As filed with the Securities and Exchange Commission on September 16, 1996
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
AND POST-EFFECTIVE AMENDMENT UNDER
THE SECURITIES ACT OF 1933
FRANKLIN RESOURCES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 13-2670991
(State or Other Jurisdiction of
Incorporation or Organization) (I.R.S. Employer Identification No.)
777 MARINERS ISLAND BLVD.
SAN MATEO, CALIFORNIA 94404
(415) 312-3000
(Address, Including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
LESLIE M. KRATTER
VICE PRESIDENT AND
ASSISTANT SECRETARY
FRANKLIN RESOURCES, INC.
777 MARINERS ISLAND BLVD.
SAN MATEO, CALIFORNIA 94404
(415) 312-3000
(Name and Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
Copies to:
JEFFREY E. TABAK, ESQ. ERIC S. HAUETER, ESQ.
WEIL, GOTSHAL & MANGES LLP BROWN & WOOD LLP
767 FIFTH AVENUE 555 CALIFORNIA STREET
NEW YORK, NEW YORK 10153 SAN FRANCISCO, CALIFORNIA 94104
(212) 310-8000 (415) 772-1200
Approximate date of commencement of proposed sale of the securities to the
public: From time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.[_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of Each Class of Proposed Maximum Proposed Maximum Aggregate Amount of
Securities to be Registered Amount to be Registered(1)(2) Offering Price Per Unit(3) Offering Price(3) Registration Fee(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities $500,000,000 100% $500,000,000 $137,932
====================================================================================================================================
<FN>
(1) Such amount shall be increased, if any Debt Securities are issued at an
original issue discount, by an amount such that the net proceeds to be
received by the Registrant shall be equal to the above amount to be
registered. Any offering of Debt Securities denominated other than in
U.S. dollars will be treated as the equivalent in U.S. dollars based on
the official exchange rate applicable to the purchase of such Debt
Securities from the Registrant.
(2) Pursuant to Rule 429 under the Securities Act of 1933, $100,000,000 of
Debt Securities included in this table are being carried forward from
Registration Statement No. 33-53147 previously filed by the Registrant
on Form S-3, and the registration fee of $34,483 associated with such
Debt Securities was previously paid by the Registrant in connection with
such earlier filed Registration Statement.
(3) Estimated solely for the purpose of determining the registration fee.
The Registrant reserves the right to issue Debt Securities in series
having varying principal amounts and offering prices. Nevertheless, the
maximum aggregate offering price of the Debt Securities will not exceed
the amount to be registered set forth above.
</FN>
</TABLE>
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement is a combined Prospectus and relates to
this Registration Statement and Registration Statement No. 33-53147 previously
filed by the Registrant on Form S-3 and declared effective on May 19, 1994. This
Registration Statement also constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 33-53147, and such Post-Effective Amendment shall
hereafter become effective concurrently with the effectiveness of this
Registration Statement in accordance with Section 8(c) of the Securities Act of
1933.
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 thereafter shall become effective in accordance with Section 8(c) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(c),
may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 16, 1996
PROSPECTUS
$500,000,000
FRANKLIN RESOURCES, INC.
DEBT SECURITIES
Franklin Resources, Inc. (the "Company") may, from time to time, offer or
solicit offers to purchase its unsecured debt securities (the "Debt Securities")
in an aggregate principal amount (or net proceeds in the case of securities
issued at an original issue discount) not to exceed $500,000,000 or, if
applicable, the equivalent thereof in one or more foreign or composite
currencies. The Debt Securities may be offered in one or more series with the
same or various maturities on terms to be determined at the time of sale.
The specific designation, aggregate principal amount, authorized
denominations, purchase price, maturity, rate or rates (which may be fixed or
variable), and time of payment of any interest, any terms for mandatory or
optional redemption (including any sinking fund), any listing on a securities
exchange and any other specific terms of the Debt Securities in respect of which
this Prospectus is being delivered, together with the terms of offering of such
Debt Securities, will be set forth in one or more supplements to this Prospectus
(each, a "Prospectus Supplement") and one or more pricing supplements (each, a
"Pricing Supplement") accompanying this Prospectus. The Prospectus Supplement
will also contain information, where applicable, about certain U.S. federal
income tax, accounting and other considerations relating to the Debt Securities
covered by it. As used herein, Debt Securities shall include debt securities
denominated in United States dollars or, if so specified in an applicable
Prospectus Supplement, in any other currency or in composite currencies or in
amounts determined by reference to an index. See "Description of Debt
Securities."
--------------------
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 OR ANY SUPPLEMENT
HERETO. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Debt Securities may be offered through underwriters, agents or dealers,
or directly to purchasers by the Company or subsidiaries of the Company. Such
underwriters, agents or dealers may include, and may include a group of
underwriters managed by one or both of, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. If an underwriter,
agent or dealer is involved in the offering of any Debt Securities, the
underwriter's discount, agent's commission or dealer's purchase price will be
described in an applicable Prospectus Supplement, and the net proceeds to the
Company from such offering will be the public offering price of the offered Debt
Securities less such discount in the case of an underwriter, the purchase price
of the offered Debt Securities less such commission in the case of an agent or
the purchase price of the offered Debt Securities in the case of a dealer, and
less, in each case, the other expenses of the Company associated with the
issuance and distribution of such Debt Securities. See "Plan of Distribution."
--------------------
This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement
--------------------
The date of this Prospectus is _________, 1996.
<PAGE>
IN CONNECTION WITH THE OFFERING OF DEBT SECURITIES HEREUNDER, THE
UNDERWRITERS, IF ANY, MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICES OF SUCH SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations 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 authorized
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 securities by
anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices in New York (Seven World Trade Center, 13th Floor,
New York, New York 10048), and Chicago (500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511). Copies of these materials may be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such information may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. The Company's common stock is listed on the New York
Stock Exchange and the Pacific Stock Exchange, and reports, proxy statements and
other information concerning the Company may be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and the
Pacific Stock Exchange, Incorporated, 115 Sansome Street, Suite 1104, San
Francisco, California 94104.
This Prospectus constitutes a part of a Registration Statement filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the Debt Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1995, (ii) the Company's
Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 1995,
March 31, 1996 and June 30, 1996, and (iii) Current Reports on Form 8-K and
8-K/A filed by the Company on October 27, 1995, January 26, 1996, April 26,
1996, June 25, 1996, June 26, 1996, July 26, 1996 and August 30, 1996.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the offering of the Debt Securities, shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of 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 purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement or document so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any and all of the documents
described above other than exhibits to such documents which are not specifically
incorporated by reference in such documents. Written or telephone requests
should be directed to: Leslie M. Kratter, Vice President, Franklin Resources,
Inc., 777 Mariners Island Boulevard, San Mateo, California 94404; telephone
number (415) 312-3000.
