
of the happening of a contingency.
"Yield to Maturity" means the yield to maturity on
any Securities, calculated at the time of issuance of such
Securities, or, if applicable, at the most recent
redetermination of interest on such Securities, and calculated
in accordance with accepted financial practice.
SECTION 1.02. Other Definitions.
Term Defined in Section
"Bankruptcy Law" 6.01
"Bearer Securities List" 2.06
"Conversion Agent" 2.03
"Conversion Date" 9.02
"Conversion Notice" 9.02
"Conversion Right" 9.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 11.07
"Market Price" 9.07
"Paying Agent" 2.03
"Registrar" 2.03
"Transfer Agent" 2.03
"U.S. Government Obligations" 8.02
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP
in the United States;
(3) GAAP principles are those applicable and in
effect on the date of this Indenture;
(4) all terms used in this Indenture that are
defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the
TIA have the meanings assigned to them by such
definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in
the plural include the singular.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may
be issued under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series. All
Securities of any one series and all coupons, if any, apper-
taining to Bearer Securities of such series shall be substan-
tially identical except as to currency of payments due thereun-
der, the denomination in which the Securities are issuable, the
rate or rates of interest, or method of determining the rate of
interest, if any, the maturity, the date from which interest,
if any, shall accrue and except as may otherwise be provided by
the Company in or pursuant to a Bond Resolution or in any sup-
plemental indenture pertaining to such series of Securities.
Each series shall be created by a Bond Resolution or a supple-
mental indenture that establishes the terms of the series,
which may include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate or rates, if any, or method of
calculating the interest rate;
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(4) the date or dates from which interest will
accrue;
(5) the record dates for interest payable on Regis-
tered Securities;
(6) the dates when principal and interest are
payable;
(7) the manner of paying principal and interest;
(8) the places where principal and interest are
payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemp-
tion by the Company;
(11) the terms of any repayment at the option of
Holders;
(12) the denominations in which Securities are
issuable;
(13) whether Securities will be issuable as Regis-
tered Securities or Bearer Securities;
(14) whether and upon what terms Registered Securi-
ties and Bearer Securities may be exchanged;
(15) whether any Securities will be represented by a
Security in global form;
(16) the terms of any global Security;
(17) the terms of any tax indemnity;
(18) the currencies (including any composite cur-
rency) in which principal or interest may be
paid;
(19) if payments of principal or interest may be made
in a currency other than that in which Securi-
ties are denominated, the manner for determining
such payments;
(20) if amounts of principal or interest may be
determined by reference to an index, formula or
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other method, the manner for determining such
amounts;
(21) provisions for electronic issuance of Securities
or for Securities in uncertificated form;
(22) the portion of principal payable upon accelera-
tion of a Discounted Security;
(23) any Events of Default or covenants in addition
to or in lieu of those set forth in this
Indenture;
(24) whether and upon what terms Securities may be
defeased;
(25) the forms of the Securities or any coupon, which
may be in the form of Exhibit A or B or
otherwise;
(26) any terms that may be required by or advisable
under U.S. or other applicable laws;
(27) whether and upon what terms the Securities will
be convertible into or exchangeable for Common
Stock of the Company, which may include the
terms provided in Article 9; and
(28) any other terms not inconsistent with this
Indenture.
All Securities of one series need not be issued at
the same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series
or to establish additional terms of such series of Securities.
The creation and issuance of a series and the authen-
tication and delivery thereof are not subject to any conditions
precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or
facsimile signature. The Company's seal may be reproduced on
the Securities. An Officer shall sign any coupons by facsimile
signature.
If an Officer whose signature is on a Security or its
coupons no longer holds that office at the time the Security is
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authenticated or delivered, the Security and coupons shall
nevertheless be valid.
A Security and its coupons shall not be valid until
the Security is authenticated by the manual signature of the
Registrar. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
Each Registered Security shall be dated the date of
its authentication. Each Bearer Security shall be dated the
date of its original issuance or as provided in the Bond
Resolution.
Securities may have notations, legends or endorse-
ments required by law, stock exchange rule, agreement or usage.
SECTION 2.03. Bond Agents.
The Company shall maintain an office or agency where
Securities may be authenticated ("Registrar"), where Securities
may be presented for registration of transfer or for exchange
("Transfer Agent"), where Securities may be presented for pay-
ment ("Paying Agent") and where Securities may be presented for
conversion ("Conversion Agent"). Whenever the Company must
issue or deliver Securities pursuant to this Indenture, the
Registrar shall authenticate the Securities at the Company's
written request. The Transfer Agent shall keep a register of
the Securities and of their transfer and exchange.
The Company may appoint more than one Registrar,
Transfer Agent, Paying Agent or Conversion Agent for a series.
The Company shall notify the Trustee of the name and address of
any Agent not a party to this Indenture. If the Company fails
to maintain a Registrar, Transfer Agent, Paying Agent or Con-
version Agent for a series, the Trustee shall act as such.
SECTION 2.04. Bearer Securities.
U.S. laws and Treasury Regulations restrict sales or
exchanges of and payments on Bearer Securities. Therefore,
except as provided below:
(1) Bearer Securities will be offered, sold and
delivered only outside the United States and
will be delivered only upon presentation of a
certificate in a form prescribed by the Company
to comply with U.S. laws and regulations.
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(2) Bearer Securities will not be issued in exchange
for Registered Securities.
(3) All payments of principal and interest (includ-
ing original issue discount) on Bearer Securi-
ties will be made outside the United States by a
Paying Agent located outside the United States
unless the Company determines that:
(A) such payments may not be made by such Pay-
ing Agent because the payments are illegal
or prevented by exchange controls as
described in Treasury Regulation
Section 1.163-5(c)(2)(v); and
(B) making the payments in the United States
would not have an adverse tax effect on the
Company.
If there is a change in the relevant provisions of
U.S. laws or Treasury Regulations or the judicial or adminis-
trative interpretation thereof, a restriction set forth in
paragraph (1), (2) or (3) above will not apply to a series if
the Company determines that the relevant provisions no longer
apply to the series or that failure to comply with the relevant
provisions would not have an adverse tax effect on the Company
or on Securityholders or cause the series to be treated as
"registration-required" obligations under U.S. law.
The Company shall notify the Trustee of any determi-
nations by the Company under this Section.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent for a
series other than the Trustee to agree in writing that the Pay-
ing Agent will hold in trust for the benefit of the persons
entitled thereto all money held by the Paying Agent for the
payment of principal of or interest on the series, and will
notify the Trustee of any default by the Company in making any
such payment.
While any such default continues, the Trustee may
require a Paying Agent to pay all money so held by it to the
Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent shall have no further liability
for the money.
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If the Company or an Affiliate acts as Paying Agent
for a series, it shall segregate and hold as a separate trust
fund all money held by it as Paying Agent for the series.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders. If the Trustee is
not the Transfer Agent, the Company shall furnish to the Trus-
tee semiannually and at such other times as the Trustee may
request a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders of
Registered Securities and Holders of Bearer Securities whose
names are on the list referred to below.
The Transfer Agent shall keep a list of the names and
addresses of Holders of Bearer Securities who file a request to
be included on such list (the "Bearer Securities List"). A
request will remain in effect for two years unless renewed or
amended.
Whenever the Company or the Trustee is required to
mail a notice to all Holders of Registered Securities of a
series, it also shall mail the notice to Holders of Bearer
Securities of the series whose names are on the Bearer Securi-
ties List.
Whenever the Company is required to publish a notice
to all Holders of Bearer Securities of a series, it also shall
mail the notice to such of them whose names are on the Bearer
Securities List.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented
to the Transfer Agent with a request to register a transfer or
to exchange them for an equal principal amount of Registered
Securities of other denominations of the series, the Transfer
Agent shall register the transfer or make the exchange if its
requirements for such transactions are met.
The Transfer Agent may require a Holder to pay a sum
sufficient to cover any taxes imposed on a transfer or
exchange.
If a series provides for Registered and Bearer Secu-
rities and for their exchange, Bearer Securities may be
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exchanged for Registered Securities and Registered Securities
may be exchanged for Bearer Securities as provided in the Secu-
rities or the Bond Resolution if the requirements of the Trans-
fer Agent for such transactions are met and if Section 2.04
permits the exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it
has been lost, destroyed or wrongfully taken, then, in the
absence of notice to the Company or the Trustee that the Secu-
rity or coupon has been acquired by a bona fide purchaser, the
Company shall issue a replacement Security or coupon if the
Company and the Trustee receive:
(1) evidence satisfactory to them of the loss,
destruction or taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their
expenses and any taxes for replacing the Secu-
rity or coupon.
A replacement Security of the same series shall contain identi-
cal terms and shall have coupons attached corresponding to
those, if any, on the original Security.
Every replacement Security or coupon is an additional
obligation of the Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the
Securities authenticated by the Registrar except for those can-
celled by it, those delivered to it for cancellation, and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08,
it ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to them that the replaced Security
is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01,
they cease to be outstanding and interest on them ceases to
accrue.
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A Security does not cease to be outstanding because
the Company or an Affiliate holds the Security.
SECTION 2.10. Discounted Securities.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction,
waiver or consent, the principal amount of a Discounted Secu-
rity shall be the amount of principal that would be due as of
the date of such determination if payment of the Security were
accelerated on that date.
SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affil-
iate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Bond Resolution so provides, the Company may
issue some or all of the Securities of a series in temporary or
permanent global form. A global Security may be in registered
form, in bearer form with or without coupons or in
uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global
Security or as endorsed thereon from time to time. At the Com-
pany's request, the Registrar shall endorse a global Security
to reflect the amount of any increase or decrease in the Secu-
rities represented thereby.
The Company may issue a global Security only to a
depository designated by the Company. A depository may trans-
fer a global Security only as a whole to its nominee or to a
successor depository.
The Bond Resolution may establish, among other
things, the manner of paying principal and interest on a global
Security and whether and upon what terms a beneficial owner of
an interest in a global Security may exchange such interest for
definitive Securities.
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The Company, an Affiliate, the Trustee and any Agent
shall not be responsible for any acts or omissions of a deposi-
tory, for any depository records of beneficial ownership inter-
ests or for any transactions between the depository and benefi-
cial owners.
SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for
delivery, the Company may use temporary Securities. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers
appropriate for temporary Securities. Temporary Securities may
be in global form. Temporary Bearer Securities may have one or
more coupons or no coupons. Without unreasonable delay, the
Company shall deliver definitive Securities in exchange for
temporary Securities.
SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the
Registrar for cancellation. The Transfer Agent and the Paying
Agent shall forward to the Registrar any Securities and coupons
surrendered to them for payment, exchange or registration of
transfer. The Registrar shall cancel all Securities or coupons
surrendered for payment, registration of transfer, exchange or
cancellation as follows: the Registrar will cancel all Regis-
tered Securities and matured coupons. The Registrar also will
cancel all Bearer Securities and unmatured coupons unless the
Company requests the Registrar to hold the same for redelivery.
Any Bearer Securities so held shall be considered delivered for
cancellation under Section 2.09. The Registrar shall destroy
cancelled Securities and coupons unless the Company otherwise
directs.
Unless the Bond Resolution otherwise provides, the
Company may not issue new Securities to replace Securities that
the Company has paid or that the Company has delivered to the
Registrar for cancellation.
SECTION 2.15. Defaulted Interest
If the Company defaults in a payment of interest on
Registered Securities, it need not pay the defaulted interest
to Holders on the regular record date. The Company may fix a
special record date for determining Holders entitled to receive
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defaulted interest or the Company may pay defaulted interest in
any other lawful manner.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before
maturity shall be redeemable in accordance with their terms
and, unless the Bond Resolution otherwise provides, in accor-
dance with this Article.
In the case of a redemption by the Company, the Com-
pany shall notify the Trustee of the redemption date and the
principal amount of Securities to be redeemed. The Company
shall notify the Trustee at least 45 days before the redemption
date unless a shorter notice is satisfactory to the Trustee.
If the Company is required to redeem Securities, it
may reduce the principal amount of Securities required to be
redeemed to the extent it is permitted a credit by the terms of
the Securities and it notifies the Trustee of the amount of the
credit and the basis for it. If the reduction is based on a
credit for acquired or redeemed Securities that the Company has
not previously delivered to the Registrar for cancellation, the
Company shall deliver the Securities at the same time as the
notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities of a series, with the
same issue date, interest rate, stated maturity and other
terms, are to be redeemed, the Trustee shall select the Securi-
ties to be redeemed by a method the Trustee considers fair and
appropriate. The Trustee shall make the selection from Securi-
ties of the series outstanding and not previously called for
redemption. The Trustee may select for redemption portions of
the principal of Securities having denominations larger than
the minimum denomination for the series. Securities and por-
tions thereof selected for redemption shall be in amounts equal
to the minimum denomination for the series or an integral mul-
tiple thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of
Securities called for redemption.
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SECTION 3.03. Notice of Redemption.
The election of the Company to redeem any Securities
shall be evidenced by or pursuant to a Bond Resolution. In
case of any redemption at the election of the Company of (a)
less than all of the Securities of any series or (b) all of the
Securities of any series, with the same issue date, interest
rate, stated maturity and other terms, the Company shall, at
least 60 days prior to the redemption date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such redemption date and of the principal
amount of Securities of such series to be redeemed.
At least 30 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption
by first-class mail to each Holder of Registered Securities
whose Securities are to be redeemed.
If Bearer Securities are to be redeemed, the Company
shall publish a notice of redemption in an Authorized Newspaper
as provided in the Securities.
A notice shall identify the Securities of the series
to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together
with all coupons, if any, maturing after the
redemption date, must be surrendered to the Pay-
ing Agent to collect the redemption price;
(5) that interest on Securities called for redemp-
tion ceases to accrue on and after the redemp-
tion date; and
(6) whether the redemption by the Company is manda-
tory or optional.
A redemption notice given by publication need not
identify Registered Securities to be redeemed.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at its expense.
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SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is given, Securities called
for redemption become due and payable on the redemption date at
the redemption price stated in the notice. The Transfer Agent
need not exchange or register the transfer of any Security
selected for redemption. The Transfer Agent need not exchange
or register the transfer of any Security for a period of 15
days before a selection of Securities to be redeemed.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall
deposit with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Securities to
be redeemed on that date.
When the Holder of a Security surrenders it for
redemption in accordance with the redemption notice, the Com-
pany shall pay to the Holder on the redemption date the redemp-
tion price and accrued interest to such date, except that:
(1) the Company will pay any such interest (except
defaulted interest) to Holders on the record
date of Registered Securities if the redemption
date occurs on an interest payment date; and
(2) the Company will pay any such interest to Hold-
ers of coupons that mature on or before the
redemption date upon surrender of such coupons
to the Paying Agent.
Coupons maturing after the redemption date on a
called Security are void absent a payment default on that date.
Nevertheless, if a Holder surrenders for redemption a Bearer
Security missing any such coupons, the Company and the Trustee
may deduct the face amount of such coupons from the redemption
price. If thereafter the Holder surrenders to the Paying Agent
the missing coupons, the Company will return the amount so
deducted. The Company also may waive surrender of the missing
coupons if it receives an indemnity bond satisfactory to the
Company and the Trustee.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in
part, the Company shall deliver to the Holder a new Security of
the same series containing identical terms and provisions equal
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in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
(1) The Company shall duly and punctually pay the
principal of (and premium, if any) and interest on a series in
accordance with the terms of the Securities for the series, any
related coupons, and this Indenture on the dates and in the
manner provided in the Securities and in this Indenture.
(2) Unless the Bond Resolution otherwise provides,
the Company shall pay interest on overdue principal of a series
of the Securities at the rate of interest or Yield to Maturity
(in the case of a Discounted Security) borne by such series of
Securities or at such other rate as may be specified in such
Security; and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.02. Corporate Existence.
Subject to Article 5, Company will do or cause to be
done all things necessary to preserve and keep in full force
and effect its corporate existence, material rights (charter
and statutory) and franchises; provided, however, that the Com-
pany shall not be required to preserve any such material right
or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of
the business of the Company.
SECTION 4.03. Limitations on Liens and Encumbrances.
The Company covenants that it will not, and it will
not permit any Subsidiary, directly or indirectly, to incur or
create any Lien on any property, assets or stock now owned or
hereafter acquired by the Company or any Subsidiary without
equally and ratably securing all series of Securities then out-
standing with the indebtedness secured by such Lien, other
than:
(1) Liens for taxes or assessments and similar
charges either (A) not delinquent or (B) being contested
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in good faith by appropriate proceedings and as to which
the Company or such Subsidiary, as the case may be, shall
have set aside on its books adequate reserves;
(2) Liens incurred or pledges and deposits made in
connection with workmen's compensation, unemployment
insurance, old-age pensions and social security benefits
or securing the performance of bids, tenders, leases, con-
tracts (other than for obligations incurred in connection
with the borrowing of money or the obtaining of advances
or credit), and statutory obligations of like nature,
incurred as an incident to and in the ordinary course of
business;
(3) materialmen's, mechanics', repairmen's, employ-
ees', operators' or other similar Liens or charges arising
in the ordinary course of business incidental to construc-
tion, maintenance or operation of any property of the Com-
pany or any Subsidiary which have not at the time been
filed pursuant to law and any such Liens and charges inci-
dental to construction, maintenance or operation of any
property of the Company or any Subsidiary, which, although
filed, relate to obligations not yet due or the payment of
which is being withheld as provided by law, or to obliga-
tions the validity of which is being contested in good
faith by appropriate proceedings;
(4) zoning restrictions, easements, licenses, reser-
vations, provisions, covenants, conditions, waivers,
restrictions on the use of property or minor irregulari-
ties of title (and with respect to leasehold interests,
mortgages, obligations, Liens and other encumbrances
incurred, created, assumed or permitted to exist and aris-
ing by, through or under or asserted by a landlord or
owner of the leased property, with or without consent of
the lessee), which will not individually or in the aggre-
gate interfere materially with the use or operation by the
Company or any Subsidiary of the property affected thereby
for the purposes for which such property was acquired or
is held by the Company or any Subsidiary;
(5) Liens created by or resulting from any liti-
gation or proceeding which is being contested in good
faith by appropriate proceedings and as to which levy and
execution have been stayed and continue to be stayed;
(6) Liens consisting of repurchase agreements, swaps
or other obligations entered into in the ordinary course
of business relating to precious metals purchased, bor-
rowed or otherwise held by the Company or any Subsidiary;
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(7) Liens incidental to the conduct of its business
or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not in the
aggregate materially detract from the value of the prop-
erty or assets subject thereto or materially impair the
use thereof in the operation of its business;
(8) Liens on property or assets of a Subsidiary to
secure obligations of such Subsidiary to the Company or
another Subsidiary;
(9) Liens arising in connection with letter of
credit trade transactions, provided that the Company or
the Subsidiary, as the case may be, discharges within 60
days its obligation to pay the indebtedness to banks aris-
ing from payments made by such banks under such letters of
credit; and
(10) other Liens, provided that the aggregate of all
properties and assets of the Company and the Subsidiaries
which are subject to or affected by such Liens and which
would properly be classified as assets on a consolidated
balance sheet prepared in accordance with GAAP (including
all leases (other than leases of office space and leases
of research and development facilities, if any) that would
be required to be reflected as capital leases pursuant to
such principles) does not at any time have a value on the
books of the Company and the Subsidiaries in excess of 25%
of the Consolidated Tangible Net Worth of the Company and
the Subsidiaries calculated for the quarter most recently
ended.
SECTION 4.04. Limitations on Sale and Leaseback Transactions.
The Company will not, and will not permit any Sig-
nificant Subsidiary to, directly or indirectly, sell or trans-
fer (other than to the Company or a Significant Subsidiary) any
Principal Property with the intention that the Company or any
Significant Subsidiary take back a lease thereof which (i) has
a term of more than three years or (ii) is renewable at the
option of the Company or such Significant Subsidiary for an
aggregate period or periods of more than three years from the
date of commencement thereof unless (a) the Company promptly
gives notice of such sale to the Trustee, and either (b) the
Principal Property owned by the Company or a Significant Sub-
sidiary immediately prior to such sale could have been sub-
jected to a Lien to secure indebtedness without any violation
of Section 4.03 and without securing the Securities as
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contemplated by Section 4.03 or (c) the net proceeds of such
sale are applied within 270 days either before or after the
effective date of any such transaction (i) to the retirement of
indebtedness of the Company or any Subsidiary (other than Secu-
rities of any series at the time outstanding) or (ii) to the
redemption of Securities of any series at the time outstanding,
if permissible under Article 3 and the terms of Securities of
such series therein referred to, at a redemption price equal to
the principal amount thereof plus the then applicable premium,
if any, together with accrued interest, if any, or (iii) to the
purchase of property, securities or other assets (other than
the Principal Property involved in such sale) having a value at
least equal to the net proceeds of such sale, or (d) the Com-
pany shall deliver to the Trustee for cancellation Securities
in an aggregate principal amount at least equal to the net pro-
ceeds of such sale (less any amounts applied in accordance with
clause (c)). The notice to the Trustee provided for in clause
(a) above shall state the amount of the net proceeds of such
sale and shall be accompanied by an Officer's Certificate to
the effect that the requirements of this Section have been com-
plied with. Any one or more of the applications permitted by
clause (c) may be combined with any other such application, or
with cancellation of Securities permitted by clause (d).
SECTION 4.05. SEC Reports.
The Company shall file with the Trustee within 30
days after it is required to file them with the SEC copies of
the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) which the Com-
pany is required to file with the SEC pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934. The Company also
shall comply with the other provisions of TIA Section 314(a).
SECTION 4.06. Annual Review Certificate.
The Company shall file with the Trustee within 120
days after the end of each fiscal year of the Company an Offic-
ers' Certificate stating:
(1) that the signing officers have supervised a
review of the activities of the Company and its Subsidiar-
ies during the preceding fiscal year to determine whether
the Company has observed and performed its obligations
under this Indenture; and
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(2) that to the best knowledge of each officer sign-
ing such certificate the Company has observed and per-
formed all of its covenants in this Indenture and is not
in default in the observance and performance of any of the
terms, provisions and conditions of this Indenture (or if
the Company is in such default, specifying those defaults
and the nature thereof of which he has knowledge).
Such certificate need not comply with Section 11.05.
SECTION 4.07. Notice to Trustee of Certain Defaults.
The Company shall give the Trustee within 30 days
written notice of (a) any failure of the kind described in Sec-
tion 6.01(3) which remains uncured for 30 days after the Com-
pany has knowledge thereof, or (b) an event of default
described in Section 6.01(4).
SECTION 4.08. Further Assurances to Trustee.
The Company will, upon request of the Trustee, exe-
cute and deliver such further instruments and do such further
acts as may reasonably be necessary or proper to carry out more
effectively the purposes of this Indenture.
ARTICLE FIVE
SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into,
or transfer all or substantially all of its assets to, any per-
son unless:
(1) the person is organized under the laws of the
United States of America or a State thereof;
(2) the person assumes by supplemental indenture all
the obligations of the Company under this Inden-
ture, the Securities and any coupons;
(3) immediately after the transaction no Default
exists; and
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(4) if, as a result of the transaction, any proper-
ties or assets of the Company would become sub-
ject to a Lien not permitted by Section 4.03,
the Company or such person secures the Securi-
ties equally and ratably with or prior to all
obligations secured by the Lien.