FORWARD-LOOKING STATEMENTS
Certain statements set forth or incorporated by reference in this
Prospectus and any Supplement hereto may be "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995, and
reference is made to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1995, incorporated herein by reference, for a summary
of certain cautionary statements and risk factors to be considered in connection
with such forward-looking statements.
_________________
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<PAGE>
THE COMPANY
The Company is a diversified financial services holding company which,
primarily through its various domestic and international subsidiaries,
principally provides investment management, financial advisory and related
services to open end investment companies (mutual funds), closed end investment
companies, international equivalents of open and closed end investment
companies, private accounts, qualified retirement plans and private trusts. The
Company also provides advisory services to and sponsors and manages public and
private real estate programs, offers consumer banking services, insured
deposits, auto loans and credit cards and provides custodial, trustee and
fiduciary services to IRA and Keogh plans and to qualified retirement plans and
private trusts.
The wide range of financial services offered by the Company gives both
domestic and international institutional and individual investors a variety of
investment alternatives designed to meet varying investment objectives,
affording customers the opportunity both to allocate and to modify their
investment resources among investment products as changing economic and market
conditions warrant.
The Company's principal office is located at 777 Mariners Island
Boulevard, San Mateo, California 94404 and its telephone number is (415)
312-3000.
The Company was incorporated under the laws of the State of Delaware in
November 1969, and is the successor by merger to businesses previously conducted
since 1947.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement or
Pricing Supplement, the Company intends to use the net proceeds from the sale of
the Debt Securities:
(a) to provide a source for a portion of the financing of the acquisition
of certain assets of Heine Securities Corporation ("HSC") pursuant to that
certain Agreement to Merge the Businesses of HSC, Franklin Mutual
Advisers, Inc. (a wholly-owned subsidiary of the Company formerly known as
Elmore Securities Corporation) and the Company, dated as of June 25, 1996,
as amended, as more particularly described in the Company's Current Report
on Form 8-K/A filed June 26, 1996 and Current Report on Form 8-K filed
August 30, 1996, which descriptions and the financial information with
respect to the HSC acquisition set forth therein are incorporated herein
by reference. The Company anticipates that the aggregate purchase price of
the HSC acquisition will be financed with a combination of the Company's
available cash, shares of the Company's common stock, and one or more
sources of third-party financing including, without limitation, sales of
Debt Securities. In addition, the Company may from time to time evaluate
the possibility of acquiring other businesses providing financial services
and products similar to those provided by the Company and its
subsidiaries. If such businesses were to be acquired, the Company may use
the net proceeds from the sale of Debt Securities to finance all or a
portion of such acquisitions;
(b) to repay (i) outstanding medium term notes and short-term unsecured
notes previously issued by the Company and (ii) other indebtedness of the
Company; and
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<PAGE>
(c) to add to working capital, to invest in or extend credit to
subsidiaries, and for other general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges was (i) 11.5, 11.4, 9.2, 43.0 and
64.3 for the fiscal years ended September 30, 1995, 1994, 1993, 1992 and 1991,
respectively, and (ii) 13.1 for the nine months ended June 30, 1996. These
ratios were calculated by dividing the sum of fixed charges into the sum of
earnings before taxes and fixed charges. Fixed charges for these purposes
consist of all interest expense and one-third of rental expenses (the
approximate portion of rental expense representing interest).
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the "Indenture"),
dated as of May 19, 1994, as amended from time to time, between the Company and
The Chase Manhattan Bank (formerly Chemical Bank), as Trustee (the "Trustee"), a
copy of which is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular Sections or defined terms of the Indenture
are referred to, it is intended that such Sections or defined terms (including,
unless otherwise indicated herein, definitions of terms capitalized in these
summaries) shall be incorporated herein by reference. The following sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered, will be
described in the Prospectus Supplement relating to such Debt Securities.
The Company's assets consist principally of the stock in its subsidiaries.
Therefore, its rights and the rights of its creditors, including the holders of
Debt Securities, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization or otherwise will be subject to the
prior claims of the subsidiary's creditors, except to the extent that claims of
the Company itself as a creditor of the subsidiary may be recognized. In
addition, dividends, loans and advances from certain subsidiaries to the Company
may be restricted by net capital requirements under the Exchange Act and under
rules of certain regulatory bodies.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured obligations of the Company. Neither the Indenture nor the Debt
Securities will limit or otherwise restrict the amount of other indebtedness
which may be incurred or other securities which may be issued by the Company or
any of its subsidiaries. The Debt Securities will rank on a parity with all
other unsecured unsubordinated indebtedness of the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms: (1) the title
of such Debt Securities; (2) any limit on the aggregate principal amount of such
Debt Securities; (3) the price or prices (expressed as a percentage of the
aggregate principal amount thereof)
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at which such Debt Securities will be issued; (4) the date or dates, or the
method or methods, if any, by which such date or dates shall be determined, on
which such Debt Securities will mature; (5) the rate or rates (which may be
fixed or variable) per annum at which such Debt Securities will bear interest,
if any, or the method or methods, if any, by which such rate or rates are to be
determined; (6) the date or dates from which such interest, if any, on such Debt
Securities will accrue or the method or methods, if any, by which such date or
dates are to be determined, the dates on which such interest, if any, will be
payable, the date or dates on which payment of such interest, if any, will
commence and the Regular Record Dates for such Interest Payment Dates, if any;
(7) the dates, if any, on which and the price or prices at which the Debt
Securities will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund or to any purchase fund provisions, be
redeemed by the Company, and the other detailed terms and provisions of such
sinking and/or purchase funds; (8) the date, if any, after which and the price
or prices at which the Debt Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the holders thereof
and the other detailed terms and provisions of such optional redemption; (9) the
extent to which any of the Debt Securities will be issuable in temporary or
permanent global form and, if so, the identity of the depositary for such global
Debt Security, or the manner in which any interest payable on a temporary or
permanent global Debt Security will be paid; (10) the denomination or
denominations in which such Debt Securities are authorized to be issued; (11)
whether such Debt Securities will be issued in registered or bearer form or both
and, if in bearer form, the terms and conditions relating thereto and any
limitations on issuance of such bearer Debt Securities (including exchange for
registered Debt Securities of the same series); (12) information with respect to
book-entry procedures; (13) whether any of the Debt Securities will be issued as
Original Issue Discount Securities; (14) each office or agency where, subject to
the terms of the Indenture, such Debt Securities may be presented for
registration of transfer or exchange; (15) the currencies or currency units in
which such Debt Securities are issued and in which the principal of, premium and
interest, if any, on, and additional amounts, if any, in respect of such Debt
Securities will be payable; (16) whether the amount of payments of principal of,
premium and interest, if any, on, and additional amounts, if any, in respect of
such Debt Securities may be determined with reference to an index, formula or
other method or methods (which index, formula or method or methods may, but need
not, be based on one or more currencies, currency units or composite currencies,
commodities, equity indices or other indices) and the manner in which such
amounts shall be determined; (17) whether the Company or a holder may elect
payment of the principal of, premium or interest, if any, on, and additional
amounts, if any, in respect of such Debt Securities in a currency, currencies,
currency unit or units or composite currency or currencies other than that in
which such Debt Securities are denominated or stated to be payable, the period
or periods within which, and the terms and conditions upon which, such election
may be made, and the time and manner of determining the exchange rate between
the currency, currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are denominated or stated to be payable
and the currency, currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are to be so payable; (18) if other
than the Trustee, the identity of each Security Registrar, Paying Agent and
Authenticating Agent; (19) if applicable, the defeasance of certain obligations
by the Company pertaining to Debt Securities of the series; (20) the person to
whom any interest on any registered Debt Security of the series shall be
payable, if other than the person in whose name that Debt Security (or one or
more predecessor Debt Securities) is registered at the close of business on the
Regular Record Date for such interest, the manner in which, or the person to
whom, any interest on any bearer Debt Security of the series shall be payable,
if otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary global Debt Security on an Interest
Payment Date will be paid if other than in the manner provided in the Indenture;
(21) whether and under what circumstances the Company will pay additional
amounts as contemplated by Section 1004 of the Indenture (the term "interest,"
as used in this Prospectus, shall include such additional amounts) on such Debt
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Securities to any holder who is not a United States person (including any
modification to the definition of such term as contained in the Indenture as
originally executed) in respect of any tax, assessment or governmental charge
and, if so, whether the Company will have the option to redeem such Debt
Securities rather than pay such additional amounts (and the terms of any such
option); (22) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to any of such Debt Securities;
and (23) any other terms of the series.
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount. In the event of an
acceleration of the maturity of any Original Issue Discount Security, the amount
payable to the holder of such Original Issue Discount Security upon such
acceleration will be determined in accordance with the applicable Prospectus
Supplement, the terms of such Debt Security and the Indenture, but will be an
amount less than the amount payable at the maturity of the principal of such
Original Issue Discount Security. Special federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating thereto.
The Indenture does not contain any provisions that would limit the ability
of the Company to incur indebtedness or that would afford holders of Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Company. Reference is made to the Prospectus Supplement relating
to the particular series of Debt Securities offered thereby for information with
respect to any deletions from, modifications of or additions to the Events of
Default described below or covenants of the Company contained in the Indenture,
including any addition of a covenant or other provision providing event risk or
similar protection.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise indicated in the Prospectus Supplement, each series of
Debt Securities will be issued in registered form only, without coupons. The
Indenture, however, provides that the Company may also issue Debt Securities in
bearer form only, or in both registered and bearer form. Debt Securities in
bearer form shall not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to any United States person (as
defined below) other than offices located outside the United States of certain
United States financial institutions. As used herein, "United States person"
means any citizen or resident of the United States, any corporation, partnership
or other entity created or organized in or under the laws of the United States,
or any estate or trust, the income of which is subject to United States federal
income taxation regardless of its source, and "United States" means the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Debt Securities in bearer form will be subject to certification
procedures and may be affected by certain limitations under United States tax
laws. Such procedures and limitations will be described in the Prospectus
Supplement relating to the offering of the Debt Securities in bearer form.
Unless otherwise indicated in the applicable Prospectus Supplement,
registered Debt Securities will be issued in denominations of $1,000 or any
integral multiple thereof and bearer Debt Securities will be issued in
denominations of $5,000. No service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
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Unless otherwise described in the Prospectus Supplement relating thereto,
the principal, premium, if any, and interest, if any, of or on the Debt
Securities will be payable, and transfer of the Debt Securities will be
registrable, at the corporate trust office of The Chase Manhattan Bank, as
Paying Agent and Security Registrar under the Indenture, in The City of New
York, New York, provided that payments of interest may be made at the option of
the Company by check mailed to the address appearing in the Security Register of
the person in whose name such registered Debt Security is registered at the
close of business on the Regular Record Date (Sections 305, 307 and 1002).
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of, premium, if any, and interest, if any, on Debt
Securities in bearer form will be made payable, subject to any applicable laws
and regulations, at such office outside the United States as specified in the
Prospectus Supplement and as the Company may designate from time to time, at the
option of the holder, by check or by transfer to an account maintained by the
payee with a bank located outside the United States. Unless otherwise indicated
in the applicable Prospectus Supplement, payment of interest and certain
additional amounts on Debt Securities in bearer form will be made only against
surrender of the coupon relating to such Interest Payment Date. Except in
limited circumstances, no payment with respect to any Debt Security in bearer
form will be made at any office or agency of the Company in the United States or
by check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States.
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 Debt Securities") that will be
deposited with, or on behalf of, a depositary (the "Depositary") identified in
the Prospectus Supplement relating to such series. Global Debt Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Debt Security may not be transferred except as a whole by the
Depositary for such Global Debt 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 successor of such
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Global Debt Securities and certain limitations and restrictions relating to a
series of bearer Global Debt Securities, will be described in the Prospectus
Supplement relating to such series.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (a) failure to pay principal of or any premium on
any Debt Security of that series when due; (b) failure to pay any interest on
any Debt Security of that series when due, continued for 30 days; (c) failure to
deposit any sinking fund payment, when due, in respect of any Debt Security of
that series; (d) breach of any other covenant or warranty of the Company in the
Indenture (other than a covenant or warranty included in the Indenture solely
for the benefit of series of Debt Securities other than that series), continued
for 60 days after written notice by the Trustee or the holders of at least 25%
in aggregate principal amount of the Outstanding Debt Securities of such series
as provided in the Indenture; (e) certain events in bankruptcy, insolvency or
reorganization involving the Company or any Material Subsidiary (as hereinafter
defined); (f) acceleration of Indebtedness (defined in the Indenture as any
indebtedness for
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borrowed money or for the unpaid purchase price of real or personal property of,
or guaranteed by, the Company or any Material Subsidiary and computed in
accordance with generally accepted accounting principles) of the Company or any
Material Subsidiary in a principal amount in excess of $10,000,000 under the
terms of the instrument under which such Indebtedness was issued or secured, if
such acceleration is not annulled within 30 days after written notice by the
Trustee or the holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of such series as provided in the Indenture; and (g)
any other Event of Default provided with respect to Debt Securities of that
series (Section 501). If an Event of Default with respect to Debt Securities of
any series at the time Outstanding occurs and is continuing, either the Trustee
or the holders of at least 25% in aggregate principal amount of the Outstanding
Debt Securities of that series may declare the principal amount of all the Debt
Securities of that series to be due and payable immediately. At any time after a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on acceleration has been
obtained, the holders of a majority in aggregate principal amount of Outstanding
Debt Securities of that series may rescind and annul such acceleration, provided
that, among other things, all Events of Default with respect to such series,
other than payment defaults caused by such acceleration, have been cured or
waived as provided in the Indenture (Section 502).