The successor shall be substituted for the Company,
and thereafter all obligations of the Company under this Inden-
ture, the Securities and any coupons shall terminate.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" with respect to a series of the
Securities occurs if:
(1) the Company defaults in the payment of
interest on a Security of such series when the same
becomes due and payable and the default continues for
a period of 30 days;
(2) the Company defaults in the payment of the
principal of a Security of such series when the same
becomes due and payable at maturity, upon redemption
or otherwise, or in the making of any sinking fund
payment, if any, required by the terms of such
series;
(3) the Company fails to comply with any of its
other covenants, conditions or agreements in the
Securities of such series or this Indenture and the
default continues for the period and after the notice
specified below;
(4) the Company, pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an
order for relief against it in an invol-
untary case,
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(C) consents to the appointment of
a Custodian of it or for all or substan-
tially all of its property, or
(D) makes a general assignment for
the benefit of its creditors;
(5) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Com-
pany in an involuntary case,
(B) appoints a Custodian of the
Company for all or substantially all of
its property, or
(C) orders the liquidation of the
Company, and the order or decree remains
unstayed and in effect for 90 days;
(6) a default under any bond, debenture, note
or other evidence of indebtedness for money borrowed
by the Company (including a default with respect to
Securities of any series other than that series) or
under any mortgage, indenture or instrument under
which there may be issued or by which there may be
secured or evidenced any indebtedness for money bor-
rowed by the Company (including this Indenture),
whether such indebtedness now exists or shall here-
after be created, which default shall involve an
amount in excess of $50,000,000, and shall constitute
a failure to pay such indebtedness when due and pay-
able after the expiration of any applicable grace
period with respect thereto and shall have resulted
in such indebtedness becoming or being declared due
and payable prior to the date on which it would
otherwise have become due and payable, without such
indebtedness having been discharged, or such acceler-
ation having been rescinded or annulled within a
period of 30 days after there shall have been given,
by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the
outstanding Securities of that series a written
notice specifying such default and requiring the Com-
pany to cause such indebtedness to be discharged or
cause such acceleration to be rescinded or annulled
and stating that such notice is a "Notice of Default"
hereunder; or
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(7) any other Event of Default provided with
respect to Securities of that series.
The term "Bankruptcy Law" means Title 11, U.S. Code
or any similar Federal or State law for the relief of debtors.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
A default under clause (3) is not an Event of Default
with respect to a series of the Securities until the Trustee or
the Holders of at least 25% in principal amount of the out-
standing Securities of such series notify the Company of the
default and the Company does not cure the default within 60
days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice
is a "Notice of Default."
SECTION 6.02. Acceleration.
If an Event of Default with respect to a series of
the Securities occurs and is continuing, the Trustee by notice
to the Company, or the Holders of at least 25% in principal
amount of the outstanding Securities of such series by notice
to the Company and the Trustee, may declare the principal and
accrued interest on all the Securities of such series to be due
and payable immediately. Upon such declaration, such principal
(or, if the Securities of a series are Discounted Securities,
such portion of the principal due and payable immediately. The
Holders of a majority in principal amount of the outstanding
Securities of such series by notice to the Trustee may rescind
or annul such acceleration and its consequences if all existing
Events of Default with respect to such series have been cured
or waived pursuant to Section 6.04 and if the rescission would
not conflict with any judgment or decree.
SECTION 6.03. Other Remedies.
(1) If an Event of Default with respect to a
series of the Securities occurs and is continuing,
the Trustee may pursue any available remedy by pro-
ceeding at law or in equity to collect the payment of
principal or interest on the Securities of such
series or to enforce the performance of any provision
of the Securities of such series or this Indenture,
and may take any necessary action required of it as
Trustee to settle, compromise, adjust or otherwise
conclude any proceedings to which it is a party.
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(2) The Trustee may maintain a proceeding even
if it does not possess any of the Securities or does
not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event
of Default. No remedy is exclusive of any other rem-
edy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
Subject to Section 10.02, the Holders of a majority
in principal amount of the outstanding Securities of a series
by notice to the Trustee may waive an existing Default with
respect to such series and its consequences. When a Default is
waived with respect to a series of the Securities, it is cured
and stops continuing with respect to such series.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the
outstanding Securities of a series may direct the time, method
and place of conducting any proceeding with respect to such
series for any remedy available to the Trustee or exercising
any trust or power conferred on it. The Trustee, however, may
refuse to follow any direction that conflicts with law or this
Indenture, that is unduly prejudicial to the rights of another
Holder of a Security of such series, that would involve the
Trustee in personal liability, or if the Trustee does not have
sufficient indemnification against any loss or expense.
SECTION 6.06. Limitations on Suits.
(1) A Holder of a Security of a series may not
pursue any remedy with respect to this Indenture or
the Securities of such series unless:
(A) the Holder gives to the Trus-
tee written notice of a continuing Event
of Default with respect to such series;
(B) the Holders of at least 25% in
principal amount of the outstanding
Securities of such series make a written
request to the Trustee to pursue the
remedy with respect to such series;
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(C) such Holder or Holders offer
to the Trustee indemnity satisfactory to
the Trustee against any loss, liability
or expense; and
(D) the Trustee does not comply
with the request within 60 days after
receipt of the request and the offer of
indemnity.
(2) a Securityholder may not use this Indenture
to prejudice the rights of another Securityholder of
the same series or to obtain a preference or priority
over the other Securityholder of the same series.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Inden-
ture, the right of a Holder of a Security to receive payment of
principal and interest on such Security, on or after the
respective due dates expressed in such Security, or to bring
suit for the enforcement of any such payment on or after such
respective dates, shall be absolute and unconditional and not
be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default with respect to a series of
the Securities in payment of interest or principal or premium,
if any, specified in Section 6.01(1) and (2) occurs and is con-
tinuing, the Company will, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities, and the
Trustee may obtain judgment in its own name and as trustee of
an express trust and enforce the same against the Company for
the whole amount of principal and interest remaining unpaid
with respect to such series of the Securities.
SECTION 6.09. Trustee May File Proofs of Claims.
The Trustee may, and is appointed the true and lawful
attorney-in-fact for the Holders of the Securities to, (a) file
such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trus-
tee and the Securityholders allowed in any judicial proceedings
relative to the Company, its creditors or its property,
(b) collect and receive any monies or property payable or
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deliverable on account of such claims as trustee of a construc-
tive trust or as holder of an equitable lien against the Com-
pany or regarding its assets, and (c) distribute the same after
deduction of its charges and expenses to the extent that such
charges and expenses are not paid out of the estate in any such
proceeding.
SECTION 6.10. Priorities.
(1) If the Trustee collects any money pursuant
to this Article with respect to a series of the Secu-
rities, it shall pay out the money in the following
order:
First: to the Trustee for amounts due under
Section 7.07;
Second: to Holders of the Securities of such
series for amounts due and unpaid on the Securities
of such series for principal (and premium, if any)
and interest, ratably, without preference or priority
of any kind according to the amounts due and payable
on the Securities of such series for principal and
interest, respectively; and
Third: the balance, if any, to the Company.
(2) The Trustee may fix a record date and pay-
ment date for any payment to Holders of Securities of
the relevant series.
SECTION 6.11. Undertaking for Costs.
All parties to this Indenture agree, and each Holder
of any Security by his acceptance thereof shall be deemed to
have agreed, that in any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trus-
tee for any action taken or omitted by it as Trustee, a court
in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party liti-
gant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.07, or a suit by a Holder or
Holders of more than 10% in principal amount of the outstanding
Securities of a series.
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SECTION 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has insti-
tuted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or aban-
doned 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 Trus-
tee and the Holders of Securities shall be restored severally
and respectively to their former positions hereunder and there-
after all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been
instituted.
SECTION 6.13. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities 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 6.14. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder
of any Security 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 acquies-
cence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders of Securities may be
exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities as
the case may be.
SECTION 6.15. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may law-
fully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby
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expressly waives all benefit or advantage of any such law, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(1) If an Event of Default actually known to the
Trustee has occurred and is continuing, the Trustee shall exer-
cise such of the rights and powers vested in it by this Inden-
ture and use the same degree of care and skill in their exer-
cise as a prudent person would exercise or use under the cir-
cumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of
Default actually known to the Trustee:
(A) The Trustee need perform only those duties as
are specifically set forth herein and no others and no
implied covenants or obligations shall be read into this
Indenture against the Trustee.
(B) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions and such other doc-
uments delivered to it pursuant to Section 11.04 hereof
furnished to the Trustee and conforming to the require-
ments of this Indenture. However, the Trustee shall exam-
ine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(A) This paragraph does not limit the effect of
paragraph (2) of this Section 7.01.
(B) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts.
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(C) 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 6.05.
(4) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or to take or omit to take any action under this
Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it or it does not
receive an indemnity satisfactory to it in its sole discretion
against such risk, liability, loss, fee or expense which might
be incurred by it in compliance with such request or direction.
(5) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (1), (2),
(3) and (4) of this Section 7.01.
(6) 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.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(1) The Trustee may rely on any document believed by
it to be genuine and to have been signed or pre-
sented by the proper person. The Trustee need
not investigate any fact or matter stated in the
document.
(2) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an
Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take
in good faith in reliance on the Certificate or
Opinion.
(3) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence
of any agent appointed with due care.
(4) The Trustee shall not be liable for any action
it takes or omits to take in good faith which it
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believes to be authorized or within its rights
or powers.
(5) Any Agent shall have the same rights and be pro-
tected to the same extent as if it were Trustee.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities or coupons and
may otherwise deal with the Company or an Affiliate with the
same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the valid-
ity or adequacy of this Indenture or the Securities or any cou-
pons; it shall not be accountable for the Company's use of the
proceeds from the Securities; it shall not be responsible for
any statement in the Securities or any coupons; it shall not be
responsible for any overissue; it shall not be responsible for
determining whether the form and terms of any Securities or
coupons were established in conformity with this Indenture; and
it shall not be responsible for determining whether any Securi-
ties were issued in accordance with this Indenture.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing on a series and
if it is known to the Trustee, the Trustee shall mail a notice
of the Default within 90 days after it occurs to Holders of
Registered Securities of the series. Except in the case of a
Default in payment on a series, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the
interest of Holders of the series. The Trustee shall withhold
notice of a Default described in Section 6.01(3) until at least
90 days after it occurs.
SECTION 7.06. Reports by Trustee to Holders.
Any report required by TIA Section 313(a) to be mailed to
Securityholders shall be mailed by the Trustee on or before
June 30 of each year. The Trustee also shall comply with TIA
Section 313(b), (c) and (d).
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A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock
exchange on which any Securities are listed. The Company shall
notify the Trustee when any Securities are listed on a stock
exchange.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to
time reasonable compensation for its services. The Trustee's
compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any
loss or liability incurred by it. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall coop-
erate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made
without its prior written consent, which consent shall not be
unreasonably withheld.
The Company need not reimburse any expense or indem-
nify against any loss or liability incurred by the Trustee
through negligence or bad faith.
To secure the Company's payment obligations in this
Section, the Trustee shall have a lien prior to the Securities
and any coupons on all money or property held or collected by
the Trustee, except that held in trust to pay principal or
interest on particular securities.
SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appoint-
ment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided
in this Section.
The Trustee may resign by so notifying the Company.
The Holders of a majority in principal amount of the Securities
may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee with the Company's consent.
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The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA Section 310(a) or
Section 310(b) or with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a Custodian or other public officer takes charge
of the Trustee or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section
6.01(4) or (5) occurs with respect to the
Trustee.
The Company also may remove the Trustee with or with-
out cause if the Company so notifies the Trustee three months
in advance and if no Default occurs during the three-month
period.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company
shall promptly appoint a successor Trustee.
If a successor Trustee does not take office within 30
days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company or the Holders of a majority in
principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with TIA Section 310(a) or
Section 310(b) or with Section 7.10, any Securityholder may petition
any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written accep-
tance of its appointment to the retiring Trustee and to the
Company. Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under
this Indenture. The successor Trustee shall mail a notice of
its succession to Holders of Registered Securities. The retir-
ing Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided
for in Section 7.07.
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SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which
shall be eligible to act as Trustee under TIA Sections 310(a)(1) and
310(a)(2). The Trustee shall have a combined capital and sur-
plus of at least $100,000,000 as set forth in its most recent
published annual report of condition. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of
TIA Section 310(b), the Trustee and the Company shall comply with the
provisions of TIA Section 310(b). If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
SECTION 7.11. Preferential Collection of Claims
Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee
who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance
with their terms and, unless the Bond Resolution otherwise pro-
vides, in accordance with this Article.
The Company at any time may terminate as to a series
all of its obligations under this Indenture, the Securities of
the series and any related coupons ("legal defeasance option").
The Company at any time may terminate as to a series its obli-
gations under Sections 4.03 and 4.04 provided that none of its
obligations in the Sections set forth in the immediately suc-
ceeding sentence may be terminated ("covenant defeasance
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option"). However, in the case of the legal defeasance option,
the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 7.07 and 7.08 shall survive until the Securities of
the series are no longer outstanding; thereafter the Company's
obligations in Section 7.07 shall survive.
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its legal defeasance option,
a series may not be accelerated because of an Event of Default.
If the Company exercises its covenant defeasance option, a
series may not be accelerated by reference to Section 4.03 or
Section 4.04.
The Trustee upon request shall acknowledge in writing
the discharge of those obligations that the Company terminates.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal
defeasance option or its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with
the Trustee or another trustee money or U.S.
Government Obligations;
(2) the Company delivers to the Trustee a certifi-
cate from a nationally recognized firm of inde-
pendent accountants expressing their opinion
that the payments of principal and interest when
due on the deposited U.S. Government Obligations
without reinvestment plus any deposited money
without investment will provide cash at such
times and in such amounts as will be sufficient
to pay principal and interest when due on all
the Securities of the series to maturity or
redemption, as the case may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under
any other agreement binding on the Company;
(5) the deposit does not cause the Trustee to have a
conflicting interest under TIA Section 310(a) or
Section 310(b) as to another series;
(6) the Company delivers to the Trustee an Opinion
of Counsel to the effect that Holders of the
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series will not recognize income, gain or loss
for Federal income tax purposes as a result of
the defeasance;
(7) the Company delivers to the Trustee an Opinion
of Counsel to the effect that the trust result-
ing from the deposit does not constitute, or is
qualified as, a regulated investment company
under the Investment Company Act of 1940; and
(8) 91 days pass after the deposit is made and dur-
ing the 91-day period no Default specified in
Section 6.01(4) or (5) occurs that is continuing
at the end of the period.
Before or after a deposit the Company may make
arrangements satisfactory to the Trustee for the redemption of
Securities at a future date in accordance with Article 3.
"U.S. Government Obligations" means direct obliga-
tions of the United States which have the full faith and credit
of the United States pledged for payment and which are not
callable at the issuer's option, or certificates representing
an ownership interest in such obligations.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Govern-
ment Obligations deposited with it pursuant to Section 8.02.
It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accor-
dance with this Indenture to the payment of principal and
interest on Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn
over to the Company upon request any excess money or securities
held by them at any time.
The Trustee and the Paying Agent shall pay to the
Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years.
After payment to the Company, Securityholders entitled to the
money must look to the Company for payment as unsecured general
creditors unless an abandoned property law designates another
person.
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ARTICLE NINE
CONVERSION
SECTION 9.01. Conversion Privilege.
If the Bond Resolution establishing the terms of a
series of securities so provides Securities of any series may
be convertible into or for Common Stock (a "Conversion Right").
The Bond Resolution may establish, among other things, the Con-
version Rate, provisions for adjustments to the Conversion Rate
and limitations upon exercise of the Conversion Right.
A Holder may convert a portion of a Security if the
portion is $1,000 or an integral multiples thereof. Provisions
of this Indenture that apply to the conversion of the aggregate
principal amount a Security also apply to conversion of a por-
tion of it.
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all
requirements in the Securities or the Bond Resolution and
(i) complete and manually sign the conversion notice (the "Con-
version Notice") provided for in the Bond Resolution or the
Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other
office or agency maintained for such purpose, (ii) surrender
the Security to the Conversion Agent or at such other office or
agency by physical delivery, (iii) if required, furnish appro-
priate endorsements and transfer documents, and (iv) if
required, pay all transfer or similar taxes. The date on which
such notice shall have been received by and the Security shall
have been so surrendered to the Conversion Agent is the "Con-
version Date." Such Conversion Notice shall be irrevocable and
may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conver-
sion of Securities not later than the fifth business day fol-
lowing the Conversion Date in respect of the cash portion
elected to be delivered in lieu of shares and not later than
the seventh business day following the Conversion Date in
respect of the portion to be settled in Common Stock.
If any Security is converted between the record date
for the payment of interest and the next succeeding interest
payment date, such Security must be accompanied by funds equal
to the interest payable on such succeeding interest payment
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date on the principal amount so converted (unless such Security
shall have been called for redemption during such period, in
which case no such payment shall be required). A Security con-
verted on an interest payment date need not be accompanied by
any payment, and the interest on the principal amount of the
Security being converted will be paid on such interest payment
date to the registered holder of such Security on the immedi-
ately preceding record date. Subject to the aforesaid right of
the registered holder to receive interest, no payment or
adjustment will be made on conversion for interest accrued on
the converted Security or for interest, dividends or other dis-
tributions payable on any security issued on conversion.
If a Holder converts more than one Security at the
same time, the number of full shares issuable or cash payable
upon the conversion shall be based on the total principal
amount of the Securities converted.
Upon surrender of a Security that is converted in
part the Trustee shall authenticate for the Holder a new Secu-
rity equal in principal amount to the unconverted portion of
the Security surrendered; except that if a Global Security is
so surrendered the Trustee shall authenticate and deliver to
the Depositary a new Global Security in a denomination equal to
and in exchange for the unconverted portion of the principal of
the Global Security so surrendered.
If the last day on which a Security may be converted
is a Legal Holiday in a place where a Conversion Agent is
located, the Security may be surrendered to that Conversion
Agent on the next succeeding day that is not a Legal Holiday.
SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion
Right, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of shares of Common
Stock upon the conversion. However, the Holder shall pay any
such tax which is due because securities or other property are
issued in a name other than the Holder's name. Nothing herein
shall preclude any income tax or other withholding required by
law or regulations.
SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors must
make pursuant to this Article 9 is conclusive, absent manifest
error.
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SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the
Company) has no duty to determine when or if an adjustment
under this Article 9 or any Bond Resolution should be made, how
it should be made or calculated or what it should be. The
Trustee (and each Conversion Agent other than the Company)
makes no representation as to the validity or value of any
shares issued upon conversion of Securities. The Trustee (and
each Conversion Agent other than the Company) shall not be
responsible for the Company's failure to comply with this
Article 9 or any provision of a Bond Resolution relating to a
Conversion Right.
SECTION 9.06. Company to Provide Conversion Securities.
The Company shall reserve out of its authorized but
unissued Common Stock or its Common Stock held in treasury suf-
ficient shares to permit the conversion of all of the Securi-
ties convertible into Common Stock.
All shares of Common Stock of any person which may be
issued upon conversion of the Securities shall be validly
issued, fully paid and non-assessable.
The Company will comply with all securities laws reg-
ulating the offer and delivery of securities upon conversion of
Securities.
SECTION 9.07. Cash Settlement Option.
If the Bond Resolution so provides, the Company may
elect to satisfy, in whole or in part, a Conversion Right of
Securities convertible into Common Stock of any person by the
delivery of cash. The amount of cash to be delivered shall be
equal to the Market Price (as defined below) on the last Stock
Trading Day preceding the applicable Conversion Date of a share
of Common Stock multiplied by the number of shares of Common
Stock in respect of which the Company elects to deliver cash.
If the Company elects to satisfy, in whole or in part, a Con-
version Right by the delivery of shares of Common Stock, no
fractional shares will be delivered. Instead, the Company will
pay cash based on the Market Price for such fractional share of
Common Stock.
The "Market Price" of the Common Stock into which
Securities may be converted pursuant to a Bond Resolution or
this Article 9 on any Stock Trading Day means the weighted
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average per share sale price for all sales of the Common Stock
on such Stock Trading Day (or, if the information necessary to
calculate such weighted average per share sale price is not
reported, the average of the high and low sale prices, or if no
sales are reported, the average of the bid and ask prices or,
if more than one in either case, the average of the average bid
and average ask prices), as reported in the composite transac-
tions for the New York Stock Exchange, or if the Common Stock
is not listed or admitted to trading on such exchange, as
reported in the composite transactions for the principal
national or regional United States securities exchange on which
the Common Stock is listed or admitted to trading or, if the
Common Stock is not listed or admitted to trading on a United
States national or regional securities exchange, as reported by
NASDAQ or by the National Quotation Bureau Incorporated. In
the absence of such quotations, the Company shall be entitled
to determine the Market Price on the basis of such quotations
as it considers appropriate.
SECTION 9.08. Adjustment in Conversion Rate
for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(3) combines its outstanding shares of Common Stock
into a smaller number of shares;
(4) pays a dividend or makes a distribution on its
Common Stock in shares of its Capital Stock other than
Common Stock; or
(5) issues by reclassification of its Common Stock
any shares of its capital stock,
then the conversion privilege and the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the
Holder of a Security thereafter converted may receive the num-
ber of shares of Capital Stock of the Company (or, at the Com-
pany's option, an equivalent amount in cash) which he would
have owned immediately following such action if he had con-
verted the Security immediately prior to such action.
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The adjustment shall become effective immediately
after the record date in the case of a dividend or distribution
and immediately after the effective date in the case of a sub-
division, combination or reclassification.
If after an adjustment a Holder of a Security may,
upon conversion, receive shares of two or more classes of Capi-
tal Stock of the Company, the Board of Directors of the Company
shall determine the allocation of the adjusted Conversion Rate
between or among the classes of Capital Stock. After such
allocation, the conversion privilege and the Conversion Rate of
each class of Capital Stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common
Stock in this Article.
SECTION 9.09. Adjustment in Conversion Rate for
Common Stock Issued Below Market Price.
If the Company issues to all holders of Common Stock
rights, options or warrants to subscribe for or purchase shares
of Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock, or rights, options or
warrants to subscribe for or purchase such convertible or
exchangeable securities at a Price Per Share (as defined and
determined according to the formula given below) lower than the
current Market Price on the date of such issuance, the Conver-
sion Rate shall be adjusted in accordance with the following
formula:
AC = CC x O + N___
O + (R)
M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares outstanding immediately prior to such
issuance (which number shall include shares owned or held
by or for the account of the Company).
N = the "Number of Shares," which (i) in the case of rights,
options or warrants to subscribe for or purchase shares of
Common Stock or of securities convertible into or
exchangeable for shares of Common Stock, is the maximum
number of shares of Common Stock initially issuable upon
exercise, conversion or exchange thereof; and (ii) in the
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case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable securities, is the
maximum number of shares of Common Stock initially issu-
able upon the conversion or exchange of the convertible or
exchangeable securities issuable upon the exercise of such
rights, options or warrants.