"Material Subsidiary" means (a) Franklin Advisers, Inc., a California
corporation, (b) Franklin/Templeton Distributors, Inc., a New York corporation,
(c) Franklin/Templeton Investor Services, Inc., a California corporation, (d)
Templeton Global Advisers Limited (formerly Templeton, Galbraith & Hansberger,
Ltd.), a Bahamas corporation, (e) Templeton Investment Counsel, Inc., a Florida
corporation, (f) from and after the consummation, if any, of the acquisition of
HSC as described under "Use of Proceeds," Franklin Mutual Advisers, Inc.
(formerly Elmore Securities Corporation), a Delaware corporation, (g) any other
Subsidiary which owns, directly or indirectly, any of the capital stock of any
corporation listed in (a) through (f) above or any successor entity and (h) any
other Subsidiary with which any corporation listed in (a) through (f) above or
any successor entity is merged or consolidated or which acquires or succeeds to
a significant portion of the business, properties or assets of any corporation
listed in (a) through (f) above or any successor entity.
ADDITIONAL PROVISIONS
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders, unless such holders shall have
offered to the Trustee reasonable indemnity (Section 601). Subject to such
provisions for the indemnification of the Trustee and certain other conditions,
the holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the Debt
Securities of that series (Section 512).
No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless: (i) such holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of that series; (ii) the holders of not less than 25% in aggregate principal
amount of the Outstanding Debt Securities of that series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee; (iii) the Trustee shall have failed to institute such
proceeding within 60 days after receipt of such written request; and (iv) the
Trustee shall not
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have received from the holders of a majority in principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with such
request (Section 507). However, the holder of any Debt Security will have an
absolute right to receive payment of the principal of (and premium, if any) and
interest on such Debt Security on or after the due dates expressed in such Debt
Security and to institute suit for the enforcement of any such payment (Section
508).
The Company is required to furnish to the Trustee annually a statement as
to performance by the Company of certain of its obligations under the Indenture
and as to any default in such performance. The Company is also required to
deliver to the Trustee, within five days after the occurrence thereof, written
notice of any event which after notice or lapse of time or both would constitute
an Event or Default (Section 1009).
OUTSTANDING DEBT SECURITIES
In determining whether the holders of the requisite principal amount of
Outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, (i) the portion of the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon acceleration pursuant
to the terms of such Original Issue Discount Security as of the date of such
determination, (ii) the principal amount of any Indexed Security shall be the
principal face amount of such Indexed Security determined on the date of its
original issuance and (iii) any Debt Security owned by the Company or any other
obligor on such Debt Security or any Affiliate of the Company or such other
obligor shall be deemed not to be Outstanding (Section 101).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of 66 2/3% in aggregate
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment: provided, however, that no such modification or
amendment may, without the consent of the holder of each Outstanding Debt
Security affected thereby: (a) change the stated maturity date of the principal
of, or any premium or installment of interest on, or any additional amounts with
respect to, any Debt Security; (b) reduce the principal amount of, or any
premium or interest on, any Debt Security; (c) reduce the amount of principal of
an Original Issue Discount Security payable upon acceleration of the maturity
thereof or the amount thereof provable in bankruptcy; (d) adversely affect the
right of repayment at the option of any holder; (e) change the place of payment
of, currency of payment of principal of, or any premium or interest on, any Debt
Security; (f) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security; or (g) reduce the percentage in
principal amount of Outstanding Debt Securities of any series the consent of
whose holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults (Section 902).
The holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of each series may, on behalf of all holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Indenture (Section 1008). The
holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of each series may, on behalf of all holders of Debt Securities of
that series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default in the payment of principal or any
premium or interest, or a default in respect of a provision which
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under the Indenture cannot be modified or amended without the consent of the
holder of each affected Outstanding Debt Security of that series (Section 513).
Modification and amendment of the Indenture may be made by the Company and
the Trustee without the consent of any holder for any of the following purposes:
(i) to evidence the succession of another corporation to the Company; (ii) to
add to the covenants of the Company for the benefit of the holders of all or any
series of Debt Securities; (iii) to add Events of Default; (iv) to add or change
any provisions of the Indenture to facilitate the issuance of bearer Debt
Securities; (v) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debt Securities; (vi) to establish the form or
terms of Debt Securities of any series and any related coupons; (vii) to provide
for the acceptance of appointment by a successor Trustee; (viii) to cure any
ambiguity, defect or inconsistency in the Indenture, provided such action does
not adversely affect the interests of holders of Debt Securities of any series
or any related coupons in any material respect; (ix) to supplement any of the
provisions of the Indenture to such extent as shall be necessary to permit or
facilitate the defeasance and discharge of any series of Debt Securities,
provided such action does not adversely affect the interests of holders of Debt
Securities of such series or any related coupons in any material respect; (x) to
secure the Debt Securities; and (xi) to amend or supplement any provision
contained in the Indenture or in any supplemental indenture, provided that such
amendment or supplement does not materially adversely affect the interests of
the holders of any Debt Securities then Outstanding (Section 901).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may consolidate or merge with or into, or transfer its assets
substantially as an entirety to, any corporation organized under the laws of any
domestic jurisdiction, provided that the successor corporation assumes the
Company's obligations on the Debt Securities and under the Indenture, that
immediately after giving effect to the transaction no Event of Default, and no
event which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing, and that certain other conditions are met
(Section 801).
CONCERNING THE TRUSTEE
The Company and certain of its subsidiaries maintain banking relationships
with the Trustee in the ordinary course of their businesses.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby: (i)
directly to purchasers; (ii) through agents; (iii) through underwriters; (iv)
through dealers; or (v) through a combination of any such methods of sale. Such
underwriters, agents or dealers may include, and may include a group of
underwriters managed by one or both of, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions: (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
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Offers to purchase Debt Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Any such
agent, which may be deemed to be an underwriter as that term is defined in the
Securities Act, 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 Prospectus Supplement or
Pricing Supplement. Unless otherwise indicated in the Prospectus Supplement or
Pricing Supplement, any such agent will be acting on a reasonable efforts basis.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement or Pricing Supplement, which will
be used by the underwriters to make resales of the Debt Securities in respect of
which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale.
Certain of the underwriters, dealers or agents may be customers of, engage
in transactions with, and perform services for, the Company or one or more of
its affiliates in the ordinary course of business. Underwriters, dealers, agents
and other persons may be entitled, under agreements which may be entered into
with the Company, to indemnification against certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement or Pricing Supplement, the
Company will authorize agents and underwriters to solicit offers by certain
institutions to purchase Debt Securities from the Company at the public offering
price set forth in the Prospectus Supplement or Pricing Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date stated in the Prospectus Supplement or Pricing Supplement. Each
Contract will be for an amount not less than, and, unless the Company otherwise
agrees, the aggregate principal amount of Debt Securities sold pursuant to
Contracts shall be not less nor more than, the respective amounts stated in the
Prospectus Supplement or Pricing Supplement. Institutions with whom Contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but shall in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
(i) that the purchase by an institution of the Debt Securities covered by its
Contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject and (ii)
if such Debt Securities are being sold to underwriters, the Company shall have
sold to such underwriters the total principal amount of such Debt Securities
less the principal amount thereof covered by applicable Contracts. A commission
indicated in the Prospectus Supplement or Pricing Supplement will be paid to
underwriters and agents soliciting purchases of Debt Securities pursuant to
Contracts accepted by the Company.
ERISA CONSIDERATIONS
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), prohibits the borrowing of money, the sale of property and certain
other transactions involving the assets of plans that are qualified under the
Code ("Qualified Plans") or individual retirement accounts ("IRAs") and persons
who have certain specified relationships to them. Section 406 of the Employee
Retirement Income Security Act of 1974, as amended
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("ERISA"), prohibits similar transactions involving employee benefit plans that
are subject to ERISA ("ERISA Plans"). Qualified Plans, IRAs and ERISA Plans are
hereinafter collectively referred to as "Plans."
Persons who have such specified relationships are referred to as "parties
in interest" under ERISA and as "disqualified persons" under the Code. "Parties
in interest" and "disqualified persons" encompass a wide range of persons,
including any fiduciary (e.g., investment manager, trustee or custodian), any
person providing services (e.g., a broker), the Plan sponsor, an employee
organization any of whose members are covered by the Plan, and certain persons
related to or affiliated with any of the foregoing.
The Company's subsidiaries are considered "parties in interest" or
"disqualified persons" with respect to many Plans, including IRAs established
with any of them. The purchase and/or holding of Debt Securities by a Plan with
respect to which any of the Company's subsidiaries is a fiduciary and/or a
service provider (or otherwise is a "party in interest" or "disqualified
person") would constitute or result in a prohibited transaction under Section
406 of ERISA or Section 4975 of the Code, unless such Debt Securities are
acquired or held pursuant to and in accordance with an applicable statutory or
administrative exemption. An IRA that engages in a non-exempt prohibited
transaction could forfeit its tax-exempt status under Section 408 of the Code.
Applicable exemptions may include the exemption for services under Section
408(b)(2) of ERISA and certain prohibited transaction class exemptions (e.g.,
Prohibited Transaction Class Exemption 84-14 relating to qualified professional
asset managers, Prohibited Transaction Class Exemption 96-23 relating to certain
in-house asset managers and Prohibited Transaction Class Exemptions 75-1 and
86-128 relating to securities transactions involving employee benefit plans and
broker-dealers).
In accordance with ERISA's general fiduciary requirement, a fiduciary with
respect to any ERISA Plan who is considering the purchase of Debt Securities on
behalf of such plan should determine whether such purchase is permitted under
the governing plan document and is prudent and appropriate for the ERISA Plan in
view of its overall investment policy and the composition and diversification of
its portfolio. No IRA established with, or for which services are provided by,
any subsidiary of the Company should acquire any Debt Securities and other Plans
established with, or for which services are provided by, any subsidiary of the
Company should consult with counsel prior to making any such acquisition.
LEGAL OPINIONS
The legality of the Debt Securities offered hereby will be passed upon for
the Company by Weil, Gotshal & Manges LLP, New York, New York, and for the
underwriters or agents by Brown & Wood LLP, San Francisco, California.
EXPERTS
The audited consolidated financial statements and schedules of the Company
as of September 30, 1995 and 1994 and for each of the three years in the period
ended September 30, 1995, have been incorporated herein by reference in reliance
on the report of Coopers & Lybrand L.L.P., independent accountants, given the
authority of that firm as experts in accounting and auditing. The audited
financial statements of HSC as of December 31, 1995
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and 1994 and for each of the two years in the period ended December 31, 1995,
have been incorporated herein by reference in reliance on the report of Graber &
Co., independent accountants, given 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
The following table sets forth the expenses in connection with this
Registration Statement. All such expenses are estimates, other than the filing
fee payable to the Securities and Exchange Commission.
Item Amount
- ---- ------
SEC registration fee $ 137,932
Trustee's fees and expenses $ 10,000
Printing and engraving expenses $ 25,000
Legal fees and expenses $ 25,000
Accounting fees and expenses $ 10,000
Rating agencies' fees $________
Blue Sky fees and expenses $ 15,000
Miscellaneous $________
Total $________
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL") is
applicable to the officers, directors, employees and agents of the Company
("Covered Persons") and provides certain specific statutory rights and
limitations on indemnification to persons involved as plaintiff or defendant in
actual or threatened litigation or an investigation by reason of the status of
such person as an officer, director, employee or agent of a corporation.
Indemnification of Covered Persons for judgments or amounts paid in settlement
in civil cases, including attorneys' fees and other expenses is permitted,
provided such action or civil case is not brought by or in the right of the
corporation. In such instance, a Covered Person seeking indemnification must
have acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation in respect of the claim; or, in
addition, in the case where a Covered Person is seeking indemnification for
fines and costs in a criminal action, such Covered Person did not have
reasonable cause to believe his conduct was unlawful.
Indemnification of a Covered Person for expenses, including attorneys'
fees, in connection with actions brought by or in the right of the corporation
is also permitted but only where such Covered Person shall not have been
adjudged to be liable to the Company unless a court determines that despite such
finding of liability, indemnification for such expenses is proper in view of all
the circumstances of the matter.
The DGCL requires that a corporation indemnify a Covered Person to the
extent such Covered Person has been successful on the merits in connection with
any action described therein, provides procedures for determining
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the merits of indemnification by the corporation and permits an unsecured
advance of expenses prior to the final disposition of such proceeding upon a
repayment undertaking by the Covered Person if such person is not entitled to be
so indemnified.
The above provisions are non-exclusive and indemnification is also
permitted by law, agreement, vote of stockholders or disinterested directors or
otherwise. In addition, the DGCL permits the procurement of officers and
directors liability insurance by a corporation to insure against various
liabilities even if indemnification of such liability may not otherwise be
permitted.