R = the proceeds received or receivable by the Company, which
(i) in the case of rights, options or warrants to sub-
scribe for or purchase shares of Common Stock or of secu-
rities convertible into or exchangeable for shares of Com-
mon Stock, is the aggregate amount received or receivable
by the Company in consideration for the sale and issuance
of such rights, options, warrants or convertible or
exchangeable securities, plus the minimum aggregate amount
of additional consideration, other than the convertible or
exchangeable securities, payable to the Company upon exer-
cise, conversion or exchange thereof; and (ii) in the case
of rights, options or warrants to subscribe for or pur-
chase convertible or exchangeable securities, is the
aggregate amount received or receivable by the Company in
consideration for the sale and issuance of such rights,
options or warrants, plus the minimum aggregate considera-
tion payable to the Company upon the exercise thereof,
plus the minimum aggregate amount of additional considera-
tion, other than the convertible or exchangeable securi-
ties, payable upon the conversion or exchange of the con-
vertible or exchangeable securities; provided, that in
each case the proceeds received or receivable by the Com-
pany shall be deemed to be the amount of gross cash pro-
ceeds without deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase
thereof by underwriters or dealers or others performing
similar services or any expenses incurred in connection
therewith.
M = the current Market Price per share of Common Stock on the
date of issue of the rights, options or warrants to sub-
scribe for or purchase shares of Common Stock or the secu-
rities convertible into or exchangeable for shares of Com-
mon Stock or the rights, options or warrants to subscribe
for or purchase convertible or exchangeable securities.
"Price Per Share" shall be defined and determined accord-
ing to the following formula:
P = R
N
where:
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P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants
or convertible or exchangeable securities for a consideration
consisting, in whole or in part, of property other than cash
the amount of such consideration shall be determined in good
faith by the Board of Directors whose determination shall be
conclusive and evidenced by a resolution of the Board of Direc-
tors filed with the Trustee.
The adjustment shall be made successively whenever
any such additional rights, options, warrants or convertible or
exchangeable securities are issued, and shall become effective
immediately after the date of issue of such shares, rights,
options, warrants or convertible or exchangeable securities.
To the extent that such rights, options or warrants
expire unexercised or to the extent any convertible or
exchangeable securities are redeemed by the Company or other-
wise cease to be convertible or exchangeable into shares of
Common Stock, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect had the adjust-
ment made upon the date of issuance of such rights, options,
warrants or convertible or exchangeable securities been made
upon the basis of the issuance of rights, options or warrants
to subscribe for or purchase only the number of shares of Com-
mon Stock as to which such rights, options or warrants were
actually exercised and the number of shares of Common Stock
that were actually issued upon the conversion or exchange of
the convertible or exchangeable securities.
SECTION 9.10. Adjustment for Other Distributions.
If the Company distributes to all holders of its Com-
mon Stock any of its assets or debt securities or any rights or
warrants to purchase assets or debt securities of the Company,
the Conversion Rate shall be adjusted in accordance with the
following formula:
AC = CC x __(O x M)__
(O x M) - F
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
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O = the number of shares of Common Stock outstanding on the
record date mentioned below (which number shall include
shares owned or held by or for the account of the
Company).
M = the current Market Price per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants distributed. The Board of
Directors of the Company shall determine the fair market
value.
The adjustment shall become effective immediately
after the record date for the determination of stockholders
entitled to receive the distribution.
This Section does not apply to cash dividends or dis-
tributions or to reclassifications or distributions referred to
in Section 9.08. Also, this Section does not apply to shares
issued below Market Price referred to in Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion
Rate, temporarily or otherwise, by any amount but in no event
shall such Conversion Rate result in the issuance of Common
Stock at a price less than the par value of the Common Stock at
the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made
unless the adjustment would require a change of at least 1% in
the Conversion Rate. Any adjustments that are not made due to
the immediately preceding sentence shall be carried forward and
taken into account in any subsequent adjustment; provided, that
any adjustment carried forward shall be deferred not in excess
of three years, whereupon any adjustment to the Conversion Rate
will be effected.
All calculations under this Article 9 shall be made
to the nearest cent or to the nearest 1/100th of a share, as
the case may be.
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SECTION 9.13. When No Adjustment Required.
Except as set forth in Section 9.09, no adjustment in
the Conversion Rate shall be made because the Company issues,
in exchange for cash, property or services, shares of Common
Stock, or any securities convertible into shares of Common
Stock, or securities carrying the right to purchase shares of
Common Stock or such convertible securities.
No adjustment in the Conversion Rate need be made for
rights to purchase or the sale of Common Stock pursuant to a
Company plan providing for reinvestment of dividends or
interest.
No adjustment in the Conversion Rate need be made for
a change in the par value of the Common Stock.
No adjustment need be made for a transaction referred
to in Section 9.08, 9.09 or 9.10 if Securityholders are to par-
ticipate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock
participate in the transaction.
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company
shall promptly mail to Holders of Securities affected a notice
of the adjustment. The Company shall file with the Trustee an
Officers' Certificate or a certificate from the Company's inde-
pendent public accountants stating the facts requiring the
adjustment and the manner of computing it. The certificate
shall be conclusive evidence that the adjustment is correct,
absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that
would require an adjustment in the Conversion Rate,
(2) the Company proposes to take any action that
would require a supplemental indenture pursuant to
Section 9.16, or
(3) there is a proposed liquidation or dissolution
of the Company,
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the Company shall mail to Holders of Securities of any affected
series a notice stating the proposed record date for a dividend
or distribution or the proposed effective date of a subdivi-
sion, combination, reclassification, consolidation, merger,
transfer, lease, liquidation or dissolution. The Company shall
mail the notice at least 15 days before such date. Failure to
mail the notice or any defect in it shall not affect the valid-
ity of the transaction.
SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to
Section 5.01 or a merger which reclassifies, exchanges, or
changes its outstanding Common Stock, the successor corporation
(if other than the Company) shall enter into a supplemental
indenture which shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or
other assets which he would have owned immediately after the
consolidation, merger, transfer or lease if he had converted
the Security immediately before the effective date of the
transaction. The supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be prac-
tical to the adjustments provided for in this Article. The
successor company shall mail to Holders of Securities of any
affected series a notice briefly describing the supplemental
indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10
do not apply.
ARTICLE TEN
AMENDMENTS
SECTION 10.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture, the
Securities or any coupons without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
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(3) to provide that specific provisions of this
Indenture shall not apply to a series not previ-
ously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or
more series; or
(6) to make any change that does not materially
adversely affect the rights of any
Securityholder.
SECTION 10.02. With Consent of Holders.
Unless the Bond Resolution otherwise provides, the
Company and the Trustee may amend this Indenture, the Securi-
ties and any coupons with the written consent of the Holders of
a majority in principal amount of the Securities of all series
affected by the amendment voting as one class. However, with-
out the consent of each Securityholder affected, an amendment
under this Section may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment;
(2) reduce the interest on or change the time for
payment of interest on any Security;
(3) change the fixed maturity of any Security;
(4) reduce the principal of any non-Discounted Secu-
rity or reduce the amount of principal of any
Discounted Security that would be due upon an
acceleration thereof;
(5) change the currency in which principal or inter-
est on a Security is payable; or
(6) make any change in Section 6.04 or 10.02, except
to increase the amount of Securities whose Hold-
ers must consent to an amendment or waiver or to
provide that other provisions of this Indenture
cannot be amended or waived without the consent
of each Securityholder affected thereby.
An amendment of a provision included solely for the
benefit of one or more series does not affect Securityholders
of any other series.
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Securityholders need not consent to the exact text of
a proposed amendment or waiver; it is sufficient if they con-
sent to the substance thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 10.01 or 10.02
shall be set forth in a supplemental indenture that complies
with the TIA as then in effect.
If a provision of the TIA requires or permits a pro-
vision of this Indenture and the TIA provision is amended, then
the Indenture provision shall be automatically amended to like
effect.
SECTION 10.04. Effect of Consents.
An amendment or waiver becomes effective in accor-
dance with its terms and thereafter binds every Securityholder
entitled to consent to it.
A consent to an amendment or waiver by a Holder of a
Security is a continuing consent by the Holder and every subse-
quent Holder of a Security that evidences the same debt as the
consenting Holder's Security. Any Holder or subsequent Holder
may revoke the consent as to his Security if the Trustee
receives notice of the revocation before the amendment or
waiver becomes effective.
The Company may fix a record date for the determina-
tion of Holders of Registered Securities entitled to give a
consent. The record date shall not be less than 10 nor more
than 60 days prior to the first written solicitation of
Securityholders.
SECTION 10.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate
notation about an amendment or waiver on any Security there-
after authenticated. The Company may issue in exchange for
affected Securities new Securities that reflect the amendment
or waiver.
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ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.
The provisions of TIA Sections 310 through 317 that
impose duties on any person (including the provisions automatically
deemed included herein unless expressly excluded by this Inden-
ture) are a part of and govern this Indenture, whether or not
physically contained herein.
If any provision of this Indenture limits, qualifies
or conflicts with another provision which is required to be
included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.02. Notices
Any notice by one party to another is duly given if
in writing and delivered in person, sent by facsimile transmis-
sion confirmed by mail or mailed by first-class mail to the
other's address shown below:
Company: Engelhard Corporation
101 Wood Avenue
Iselin, New Jersey 08830
Attention: General Counsel
Trustee: The Chase Manhattan Bank, N.A.
4 Chase Metrotech Center - 3rd Floor
Brooklyn, New York 11245
Attention: Corporate Trust Department
A party, by notice to the other parties, may desig-
nate additional or different addresses for subsequent notices.
Any notice mailed to a Securityholder shall be mailed
to his address shown on the register kept by the Transfer Agent
or on the Bearer Securities List referred to in Section 2.06.
Failure to mail a notice to a Securityholder or any defect in a
notice mailed to a Securityholder shall not affect the suffi-
ciency of the notice mailed to other Securityholders or the
sufficiency of any published notice.
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If a notice is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not
the addressee receives it.
If the Company mails a notice to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same
time.
If in the Company's opinion it is impractical to mail
a notice required to be mailed or to publish a notice required
to be published, the Company may give such substitute notice as
the Trustee approves. Failure to publish a notice as required
or any defect in it shall not affect the sufficiency of any
mailed notice.
All notices shall be in the English language, except
that any published notice may be in an official language of the
country of publication.
A "notice" includes any communication required by
this Indenture.
SECTION 11.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA
Section 312(b) with other Securityholders with respect to their
rights under this Indenture or the Securities. The Company,
the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company
shall if so requested furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions prece-
dent, if any, provided for in this Indenture
relating to the proposed action have been com-
plied with; and
(2) an Opinion of Counsel stating that, in the opin-
ion of such counsel, all such conditions prece-
dent have been complied with.
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SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compli-
ance with a condition or covenant provided for in this Inden-
ture shall include:
(1) a statement that the person making such certifi-
cate or opinion has read such covenant or
condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such cer-
tificate or opinion are based;
(3) a statement that, in the opinion of such person,
he has made such examination or investigation as
is necessary to enable him to express an
informed opinion as to whether or not such cove-
nant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has
been complied with.
SECTION 11.06. Rules by Company and Agents.
The Company may make reasonable rules for action by
or a meeting of Securityholders. An Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on
which banking institutions are not required to be open. If a
payment date is a Legal Holiday at a place of payment, unless
the Bond Resolution otherwise provides, payment may be made at
that place on the next succeeding day that is not a Legal Holi-
day, and no interest shall accrue for the intervening period.
SECTION 11.08. No Recourse Against Others.
All liability described in the Securities of any
director, officer, employee or stockholder, as such, of the
Company is waived and released.
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SECTION 11.09. Duplicate Originals.
The parties may sign any number of copies of this
Indenture. One signed copy is enough to prove this Indenture.
SECTION 11.10. Governing Law.
The laws of the State of New York shall govern this
Indenture, the Securities and any coupons, unless federal law
governs without regard to principles of conflicts of laws.
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SIGNATURES
Dated: [ ], 1996 ENGELHARD CORPORATION
By
Name:
Title:
Dated: , 1996 The Chase Manhattan Bank, N.A.,
as Trustee
By
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EXHIBIT A
A Form of Registered Security
No. $
ENGELHARD CORPORATION
[Title of Security]
Engelhard Corporation
promises to pay to
or registered assigns
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
[ ]
ENGELHARD CORPORATION
Transfer Agent and Paying Agent
(SEAL)
Authenticated: Name:
Title:
Registrar, by
Authorized Signatory Name:
Title:
A-1
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ENGELHARD CORPORATION
[Title of Security]
1. Interest.1
Engelhard Corporation ("Company"), a Delaware corpo-
ration, promises to pay interest on the principal
amount of this Security at the rate per annum shown
above. The Company will pay interest semiannually on
and of each year
commencing , 19__. Interest on the Securi-
ties will accrue from the most recent date to which
interest has been paid or, if no interest has been
paid, from , 19__. Interest will be com-
puted on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment.2
The Company will pay interest on the Securities to
the persons who are registered holders of Securities
at the close of business on the record date for the
next interest payment date, except as otherwise pro-
vided in the Indenture. Holders must surrender Secu-
rities to a Paying Agent to collect principal pay-
ments. The Company will pay principal and interest
in money of the United States that at the time of
payment is legal tender for payment of public and
private debts. The Company may pay principal and
interest by check payable in such money. It may mail
an interest check to a holder's registered address.
3. Bond Agents.
Initially, [ ], will act
as Paying Agent, Transfer Agent and Registrar. The
Company may change any Paying Agent, Transfer Agent
or Registrar without notice. The Company or any
Affiliate may act in any such capacity. Subject to
certain conditions, the Company may change the
Trustee.
4. Indenture.
The Company issued the securities of this series
("Securities") under an Indenture dated as of
[ ], 1996 ("Indenture") between the Com-
pany and [ ] ("Trustee"). The
terms of the Securities include those stated in the
A-2
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Indenture and in the Bond Resolution creating the
Securities and those made part of the Indenture by
the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb). Securityholders are referred to
the Indenture, the Bond Resolution and the Act for a
statement of such terms.
5. Optional Redemption.3
On or after , the Company may redeem
all the Securities at any time or some of them from
time to time at the following redemption prices
(expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
and thereafter at 100%.
6. Mandatory Redemption.4
The Company will redeem $ principal amount of
Securities on and on each
thereafter through
at a redemption price of 100% of principal amount,
plus accrued interest to the redemption date.5 The
Company may reduce the principal amount of Securities
to be redeemed pursuant to this paragraph by sub-
tracting 100% of the principal amount (excluding pre-
mium) of any Securities (i) that the Company has
acquired or that the Company has redeemed other than
pursuant to this paragraph and (ii) that the Company
has delivered to the Registrar for cancellation. The
Company may subtract the same Security only once.
7. Additional Optional Redemption.6
In addition to redemptions pursuant to the above
paragraph(s), the Company may redeem not more than
$ principal amount of Securities on
and on each thereafter
through at a redemption price of 100% of
principal amount, plus accrued interest to the
redemption date.
A-3
<PAGE>
8. Notice of Redemption.7
Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date
to each holder of Securities to be redeemed at his
registered address.
9. Conversion.8
A Holder of a Security may convert it into Common
Stock of the Company or cash, or a combination
thereof, at the Company's option, at any time before
the close of business on ___________, or, if the
Security is called for redemption, the Holder may
convert it at any time before the close of business
on the redemption date. The initial Conversion Rate
is ____________ (or an equivalent amount in cash) per
$1,000 principal amount of the Securities, subject to
adjustment as provided in Article 9 of the
Indenture.9 The Company will deliver a check in lieu
of any fractional share. On conversion no payment or
adjustment for interest accrued on the Securities
will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted
between the record date for the payment of interest
and the next succeeding interest payment date, such
Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment
date on the principal amount so converted (unless
such Security shall have been called for redemption,
in which case no such payment shall be required). A
Security converted on an interest payment date need
not be accompanied by any payment, and the interest
on the principal amount of the Security being con-
verted will be paid on such interest payment date to
the registered holder of such Security on the immedi-
ately preceding record date.
To convert a Security a Holder must (1) complete and
sign the conversion notice on the back of the Secu-
rity, (2) surrender the Security to a Conversion
Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar
tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 or an integral mul-
tiple of $1,000.
A-4
<PAGE>
10. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons
in denominations of $1,00010 and whole multiples of
$1,000. The transfer of Securities may be registered
and Securities may be exchanged as provided in the
Indenture. The Transfer Agent may require a holder,
among other things, to furnish appropriate endorse-
ments and transfer documents and to pay any taxes and
fees required by law or the Indenture. The Transfer
Agent need not exchange or register the transfer of
any Security or portion of a Security selected for
redemption. Also, it need not exchange or register
the transfer of any Securities for a period of 15
days before a selection of Securities to be redeemed.
11. Persons Deemed Owners.
The registered holder of a Security may be treated as
its owner for all purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the
Securities may be amended with the consent of the
holders of a majority in principal amount of the
securities of all series affected by the amendment.11
Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the
Indenture or the Securities may be amended, among
other things, to cure any ambiguity, omission, defect
or inconsistency; to provide for assumption of Com-
pany obligations to Securityholders; or to make any
change that does not materially adversely affect the
rights of any Securityholder.
13. Restrictive Covenants.12
The Securities are unsecured general obligations of
the Company limited to $ principal amount.
14. Successors.
When a successor assumes all the obligations of the
Company under the Securities and the Indenture, the
Company will be released from those obligations.
A-5
<PAGE>
15. Defeasance Prior to Redemption or Maturity.13
Subject to certain conditions, the Company at any
time may terminate some or all of its obligations
under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest
on the Securities to redemption or maturity. U.S.
Government Obligations are securities backed by the
full faith and credit of the United States of America
or certificates representing an ownership interest in
such Obligations.
16. Defaults and Remedies.
An Event of Default with respect to this series of
Securities is: default for 30 days in payment of
interest on the Securities of this series; default in
payment of principal on them [If the Security is sub-
ject to redemption insert ",upon redemption or other-
wise"; and, if the Security is entitled to a sinking
fund also add "or in the making of any sinking fund
payment"]; failure by the Company for 60 days after
notice to it to comply with any of its other cove-
nants, conditions or agreements in the Indenture or
the Securities of this series; a default under any
bond, debenture, note or other evidence of indebted-
ness for money borrowed by the Company (including a
default with respect to Securities of any series
other than this series) or under any mortgage, inden-
ture or instrument under which there may be issued or
by which there may be secured or evidenced any
indebtedness for money borrowed by the Company
(including the Indenture), whether such indebtedness
now exists or shall hereafter be created, which
default shall involve an amount in excess of
$50,000,000 and shall constitute a failure to pay
such indebtedness when due and payable after the
expiration of any applicable grace period with
respect thereto and shall have resulted in such
indebtedness becoming or being declared due and pay-
able prior to the date on which it would otherwise
have become due and payable, without such indebted-
ness having been discharged, or such acceleration
having been rescinded or annulled within a period of
30 days after notice as provided in the Indenture;
and certain events of bankruptcy or insolvency. [Add
other events of default if applicable]. If an Event
of Default with respect to this series of the Securi-
ties occurs and is continuing, the Trustee or the
A-6
<PAGE>
Holders of at least 25% in principal amount of the
outstanding Securities of this series may declare all
the Securities of this series to be due and payable
immediately. [If the Security is a Discounted Secu-
rity, add "The amount due and payable 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 obliga-
tions in respect of the payment of the principal and
interest, if any, on the Discounted Securities of
this series shall be terminated.] Holders of Securi-
ties of this series may not enforce the Indenture or
the Securities of this series except as provided in
the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture
or the Securities of this series. Subject to certain
limitations, Holders of a majority in principal
amount of the outstanding Securities of this series
may direct the Trustee in its exercise of any trust
or power with respect to this series of the Securi-
ties. The Trustee may withhold from Holders of Secu-
rities of this series notice of any continuing
default (except a default in payment of principal or
interest) if it determines in good faith that with-
holding notice is in their interests. The Company is
required to file periodic reports with the Trustee as
to the absence of default.
17. Trustee Dealings with Company.
The Trustee, in its individual or any other capacity,
may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may
otherwise deal with those persons, as if it were not
Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for
any obligations of the Company under the Securities
or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Secu-
rity waives and releases all such liability. The
waiver and release are part of the consideration for
the issue of the Securities.
A-7
<PAGE>
19. Authentication.
This Security shall not be valid until authenticated
by a manual signature of the Registrar.
20. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM
(=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Company will furnish to any Securityholder upon writ-
ten request and without charge a copy of the Indenture and the
Bond Resolution, which contains the text of this Security in
larger type. Requests may be made to: Secretary, Engelhard
Corporation, 101 Wood Avenue, Iselin, New Jersey 08830.
A-8
<PAGE>
EXHIBIT B
A Form of Bearer Security
No. $
ENGELHARD CORPORATION
[Title of Security]
Engelhard Corporation
promises to pay to bearer
the principal sum of Dollars on ,
Interest Payment Dates:
Dated:
[ ]
ENGELHARD CORPORATION
Transfer Agent
(SEAL)
Authenticated: Name:
Title:
[ ]
Registrar, by
Authorized Signature Name:
Title:
B-1
<PAGE>
ENGELHARD CORPORATION
[Title of Security]
1. Interest.1
Engelhard Corporation ("Company"), a Delaware corpo-
ration, promises to pay to bearer interest on the
principal amount of this Security at the rate per
annum shown above. The Company will pay interest
semiannually on and of each
year commencing , 19 . Interest on the
Securities will accrue from the most recent date to
which interest has been paid or, if no interest has
been paid, from , 19 . Interest will be
computed on the basis of a 360-day year of twelve 30-
day months.
2. Method of Payment.2
Holders must surrender Securities and any coupons to
a Paying Agent to collect principal and interest pay-
ments. The Company will pay principal and interest
in money of the United States that at the time of
payment is legal tender for payment of public and
private debts. The Company may pay principal and
interest by check payable in such money.
3. Bond Agents.
Initially, [ ], will
act as Transfer Agent, Paying Agent and Registrar.
The Company may change any Paying Agent, Transfer
Agent or Registrar without notice. The Company or
any Affiliate may act in any such capacity. Subject
to certain conditions, the Company may change the
Trustee.
4. Indenture.
The Company issued the securities of this series
("Securities") under an Indenture dated as of
[ ], 1996 ("Indenture") between the Com-
pany and [ ] ("Trustee"). The
terms of the Securities include those stated in the
Indenture and the Bond Resolution and those made part
of the Indenture by the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbbb). Securityholders are
B-2
<PAGE>
referred to the Indenture, the Bond Resolution and
the Act for a statement of such terms.
5. Optional Redemption.3
On or after , the Company may redeem all
the Securities at any time or some of them from time
to time at the following redemption prices (expressed
in percentages of principal amount), plus accrued
interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
and thereafter at 100%.