In addition to the above described provisions, the Company's certificate
of incorporation eliminates liability for breach of fiduciary duty, except: (i)
for a breach of the duty of loyalty, (ii) for failure to act in good faith,
(iii) for intentional misconduct or knowing violation of law, (iv) for
violations of Section 174 of the DGCL or (v) for any transaction from which the
director derived an improper personal benefit. Section 174 of the DGCL provides
that directors shall, under certain circumstances, be jointly and severally
liable for willful or negligent violations of Sections 160 and 173 of the DGCL.
Section 160 of the DGCL imposes certain requirements with respect to stock
repurchases and redemptions, and Section 173 imposes certain requirements with
respect to dividends.
The Company's by-laws also provide that directors and certain other
personnel of the Company shall be indemnified against expenses and certain other
liabilities as provided in Section 145 of the DGCL.
The Company has also entered into indemnification agreements (the
"Indemnification Agreements") with its directors, some of whom are also
executive officers (the "Indemnified Persons") which provide for the prompt
indemnification "to the fullest extent permitted by law," and the prompt
advancing, of attorneys' fees and all other costs, expenses and obligations
(collectively, "Expenses") paid or incurred by the Indemnified Person in
connection with the investigation, defending, being a witness or otherwise
participating in any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation that the Indemnified Person in good
faith believes might lead to the institution of any such action, suit or
proceeding (any of the foregoing, a "Claim") related to the fact that the
Indemnified Person is or was a director, officer, employee, agent or fiduciary
of the Company or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by a director in any such capacity.
However, the Indemnification Agreements prohibit such indemnification (i) in
connection with any Claim initiated by the Indemnified Person against the
Company or any director or officer of the Company when the Company has joined in
or consented to such Claim, or (ii) if the Board of Directors or other person or
body appointed by the Board of Directors (the "Reviewing Party") determines that
such indemnification is not permitted under applicable law (and, in the event of
such determination, requires the Indemnified Person to reimburse the Company for
all amounts theretofore paid in respect of such indemnification).
The Indemnification Agreements also provide: (i) that the Indemnified
Person is entitled to indemnification for Expenses to the extent he is
successful in defending any Claim, whether on the merits or otherwise, and to
partial indemnification if he is entitled to indemnification for some, but not
all, of such Expenses, (ii) a mechanism through which the Indemnified Person may
seek court relief if the Reviewing Party determines that the Indemnified Person
would not be permitted to be indemnified under applicable law (and therefore is
not entitled to indemnification under the Indemnification Agreements), (iii)
that the Indemnified Person is entitled to indemnification against all Expenses
incurred in seeking to collect an indemnity claim from the Company or in seeking
to recover under a directors' and officers' liability insurance policy and (iv)
that the Company has the burden of proving that the Indemnified Person is
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not entitled to indemnification in any particular case and that the termination
of any Claim by judgment, order, settlement or conviction shall not create a
presumption that the indemnification is not permitted by applicable law.
The Indemnification Agreements provide that in the event of a change in
control of the Company, the Company will seek legal advice from special,
independent counsel selected by the Indemnified Person and approved by the
Company with respect to matters thereafter arising concerning rights of the
Indemnified Person under the Indemnification Agreements. Additionally, such
agreements provide that in the event of a potential change in control, the
Company will, upon written request of the Indemnified Person, create and fund a
trust to satisfy expenses incurred in connection with a claim relating to an
indemnifiable event. The Company is not currently, nor does it expect to be,
subject to a change in control.
The rights of the Indemnified Persons under the Indemnification Agreements
will not be exclusive of any rights they may have under the DGCL, directors' and
officers' liability insurance, the Company's by-laws, or otherwise; however, the
Indemnification Agreements will not permit double payment. The Indemnification
Agreements, while not requiring that the Company maintain directors' and
officers' liability insurance, do require that the Indemnified Person be
provided with full coverage under any policy or policies actually obtained.
Additionally, the Indemnification Agreements provide that if the Company pays an
Indemnified Person pursuant to the Indemnification Agreements, the Company will
be subrogated to the Indemnified Person's rights to recover from other parties.
To the extent that the Board of Directors or the stockholders of the
Company may in the future wish to limit or repeal the ability of the Company to
indemnify directors or other persons, such repeal or limitation will not affect
the indemnification of the Indemnified Persons under the Indemnification
Agreements referred to above, since their rights to full protection are
contractually assured by the Indemnification Agreements.
The Company has purchased an insurance policy indemnifying its officers
and directors and the officers and directors of its subsidiaries against claims
and liabilities (with stated exceptions) to which they may become subject by
reason of their positions with the Company as directors and officers.
Item 16. Exhibits
1* Form of Distribution Agreement
4.1** Indenture, dated as of May 19, 1994,
between the Company and The Chase Manhattan
Bank (formerly Chemical Bank), as trustee
4.2*** Supplemental Indenture
4.3** Form of Fixed Rate Note
4.4** Form of Floating Rate Note
5* Opinion of Weil, Gotshal & Manges LLP
12* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Coopers & Lybrand L.L.P.
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23.2* Consent of Graber & Co.
23.3* Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5)
24* Power of Attorney (included as part of the signature page hereof)
25* Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank (separately bound)
------------------------
* Filed herewith.
** Incorporated by reference from the Company's Registration Statement on
Form S-3 (Registration No. 33-53147), originally filed with the
Commission on April 14, 1994.
*** To be filed by amendment.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered), and any deviation from the low or high
and of the estimated maximum offering range, may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective
Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
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periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are incorporated by reference in this Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which remain
unsold at the termination of the offering.
(d) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(e) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(f) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(g) That, insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
hereby certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Mateo, State of California, on the 16th day of
September, 1996.
FRANKLIN RESOURCES, INC.
By: /s/ LESLIE M. KRATTER
-------------------------
Leslie M. Kratter
Vice President and Assistant
Secretary
POWER OF ATTORNEY
Each officer or director whose signature appears below hereby appoints
Leslie Kratter his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, to sign on his behalf, as an individual and
in the capacity stated below, any amendment or post-effective amendment to this
Registration Statement, to file the same, with all Exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing which such attorney-in-fact and agent may
deem appropriate or necessary, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or any substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on the 16th day
of September, 1996 in the capacities indicated.
Signature Title
- --------- -----
/s/ CHARLES B. JOHNSON Chairman, President and Chief Executive Officer,
- ------------------------- Principal Executive Officer and Director
Charles B. Johnson
/s/ HARMON E. BURNS Executive Vice President, Legal and
- -------------------------- Administrative, Secretary and Director
Harmon E. Burns
/s/ MARTIN L. FLANAGAN Senior Vice President and Chief Financial Officer,
- -------------------------- Principal Financial Officer and Principal Accounting
Martin L. Flanagan Officer
II-6
<PAGE>
/s/ RUPERT H. JOHNSON, JR. Director
- --------------------------
Rupert H. Johnson, Jr.