6. Mandatory Redemption.4
The Company will redeem $ principal amount of
Securities on and on each
thereafter through at a redemption price
of 100% of principal amount, plus accrued interest to
the redemption date.5 The Company may reduce the
principal amount of Securities to be redeemed pursu-
ant to this paragraph by subtracting 100% of the
principal amount (excluding premium) of any Securi-
ties (i) that the Company has acquired or that the
Company has redeemed other than pursuant to this
paragraph and (ii) that the Company has delivered to
the Registrar for cancellation. The Company may
subtract the same Security only once.
7. Additional Optional Redemption.6
In addition to redemptions pursuant to the above
paragraph(s), the Company may redeem not more than
$ principal amount of Securities on
and on each thereafter through
at a redemption price of 100% of principal amount,
plus accrued interest to the redemption date.
8. Notice of Redemption.7
Notice of redemption will be published once in an
Authorized Newspaper in the City of New York and if
the Securities are listed on any stock exchange
located outside the United States and such stock
exchange so requires, in any other required city
B-3
<PAGE>
outside the United States at least 30 days but not
more than 60 days before the redemption date. Notice
of redemption also will be mailed to holders who have
filed their names and addresses with the Transfer
Agent within the two preceding years. A holder of
Securities may miss important notices if he fails to
maintain his name and address with the Transfer
Agent.
9. Conversion.8
A Holder of a Security may convert it into Common
Stock of the Company or cash, or a combination
thereof, at the Company's option, at any time before
the close of business on ___________, or, if the
Security is called for redemption, the Holder may
convert it at any time before the close of business
on the redemption date. The initial Conversion Rate
is ____________ (or an equivalent amount in cash) per
$1,000 principal amount of the Securities, subject to
adjustment as provided in Article 9 of the
Indenture.9 The Company will deliver a check in lieu
of any fractional share. On conversion no payment or
adjustment for interest accrued on the Securities
will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted
between the record date for the payment of interest
and the next succeeding interest payment date, such
Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment
date on the principal amount so converted (unless
such Security shall have been called for redemption,
in which case no such payment shall be required). A
Security converted on an interest payment date need
not be accompanied by any payment, and the interest
on the principal amount of the Security being con-
verted will be paid on such interest payment date to
the registered holder of such Security on the immedi-
ately preceding record date.
To convert a Security a Holder must (1) complete and
sign the conversion notice on the back of the Secu-
rity, (2) surrender the Security to a Conversion
Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar
tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 or an integral mul-
tiple of $1,000.
B-4
<PAGE>
10. Denominations, Transfer, Exchange.
The Securities are in bearer form with coupons in
denominations of $5,00010 and whole multiples of
$5,000. The Securities may be transferred by deliv-
ery and exchanged as provided in the Indenture. Upon
an exchange, the Transfer Agent may require a holder,
among other things, to furnish appropriate documents
and to pay any taxes and fees required by law or the
Indenture. The Transfer Agent need not exchange any
Security or portion of a Security selected for
redemption. Also, it need not exchange any Securi-
ties for a period of 15 days before a selection of
Securities to be redeemed.
11. Persons Deemed Owners.
The holder of a Security or coupon may be treated as
its owner for all purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the
Securities may be amended with the consent of the
holders of a majority in principal amount of the
securities of all series affected by the amendment.11
Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the Inden-
ture or the Securities may be amended, among other
things, to cure any ambiguity, omission, defect or
inconsistency; to provide for assumption of Company
obligations to Securityholders; or to make any change
that does not materially adversely affect the rights
of any Securityholder.
13. Restrictive Covenants.12
The Securities are unsecured general obligations of
the Company limited to $ principal amount.
14. Successors.
When a successor assumes all the obligations of the
Company under the Securities, any coupons and the
Indenture, the Company will be released from those
obligations.
B-5
<PAGE>
15. Defeasance Prior to Redemption or Maturity.13
Subject to certain conditions, the Company at any
time may terminate some or all of its obligations
under the Securities, any coupons and the Indenture
if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of prin-
cipal and interest on the Securities to redemption or
maturity. U.S. Government Obligations are securities
backed by the full faith and credit of the United
States of America or certificates representing an
ownership interest in such Obligations.
16. Defaults and Remedies.
An Event of Default with respect to this series of
Securities is: default for 30 days in payment of
interest on the Securities of this series; default in
payment of principal on them [If the Security is sub-
ject to redemption insert ",upon redemption or other-
wise"; and, if the Security is entitled to a sinking
fund also add "or in the making of any sinking fund
payment"]; failure by the Company for 60 days after
notice to it to comply with any of its other cove-
nants, conditions or agreements in the Indenture or
the Securities of this series; a default under any
bond, debenture, note or other evidence of indebted-
ness for money borrowed by the Company (including a
default with respect to Securities of any series
other than this series) or under any mortgage, inden-
ture or instrument under which there may be issued or
by which there may be secured or evidenced any
indebtedness for money borrowed by the Company
(including the Indenture), whether such indebtedness
now exists or shall hereafter be created, which
default shall involve an amount in excess of
$50,000,000 and shall constitute a failure to pay
such indebtedness when due and payable after the
expiration of any applicable grace period with
respect thereto and shall have resulted in such
indebtedness becoming or being declared due and pay-
able prior to the date on which it would otherwise
have become due and payable, without such indebted-
ness having been discharged, or such acceleration
having been rescinded or annulled within a period of
30 days after notice as provided in the Indenture;
and certain events of bankruptcy or insolvency. [Add
other events of default if applicable]. If an Event
of Default with respect to this series of the Securi-
ties occurs and is continuing, the Trustee or the
B-6
<PAGE>
Holders of at least 25% in principal amount of the
outstanding Securities of this series may declare all
the Securities of this series to be due and payable
immediately. [If the Security is a Discounted Secu-
rity, add "The amount due and payable 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 obliga-
tions in respect of the payment of the principal and
interest, if any, on the Discounted Securities of
this series shall be terminated.] Holders of Securi-
ties of this series may not enforce the Indenture or
the Securities of this series except as provided in
the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture
or the Securities of this series. Subject to certain
limitations, Holders of a majority in principal
amount of the outstanding Securities of this series
may direct the Trustee in its exercise of any trust
or power with respect to this series of the Securi-
ties. The Trustee may withhold from Holders of Secu-
rities of this series notice of any continuing
default (except a default in payment of principal or
interest) if it determines in good faith that with-
holding notice is in their interests. The Company is
required to file periodic reports with the Trustee as
to the absence of default.
17. Trustee Dealings with Company.
The Trustee, in its individual or any other capacity,
may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may
otherwise deal with those persons, as if it were not
Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for
any obligations of the Company under the Securities
or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Secu-
rity waives and releases all such liability. The
waiver and release are part of the consideration for
the issue of the Securities.
B-7
<PAGE>
19. Authentication.
This Security shall not be valid until authenticated
by a manual signature of the Registrar.
20. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM
(=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Company will furnish to any Securityholder upon
written request and without charge a copy of the Indenture and
the Bond Resolution, which contains the text of this Security
in larger type. Requests may be made to: Secretary, Engelhard
Corporation, 101 Wood Avenue, Iselin, New Jersey 08830.
B-8
<PAGE>
[FACE OF COUPON]
...............
[$]............
Due............
ENGELHARD CORPORATION
[Title of Security]
Unless the Security attached to this coupon has been
called for redemption, Engelhard Corporation ("Company") will
pay to bearer, upon surrender, the amount shown hereon when
due. This coupon may be surrendered for payment to any Paying
Agent listed on the back of this coupon unless the Company has
replaced such Agent. Payment may be made by check. This cou-
pon represents six months' interest.
ENGELHARD CORPORATION
By
[REVERSE OF COUPON]
PAYING AGENTS
<PAGE>
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate
per annum, insert a description of the manner in which the
rate of interest is to be determined. If the Security is
not to bear interest prior to maturity, so state.
2 If the method or currency of payment is different, insert
a statement thereof.
3 If applicable.
4 If applicable.
5 If the Security is a Discounted Security, insert amount to
be redeemed or method of calculating such amount.
6 If applicable. Also insert, if applicable, provisions for
repayment of Securities at the option of the
Securityholder.
7 If applicable.
8 If applicable.
9 If additional or different adjustment provisions apply so
specify.
10 If applicable. Insert additional or different
denominations.
11 If different terms apply, insert a brief summary thereof.
12 If applicable. If additional or different covenants
apply, insert a brief summary thereof.
13 If applicable. If different defeasance terms apply,
insert a brief summary thereof.
Note: U.S. tax law may require certain legends on Discounted
and Bearer Securities.
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_________________________________________
: :
:_______________________________________:
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the books of the Company.
The agent may substitute another to act for him.
Date: _______________ Your Signature:
(Sign exactly as your name appears on the other side of
this Security)
C-1
<PAGE>
EXHIBIT D
CONVERSION NOTICE
To convert this Security,
check the box:
_____
/ /
To convert only part of this
Security, state the amount
(must be in integral multiples
of $1,000);
$_____________________________
If you want the securities
delivered upon conversion made
out in another person's name,
fill in the form below:
(Insert other person's Social
Security or Tax I.D. Number)
______________________________
______________________________
______________________________
______________________________
(Print or type other
person's name, address
and zip code)
Date: _________ Signature(s): ______________________________
______________________________
(Sign exactly as your name(s)
appear(s) on the other side of
this Security)
D-1
<PAGE>
Signature(s) guaranteed by: ________________________________
(All signatures must be
guaranteed by a member of a
national securities exchange or
of the National Association of
Securities Dealers, Inc. or by a
commercial bank or trust company
located in the United States)
D-2
Exhibit 4.2
_____________________________________________________________
_____________________________________________________________
ENGELHARD CORPORATION
SUBORDINATED DEBT SECURITIES
INDENTURE
Dated as of , 199[ ]
, Trustee
_____________________________________________________________
_____________________________________________________________
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section_
310(a)(1)........................................... 7.08; 7.10
(a)(2).......................................... 7.08; 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.08
(b)............................................. 7.08; 7.10; 12.02
(c)............................................. N.A.
311(a).............................................. 7.11
(b)............................................. 7.11
(c)............................................. N.A.
312(a).............................................. 2.06
(b)............................................. 12.03
(c)............................................. 12.03
313(a).............................................. 7.06
(b)(1).......................................... N.A.
(b)(2).......................................... 7.05
(c)............................................. 7.06; 12.02
(d)............................................. 7.06
314(a).............................................. 4.05; 4.06; 12.02
(b)............................................. N.A.
(c)(1).......................................... 12.04
(c)(2).......................................... 12.04
(c)(3).......................................... N.A.
(d)............................................. N.A.
(e)............................................. 12.05
(f)............................................. N.A.
315(a).............................................. 7.01(2)
(b)............................................. 7.05; 12.02
(c)............................................. 7.01(1)
(d)............................................. 7.01(3)
(e)............................................. 6.11
316(a)(last sentence)............................... 2.11
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07
(c)............................................. 11.04
317(a)(1)........................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.05
318(a).............................................. 12.01
(b)............................................. N.A.
(c)............................................. 12.01
______________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
SECTION 1.01 Definitions .................................. 1
SECTION 1.02 Other Definitions ............................ 4
SECTION 1.03 Rules of Construction ........................ 4
ARTICLE TWO
THE SECURITIES
SECTION 2.01 Issuable in Series ........................... 5
SECTION 2.02 Execution and Authentication.................. 7
SECTION 2.03 Bond Agents .................................. 8
SECTION 2.04 Bearer Securities ............................ 8
SECTION 2.05 Paying Agent to Hold Money in
Trust ...................................... 9
SECTION 2.06 Securityholder Lists ......................... 9
SECTION 2.07 Transfer and Exchange ........................ 10
SECTION 2.08 Replacement Securities ....................... 10
SECTION 2.09 Outstanding Securities ....................... 11
SECTION 2.10 Discounted Securities ........................ 11
SECTION 2.11 Treasury Securities .......................... 12
SECTION 2.12 Global Securities ............................ 12
SECTION 2.13 Temporary Securities ......................... 12
SECTION 2.14 Cancellation ................................. 13
SECTION 2.15 Defaulted Interest ........................... 13
ARTICLE THREE
REDEMPTION
SECTION 3.01 Notices to Trustee ........................... 13
SECTION 3.02 Selection of Securities To Be
Redeemed ................................... 14
SECTION 3.03 Notice of Redemption ......................... 14
SECTION 3.04 Effect of Notice of Redemption ............... 15
SECTION 3.05 Payment of Redemption Price .................. 15
SECTION 3.06 Securities Redeemed in Part .................. 16
-i-
<PAGE>
Page
ARTICLE FOUR
COVENANTS
SECTION 4.01 Payment of Securities ........................ 16
SECTION 4.02 Corporate Existence .......................... 16
SECTION 4.03 SEC Reports .................................. 17
SECTION 4.04 Annual Review Certificate .................... 17
SECTION 4.05 Notice to Trustee of Certain
Defaults ................................... 17
SECTION 4.06 Further Assurances to Trustee ................ 18
ARTICLE FIVE
SUCCESSORS
SECTION 5.01 When Company May Merge, etc. ................. 18
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default ............................ 18
SECTION 6.02 Acceleration ................................. 20
SECTION 6.03 Other Remedies ............................... 21
SECTION 6.04 Waiver of Past Defaults ...................... 21
SECTION 6.05 Control by Majority .......................... 21
SECTION 6.06 Limitations on Suits ......................... 22
SECTION 6.07 Rights of Holders To Receive
Payment .................................... 22
SECTION 6.08 Collection Suit by Trustee ................... 23
SECTION 6.09 Trustee May File Proofs of Claims ............ 23
SECTION 6.10 Priorities ................................... 23
SECTION 6.11 Undertaking for Costs ........................ 24
SECTION 6.12 Restoration of Rights and
Remedies ................................... 24
SECTION 6.13 Rights and Remedies Cumulative ............... 24
SECTION 6.14 Delay or Omission Not Waiver ................. 25
SECTION 6.15 Waiver of Stay or Extension Laws ............. 25
ARTICLE SEVEN
TRUSTEE
SECTION 7.01 Duties of Trustee............................. 25
SECTION 7.02 Rights of Trustee ............................ 27
SECTION 7.03 Individual Rights of Trustee ................. 27
SECTION 7.04 Trustee's Disclaimer ......................... 27
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Page
SECTION 7.05 Notice of Defaults ........................... 28
SECTION 7.06 Reports by Trustee to Holders ................ 28
SECTION 7.07 Compensation and Indemnity ................... 28
SECTION 7.08 Replacement of Trustee ....................... 29
SECTION 7.09 Successor Trustee by Merger, etc. ............ 30
SECTION 7.10 Eligibility; Disqualification ................ 30
SECTION 7.11 Preferential Collection of Claims
Against Company ............................ 31
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01 Defeasance ................................... 31
SECTION 8.02 Conditions to Defeasance ..................... 31
SECTION 8.03 Application of Trust Money ................... 33
SECTION 8.04 Repayment to Company ......................... 33
ARTICLE NINE
CONVERSION
SECTION 9.01 Conversion Privilege ......................... 33
SECTION 9.02 Conversion Procedure ......................... 33
SECTION 9.03 Taxes on Conversion .......................... 35
SECTION 9.04 Company Determination Final .................. 35
SECTION 9.05 Trustee's and Conversion Agent's
Disclaimer ................................. 35
SECTION 9.06 Company To Provide Conversion
Securities ................................. 35
SECTION 9.07 Cash Settlement Option ....................... 36
SECTION 9.08 Adjustment in Conversion Rate for
Change in Capital Stock .................... 37
SECTION 9.09 Adjustment in Conversion Rate
for Common Stock Issued
Below Market Price ......................... 37
SECTION 9.10 Adjustment for Other
Distributions .............................. 40
SECTION 9.11 Voluntary Adjustment ......................... 41
SECTION 9.12 When Adjustment May Be Deferred .............. 41
SECTION 9.13 When No Adjustment Required .................. 41
SECTION 9.14 Notice of Adjustment ......................... 42
SECTION 9.15 Notice of Certain Transactions ............... 42
SECTION 9.16 Reorganization of the Company ................ 42
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Page
ARTICLE TEN
SUBORDINATION
SECTION 10.01 Agreement to Subordinate ..................... 43
SECTION 10.02 Certain Definitions .......................... 43
SECTION 10.03 Liquidation; Dissolution;
Bankruptcy ................................. 44
SECTION 10.04 Company Not To Make Payments with
Respect to Securities in Certain
Circumstances .............................. 44
SECTION 10.05 Acceleration of Securities ................... 45
SECTION 10.06 When Distribution Must Be Paid
Over ....................................... 45
SECTION 10.07 Notice by Company ............................ 46
SECTION 10.08 Subrogation .................................. 46
SECTION 10.09 Subordination May Not Be Impaired
by Company ................................. 46
SECTION 10.10 Distribution or Notice to
Representative ............................. 47
SECTION 10.11 Rights of Trustee and Paying
Agent ...................................... 47
SECTION 10.12 Officer's Certificate ........................ 48
SECTION 10.13 Obligation of Company
Unconditional .............................. 48
ARTICLE ELEVEN
AMENDMENTS
SECTION 11.01 Without Consent of Holders ................... 49
SECTION 11.02 With Consent of Holders ...................... 49
SECTION 11.03 Compliance with Trust Indenture
Act ........................................ 50
SECTION 11.04 Effect of Consents ........................... 50
SECTION 11.05 Notation on or Exchange of
Securities ................................. 51
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act .......................... 51
SECTION 12.02 Notices ...................................... 51
SECTION 12.03 Communications by Holders with
Other Holders............................... 53
SECTION 12.04 Certificate and Opinion as to Con-
ditions Precedent .......................... 53
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Page
SECTION 12.05 Statements Required in Certificate
or Opinion ................................. 53
SECTION 12.06 Rules by Company and Agents .................. 54
SECTION 12.07 Legal Holidays ............................... 54
SECTION 12.08 No Recourse Against Others ................... 54
SECTION 12.09 Duplicate Originals .......................... 54
SECTION 12.10 Governing Law ................................ 54
SIGNATURES...................................................... 55
Exhibit A: A Form of Registered
Security ................................. A-1
Exhibit B: A Form of Bearer Security
Notes to Exhibits A and B ................ B-1
Exhibit C: A Form of Assignment ................................. C-1
Exhibit D: A Form of Conversion Notice .......................... D-1
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INDENTURE dated as of , 199[ ] between
ENGELHARD CORPORATION, a Delaware corporation ("Company"), and
, a ("Trustee").
Each party agrees as follows for the benefit of the
Holders of the Company's debt securities issued under this
Indenture:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions.
"Affiliate" means any person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company.
"Agent" means any Registrar, Transfer Agent or Paying
Agent.
"Authorized Newspaper" means a newspaper that is:
(1) printed in the English language or in an offi-
cial language of the country of publication;
(2) customarily published on each business day in
the place of publication; and
(3) of general circulation in the relevant place or
in the financial community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business
days and in the same or different Authorized Newspapers.
"Bearer Security" means a Security payable to bearer.
"Board" or "Board of Directors" means the Board of
Directors of the Company or any authorized committee of the
Board.
"Bond Resolution" means a resolution adopted by the
Board or by an Officer or committee of Officers pursuant to
Board delegation authorizing a series of Securities.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of
<PAGE>
capital stock of any person and all warrants or options to
acquire such capital stock.
"Common Stock" means the Common Stock, par value
$1.00 per share, of the Company or any security into which the
Common Stock may be converted.
"Company" means the party named as such above until a
successor replaces it and thereafter means the successor.
"Conversion Rate" means such number of shares of Com-
mon Stock for which $1,000 aggregate principal amount of Secu-
rities of any series is convertible, initially as stated in the
Bond Resolution authorizing the series and as adjusted pursuant
to the terms of this Indenture and the Bond Resolution.
"coupon" means an interest coupon for a Bearer
Security.
"Default" with respect to a series of the Securities
or to all series of the Securities, as the case may be, means
any event which is, or after notice or passage of time would
be, an Event of Default with respect to such series or to all
series of the Securities, as the case may be.
"Discounted Security" means a Security where the
amount of principal due upon acceleration is less than the
stated principal amount.
"GAAP" shall mean generally accepted accounting prin-
ciples set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certi-
fied Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a sig-
nificant segment of the accounting profession, which are appli-
cable to the circumstances as in effect on the date of this
Indenture.
"Holder" or "Securityholder" means the person in
whose name a Registered Security is registered and the bearer
of a Bearer Security or coupon.
"Indenture" means this Indenture and any Bond Resolu-
tion as amended from time to time.
"NASDAQ" means the National Association of Securities
Dealers Automated Quotation System.
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"Officer" means the Chairman of the Board, the Presi-
dent, any Vice President (including any Executive Vice Presi-
dent or Senior Vice President), the Treasurer, any Assistant
Treasurer, the Secretary, or the Controller of the Company.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Secretary or
Assistant Controller of the Company.
"Opinion of Counsel" means a written opinion from
legal counsel who is acceptable to the Trustee. The counsel
may be an employee of or counsel to the Company or the Trustee.
"principal" of a debt security means the principal of
the security plus the premium, if and when applicable, on the
security.
"Registered Security" means a Security registered as
to principal and interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debt securities issued under
this Indenture.
"series" means a series of Securities or the Securi-
ties of the series.
"Stock Trading Day" means each day on which the secu-
rities exchange or quotation system which is used to determine
the Market Price is open for trading or quotation.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code Section 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Treasury Regulations" means regulations of the U.S.
Treasury Department under the Internal Revenue Code of 1986, as
amended.
"Trustee" means the party named as such above until a
successor replaces it and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate
trust matters.
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"United States" means the United States of America,
its territories and possessions and other areas subject to its
jurisdiction.
"Yield to Maturity" means the yield to maturity on
any Securities, calculated at the time of issuance of such
Securities, or, if applicable, at the most recent
redetermination of interest on such Securities, and calculated
in accordance with accepted financial practice.
SECTION 1.02. Other Definitions.
Term Defined in Section
"Bankruptcy Law" 6.01
"Bearer Securities List" 2.06
"Conversion Agent" 2.03
"Conversion Date" 9.02
"Conversion Notice" 9.02
"Conversion Right" 9.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 12.07
"Market Price" 9.07
"Paying Agent" 2.03
"Registrar" 2.03
"Representative" 10.02
"Senior Indebtedness" 10.02
"Transfer Agent" 2.03
"U.S. Government Obligations" 8.02
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP
in the United States;
(3) GAAP principles are those applicable and in
effect on the date of this Indenture;
(4) all terms used in this Indenture that are
defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the
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TIA have the meanings assigned to them by such
definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in
the plural include the singular.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may
be issued under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series. Each
series shall be created by a Bond Resolution or a supplemental
indenture that establishes the terms of the series, which may
include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate, if any, or method of calcula-
ting the interest rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Regis-
tered Securities;
(6) the dates when principal and interest are
payable;
(7) the manner of paying principal and interest;
(8) the places where principal and interest are
payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemp-
tion by the Company;
(11) the terms of any redemption at the option of
Holders;
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(12) the denominations in which Securities are
issuable;
(13) whether Securities will be issuable as Regis-
tered Securities or Bearer Securities;
(14) whether and upon what terms Registered Securi-
ties and Bearer Securities may be exchanged;
(15) whether any Securities will be represented by a
Security in global form;
(16) the terms of any global Security;
(17) the terms of any tax indemnity;
(18) the currencies (including any composite cur-
rency) in which principal or interest may be
paid;
(19) if payments of principal or interest may be made
in a currency other than that in which Securi-
ties are denominated, the manner for determining
such payments;
(20) if amounts of principal or interest may be
determined by reference to an index, formula or
other method, the manner for determining such
amounts;
(21) provisions for electronic issuance of Securities
or for Securities in uncertificated form;
(22) the portion of principal payable upon accelera-
tion of a Discounted Security;
(23) any Events of Default or covenants in addition
to or in lieu of those set forth in this
Indenture;
(24) whether and upon what terms Securities may be
defeased;
(25) the forms of the Securities or any coupon, which
may be in the form of Exhibit A or B or
otherwise;
(26) any terms that may be required by or advisable
under U.S. or other applicable laws;
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(27) the terms of the subordination of the Securities
of such series, if different from that provided
in Article 10;
(28) whether and upon what terms the Securities will
be convertible into or exchangeable for Common
Stock of the Company, which may include the
terms provided in Article 9; and
(29) any other terms not inconsistent with this
Indenture.
All Securities of one series need not be issued at
the same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series.
The creation and issuance of a series and the authen-
tication and delivery thereof are not subject to any conditions
precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or
facsimile signature. The Company's seal may be reproduced on
the Securities. An Officer shall sign any coupons by facsimile
signature.
If an Officer whose signature is on a Security or its
coupons no longer holds that office at the time the Security is
authenticated or delivered, the Security and coupons shall
nevertheless be valid.
A Security and its coupons shall not be valid until
the Security is authenticated by the manual signature of the
Registrar. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
Each Registered Security shall be dated the date of
its authentication. Each Bearer Security shall be dated the
date of its original issuance or as provided in the Bond
Resolution.
Securities may have notations, legends or endorse-
ments required by law, stock exchange rule, agreement or usage.
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SECTION 2.03. Bond Agents.
The Company shall maintain an office or agency where
Securities may be authenticated ("Registrar"), where Securities
may be presented for registration of transfer or for exchange
("Transfer Agent"), where Securities may be presented for pay-
ment ("Paying Agent") and where Securities may be presented for
conversion ("Conversion Agent"). Whenever the Company must
issue or deliver Securities pursuant to this Indenture, the
Registrar shall authenticate the Securities at the Company's
written request. The Transfer Agent shall keep a register of
the Securities and of their transfer and exchange.
The Company may appoint more than one Registrar,
Transfer Agent, Paying Agent or Conversion Agent for a series.
The Company shall notify the Trustee of the name and address of
any Agent not a party to this Indenture. If the Company fails
to maintain a Registrar, Transfer Agent, Paying Agent or Con-
version Agent for a series, the Trustee shall act as such.
SECTION 2.04. Bearer Securities.
U.S. laws and Treasury Regulations restrict sales or
exchanges of and payments on Bearer Securities. Therefore,
except as provided below:
(1) Bearer Securities will be offered, sold and
delivered only outside the United States and
will be delivered only upon presentation of a
certificate in a form prescribed by the Company
to comply with U.S. laws and regulations.
(2) Bearer Securities will not be issued in exchange
for Registered Securities.
(3) All payments of principal and interest (includ-
ing original issue discount) on Bearer Securi-
ties will be made outside the United States by a
Paying Agent located outside the United States
unless the Company determines that:
(A) such payments may not be made by such Pay-
ing Agent because the payments are illegal
or prevented by exchange controls as
described in Treasury Regulation
Section 1.163-5(c)(2)(v); and
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<PAGE>
(B) making the payments in the United States
would not have an adverse tax effect on the
Company.
If there is a change in the relevant provisions of
U.S. laws or Treasury Regulations or the judicial or adminis-
trative interpretation thereof, a restriction set forth in
paragraph (1), (2) or (3) above will not apply to a series if
the Company determines that the relevant provisions no longer
apply to the series or that failure to comply with the relevant
provisions would not have an adverse tax effect on the Company
or on Securityholders or cause the series to be treated as
"registration-required" obligations under U.S. law.
The Company shall notify the Trustee of any determi-
nations by the Company under this Section.
SECTION 2.05. Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent for a
series other than the Trustee to agree in writing that the Pay-
ing Agent will hold in trust for the benefit of the persons
entitled thereto all money held by the Paying Agent for the
payment of principal of or interest on the series, and will
notify the Trustee of any default by the Company in making any
such payment.
While any such default continues, the Trustee may
require a Paying Agent to pay all money so held by it to the
Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent shall have no further liability
for the money.
If the Company or an Affiliate acts as Paying Agent
for a series, it shall segregate and hold as a separate trust
fund all money held by it as Paying Agent for the series.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders. If the Trustee is
not the Transfer Agent, the Company shall furnish to the Trus-
tee semiannually and at such other times as the Trustee may
request a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders of
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Registered Securities and Holders of Bearer Securities whose
names are on the list referred to below.
The Transfer Agent shall keep a list of the names and
addresses of Holders of Bearer Securities who file a request to
be included on such list (the "Bearer Securities List"). A
request will remain in effect for two years unless renewed or
amended.
Whenever the Company or the Trustee is required to
mail a notice to all Holders of Registered Securities of a
series, it also shall mail the notice to Holders of Bearer
Securities of the series whose names are on the Bearer Securi-
ties List.
Whenever the Company is required to publish a notice
to all Holders of Bearer Securities of a series, it also shall
mail the notice to such of them whose names are on the Bearer
Securities List.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented
to the Transfer Agent with a request to register a transfer or
to exchange them for an equal principal amount of Registered
Securities of other denominations of the series, the Transfer
Agent shall register the transfer or make the exchange if its
requirements for such transactions are met.
The Transfer Agent may require a Holder to pay a sum
sufficient to cover any taxes imposed on a transfer or
exchange.
If a series provides for Registered and Bearer Secu-
rities and for their exchange, Bearer Securities may be
exchanged for Registered Securities and Registered Securities
may be exchanged for Bearer Securities as provided in the Secu-
rities or the Bond Resolution if the requirements of the Trans-
fer Agent for such transactions are met and if Section 2.04
permits the exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it
has been lost, destroyed or wrongfully taken, then, in the
absence of notice to the Company or the Trustee that the Secu-
rity or coupon has been acquired by a bona fide purchaser, the
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<PAGE>
Company shall issue a replacement Security or coupon if the
Company and the Trustee receive:
(1) evidence satisfactory to them of the loss,
destruction or taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their
expenses and any taxes for replacing the Secu-
rity or coupon.
A replacement Security shall have coupons attached correspond-
ing to those, if any, on the original Security.
Every replacement Security or coupon is an additional
obligation of the Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the
Securities authenticated by the Registrar except for those can-
celled by it, those delivered to it for cancellation, and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08,
it ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to them that the replaced Security
is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01,
they cease to be outstanding and interest on them ceases to
accrue.
A Security does not cease to be outstanding because
the Company or an Affiliate holds the Security.
SECTION 2.10. Discounted Securities.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction,
waiver or consent, the principal amount of a Discounted Secu-
rity shall be the amount of principal that would be due as of
the date of such determination if payment of the Security were
accelerated on that date.
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SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affil-
iate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Bond Resolution so provides, the Company may
issue some or all of the Securities of a series in temporary or
permanent global form. A global Security may be in registered
form, in bearer form with or without coupons or in
uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global
Security or as endorsed thereon from time to time. At the Com-
pany's request, the Registrar shall endorse a global Security
to reflect the amount of any increase or decrease in the Secu-
rities represented thereby.
The Company may issue a global Security only to a
depository designated by the Company. A depository may trans-
fer a global Security only as a whole to its nominee or to a
successor depository.
The Bond Resolution may establish, among other
things, the manner of paying principal and interest on a global
Security and whether and upon what terms a beneficial owner of
an interest in a global Security may exchange such interest for
definitive Securities.
The Company, an Affiliate, the Trustee and any Agent
shall not be responsible for any acts or omissions of a deposi-
tory, for any depository records of beneficial ownership inter-
ests or for any transactions between the depository and benefi-
cial owners.
SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for
delivery, the Company may use temporary Securities. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers
appropriate for temporary Securities. Temporary Securities may
be in global form. Temporary Bearer Securities may have one or
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more coupons or no coupons. Without unreasonable delay, the
Company shall deliver definitive Securities in exchange for
temporary Securities.
SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the
Registrar for cancellation. The Transfer Agent and the Paying
Agent shall forward to the Registrar any Securities and coupons
surrendered to them for payment, exchange or registration of
transfer. The Registrar shall cancel all Securities or coupons
surrendered for payment, registration of transfer, exchange or
cancellation as follows: the Registrar will cancel all Regis-
tered Securities and matured coupons. The Registrar also will
cancel all Bearer Securities and unmatured coupons unless the
Company requests the Registrar to hold the same for redelivery.
Any Bearer Securities so held shall be considered delivered for
cancellation under Section 2.09. The Registrar shall destroy
cancelled Securities and coupons unless the Company otherwise
directs.
Unless the Bond Resolution otherwise provides, the
Company may not issue new Securities to replace Securities that
the Company has paid or that the Company has delivered to the
Registrar for cancellation.
SECTION 2.15. Defaulted Interest
If the Company defaults in a payment of interest on
Registered Securities, it need not pay the defaulted interest
to Holders on the regular record date. The Company may fix a
special record date for determining Holders entitled to receive
defaulted interest or the Company may pay defaulted interest in
any other lawful manner.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before
maturity shall be redeemable in accordance with their terms
and, unless the Bond Resolution otherwise provides, in accor-
dance with this Article.
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In the case of a redemption by the Company, the Com-
pany shall notify the Trustee of the redemption date and the
principal amount of Securities to be redeemed. The Company
shall notify the Trustee at least 45 days before the redemption
date unless a shorter notice is satisfactory to the Trustee.
If the Company is required to redeem Securities, it
may reduce the principal amount of Securities required to be
redeemed to the extent it is permitted a credit by the terms of
the Securities and it notifies the Trustee of the amount of the
credit and the basis for it. If the reduction is based on a
credit for acquired or redeemed Securities that the Company has
not previously delivered to the Registrar for cancellation, the
Company shall deliver the Securities at the same time as the
notice.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all the Securities of a series are to be
redeemed, the Trustee shall select the Securities to be
redeemed by a method the Trustee considers fair and appropri-
ate. The Trustee shall make the selection from Securities of
the series outstanding and not previously called for redemp-
tion. The Trustee may select for redemption portions of the
principal of Securities having denominations larger than the
minimum denomination for the series. Securities and portions
thereof selected for redemption shall be in amounts equal to
the minimum denomination for the series or an integral multiple
thereof. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities
called for redemption.
SECTION 3.03. Notice of Redemption.
At least 20 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption
by first-class mail to each Holder of Registered Securities
whose Securities are to be redeemed.
If Bearer Securities are to be redeemed, the Company
shall publish a notice of redemption in an Authorized Newspaper
as provided in the Securities.
A notice shall identify the Securities of the series
to be redeemed and shall state:
(1) the redemption date;
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(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together
with all coupons, if any, maturing after the
redemption date, must be surrendered to the Pay-
ing Agent to collect the redemption price;
(5) that interest on Securities called for redemp-
tion ceases to accrue on and after the redemp-
tion date; and
(6) whether the redemption by the Company is manda-
tory or optional.
A redemption notice given by publication need not
identify Registered Securities to be redeemed.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is given, Securities called
for redemption become due and payable on the redemption date at
the redemption price stated in the notice.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall
deposit with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Securities to
be redeemed on that date.
When the Holder of a Security surrenders it for
redemption in accordance with the redemption notice, the Com-
pany shall pay to the Holder on the redemption date the redemp-
tion price and accrued interest to such date, except that:
(1) the Company will pay any such interest (except
defaulted interest) to Holders on the record
date of Registered Securities if the redemption
date occurs on an interest payment date; and
(2) the Company will pay any such interest to Hold-
ers of coupons that mature on or before the
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redemption date upon surrender of such coupons
to the Paying Agent.
Coupons maturing after the redemption date on a
called Security are void absent a payment default on that date.
Nevertheless, if a Holder surrenders for redemption a Bearer
Security missing any such coupons, the Company and the Trustee
may deduct the face amount of such coupons from the redemption
price. If thereafter the Holder surrenders to the Paying Agent
the missing coupons, the Company will return the amount so
deducted. The Company also may waive surrender of the missing
coupons if it receives an indemnity bond satisfactory to the
Company.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in
part, the Company shall deliver to the Holder a new Security of
the same series equal in principal amount to the unredeemed
portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
(1) The Company shall duly and punctually pay the
principal of (and premium, if any) and interest on a series in
accordance with the terms of the Securities for the series, any
related coupons, and this Indenture on the dates and in the
manner provided in the Securities and in this Indenture.
(2) Unless the Bond Resolution otherwise provides,
the Company shall pay interest on overdue principal of a series
of the Securities at the rate of interest or Yield to Maturity
(in the case of a Discounted Security) borne by such series of
Securities or at such other rate as may be specified in such
Security; and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.02. Corporate Existence.
Subject to Article 5, Company will do or cause to be
done all things necessary to preserve and keep in full force
and effect its corporate existence, material rights (charter
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and statutory) and franchises; provided, however, that the Com-
pany shall not be required to preserve any such material right
or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of
the business of the Company.
SECTION 4.03. SEC Reports.
The Company shall file with the Trustee within 30
days after it is required to file them with the SEC copies of
the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) which the Com-
pany is required to file with the SEC pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934. The Company also
shall comply with the other provisions of TIA Section 314(a).
SECTION 4.04. Annual Review Certificate.
The Company shall file with the Trustee within 120
days after the end of each fiscal year of the Company an Offic-
ers' Certificate stating:
(1) that the signing officers have supervised a
review of the activities of the Company and its Subsidiar-
ies during the preceding fiscal year to determine whether
the Company has observed and performed its obligations
under this Indenture; and
(2) that to the best knowledge of each officer sign-
ing such certificate the Company has observed and per-
formed all of its covenants in this Indenture and is not
in default in the observance and performance of any of the
terms, provisions and conditions of this Indenture (or if
the Company is in such default, specifying those defaults
and the nature thereof of which he has knowledge).
Such certificate need not comply with Section 12.05.
SECTION 4.05. Notice to Trustee of Certain Defaults.
The Company shall give the Trustee within 30 days
written notice of (a) any failure of the kind described in Sec-
tion 6.01(3) which remains uncured for 30 days after the Com-
pany has knowledge thereof, or (b) an event of default
described in Section 6.01(4).
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SECTION 4.06. Further Assurances to Trustee.
The Company will, upon request of the Trustee, exe-
cute and deliver such further instruments and do such further
acts as may reasonably be necessary or proper to carry out more
effectively the purposes of this Indenture.
ARTICLE FIVE
SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into,
or transfer all or substantially all of its assets to, any per-
son unless:
(1) the person is organized under the laws of the
United States or a State thereof;
(2) the person assumes by supplemental indenture all
the obligations of the Company under this Inden-
ture, the Securities and any coupons;
(3) immediately after the transaction no Default
exists; and
The successor shall be substituted for the Company,
and thereafter all obligations of the Company under this Inden-
ture, the Securities and any coupons shall terminate.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" with respect to a series of the
Securities occurs if:
(1) the Company defaults in the payment of
interest on a Security of such series when the same
becomes due and payable and the default continues for
a period of 30 days;
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(2) the Company defaults in the payment of the
principal of a Security of such series when the same
becomes due and payable at maturity, upon redemption
or otherwise, or in the making of any sinking fund
payment, if any, required by the terms of such
series;
(3) the Company fails to comply with any of its
other covenants, conditions or agreements in the
Securities of such series or this Indenture and the
default continues for the period and after the notice
specified below;
(4) the Company, pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an
order for relief against it in an invol-
untary case,
(C) consents to the appointment of
a Custodian of it or for all or substan-
tially all of its property, or
(D) makes a general assignment for
the benefit of its creditors;
(5) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Com-
pany in an involuntary case,
(B) appoints a Custodian of the
Company for all or substantially all of
its property, or
(C) orders the liquidation of the
Company, and the order or decree remains
unstayed and in effect for 90 days;
(6) a default under any bond, debenture, note
or other evidence of indebtedness for money borrowed
by the Company (including a default with respect to
Securities of any series other than that series) or
under any mortgage, indenture or instrument under
which there may be issued or by which there may be
secured or evidenced any indebtedness for money
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borrowed by the Company (including this Indenture),
whether such indebtedness now exists or shall here-
after be created, which default shall involve an
amount in excess of $50,000,000, and shall constitute
a failure to pay such indebtedness when due and pay-
able after the expiration of any applicable grace
period with respect thereto and shall have resulted
in such indebtedness becoming or being declared due
and payable prior to the date on which it would
otherwise have become due and payable, without such
indebtedness having been discharged, or such acceler-
ation having been rescinded or annulled within a
period of 30 days after there shall have been given,
by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the
Holders of at least 10% in principal amount of the
outstanding Securities of that series a written
notice specifying such default and requiring the Com-
pany to cause such indebtedness to be discharged or
cause such acceleration to be rescinded or annulled
and stating that such notice is a "Notice of Default"
hereunder; or
(7) any other Event of Default provided with
respect to Securities of that series.
The term "Bankruptcy Law" means Title 11, U.S. Code
or any similar Federal or State law for the relief of debtors.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
A default under clause 3 is not an Event of Default
with respect to a series of the Securities until the Trustee or
the Holders of at least 25% in principal amount of the out-
standing Securities of such series notify the Company of the
default and the Company does not cure the default within 60
days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice
is a "Notice of Default."
SECTION 6.02. Acceleration.
If an Event of Default with respect to a series of
the Securities occurs and is continuing, the Trustee by notice
to the Company, or the Holders of at least 25% in principal
amount of the outstanding Securities of such series by notice
to the Company and the Trustee, may declare the principal and
accrued interest on all the Securities of such series to be due
and payable immediately. Upon such declaration, such principal
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(or, if the Securities of a series are Discounted Securities,
such portion of the principal due and payable immediately. The
Holders of a majority in principal amount of the outstanding
Securities of such series by notice to the Trustee may rescind
or annul such acceleration and its consequences if all existing
Events of Default with respect to such series have been cured
or waived pursuant to Section 6.04 and if the rescission would
not conflict with any judgment or decree.
SECTION 6.03. Other Remedies.
(1) If an Event of Default with respect to a
series of the Securities occurs and is continuing,
the Trustee may pursue any available remedy by pro-
ceeding at law or in equity to collect the payment of
principal or interest on the Securities of such
series or to enforce the performance of any provision
of the Securities of such series or this Indenture,
and may take any necessary action required of it as
Trustee to settle, compromise, adjust or otherwise
conclude any proceedings to which it is a party.
(2) The Trustee may maintain a proceeding even
if it does not possess any of the Securities or does
not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event
of Default. No remedy is exclusive of any other rem-
edy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
Subject to Section 11.02, the Holders of a majority
in principal amount of the outstanding Securities of a series
by notice to the Trustee may waive an existing Default with
respect to such series and its consequences. When a Default is
waived with respect to a series of the Securities, it is cured
and stops continuing with respect to such series.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the
outstanding Securities of a series may direct the time, method
and place of conducting any proceeding with respect to such
series for any remedy available to the Trustee or exercising
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any trust or power conferred on it. The Trustee, however, may
refuse to follow any direction that conflicts with law or this
Indenture, that is unduly prejudicial to the rights of another
Holder of a Security of such series, that would involve the
Trustee in personal liability, or if the Trustee does not have
sufficient indemnification against any loss or expense.
SECTION 6.06. Limitations on Suits.
(1) A Holder of a Security of a series may not
pursue any remedy with respect to this Indenture or
the Securities of such series unless:
(A) the Holder gives to the Trus-
tee written notice of a continuing Event
of Default with respect to such series;
(B) the Holders of at least 25% in
principal amount of the outstanding
Securities of such series make a written
request to the Trustee to pursue the
remedy with respect to such series;
(C) such Holder or Holders offer
to the Trustee indemnity satisfactory to
the Trustee against any loss, liability
or expense; and
(D) the Trustee does not comply
with the request within 60 days after
receipt of the request and the offer of
indemnity.
(2) a Securityholder may not use this Indenture
to prejudice the rights of another Securityholder of
the same series or to obtain a preference or priority
over the other Securityholder of the same series.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Inden-
ture, the right of a Holder of a Security to receive payment of
principal and interest on such Security, on or after the
respective due dates expressed in such Security, or to bring
suit for the enforcement of any such payment on or after such
respective dates, shall be absolute and unconditional and not
be impaired or affected without the consent of such Holder.
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SECTION 6.08. Collection Suit by Trustee.
If an Event of Default with respect to a series of
the Securities in payment of interest or principal or premium,
if any, specified in Section 6.01(1) and (2) occurs and is con-
tinuing, the Company will, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities, and the
Trustee may obtain judgment in its own name and as trustee of
an express trust and enforce the same against the Company for
the whole amount of principal and interest remaining unpaid
with respect to such series of the Securities.
SECTION 6.09. Trustee May File Proofs of Claims.
The Trustee may, and is appointed the true and lawful
attorney-in-fact for the Holders of the Securities to, (a) file
such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trus-
tee and the Securityholders allowed in any judicial proceedings
relative to the Company, its creditors or its property,
(b) collect and receive any monies or property payable or
deliverable on account of such claims as trustee of a construc-
tive trust or as holder of an equitable lien against the Com-
pany or regarding its assets, and (c) distribute the same after
deduction of its charges and expenses to the extent that such
charges and expenses are not paid out of the estate in any such
proceeding.
SECTION 6.10. Priorities.
(1) If the Trustee collects any money pursuant
to this Article with respect to a series of the Secu-
rities, it shall pay out the money in the following
order:
First: to the Trustee for amounts due under
Section 7.07;
Second: to Holders of the Securities of such
series for amounts due and unpaid on the Securities
of such series for principal (and premium, if any)
and interest, ratably, without preference or priority
of any kind according to the amounts due and payable
on the Securities of such series for principal and
interest, respectively; and
Third: the balance, if any, to the Company.
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(2) The Trustee may fix a record date and pay-
ment date for any payment to Holders of Securities of
the relevant series.
SECTION 6.11. Undertaking for Costs.
All parties to this Indenture agree, and each Holder
of any Security by his acceptance thereof shall be deemed to
have agreed, that in any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trus-
tee for any action taken or omitted by it as Trustee, a court
in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party liti-
gant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.07, or a suit by a Holder or
Holders of more than 10% in principal amount of the outstanding
Securities of a series.
SECTION 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has insti-
tuted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or aban-
doned 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 Trus-
tee and the Holders of Securities shall be restored severally
and respectively to their former positions hereunder and there-
after all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been
instituted.