/s/ JUDSON R. GROSVENOR Director
- --------------------------
Judson R. Grosvenor
/s/ CHARLES E. JOHNSON Director
- --------------------------
Charles E. Johnson
/s/ HARRY O. KLINE Director
- --------------------------
Harry O. Kline
/s/ LOUIS E. WOODWORTH Director
- --------------------------
Louis E. Woodworth
/s/ F. WARREN HELLMAN Director
- --------------------------
F. Warren Hellman
/s/ PETER M. SACERDOTE Director
- --------------------------
Peter M. Sacerdote
II-7
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Page
- ----------- ----
1* Form of Distribution Agreement
4.1** Indenture, dated as of May 19, 1994,
between the Company and The Chase Manhattan
Bank (formerly Chemical Bank), as trustee
4.2*** Supplemental Indenture
4.3** Form of Fixed Rate Note
4.4** Form of Floating Rate Note
5* Opinion of Weil, Gotshal & Manges LLP
12* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Graber & Co.
23.3* Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5)
24* Power of Attorney (included as part of the signature page hereof)
25* Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank (separately bound)
------------------------
* Filed herewith.
** Incorporated by reference from the Company's Registration Statement on
Form S-3 (Registration No. 33-53147), originally filed with the
Commission on April 14, 1994.
*** To be filed by amendment.
II-8
NYFS08...:\60\46360\0018\1798\FRM6266P.28C
EXHIBIT 1
FRANKLIN RESOURCES, INC.
MEDIUM-TERM NOTES
DISTRIBUTION AGREEMENT
[_______], 199[_]
[Name of Agent]
[Address of Agent]
[Name of Agent]
[Address of Agent]
Dear Sirs:
Franklin Resources, Inc., a Delaware corporation (the "Company"), confirms
its agreement with [Names of Agents] (each referred to as an "Agent" and
collectively referred to as the "Agents") with respect to the issue and sale by
the Company of its Medium-Term Notes described herein (the "Notes"). The Notes
are part of an existing series of debt securities of the Company and are to be
issued pursuant to an indenture (the "Indenture") dated as of [_____], 199[_]
between the Company and [____], as trustee (the "Trustee"). As of the date
hereof, the Company has authorized the issuance and sale of up to U.S.
$[_],000,000 aggregate principal amount (or its equivalent, based upon the
applicable exchange rate at the time of issuance, in such foreign or composite
currencies as the Company shall designate at the time of issuance) (the issue
price of any original issue discount obligations being treated as the principal
amount thereof) of Notes to or through the Agents pursuant to the terms of this
Agreement. It is understood, however, that the Company may from time to time
authorize the issuance of additional series of Notes and that such additional
Notes may be sold to or through the Agents pursuant to the terms of this
Agreement.
This Agreement provides both for the sale of Notes by the Company to an
Agent as principal for resale to investors and other purchasers and for the sale
of Notes by the Company directly to investors (as may from time to time be
agreed to by the Company and the applicable
<PAGE>
Agent), in which case the applicable Agent will act as an agent of the Company
in soliciting Note purchases.
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. [_]), which registration
statement also constitutes post-effective amendment no. 1 to a registration
statement on Form S-3 (No. 33-53147), for the registration of debt securities,
including the Notes, under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415 of
the rules and regulations of the SEC under the 1933 Act (the "1933 Act
Regulations"). Such registration statements have been declared effective by the
SEC and the Indenture has been qualified under the Trust Indenture Act of 1939
(the "1939 Act"). Such registration statements and the prospectus constituting a
part thereof, and any prospectus supplements relating to the Notes, including
all documents incorporated therein by reference, as from time to time amended or
supplemented by the filing of documents pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are referred
to herein as the "Registration Statements" and the "Prospectus", respectively,
except that if any revised prospectus shall be provided to the Agents by the
Company for use in connection with the offering of the Notes, whether or not
such revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to each Agent
for such use.
SECTION 1. Appointment as Agents.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby agrees that Notes will be sold to or through
the Agents. Each Agent is authorized to engage the services of any other broker
or dealer in connection with the offer or sale of the Notes purchased by such
Agent as principal for resale to others but is not authorized to appoint
subagents. In connection with sales by an Agent of Notes purchased by such Agent
as principal to other brokers or dealers, such Agent may allow any portion of
the discount it has received in connection with such purchase from the Company
to such brokers or dealers. Each Agent is acting in connection with the Notes
individually and not collectively or jointly. The Company agrees that, during
the period the Agents are acting as the Company's agents hereunder, unless
otherwise agreed, the Company will not contact or solicit potential investors to
purchase the Notes and will not appoint other agents to act on its behalf, or to
assist it, in the placement of the Notes.
(b) Sale of Notes. The Company shall not sell or approve the solicitation
of purchases of Notes in excess of the amount which shall be authorized by the
Company from time to time or in excess of the principal amount of Notes
registered pursuant to the Registration Statements. The Agents will have no
responsibility for maintaining records with respect to the aggregate principal
amount of Notes sold, or of otherwise monitoring the availability of Notes for
sale, under the Registration Statements.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal, but each Agent may agree from time
to time to purchase
2
<PAGE>
Notes as principal. Any such purchase of Notes by an Agent as principal shall be
made in accordance with Section 3(a) hereof.
(d) Solicitations as Agent. If agreed upon by the Agents and the Company,
the Agents, acting solely as agents for the Company and not as principal, will
solicit purchases of the Notes. Each Agent will communicate to the Company,
orally, each offer to purchase Notes solicited by such Agent on an agency basis,
other than those offers rejected by such Agent. Each Agent shall have the right,
in its discretion reasonably exercised, to reject any proposed purchase of
Notes, as a whole or in part, and any such rejection shall not be deemed a
breach of such Agent's agreement contained herein. The Company may accept or
reject any proposed purchase of the Notes, in whole or in part. Each Agent shall
make reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company. The Agents shall not have any liability to the Company
in the event any such agency purchase is not consummated for any reason. If the
Company shall default on its obligation to deliver Notes to a purchaser whose
offer it has accepted, the Company shall (i) hold the applicable Agent harmless
against any loss, claim or damage arising from or as a result of such default by
the Company and (ii) notwithstanding such default, pay to the applicable Agent
any commission to which it would be entitled in connection with such sale.