SECTION 6.13. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities is intended to
be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION 6.14. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder
of any Security 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 acquies-
cence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders of Securities may be
exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities as
the case may be.
SECTION 6.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may law-
fully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the cove-
nants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, but will suffer and
permit the execution of every such power as though no such law
had been enacted.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(1) If an Event of Default actually known to the
Trustee has occurred and is continuing, the Trustee shall exer-
cise such of the rights and powers vested in it by this Inden-
ture and use the same degree of care and skill in their exer-
cise as a prudent person would exercise or use under the cir-
cumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of
Default actually known to the Trustee:
(A) The Trustee need perform only those duties
as are specifically set forth herein and no others and no
implied covenants or obligations shall be read into this
Indenture against the Trustee.
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(B) In the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions and such other doc-
uments delivered to it pursuant to Section 12.04 hereof
furnished to the Trustee and conforming to the require-
ments of this Indenture. However, the Trustee shall exam-
ine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(A) This paragraph does not limit the effect of
paragraph (2) of this Section 7.01.
(B) The Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(C) 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 pursu-
ant to Section 6.05
(4) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder to to take or omit to take any action under this
Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it or it does not
receive an indemnity satisfactory to it in its sole discretion
against such risk, liability, loss, fee or expense which might
be incurred by it in compliance with such request or direction.
(5) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (1), (2),
(3) and (4) of this Section 7.01.
(6) 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.
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SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(1) The Trustee may rely on any document believed by
it to be genuine and to have been signed or pre-
sented by the proper person. The Trustee need
not investigate any fact or matter stated in the
document.
(2) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an
Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take
in good faith in reliance on the Certificate or
Opinion.
(3) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence
of any agent appointed with due care.
(4) The Trustee shall not be liable for any action
it takes or omits to take in good faith which it
believes to be authorized or within its right or
powers.
(5) Any Agent shall have the same rights and be pro-
tected to the same extent as if it were Trustee.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities or coupons and
may otherwise deal with the Company or an Affiliate with the
same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the valid-
ity or adequacy of this Indenture or the Securities or any cou-
pons; it shall not be accountable for the Company's use of the
proceeds from the Securities; it shall not be responsible for
any statement in the Securities or any coupons; it shall not be
responsible for any overissue; it shall not be responsible for
determining whether the form and terms of any Securities or
coupons were established in conformity with this Indenture; and
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it shall not be responsible for determining whether any Securi-
ties were issued in accordance with this Indenture.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing on a series and
if it is known to the Trustee, the Trustee shall mail a notice
of the Default within 90 days after it occurs to Holders of
Registered Securities of the series. Except in the case of a
Default in payment on a series, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the
interest of Holders of the series. The Trustee shall withhold
notice of a Default described in Section 6.01(3) until at least
90 days after it occurs.
SECTION 7.06. Reports by Trustee to Holders.
Any report required by TIA Section 313(a) to be mailed to
Securityholders shall be mailed by the Trustee on or before
June 30 of each year. The Trustee also shall comply with TIA
Section 313(b), (c) and (d).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock
exchange on which any Securities are listed. The Company shall
notify the Trustee when any Securities are listed on a stock
exchange.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to
time reasonable compensation for its services. The Trustee's
compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any
loss or liability incurred by it. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall coop-
erate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made
without its prior written consent.
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The Company need not reimburse any expense or indem-
nify against any loss or liability incurred by the Trustee
through negligence or bad faith.
To secure the Company's payment obligations in this
Section, the Trustee shall have a lien prior to the Securities
and any coupons on all money or property held or collected by
the Trustee, except that held in trust to pay principal or
interest on particular securities.
SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appoint-
ment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided
in this Section.
The Trustee may resign by so notifying the Company.
The Holders of a majority in principal amount of the Securities
may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee with the Company's consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA Section 310(a)
or Section 310(b) or with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a Custodian or other public officer takes charge
of the Trustee or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section
6.01(4) or (5) occurs with respect to the
Trustee.
The Company also may remove the Trustee with or with-
out cause if the Company so notifies the Trustee three months
in advance and if no Default occurs during the three-month
period.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company
shall promptly appoint a successor Trustee.
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If a successor Trustee does not take office within 30
days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company or the Holders of a majority in
principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with TIA Section 310(a) or
Section 310(b) or with Section 7.10, any Securityholder may petition
any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written accep-
tance of its appointment to the retiring Trustee and to the
Company. Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under
this Indenture. The successor Trustee shall mail a notice of
its succession to Holders of Registered Securities. The retir-
ing Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided
for in Section 7.07.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which
shall be eligible to act as Trustee under TIA Sections 310(a)(1) and
310(a)(2). The Trustee shall have a combined capital and sur-
plus of at least $100,000,000 as set forth in its most recent
published annual report of condition. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of
TIA Section 310(b), the Trustee and the Company shall comply with the
provisions of TIA Section 310(b). If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
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SECTION 7.11. Preferential Collection of Claims Against
Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee
who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance
with their terms and, unless the Bond Resolution otherwise pro-
vides, in accordance with this Article.
The Company at any time may terminate as to a series
all of its obligations under this Indenture, the Securities of
the series and any related coupons ("legal defeasance option").
The Company at any time may terminate as to a series certain of
its obligations; provided that none of its obligations in the
Sections set forth in the immediately succeeding sentence may
be terminated ("covenant defeasance option"). However, in the
case of the legal defeasance option, the Company's obligations
in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08
shall survive until the Securities of the series are no longer
outstanding; thereafter the Company's obligations in Section
7.07 shall survive.
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its legal defeasance option,
a series may not be accelerated because of an Event of Default.
The Trustee upon request shall acknowledge in writing
the discharge of those obligations that the Company terminates.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal
defeasance option or its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with
the Trustee or another trustee money or U.S.
Government Obligations;
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(2) the Company delivers to the Trustee a certifi-
cate from a nationally recognized firm of inde-
pendent accountants expressing their opinion
that the payments of principal and interest when
due on the deposited U.S. Government Obligations
without reinvestment plus any deposited money
without investment will provide cash at such
times and in such amounts as will be sufficient
to pay principal and interest when due on all
the Securities of the series to maturity or
redemption, as the case may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under
any other agreement binding on the Company;
(5) the deposit does not cause the Trustee to have a
conflicting interest under TIA Section 310(a) or
Section 310(b) as to another series;
(6) the Company delivers to the Trustee an Opinion
of Counsel to the effect that Holders of the
series will not recognize income, gain or loss
for Federal income tax purposes as a result of
the defeasance;
(7) the Company delivers to the Trustee an Opinion
of Counsel to the effect that the trust result-
ing from the deposit does not constitute, or is
qualified as, a regulated investment company
under the Investment Company Act of 1940; and
(8) 91 days pass after the deposit is made and dur-
ing the 91-day period no Default specified in
Section 6.01(4) or (5) occurs that is continuing
at the end of the period.
Before or after a deposit the Company may make
arrangements satisfactory to the Trustee for the redemption of
Securities at a future date in accordance with Article 3.
"U.S. Government Obligations" means direct obliga-
tions of the United States which have the full faith and credit
of the United States pledged for payment and which are not
callable at the issuer's option, or certificates representing
an ownership interest in such obligations.
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SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Govern-
ment Obligations deposited with it pursuant to Section 8.02.
It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accor-
dance with this Indenture to the payment of principal and
interest on Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn
over to the Company upon request any excess money or securities
held by them at any time.
The Trustee and the Paying Agent shall pay to the
Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years.
After payment to the Company, Securityholders entitled to the
money must look to the Company for payment as unsecured general
creditors unless an abandoned property law designates another
person.
ARTICLE NINE
CONVERSION
SECTION 9.01. Conversion Privilege.
If the Bond Resolution establishing the terms of a
series of securities so provides Securities of any series may
be convertible into or for Common Stock (a "Conversion Right").
The Bond Resolution may establish, among other things, the Con-
version Rate, provisions for adjustments to the Conversion Rate
and limitations upon exercise of the Conversion Right.
A Holder may convert a portion of a Security if the
portion is $1,000 or an integral multiples thereof. Provisions
of this Indenture that apply to the conversion of the aggregate
principal amount a Security also apply to conversion of a por-
tion of it.
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all
requirements in the Securities or the Bond Resolution and
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(i) complete and manually sign the conversion notice (the "Con-
version Notice") provided for in the Bond Resolution or the
Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other
office or agency maintained for such purpose, (ii) surrender
the Security to the Conversion Agent or at such other office or
agency by physical delivery, (iii) if required, furnish appro-
priate endorsements and transfer documents, and (iv) if
required, pay all transfer or similar taxes. The date on which
such notice shall have been received by and the Security shall
have been so surrendered to the Conversion Agent is the "Con-
version Date." Such Conversion Notice shall be irrevocable and
may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conver-
sion of Securities not later than the fifth business day fol-
lowing the Conversion Date in respect of the cash portion
elected to be delivered in lieu of shares and not later than
the seventh business day following the Conversion Date in
respect of the portion to be settled in Common Stock.
If any Security is converted between the record date
for the payment of interest and the next succeeding interest
payment date, such Security must be accompanied by funds equal
to the interest payable on such succeeding interest payment
date on the principal amount so converted (unless such Security
shall have been called for redemption during such period, in
which case no such payment shall be required). A Security con-
verted on an interest payment date need not be accompanied by
any payment, and the interest on the principal amount of the
Security being converted will be paid on such interest payment
date to the registered holder of such Security on the immedi-
ately preceding record date. Subject to the aforesaid right of
the registered holder to receive interest, no payment or
adjustment will be made on conversion for interest accrued on
the converted Security or for interest, dividends or other dis-
tributions payable on any security issued on conversion.
If a Holder converts more than one Security at the
same time, the number of full shares issuable or cash payable
upon the conversion shall be based on the total principal
amount of the Securities converted.
Upon surrender of a Security that is converted in
part the Trustee shall authenticate for the Holder a new Secu-
rity equal in principal amount to the unconverted portion of
the Security surrendered; except that if a Global Security is
so surrendered the Trustee shall authenticate and deliver to
the Depositary a new Global Security in a denomination equal to
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and in exchange for the unconverted portion of the principal of
the Global Security so surrendered.
If the last day on which a Security may be converted
is a Legal Holiday in a place where a Conversion Agent is
located, the Security may be surrendered to that Conversion
Agent on the next succeeding day that is not a Legal Holiday.
SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion
Right, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of shares of Common
Stock upon the conversion. However, the Holder shall pay any
such tax which is due because securities or other property are
issued in a name other than the Holder's name. Nothing herein
shall preclude any income tax or other withholding required by
law or regulations.
SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors must
make pursuant to this Article 9 is conclusive, absent manifest
error.
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the
Company) has no duty to determine when or if an adjustment
under this Article 9 or any Bond Resolution should be made, how
it should be made or calculated or what it should be. The
Trustee (and each Conversion Agent other than the Company)
makes no representation as to the validity or value of any
shares issued upon conversion of Securities. The Trustee (and
each Conversion Agent other than the Company) shall not be
responsible for the Company's failure to comply with this
Article 9 or any provision of a Bond Resolution relating to a
Conversion Right.
SECTION 9.06. Company To Provide Conversion Securities.
The Company shall reserve out of its authorized but
unissued Common Stock or its Common Stock held in treasury suf-
ficient shares to permit the conversion of all of the Securi-
ties convertible into Common Stock.
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All shares of Common Stock of any person which may be
issued upon conversion of the Securities shall be validly
issued, fully paid and non-assessable.
The Company will comply with all securities laws reg-
ulating the offer and delivery of securities upon conversion of
Securities.
SECTION 9.07. Cash Settlement Option.
If the Bond Resolution so provides, the Company may
elect to satisfy, in whole or in part, a Conversion Right of
Securities convertible into Common Stock of any person by the
delivery of cash. The amount of cash to be delivered shall be
equal to the Market Price (as defined below) on the last Stock
Trading Day preceding the applicable Conversion Date of a share
of Common Stock multiplied by the number of shares of Common
Stock in respect of which the Company elects to deliver cash.
If the Company elects to satisfy, in whole or in part, a Con-
version Right by the delivery of shares of Common Stock, no
fractional shares will be delivered. Instead, the Company will
pay cash based on the Market Price for such fractional share of
Common Stock.
The "Market Price" of the Common Stock into which
Securities may be converted pursuant to a Bond Resolution or
this Article 9 on any Stock Trading Day means the weighted
average per share sale price for all sales of the Common Stock
on such Stock Trading Day (or, if the information necessary to
calculate such weighted average per share sale price is not
reported, the average of the high and low sale prices, or if no
sales are reported, the average of the bid and ask prices or,
if more than one in either case, the average of the average bid
and average ask prices), as reported in the composite transac-
tions for the New York Stock Exchange, or if the Common Stock
is not listed or admitted to trading on such exchange, as
reported in the composite transactions for the principal
national or regional United States securities exchange on which
the Common Stock is listed or admitted to trading or, if the
Common Stock is not listed or admitted to trading on a United
States national or regional securities exchange, as reported by
NASDAQ or by the National Quotation Bureau Incorporated. In
the absence of such quotations, the Company shall be entitled
to determine the Market Price on the basis of such quotations
as it considers appropriate.
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SECTION 9.08. Adjustment in Conversion Rate
for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(3) combines its outstanding shares of Common Stock
into a smaller number of shares;
(4) pays a dividend or makes a distribution on its
Common Stock in shares of its Capital Stock other than
Common Stock; or
(5) issues by reclassification of its Common Stock
any shares of its capital stock,
then the conversion privilege and the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the
Holder of a Security thereafter converted may receive the num-
ber of shares of Capital Stock of the Company (or, at the Com-
pany's option, an equivalent amount in cash) which he would
have owned immediately following such action if he had con-
verted the Security immediately prior to such action.
The adjustment shall become effective immediately
after the record date in the case of a dividend or distribution
and immediately after the effective date in the case of a sub-
division, combination or reclassification.
If after an adjustment a Holder of a Security may,
upon conversion, receive shares of two or more classes of Capi-
tal Stock of the Company, the Board of Directors of the Company
shall determine the allocation of the adjusted Conversion Rate
between or among the classes of Capital Stock. After such
allocation, the conversion privilege and the Conversion Rate of
each class of Capital Stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common
Stock in this Article.
SECTION 9.09. Adjustment in Conversion Rate for
Common Stock Issued Below Market Price.
If the Company issues to all holders of Common Stock
rights, options or warrants to subscribe for or purchase shares
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of Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock, or rights, options or
warrants to subscribe for or purchase such convertible or
exchangeable securities at a Price Per Share (as defined and
determined according to the formula given below) lower than the
current Market Price on the date of such issuance, the Conver-
sion Rate shall be adjusted in accordance with the following
formula:
AC = CC x O + N
--------
O + (R)
---
M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares outstanding immediately prior to such
issuance (which number shall include shares owned or held
by or for the account of the Company).
N = the "Number of Shares," which (i) in the case of rights,
options or warrants to subscribe for or purchase shares of
Common Stock or of securities convertible into or
exchangeable for shares of Common Stock, is the maximum
number of shares of Common Stock initially issuable upon
exercise, conversion or exchange thereof; and (ii) in the
case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable securities, is the
maximum number of shares of Common Stock initially issu-
able upon the conversion or exchange of the convertible or
exchangeable securities issuable upon the exercise of such
rights, options or warrants.
R = the proceeds received or receivable by the Company, which
(i) in the case of rights, options or warrants to sub-
scribe for or purchase shares of Common Stock or of secu-
rities convertible into or exchangeable for shares of Com-
mon Stock, is the aggregate amount received or receivable
by the Company in consideration for the sale and issuance
of such rights, options, warrants or convertible or
exchangeable securities, plus the minimum aggregate amount
of additional consideration, other than the convertible or
exchangeable securities, payable to the Company upon exer-
cise, conversion or exchange thereof; and (ii) in the case
of rights, options or warrants to subscribe for or pur-
chase convertible or exchangeable securities, is the
aggregate amount received or receivable by the Company in
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consideration for the sale and issuance of such rights,
options or warrants, plus the minimum aggregate considera-
tion payable to the Company upon the exercise thereof,
plus the minimum aggregate amount of additional considera-
tion, other than the convertible or exchangeable securi-
ties, payable upon the conversion or exchange of the con-
vertible or exchangeable securities; provided, that in
each case the proceeds received or receivable by the Com-
pany shall be deemed to be the amount of gross cash pro-
ceeds without deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase
thereof by underwriters or dealers or others performing
similar services or any expenses incurred in connection
therewith.
M = the current Market Price per share of Common Stock on the
date of issue of the rights, options or warrants to sub-
scribe for or purchase shares of Common Stock or the secu-
rities convertible into or exchangeable for shares of Com-
mon Stock or the rights, options or warrants to subscribe
for or purchase convertible or exchangeable securities.
"Price Per Share" shall be defined and determined accord-
ing to the following formula:
P = R
-
N
where:
P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants
or convertible or exchangeable securities for a consideration
consisting, in whole or in part, of property other than cash
the amount of such consideration shall be determined in good
faith by the Board of Directors whose determination shall be
conclusive and evidenced by a resolution of the Board of Direc-
tors filed with the Trustee.
The adjustment shall be made successively whenever
any such additional rights, options, warrants or convertible or
exchangeable securities are issued, and shall become effective
immediately after the date of issue of such shares, rights,
options, warrants or convertible or exchangeable securities.
To the extent that such rights, options or warrants
expire unexercised or to the extent any convertible or
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exchangeable securities are redeemed by the Company or other-
wise cease to be convertible or exchangeable into shares of
Common Stock, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect had the adjust-
ment made upon the date of issuance of such rights, options,
warrants or convertible or exchangeable securities been made
upon the basis of the issuance of rights, options or warrants
to subscribe for or purchase only the number of shares of Com-
mon Stock as to which such rights, options or warrants were
actually exercised and the number of shares of Common Stock
that were actually issued upon the conversion or exchange of
the convertible or exchangeable securities.
SECTION 9.10. Adjustment for Other Distributions.
If the Company distributes to all holders of its Com-
mon Stock any of its assets or debt securities or any rights or
warrants to purchase assets or debt securities of the Company,
the Conversion Rate shall be adjusted in accordance with the
following formula:
AC = CC x (O x M)
-------------
(O x M) - F
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding on the
record date mentioned below (which number shall include
shares owned or held by or for the account of the
Company).
M = the current Market Price per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants distributed. The Board of
Directors of the Company shall determine the fair market
value.
The adjustment shall become effective immediately
after the record date for the determination of stockholders
entitled to receive the distribution.
This Section does not apply to cash dividends or dis-
tributions or to reclassifications or distributions referred to
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in Section 9.08. Also, this Section does not apply to shares
issued below Market Price referred to in Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion
Rate, temporarily or otherwise, by any amount but in no event
shall such Conversion Rate result in the issuance of Common
Stock at a price less than the par value of the Common Stock at
the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made
unless the adjustment would require a change of at least 1% in
the Conversion Rate. Any adjustments that are not made due to
the immediately preceding sentence shall be carried forward and
taken into account in any subsequent adjustment; provided, that
any adjustment carried forward shall be deferred not in excess
of three years, whereupon any adjustment to the Conversion Rate
will be effected.
All calculations under this Article 9 shall be made
to the nearest cent or to the nearest 1/100th of a share, as
the case may be.
SECTION 9.13. When No Adjustment Required.
Except as set forth in Section 9.09, no adjustment in
the Conversion Rate shall be made because the Company issues,
in exchange for cash, property or services, shares of Common
Stock, or any securities convertible into shares of Common
Stock, or securities carrying the right to purchase shares of
Common Stock or such convertible securities.
No adjustment in the Conversion Rate need be made for
rights to purchase or the sale of Common Stock pursuant to a
Company plan providing for reinvestment of dividends or
interest.
No adjustment in the Conversion Rate need be made for
a change in the par value of the Common Stock.
No adjustment need be made for a transaction referred
to in Section 9.08, 9.09 or 9.10 if Securityholders are to par-
ticipate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in
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light of the basis and notice on which holders of Common Stock
participate in the transaction.
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company
shall promptly mail to Holders of Securities affected a notice
of the adjustment. The Company shall file with the Trustee an
Officers' Certificate or a certificate from the Company's inde-
pendent public accountants stating the facts requiring the
adjustment and the manner of computing it. The certificate
shall be conclusive evidence that the adjustment is correct,
absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that
would require an adjustment in the Conversion Rate,
(2) the Company proposes to take any action that
would require a supplemental indenture pursuant to
Section 9.16, or
(3) there is a proposed liquidation or dissolution
of the Company,
the Company shall mail to Holders of Securities of any affected
series a notice stating the proposed record date for a dividend
or distribution or the proposed effective date of a subdivi-
sion, combination, reclassification, consolidation, merger,
transfer, lease, liquidation or dissolution. The Company shall
mail the notice at least 15 days before such date. Failure to
mail the notice or any defect in it shall not affect the valid-
ity of the transaction.
SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to
Section 5.01 or a merger which reclassifies, exchanges, or
changes its outstanding Common Stock, the successor corporation
(if other than the Company) shall enter into a supplemental
indenture which shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or
other assets which he would have owned immediately after the
consolidation, merger, transfer or lease if he had converted
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the Security immediately before the effective date of the
transaction. The supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be prac-
tical to the adjustments provided for in this Article. The
successor company shall mail to Holders of Securities of any
affected series a notice briefly describing the supplemental
indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10
do not apply.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Agreement to Subordinate.
The Company agrees, and each Securityholder by
accepting a Security agrees, that the indebtedness evidenced by
the Securities and the payment of principal thereof and inter-
est thereon are subordinated in right of payment, to the extent
and in the manner provided in this Article, to the prior pay-
ment in full of all Senior Indebtedness and that the subordina-
tion is for the benefit of the holders of Senior Indebtedness.
Money and securities held in trust pursuant to
Article 8 are not subject to the subordination provisions of
this Article 10.
SECTION 10.02. Certain Definitions.
"Representative" means the indenture trustee or other
trustee, agent or representative for an issue of Senior
Indebtedness.
"Senior Indebtedness" means the principal of and
interest on (a) any and all indebtedness and obligations of the
Company (including indebtedness of others guaranteed by the
Company) other than the Securities, whether or not contingent
and whether outstanding on the date of this Indenture or there-
after created, incurred or assumed, which (i) are for money
borrowed; (ii) are evidenced by any bond, note, debenture or
similar instrument; (iii) represent the unpaid balance on the
purchase price of any property, business or asset of any kind;
(iv) are obligations of the Company as lessee under any and all
leases of property, equipment or other assets required to be
capitalized on the balance sheet of the lessee under GAAP;
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(v) are reimbursement obligations of the Company with respect
to letters of credit; (vi) are obligations of the Company with
respect to interest rate swap obligations and foreign exchange
agreements; or (vii) are obligations of others secured by a
lien to which any of the properties or assets (including, with-
out limitation, leasehold interests and any other tangible or
intangible property rights) of the Company are subject, whether
or not the obligations secured thereby shall have been assumed
by the Company or shall otherwise be the Company's legal lia-
bility and (b) any deferrals, amendments, renewals, extensions,
modifications and refundings of any indebtedness or obligations
of the types referred to above; provided that Senior Indebted-
ness shall not include (i) the Securities; (ii) any indebted-
ness or obligation of the Company which, by its express terms
or the express terms of the instrument creating or evidencing
it, is not superior in right of payment to the Securities; and
(iii) any indebtedness or obligation incurred by the Company in
connection with the purchase of assets, materials or services
in the ordinary course of business and which constitutes a
trade payable.
SECTION 10.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment or distribution of the Company's
assets to creditors of the Company in a liquidation or dissolu-
tion of the Company or in a bankruptcy, reorganization, insol-
vency, receivership or similar proceeding relating to the Com-
pany or its property, whether voluntary or involuntary:
(1) holders of Senior Indebtedness shall be entitled
to receive payment in full of the principal of and inter-
est to the date of payment on the Senior Indebtedness
before Securityholders shall be entitled to receive any
payment of principal of or interest on Securities; and
(2) until the Senior Indebtedness is paid in full,
any distribution to which Securityholders would be enti-
tled but for this Article shall be made to holders of
Senior Indebtedness as their interests may appear, except
the Securityholders may receive securities that are subor-
dinated to Senior Indebtedness to at least the same extent
as the Securities.
SECTION 10.04. Company Not To Make Payments with Respect to
Securities in Certain Circumstances.
Except for payment in or distribution of securities
that are subordinated to Senior Indebtedness to at least the
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same extent as the Securities, the Company shall not make any
payment with respect to the principal of or interest on any of
the Securities, or make any other payment with respect to the
purchase or other acquisition of any of the Securities:
(1) if there shall have occurred a default in the
payment of the principal of or interest on any Senior
Indebtedness in an aggregate principal amount of at least
$50,000,000; or
(2) if there shall exist at the time of such pay-
ment, or such payment would create, an event of default
(or an event which, with the giving of notice or the pas-
sage of time or both, would become an event of default)
with respect to any Senior Indebtedness in an aggregate
amount of at least $50,000,000 which would permit the
holders (or any specified proportion of such holders) of
such Senior Indebtedness to accelerate the maturity
thereof, and if notification of such default or event of
default has been given to the Company by a holder of such
Senior Indebtedness or by a trustee, agent or Representa-
tive for an issue of Senior Indebtedness;
unless and until, in each case, whether described in clause (1)
or clause (2), such default or event of default shall have been
cured or waived in the manner required by the instrument relat-
ing to such Senior Indebtedness or shall otherwise have ceased
to exist.
Regardless of anything to the contrary herein, noth-
ing shall prevent (a) any payment by the Trustee to the
Securityholders of amounts deposited with it pursuant to
Article 8 or (b) any payment by the Trustee or the Paying Agent
as permitted by Section 10.11.
SECTION 10.05. Acceleration of Securities.
If payment of the Securities is accelerated because
of an Event of Default, the Company shall promptly notify hold-
ers of Senior Indebtedness of the acceleration.
SECTION 10.06. When Distribution Must Be Paid Over.
In the event that the Company shall make any payment
to the Trustee of the principal of or interest on the Securi-
ties at a time when such payment is prohibited by Section 10.03
or 10.04, such payment shall be held by the Trustee, in trust
for the benefit of, and shall be paid forthwith over and
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delivered to, the Representatives or the trustee under the
indenture or other agreement (if any) pursuant to which Senior
Indebtedness may have been issued, as their respective inter-
ests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay
all Senior Indebtedness in full in accordance with its terms,
after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders that
because of this Article should not have been made to them, the
Securityholders who receive the distribution shall hold it in
trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
SECTION 10.07. Notice by Company.
The Company shall promptly notify the Trustee and any
Paying Agent in writing of any facts known to the Company that
would cause a payment of principal of or interest on Securities
to violate this Article.
SECTION 10.08. Subrogation.
After all Senior Indebtedness is paid in full and
until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the Security-
holders have been applied to the payment of Senior Indebted-
ness. A distribution made under this Article to holders of
Senior Indebtedness which otherwise would have been made to
Securityholders is not, as between the Company and Security-
holders, a payment by the Company on Senior Indebtedness.
SECTION 10.09. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness to
enforce the subordination of the indebtedness evidenced by the
Securities shall be impaired by any act or failure to act by
the Company or by its failure to comply with this Indenture.
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SECTION 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice
given to holders of Senior Indebtedness, the distribution may
be made and the notice given to their Representative.
SECTION 10.11. Rights of Trustee and Paying Agent.
The Trustee or Paying Agent may continue to make pay-
ments on the Securities until a Trust Officer of the Trustee
receives written notice of facts that would cause a payment of
principal of or interest on the Securities to violate this
Article. Only the Company, a Representative or a holder of an
issue of Senior Indebtedness that has no Representative may
give the notice.
The Trustee shall be entitled to rely on the delivery
to it of a written notice by a person representing himself to
be a holder of Senior Indebtedness (or a Representative on
behalf of such holder) to establish that such notice has been
given by a holder of Senior Indebtedness or a Representative on
behalf of any such holder. In the event that the Trustee
determines in good faith that further evidence is required with
respect to the right of any person who is a holder of Senior
Indebtedness to participate in any payment or distribution pur-
suant to this Article, the Trustee may request such person to
furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness held by such person,
the extent to which such person is entitled to participate in
such payment or distribution and any other facts pertinent to
the rights of such person under this Article, and if such evi-
dence 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 or until such time as the
Trustee shall be otherwise satisfied as to the right of such
person to receive such payment.
The Trustee in its individual or any other capacity
may hold Senior Indebtedness with the same rights it would have
if it were not Trustee. Any Agent may do the same with like
rights.
The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness and shall not be
liable to any such holder if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other per-
son money or assets to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.
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<PAGE>
SECTION 10.12. Officers' Certificate.
If there occurs an event referred to in Section 10.03
or 10.04, the Company shall promptly give to a Trust Officer of
the Trustee an Officers' Certificate (on which the Trustee may
conclusively rely) identifying all holders of Senior Indebted-
ness or their Representatives and the principal amount of
Senior Indebtedness then outstanding held by each such holder
and stating the reasons why such Officers' Certificate is being
delivered to the Trustee.
SECTION 10.13. Obligation of Company Unconditional.
Nothing contained in this Article 10 or elsewhere in
this Indenture or in any Bond Resolution is intended to or
shall impair, as between the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securi-
ties, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the
same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of
the Holders of the Securities and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of
any Security from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to
the rights, if any, under this Article 10 of the holders of
Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any distribution of assets of the Company referred to in
this Article 10, the Trustee, subject to the provisions of
Section 7.02, and the Holders of the Securities shall be enti-
tled to rely upon any order or decree by any court of competent
jurisdiction in which such dissolution, winding up, liquidation
or reorganization proceedings are pending, or a certificate of
the liquidating trustee or agent or other person making any
distribution to the Trustee or the Holders of the Securities,
for the purpose of ascertaining the persons entitled to par-
ticipate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or dis-
tributed thereon and all other facts pertinent thereto or to
this Article 10. Nothing contained in this Article 10 or else-
where in this Indenture or in any Security is intended to or
shall affect the obligation of the Company to make, or prevent
the Company from making, at any time except during the pendency
of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default
-48-
<PAGE>
specified in Section 10.04 (not cured or waived), payments at
any time of the principal or of interest on the Securities.
ARTICLE ELEVEN
AMENDMENTS
SECTION 11.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture, the
Securities or any coupons without the consent of any Security-
holder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide that specific provisions of this
Indenture shall not apply to a series not previ-
ously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or
more series; or
(6) to make any change that does not materially
adversely affect the rights of any
Securityholder.
SECTION 11.02. With Consent of Holders.
Unless the Bond Resolution otherwise provides, the
Company and the Trustee may amend this Indenture, the Securi-
ties and any coupons with the written consent of the Holders of
a majority in principal amount of the Securities of all series
affected by the amendment voting as one class. However, with-
out the consent of each Securityholder affected, an amendment
under this Section may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment;
(2) reduce the interest on or change the time for
payment of interest on any Security;
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<PAGE>
(3) change the fixed maturity of any Security;
(4) reduce the principal of any non-Discounted Secu-
rity or reduce the amount of principal of any
Discounted Security that would be due upon an
acceleration thereof;
(5) change the currency in which principal or inter-
est on a Security is payable; or
(6) make any change in Section 6.04 or 11.02, except
to increase the amount of Securities whose Hold-
ers must consent to an amendment or waiver or to
provide that other provisions of this Indenture
cannot be amended or waived without the consent
of each Securityholder affected thereby.
An amendment of a provision included solely for the
benefit of one or more series does not affect Securityholders
of any other series.
Securityholders need not consent to the exact text of
a proposed amendment or waiver; it is sufficient if they con-
sent to the substance thereof.
SECTION 11.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 11.01 or 11.02
shall be set forth in a supplemental indenture that complies
with the TIA as then in effect.
If a provision of the TIA requires or permits a pro-
vision of this Indenture and the TIA provision is amended, then
the Indenture provision shall be automatically amended to like
effect.
SECTION 11.04. Effect of Consents.
An amendment or waiver becomes effective in accor-
dance with its terms and thereafter binds every Securityholder
entitled to consent to it.
A consent to an amendment or waiver by a Holder of a
Security is a continuing consent by the Holder and every subse-
quent Holder of a Security that evidences the same debt as the
consenting Holder's Security. Any Holder or subsequent Holder
may revoke the consent as to his Security if the Trustee
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<PAGE>
receives notice of the revocation before the amendment or
waiver becomes effective.
The Company may fix a record date for the determina-
tion of Holders of Registered Securities entitled to give a
consent. The record date shall not be less than 10 nor more
than 60 days prior to the first written solicitation of
Securityholders.
SECTION 11.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate
notation about an amendment or waiver on any Security there-
after authenticated. The Company may issue in exchange for
affected Securities new Securities that reflect the amendment
or waiver.
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act.
The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically
deemed included herein unless expressly excluded by this Inden-
ture) are a part of and govern this Indenture, whether or not
physically contained herein.
If any provision of this Indenture limits, qualifies
or conflicts with another provision which is required to be
included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.02. Notices.
Any notice by one party to another is duly given if
in writing and delivered in person, sent by facsimile transmis-
sion confirmed by mail or mailed by first-class mail to the
other's address shown below:
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<PAGE>
Company: Engelhard Corporation
101 Wood Avenue
Iselin, New Jersey 08830
Attention: General Counsel
Trustee:
Attention: Corporate Trust Department
A party, by notice to the other parties, may desig-
nate additional or different addresses for subsequent notices.
Any notice mailed to a Securityholder shall be mailed
to his address shown on the register kept by the Transfer Agent
or on the Bearer Securities List referred to in Section 2.06.
Failure to mail a notice to a Securityholder or any defect in a
notice mailed to a Securityholder shall not affect the suffi-
ciency of the notice mailed to other Securityholders or the
sufficiency of any published notice.
If a notice is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not
the addressee receives it.
If the Company mails a notice to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same
time.
If in the Company's opinion it is impractical to mail
a notice required to be mailed or to publish a notice required
to be published, the Company may give such substitute notice as
the Trustee approves. Failure to publish a notice as required
or any defect in it shall not affect the sufficiency of any
mailed notice.
All notices shall be in the English language, except
that any published notice may be in an official language of the
country of publication.
A "notice" includes any communication required by
this Indenture.
SECTION 12.03. Communications by Holders with Other Holders.
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<PAGE>
Securityholders may communicate pursuant to TIA
Section 312(b) with other Securityholders with respect to their
rights under this Indenture or the Securities. The Company,
the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company
shall if so requested furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions prece-
dent, if any, provided for in this Indenture
relating to the proposed action have been com-
plied with; and
(2) an Opinion of Counsel stating that, in the opin-
ion of such counsel, all such conditions prece-
dent have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compli-
ance with a condition or covenant provided for in this Inden-
ture shall include:
(1) a statement that the person making such certifi-
cate or opinion has read such covenant or
condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such cer-
tificate or opinion are based;
(3) a statement that, in the opinion of such person,
he has made such examination or investigation as
is necessary to enable him to express an
informed opinion as to whether or not such cove-
nant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has
been complied with.
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<PAGE>
SECTION 12.06. Rules by Company and Agents.
The Company may make reasonable rules for action by
or a meeting of Securityholders. An Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 12.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on
which banking institutions are not required to be open. If a
payment date is a Legal Holiday at a place of payment, unless
the Bond Resolution otherwise provides, payment may be made at
that place on the next succeeding day that is not a Legal Holi-
day, and no interest shall accrue for the intervening period.
SECTION 12.08. No Recourse Against Others.
All liability described in the Securities of any
director, officer, employee or stockholder, as such, of the
Company is waived and released.
SECTION 12.09. Duplicate Originals.
The parties may sign any number of copies of this
Indenture. One signed copy is enough to prove this Indenture.
SECTION 12.10. Governing Law.
The laws of the State of New York shall govern this
Indenture, the Securities and any coupons, unless federal law
governs without regard to principles of conflicts of laws.
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<PAGE>
SIGNATURES
Dated: , 199[ ] ENGELHARD CORPORATION
By
Name:
Title:
Dated: , 199[ ] [ ]
as Trustee
By
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<PAGE>
EXHIBIT A
A Form of Registered Security
No. $
ENGELHARD CORPORATION
[Title of Security]
Engelhard Corporation
promises to pay to
or registered assigns
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
[ ]
ENGELHARD CORPORATION
Transfer Agent and Paying Agent
(SEAL)
Authenticated: Name:
Title:
Registrar, by
Authorized Signatory Name:
Title:
A-1
<PAGE>
ENGELHARD CORPORATION
[Title of Security]
1. Interest.1
Engelhard Corporation ("Company"), a Delaware corpo-
ration, promises to pay interest on the principal
amount of this Security at the rate per annum shown
above. The Company will pay interest semiannually on
and of each year
commencing , 19__. Interest on the Securi-
ties will accrue from the most recent date to which
interest has been paid or, if no interest has been
paid, from , 19__. Interest will be com-
puted on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment.2
The Company will pay interest on the Securities to
the persons who are registered holders of Securities
at the close of business on the record date for the
next interest payment date, except as otherwise pro-
vided in the Indenture. Holders must surrender Secu-
rities to a Paying Agent to collect principal pay-
ments. The Company will pay principal and interest
in money of the United States that at the time of
payment is legal tender for payment of public and
private debts. The Company may pay principal and
interest by check payable in such money. It may mail
an interest check to a holder's registered address.
3. Bond Agents.
Initially, [ ], will act
as Paying Agent, Transfer Agent and Registrar. The
Company may change any Paying Agent, Transfer Agent
or Registrar without notice. The Company or any
Affiliate may act in any such capacity. Subject to
certain conditions, the Company may change the
Trustee.
4. Indenture.
The Company issued the securities of this series
("Securities") under an Indenture dated as of ,
199[ ] ("Indenture") between the Company and
[ ] ("Trustee"). The terms of the
Securities include those stated in the Indenture and
A-2
<PAGE>
in the Bond Resolution creating the Securities and
those made part of the Indenture by the Trust Inden-
ture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb).
Securityholders are referred to the Indenture, the
Bond Resolution and the Act for a statement of such
terms.
5. Optional Redemption.3
On or after , the Company may redeem
all the Securities at any time or some of them from
time to time at the following redemption prices
(expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
and thereafter at 100%.
6. Mandatory Redemption.4
The Company will redeem $ principal amount of
Securities on and on each
thereafter through
at a redemption price of 100% of principal amount,
plus accrued interest to the redemption date.5 The
Company may reduce the principal amount of Securities
to be redeemed pursuant to this paragraph by sub-
tracting 100% of the principal amount (excluding pre-
mium) of any Securities (i) that the Company has
acquired or that the Company has redeemed other than
pursuant to this paragraph and (ii) that the Company
has delivered to the Registrar for cancellation. The
Company may subtract the same Security only once.
7. Additional Optional Redemption.6
In addition to redemptions pursuant to the above
paragraph(s), the Company may redeem not more than
$ principal amount of Securities on
and on each thereafter
through at a redemption price of 100% of
principal amount, plus accrued interest to the
redemption date.
A-3
<PAGE>
8. Notice of Redemption.7
Notice of redemption will be mailed at least 20 days
but not more than 60 days before the redemption date
to each holder of Securities to be redeemed at his
registered address.
9. Conversion.8
A Holder of a Security may convert it into Common
Stock of the Company or cash, or a combination
thereof, at the Company's option, at any time before
the close of business on ___________, or, if the
Security is called for redemption, the Holder may
convert it at any time before the close of business
on the redemption date. The initial Conversion Rate
is ____________ (or an equivalent amount in cash) per
$1,000 principal amount of the Securities, subject to
adjustment as provided in Article 9 of the
Indenture.9 The Company will deliver a check in lieu
of any fractional share. On conversion no payment or
adjustment for interest accrued on the Securities
will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted
between the record date for the payment of interest
and the next succeeding interest payment date, such
Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment
date on the principal amount so converted (unless
such Security shall have been called for redemption,
in which case no such payment shall be required). A
Security converted on an interest payment date need
not be accompanied by any payment, and the interest
on the principal amount of the Security being con-
verted will be paid on such interest payment date to
the registered holder of such Security on the immedi-
ately preceding record date.
To convert a Security a Holder must (1) complete and
sign the conversion notice on the back of the Secu-
rity, (2) surrender the Security to a Conversion
Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar
tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 or an integral mul-
tiple of $1,000.
A-4
<PAGE>
10. Subordination.10
The Securities are subordinated in right of payment,
in the manner and to the extent set forth in the
Indenture, to the prior payment in full of all Senior
Indebtedness (as defined in the Indenture). Each
Holder by accepting a Security agrees to such subor-
dination and authorizes the Trustee to give it
effect.
11. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons
in denominations of $1,00011 and whole multiples of
$1,000. The transfer of Securities may be registered
and Securities may be exchanged as provided in the
Indenture. The Transfer Agent may require a holder,
among other things, to furnish appropriate endorse-
ments and transfer documents and to pay any taxes and
fees required by law or the Indenture. The Transfer
Agent need not exchange or register the transfer of
any Security or portion of a Security selected for
redemption. Also, it need not exchange or register
the transfer of any Securities for a period of 15
days before a selection of Securities to be redeemed.
12. Persons Deemed Owners.
The registered holder of a Security may be treated as
its owner for all purposes.
13. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the
Securities may be amended with the consent of the
holders of a majority in principal amount of the
securities of all series affected by the amendment.12
Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the
Indenture or the Securities may be amended, among
other things, to cure any ambiguity, omission, defect
or inconsistency; to provide for assumption of Com-
pany obligations to Securityholders; or to make any
change that does not materially adversely affect the
rights of any Securityholder.
A-5
<PAGE>
14. Restrictive Covenants.13
The Securities are unsecured general obligations of
the Company limited to $ principal amount.
15. Successors.
When a successor assumes all the obligations of the
Company under the Securities and the Indenture, the
Company will be released from those obligations.
16. Defeasance Prior to Redemption or Maturity.14
Subject to certain conditions, the Company at any
time may terminate some or all of its obligations
under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest
on the Securities to redemption or maturity. U.S.
Government Obligations are securities backed by the
full faith and credit of the United States of America
or certificates representing an ownership interest in
such Obligations.
17. Defaults and Remedies.
An Event of Default with respect to this series of
Securities is: default for 30 days in payment of
interest on the Securities of this series; default in
payment of principal on them [If the Security is sub-
ject to redemption insert ",upon redemption or other-
wise"; and, if the Security is entitled to a sinking
fund also add "or in the making of any sinking fund
payment"]; failure by the Company for 60 days after
notice to it to comply with any of its other cove-
nants, conditions or agreements in the Indenture or
the Securities of this series; a default under any
bond, debenture, note or other evidence of indebted-
ness for money borrowed by the Company (including a
default with respect to Securities of any series
other than this series) or under any mortgage, inden-
ture or instrument under which there may be issued or
by which there may be secured or evidenced any
indebtedness for money borrowed by the Company
(including the Indenture), whether such indebtedness
now exists or shall hereafter be created, which
default shall involve an amount in excess of
$50,000,000 and shall constitute a failure to pay
such indebtedness when due and payable after the
A-6
<PAGE>
expiration of any applicable grace period with
respect thereto and shall have resulted in such
indebtedness becoming or being declared due and pay-
able prior to the date on which it would otherwise
have become due and payable, without such indebted-
ness having been discharged, or such acceleration
having been rescinded or annulled within a period of
30 days after notice as provided in the Indenture;
and certain events of bankruptcy or insolvency. [Add
other events of default if applicable]. If an Event
of Default with respect to this series of the Securi-
ties occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the
outstanding Securities of this series may declare all
the Securities of this series to be due and payable
immediately. [If the Security is a Discounted Secu-
rity, add "The amount due and payable 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 obliga-
tions in respect of the payment of the principal and
interest, if any, on the Discounted Securities of
this series shall be terminated.] Holders of Securi-
ties of this series may not enforce the Indenture or
the Securities of this series except as provided in
the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture
or the Securities of this series. Subject to certain
limitations, Holders of a majority in principal
amount of the outstanding Securities of this series
may direct the Trustee in its exercise of any trust
or power with respect to this series of the Securi-
ties. The Trustee may withhold from Holders of Secu-
rities of this series notice of any continuing
default (except a default in payment of principal or
interest) if it determines in good faith that with-
holding notice is in their interests. The Company is
required to file periodic reports with the Trustee as
to the absence of default.
18. Trustee Dealings with Company.
The Trustee, in its individual or any other capacity,
may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may
otherwise deal with those persons, as if it were not
Trustee.
A-7
<PAGE>
19. No Recourse Against Others.
A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for
any obligations of the Company under the Securities
or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Secu-
rity waives and releases all such liability. The
waiver and release are part of the consideration for
the issue of the Securities.
20. Authentication.
This Security shall not be valid until authenticated
by a manual signature of the Registrar.
21. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM
(=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Company will furnish to any Securityholder upon
written request and without charge a copy of the Indenture and
the Bond Resolution, which contains the text of this Security
in larger type. Requests may be made to: Secretary, Engelhard
Corporation, 101 Wood Avenue, Iselin, New Jersey 08830.
A-8
<PAGE>
EXHIBIT B
A Form of Bearer Security
No. $
ENGELHARD CORPORATION
[Title of Security]
Engelhard Corporation
promises to pay to bearer
the principal sum of Dollars on ,
Interest Payment Dates:
Dated:
[ ]
ENGELHARD CORPORATION
Transfer Agent
(SEAL)
Authenticated: Name:
Title:
[ ]
Registrar, by
Authorized Signature Name:
Title:
B-1
<PAGE>
ENGELHARD CORPORATION
[Title of Security]
1. Interest.1
Engelhard Corporation ("Company"), a Delaware corpo-
ration, promises to pay to bearer interest on the
principal amount of this Security at the rate per
annum shown above. The Company will pay interest
semiannually on and of each
year commencing , 19 . Interest on the
Securities will accrue from the most recent date to
which interest has been paid or, if no interest has
been paid, from , 19 . Interest will be
computed on the basis of a 360-day year of twelve 30-
day months.
2. Method of Payment.2
Holders must surrender Securities and any coupons to
a Paying Agent to collect principal and interest pay-
ments. The Company will pay principal and interest
in money of the United States that at the time of
payment is legal tender for payment of public and
private debts. The Company may pay principal and
interest by check payable in such money.
3. Bond Agents.
Initially, [ ], will
act as Transfer Agent, Paying Agent and Registrar.
The Company may change any Paying Agent, Transfer
Agent or Registrar without notice. The Company or
any Affiliate may act in any such capacity. Subject
to certain conditions, the Company may change the
Trustee.
4. Indenture.
The Company issued the securities of this series
("Securities") under an Indenture dated as of
, 199[ ] ("Indenture") between the Company
and [ ] ("Trustee"). The terms of
the Securities include those stated in the Indenture
and the Bond Resolution and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S.
Code Sections 77aaa-77bbbb). Securityholders are referred
B-2
<PAGE>
to the Indenture, the Bond Resolution and the Act for
a statement of such terms.
5. Optional Redemption.3
On or after , the Company may redeem all
the Securities at any time or some of them from time
to time at the following redemption prices (expressed
in percentages of principal amount), plus accrued
interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
and thereafter at 100%.
6. Mandatory Redemption.4
The Company will redeem $ principal amount of
Securities on and on each
thereafter through at a redemption price
of 100% of principal amount, plus accrued interest to
the redemption date.5 The Company may reduce the
principal amount of Securities to be redeemed pursu-
ant to this paragraph by subtracting 100% of the
principal amount (excluding premium) of any Securi-
ties (i) that the Company has acquired or that the
Company has redeemed other than pursuant to this
paragraph and (ii) that the Company has delivered to
the Registrar for cancellation. The Company may
subtract the same Security only once.
7. Additional Optional Redemption.6
In addition to redemptions pursuant to the above
paragraph(s), the Company may redeem not more than
$ principal amount of Securities on
and on each thereafter through
at a redemption price of 100% of principal amount,
plus accrued interest to the redemption date.
8. Notice of Redemption.7
Notice of redemption will be published once in an
Authorized Newspaper in the City of New York and if
the Securities are listed on any stock exchange
located outside the United States and such stock
exchange so requires, in any other required city
B-3
<PAGE>
outside the United States at least 20 days but not
more than 60 days before the redemption date. Notice
of redemption also will be mailed to holders who have
filed their names and addresses with the Transfer
Agent within the two preceding years. A holder of
Securities may miss important notices if he fails to
maintain his name and address with the Transfer
Agent.
9. Conversion.8
A Holder of a Security may convert it into Common
Stock of the Company or cash, or a combination
thereof, at the Company's option, at any time before
the close of business on ___________, or, if the
Security is called for redemption, the Holder may
convert it at any time before the close of business
on the redemption date. The initial Conversion Rate
is ____________ (or an equivalent amount in cash) per
$1,000 principal amount of the Securities, subject to
adjustment as provided in Article 9 of the
Indenture.9 The Company will deliver a check in lieu
of any fractional share. On conversion no payment or
adjustment for interest accrued on the Securities
will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted
between the record date for the payment of interest
and the next succeeding interest payment date, such
Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment
date on the principal amount so converted (unless
such Security shall have been called for redemption,
in which case no such payment shall be required). A
Security converted on an interest payment date need
not be accompanied by any payment, and the interest
on the principal amount of the Security being con-
verted will be paid on such interest payment date to
the registered holder of such Security on the immedi-
ately preceding record date.
To convert a Security a Holder must (1) complete and
sign the conversion notice on the back of the Secu-
rity, (2) surrender the Security to a Conversion
Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar
tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 or an integral mul-
tiple of $1,000.
B-4
<PAGE>
10. Subordination.10
The Securities are subordinated in right of payment,
in the manner and to the extent set forth in the
Indenture, to the prior payment in full of all Senior
Indebtedness (as defined in the Indenture). Each
Holder by accepting a Security agrees to such subor-
dination and authorizes the Trustee to give it
effect.
11. Denominations, Transfer, Exchange.
The Securities are in bearer form with coupons in
denominations of $5,00011 and whole multiples of
$5,000. The Securities may be transferred by deliv-
ery and exchanged as provided in the Indenture. Upon
an exchange, the Transfer Agent may require a holder,
among other things, to furnish appropriate documents
and to pay any taxes and fees required by law or the
Indenture. The Transfer Agent need not exchange any
Security or portion of a Security selected for
redemption. Also, it need not exchange any Securi-
ties for a period of 15 days before a selection of
Securities to be redeemed.
12. Persons Deemed Owners.
The holder of a Security or coupon may be treated as
its owner for all purposes.
13. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the
Securities may be amended with the consent of the
holders of a majority in principal amount of the
securities of all series affected by the amendment.12
Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the Inden-
ture or the Securities may be amended, among other
things, to cure any ambiguity, omission, defect or
inconsistency; to provide for assumption of Company
obligations to Securityholders; or to make any change
that does not materially adversely affect the rights
of any Securityholder.
B-5
<PAGE>
14. Restrictive Covenants.13
The Securities are unsecured general obligations of
the Company limited to $ principal amount.
15. Successors.
When a successor assumes all the obligations of the
Company under the Securities, any coupons and the
Indenture, the Company will be released from those
obligations.
16. Defeasance Prior to Redemption or Maturity.14
Subject to certain conditions, the Company at any
time may terminate some or all of its obligations
under the Securities, any coupons and the Indenture
if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of prin-
cipal and interest on the Securities to redemption or
maturity. U.S. Government Obligations are securities
backed by the full faith and credit of the United
States of America or certificates representing an
ownership interest in such Obligations.
17. Defaults and Remedies.
An Event of Default with respect to this series of
Securities is: default for 30 days in payment of
interest on the Securities of this series; default in
payment of principal on them [If the Security is sub-
ject to redemption insert ",upon redemption or other-
wise"; and, if the Security is entitled to a sinking
fund also add "or in the making of any sinking fund
payment"]; failure by the Company for 60 days after
notice to it to comply with any of its other cove-
nants, conditions or agreements in the Indenture or
the Securities of this series; a default under any
bond, debenture, note or other evidence of indebted-
ness for money borrowed by the Company (including a
default with respect to Securities of any series
other than this series) or under any mortgage, inden-
ture or instrument under which there may be issued or
by which there may be secured or evidenced any
indebtedness for money borrowed by the Company
(including the Indenture), whether such indebtedness
now exists or shall hereafter be created, which
default shall involve an amount in excess of
$50,000,000 and shall constitute a failure to pay
such indebtedness when due and payable after the
B-6
<PAGE>
expiration of any applicable grace period with
respect thereto and shall have resulted in such
indebtedness becoming or being declared due and pay-
able prior to the date on which it would otherwise
have become due and payable, without such indebted-
ness having been discharged, or such acceleration
having been rescinded or annulled within a period of
30 days after notice as provided in the Indenture;
and certain events of bankruptcy or insolvency. [Add
other events of default if applicable]. If an Event
of Default with respect to this series of the Securi-
ties occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the
outstanding Securities of this series may declare all
the Securities of this series to be due and payable
immediately. [If the Security is a Discounted Secu-
rity, add "The amount due and payable 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 obliga-
tions in respect of the payment of the principal and
interest, if any, on the Discounted Securities of
this series shall be terminated.] Holders of Securi-
ties of this series may not enforce the Indenture or
the Securities of this series except as provided in
the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture
or the Securities of this series. Subject to certain
limitations, Holders of a majority in principal
amount of the outstanding Securities of this series
may direct the Trustee in its exercise of any trust
or power with respect to this series of the Securi-
ties. The Trustee may withhold from Holders of Secu-
rities of this series notice of any continuing
default (except a default in payment of principal or
interest) if it determines in good faith that with-
holding notice is in their interests. The Company is
required to file periodic reports with the Trustee as
to the absence of default.
18. Trustee Dealings with Company.
The Trustee, in its individual or any other capacity,
may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may
otherwise deal with those persons, as if it were not
Trustee.
B-7
<PAGE>
19. No Recourse Against Others.
A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for
any obligations of the Company under the Securities
or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Secu-
rity waives and releases all such liability. The
waiver and release are part of the consideration for
the issue of the Securities.
20. Authentication.
This Security shall not be valid until authenticated
by a manual signature of the Registrar.
21. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM
(=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Company will furnish to any Securityholder upon
written request and without charge a copy of the Indenture and
the Bond Resolution, which contains the text of this Security
in larger type. Requests may be made to: Secretary, Engelhard
Corporation, 101 Wood Avenue, Iselin, New Jersey 08830.
B-8
<PAGE>
[FACE OF COUPON]
...............
[$]............
Due............
ENGELHARD CORPORATION
[Title of Security]
Unless the Security attached to this coupon has been
called for redemption, Engelhard Corporation ("Company") will
pay to bearer, upon surrender, the amount shown hereon when
due. This coupon may be surrendered for payment to any Paying
Agent listed on the back of this coupon unless the Company has
replaced such Agent. Payment may be made by check. This cou-
pon represents six months' interest.
ENGELHARD CORPORATION
By
[REVERSE OF COUPON]
PAYING AGENTS
<PAGE>
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate
per annum, insert a description of the manner in which the
rate of interest is to be determined. If the Security is
not to bear interest prior to maturity, so state.
2 If the method or currency of payment is different, insert
a statement thereof.
3 If applicable.
4 If applicable.
5 If the Security is a Discounted Security, insert amount to
be redeemed or method of calculating such amount.
6 If applicable. Also insert, if applicable, provisions for
repayment of Securities at the option of the
Securityholder.
7 If applicable.
8 If applicable.
9 If additional or different adjustment provisions apply so
specify.
10 If additional or different subordination terms apply,
insert a brief summary thereof.
11 If applicable. Insert additional or different
denominations.
12 If different terms apply, insert a brief summary thereof.
13 If applicable. If additional or different covenants
apply, insert a brief summary thereof.
14 If applicable. If different defeasance terms apply,
insert a brief summary thereof.
Note: U.S. tax law may require certain legends on Discounted
and Bearer Securities.
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_________________________________________
: :
:_______________________________________:
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the books of the Company.
The agent may substitute another to act for him.
Date: _______________ Your Signature:
(Sign exactly as your name appears on the other side of
this Security)
C-1
<PAGE>
EXHIBIT D
CONVERSION NOTICE
To convert this Security,
check the box:
_____
/ /
To convert only part of this
Security, state the amount
(must be in integral multiples
of $1,000);
$_____________________________
If you want the securities
delivered upon conversion made
out in another person's name,
fill in the form below:
(Insert other person's Social
Security or Tax I.D. Number)
______________________________
______________________________
______________________________
______________________________
(Print or type other
person's name, address
and zip code)
Date: _________ Signature(s): ______________________________
______________________________
(Sign exactly as your name(s)
appear(s) on the other side of
this Security)
D-1
<PAGE>
Signature(s) guaranteed by: ________________________________
(All signatures must be
guaranteed by a member of a
national securities exchange or
of the National Association of
Securities Dealers, Inc. or by a
commercial bank or trust company
located in the United States)
D-2
<PAGE>
CAHILL GORDON & REINDEL
EIGHTY PINE STREET
NEW YORK, N.Y. 10005
May 23, 1996
(212) 701-3000
Engelhard Corporation
101 Wood Avenue
Iselin, New Jersey 08830-0770
Ladies and Gentlemen:
We have acted as special counsel to Engelhard Corpora-
tion, a Delaware corporation (the "Company"), in connection with
the filing of a Registation Statement on Form S-3 (the "Registra-
tion Statement") under the Securities Act of 1933, as amended (the
"Act"), relating to (i) up to $250 million aggregate principal
amount (or such greater principal amount that may result from
issuances with original issue discount) of the Company's unsecured
senior and subordinated debt securities (the "Debt Securities")
that may be issued from time to time pursuant to indentures
(collectively the "Indentures") to be substantially in the form
filed as Exhibits 4.1 and 4.2 to the Registration Statement, and
(ii) shares of the Company's Common Stock, par value $1.00 per
<PAGE>
-2-
share (the "Common Stock"), that may be issuable upon redemption
or conversion of certain Debt Securities.
We advise you that, in our opinion, the Debt Securities
have been duly authorized and (upon execution and delivery of the
applicable Indenture and execution and authentication of the Debt
Securities in accordance with such Indenture and delivery to the
purchasers thereof against payment therefor pursuant to a sale in
the manner described in the Registration Statement, including the
prospectus forming a part thereof (the "Prospectus") and any pro-
spectus supplement thereto) will be legally issued, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy, insol-
vency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
We also advise you that, in our opinion, shares of Com-
mon Stock issuable upon redemption or conversion of any Debt Secu-
rities that are redeemable for or convertible into Common Stock,
when issued in accordance with the terms of the applicable Inden-
ture upon redemption or conversion of such Debt Securities (assum-
ing that such issuance has previously been authorized by all nec-
essary corporate action by the Company's Board of Directors and
otherwise), will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an
Exhibit to the Registration Statement and to the reference to our
firm under the caption "Legal Matters" in the Registration State-
ment and related Prospectus. Our consent to such reference does
not constitute a consent under Section 7 of the Act, as in con-
senting to such reference we have not certified any part of the
Registration Statement and do not otherwise come within the cate-
gories of persons whose consent is required under said Section 7
or under the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
Cahill Gordon & Reindel
EXHIBIT 12.1
ENGELHARD CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March, 31 Year Ended December 31,
----------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income from continuing
operations before
provision for income taxes $45,531 $185,312 $157,306 $(4,709) $133,858 $117,569
Add/(deduct)
Portion of rents
representative
of the interest factor 1,175 4,700 4,800 4,500 4,000 4,200
Interest on indebtedness 9,527 31,326 21,954 13,696 16,231 21,658
Equity dividends 0 3,411 3,800 2,600 3,100 3,200
Equity (earnings)/loss 927 (695) (632) (3,443) (7,445) (5,024)
------- -------- ------- ------ ------- -------
Earnings as adjusted $57,160 $224,054 187,228 12,644 149,744 141,603
======= ======== ======= ====== ======= =======
Fixed Charges
Portion of rents
representative
of interest factor $ 1,175 $ 4,700 4,800 4,500 4,000 4,200
Interest on indebtedness 9,527 31,326 21,954 13,696 16,231 21,658
Capitalized Interest 119 1,000 800 2,700 400 110
------- -------- ------- ------ ------- -------
$10,821 $37,026 $27,554 $20,896 $20,631 $25,968
======= ======== ======= ====== ======= =======
Ratio of Earnings to
Fixed Charges 5.28 6.05 6.79 (a) 7.26 5.45
</TABLE>
(a) For fiscal 1993, earnings were insufficient to cover fixed charges by
approximately $8.3 million. Earnings in 1993 were negatively impacted by
a charge of approximately $148 million for the realignment and
consolidation of businesses
<PAGE>
and environmental matters. Without such charge, the ratio of earnings to
fixed charges for fiscal 1993 would have been 7.14.
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement on Form S-3 of our report dated
February 6, 1996, on our audits of the financial statements of
Engelhard Corporation. We also consent to the reference to our
firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
New York, New York
May 23, 1996
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 7th day of May, 1996.
/s/ Linda G. Alvarado
----------------------------
Linda G. Alvarado
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints William E. Nettles
and Arthur A. Dornbusch, II, and each of them individually, the
true and lawful attorneys of the undersigned, with power to act
on behalf of the undersigned, to execute in his or her name,
place and stead in his or her capacity as an officer or direc-
tor or both of Engelhard Corporation, a Delaware corporation
(the "Company"), a Registation Statement on Form S-3 ("Regis-
tration Statement"), under the Securities Act of 1933, as
amended (the "Act"), covering up to $350,000,000 of debt and
equity securities of the Company to be issued from time to time
pursuant to Rule 415 under the Act, and any amendments to such
Registration Statement (including post-effective amendments),
and all instruments necessary or incidental in connection
therewith, and to file or cause to be filed such Registration
Statement and amendments thereto (including post-effective
amendments) and other instruments with the Securities and
Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on
behalf of the undersigned, every act whatsoever necessary or
desirable to be done in the premises, as fully to all intents
and purposes as the undersigned could do in person. The under-
signed hereby ratifies and approves the actions of said attor-
neys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ Orin R. Smith
----------------------------
Orin R. Smith
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ Marion H. Antonini
----------------------------
Marion H. Antonini
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ William R. Loomis, Jr.
----------------------------
William R. Loomis, Jr.
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ L. Donald LaTorre
----------------------------
L. Donald LaTorre
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ Norma T. Pace
----------------------------
Norma T. Pace
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ James V. Napier
----------------------------
James V. Napier
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 8th day of May, 1996.
/s/ Reuben F. Richards
----------------------------
Reuben F. Richards
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ Henry R. Slack
----------------------------
Henry R. Slack
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 9th day of May, 1996.
/s/ Douglas G. Watson
----------------------------
Douglas G. Watson
<PAGE>
ENGELHARD CORPORATION
Power of Attorney
The undersigned hereby appoints Orin R. Smith,
William E. Nettles and Arthur A. Dornbusch, II, and each of
them individually, the true and lawful attorneys of the under-
signed, with power to act on behalf of the undersigned, to exe-
cute in his or her name, place and stead in his or her capacity
as an officer or director or both of Engelhard Corporation, a
Delaware corporation (the "Company"), a Registation Statement
on Form S-3 ("Registration Statement"), under the Securities
Act of 1933, as amended (the "Act"), covering up to
$350,000,000 of debt and equity securities of the Company to be
issued from time to time pursuant to Rule 415 under the Act,
and any amendments to such Registration Statement (including
post-effective amendments), and all instruments necessary or
incidental in connection therewith, and to file or cause to be
filed such Registration Statement and amendments thereto
(including post-effective amendments) and other instruments
with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and per-
form, in the name and on behalf of the undersigned, every act
whatsoever necessary or desirable to be done in the premises,
as fully to all intents and purposes as the undersigned could
do in person. The undersigned hereby ratifies and approves the
actions of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
Power of Attorney on the 8th day of May, 1996.
/s/ Anthony W. Lea
----------------------------
Anthony W. Lea
Securities Act of 1933 File No. _________
(If application to determine eligibility
of trustee for delayed offering pursuant
to Section 305 (b) (2))
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)_________________
------------------
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
---------------
ENGELHARD CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-1586002
(I.R.S. Employer Identification No.)
101 WOOD AVENUE
ISELIN, NEW JERSEY
(Address principal executive offices)
08830
(Zip Code)
---------------------------------
SENIOR DEBT SECURITIES
(Title of the indenture securities)
------------------------------------------------------------------------
------------------------------------------------------------------------
<PAGE>
<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.
Board of Governors of The Federal Reserve System,
Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The Trustee is not the obligor, nor is the Trustee directly
or indirectly controlling, controlled by, or under common
control with the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
*1. -- A copy of the articles of association of the trustee as now
in effect . (See Exhibit T-1 (Item 12) , Registration No.
33-55626.)
*2. -- Copies of the respective authorizations of The Chase
Manhattan Bank (National Association) and The Chase Bank of New
York (National Association) to commence business and a copy of
approval of merger of said corporations, all of which documents
are still in effect. (See Exhibit T-1 (Item 12), Registration
No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank
(National Association) to exercise corporate trust powers, both
of which documents are still in effect. (See Exhibit T-1 (Item
12), Registration No. 2-67437.)
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit
T-1 (Item 12(a)), Registration No. 33-28806.)
*5. -- A copy of each indenture referred to in Item 4, if the
obligor is in default. (Not applicable.)
*6. -- The consents of United States institutional trustees
required by Section 321(b) of the Act. (See Exhibit T-1 (Item
12), Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
- -------------------
*The Exhibits thus designated are incorporated herein by reference.
Following the description of such Exhibits is a reference to the copy of the
Exhibit heretofore filed with the Securities and Exchange Commission, to which
there have been no amendments or changes.
-------------------
1.
<PAGE>
<PAGE>
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan 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 New York, and the
State of New York, on the 23rd day of May 1996.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By /s/ Sheik Wiltshire
----------------------------------
Sheik Wiltshire, Second Vice President
-----------------
2.
<PAGE>
<PAGE>
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
THE CHASE MANHATTAN BANK, N.A.
of New York in the State of New York, at the close of business on December 31,
1995, published in response to call made by Comptroller of the Currency, under
title 12, United States Code, Section 161.
CHARTER NUMBER 2370 COMPTROLLER OF THE CURRENCY
STATEMENT OF RESOURCES AND LIABILITIES NORTHEASTERN DISTRICT
<TABLE>
<CAPTION>
ASSETS
THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 5,574,000
Interest-bearing balances 5,950,000
Held to maturity securities 0
Available-for-sale securities 6,731,000
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 2,488,000
Securities purchased under agreements to resell 35,000
Loans and lease financing receivable:
Loans and leases, net of unearned income $ 57,786,000
LESS: Allowance for loan and lease losses 1,114,000
LESS: Allocated transfer risk reserve 0
------------
0
Loans and leases, net of unearned income, allowance, and reserve 56,672,000
Assets held in trading accounts 12,994,000
Premises and fixed assets (including capitalized leases) 1,723,000
Other real estate owned 364,000
Investments in unconsolidated subsidiaries and associated companies 28,000
Customers' liability to this bank on acceptances outstanding 944,000
Intangible assets 1,343,000
Other assets 5,506,000
------------
TOTAL ASSETS $100,352,000
------------
LIABILITIES
Deposits:
In domestic offices $ 32,483,000
Noninterest-bearing $ 13,704,000
Interest-bearing 18,779,000
------------
In foreign offices, Edge and Agreement subsidiaries, and IBFs 37,639,000
Noninterest-bearing $ 3,555,000
Interest-bearing 34,084,000
------------
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 1,572,000
Securities sold under agreements to repurchase 211,000
Demand notes issued to the U.S. Treasury 25,000
Trading liabilities 9,146,000
Other borrowed money:
With original maturity of one year or less 2,562,000
With original maturity of more than one year 379,000
Mortgage indebtedness and obligations under capitalized leases 40,000
Bank's liability on acceptances executed and outstanding 949,000
Subordinated notes and debentures 1,960,000
Other liabilities 5,411,000
-----------
TOTAL LIABILITIES 92,377,000
-----------
Limited-life preferred stock and related surplus 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 921,000
Surplus 5,285,000
<PAGE>
Undivided profits and capital reserves 1,751,000
Net unrealized holding gains (losses) on available-for-sale securities 7,000
Cumulative foreign currency translation adjustments 11,000
----------
TOTAL EQUITY CAPITAL 7,975,000
----------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK,
AND EQUITY CAPITAL $100,352,000
------------
I, Lester J. Stephens, Jr., Senior Vice President and Controller of the above
named bank do hereby declare that this Report of Condition is true and correct
to the best of my knowledge and belief.
(Signed) Lester J. Stephens, Jr.
We the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
(Signed) Thomas G. Labrecque
(Signed) Donald Trautlein Directors
(Signed) Richard J. Boyle
</TABLE>