(e) Reliance. The Company and each Agent agree that any Notes purchased by
such Agent shall be purchased, and any Notes the placement of which such Agent
arranges shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to an Agent as principal or through an Agent as
agent), as of the date of each delivery of Notes (whether to an Agent as
principal or through an Agent as agent) (the date of each such delivery to an
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that any Registration Statement or the Prospectus shall be amended
or supplemented or there is filed with the SEC any document incorporated by
reference into the Prospectus (each of the times referenced above being referred
to herein as a "Representation Date") as follows:
(i) Due Incorporation and Qualification. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of Delaware with all requisite power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify and be in good standing would not
have a material adverse effect on the financial
3
<PAGE>
condition or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a
significant subsidiary (each, a "Significant Subsidiary") as defined in
Rule 405 of Regulation C of the 1933 Act Regulations has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has all requisite
power and authority to own, lease and operate its properties and conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify and be in good standing would not have a
material adverse effect on the financial condition or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; 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, except for
directors' qualifying shares, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(iii) Registration Statements and Prospectus. At the time each
Registration Statement became effective, such Registration Statement
complied, and as of each applicable Representation Date will comply, in
all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the SEC
promulgated thereunder. Each Registration Statement, at the time it became
effective, did not, and at each time thereafter at which any amendment to
such Registration Statement becomes effective or any Annual Report on Form
10-K is filed by the Company with the SEC and as of each Representation
Date, will not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Prospectus, as of the date
hereof does not, and as of each Representation Date will not, include an
untrue statement of a material fact or omit 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; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or omissions from any Registration Statement or
the Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Agents expressly for use in
such Registration Statement or Prospectus or to that part of a
Registration Statement which constitutes the Trustee's Statement of
Eligibility and Qualification under the 1939 Act (Form T-1).
(iv) Incorporated Documents. The documents incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3, at the time
they were or hereafter are filed with the SEC, complied or when so filed
will comply, as the case may be, in all material respects with the
requirements of the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations"), and, when read together and with
the other information in the Prospectus, did not and will not include an
untrue statement
4
<PAGE>
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were or are made, not misleading.
(v) Accountants. The accountants who certified the financial
statements included or incorporated by reference in the Prospectus are
independent public accountants within the meaning of the 1933 Act and the
1933 Act Regulations.
(vi) Financial Statements. The financial statements and any
supporting schedules of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration Statements and
the Prospectus present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and
the consolidated results of their operations for the periods specified;
and, except as stated therein, said financial statements have been
prepared in conformity with generally accepted accounting principles in
the United States applied on a consistent basis; and the supporting
schedules included in the Registration Statements present fairly the
information required to be stated therein.
(vii) Authorization and Validity of this Agreement, the Indenture
and the Notes. This Agreement has been duly authorized, executed and
delivered by the Company and, upon due authorization, execution and
delivery by the Agents, will be a valid and legally binding agreement of
the Company; the Indenture has been duly authorized, executed and
delivered by the Company and, upon due authorization, execution and
delivery by the Trustee, will be a valid and legally binding obligation of
the Company enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles, and except further as enforcement thereof may be limited by
(i) requirements that a claim with respect to any Notes denominated other
than in U.S. dollars (or a foreign currency or currency unit judgment in
respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or
(ii) governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Notes have been duly and validly
authorized for issuance, offer and sale pursuant to this Agreement and,
when issued, authenticated and delivered pursuant to the provisions of
this Agreement and the Indenture against payment of the consideration
therefor specified in the Prospectus or agreed upon pursuant to the
provisions of this Agreement, the Notes will constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by general equity
principles, and except further as enforcement thereof may be limited by
(i) requirements that a claim with respect to any Notes denominated other
than in U.S. dollars (or a foreign currency or currency unit judgment in
respect of such claim) be converted into U.S. dollars at a rate or
exchange prevailing on a date determined pursuant to applicable law or
(ii) governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Notes and the Indenture will be
substantially in the form heretofore
5
<PAGE>
delivered to the Agents and conform in all material respects to all
statements relating thereto contained in the Prospectus; and each holder
of Notes will be entitled to the benefits of the Indenture.
(viii) Material Changes or Material Transactions. Since the
respective dates as of which information is given in each Registration
Statement and the Prospectus, except as may otherwise be stated therein or
contemplated thereby, (a) 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 considered as one
enterprise, whether or not arising in the ordinary course of business and
(b) there have been no material transactions entered into by the Company
or any of its subsidiaries other than those in the ordinary course of
business.
(ix) No Defaults; Regulatory Approvals. Neither the Company nor
any of its Significant Subsidiaries is in violation of its charter or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or any of them or their properties may be bound, which violation
or default would have a material adverse effect on the financial condition
or the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise; the issuance and sale of
the Notes and the compliance by the Company with all the terms and
provisions thereof and the execution and delivery of this Agreement and
the Indenture and the consummation of the transactions contemplated herein
and therein have been duly authorized by all necessary corporate action
and will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound or to which any of
the property or assets of the Company or any such subsidiary is subject,
nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any law, administrative regulation or
administrative or court order or decree; and no consent, approval,
authorization, order or decree of any court or governmental agency or body
is required for the consummation by the Company of the transactions
contemplated by this Agreement or in connection with the sale of Notes
hereunder, except such as have been obtained or rendered, as the case may
be, or as may be required under the securities laws of any state or other
jurisdiction of the United States (the "Blue Sky" laws).
(x) Regulatory Certificates, Authorities and Permits. The
Company and its subsidiaries possess such certificates, authorities or
permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them,
except where the failure to possess such certificates, authorities or
permits would not have a material adverse effect on the financial
condition or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such
6
<PAGE>
certificate, authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially
and adversely affect the financial condition or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xi) Legal Proceedings; Contracts. Except as may be set forth in
the Registration Statements, there is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened against or
affecting, the Company or any of its subsidiaries, which might, in the
opinion of the Company, result in any material adverse change in the
financial condition or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, or might materially and adversely affect the properties or
assets thereof or might materially and adversely affect the consummation
of this Agreement or the Indenture or any transaction contemplated hereby
or thereby; and there are no contracts or documents of the Company or any
of its subsidiaries which are required to be filed as exhibits to the
Registration Statements by the 1933 Act or by the 1933 Act Regulations
which have not been so filed.
(xii) Advisers Act. Each subsidiary of the Company required to be
registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), is duly registered as an investment adviser with the SEC
under the Advisers Act, and in each jurisdiction where the conduct of its
business requires such registration, and such subsidiary is not prohibited
from acting as an investment adviser or carrying on its business as now
conducted or as contemplated in the Registration Statements by any
applicable laws, rules, regulations, orders, by-laws or similar
requirements.
(xiii) Effect on Business. Consummation of the transactions
contemplated by this Agreement will not adversely affect the ability of
the Company or any of its subsidiaries to conduct its business as
described in the Registration Statements, including, but not limited to,
the rendering of investment advisory services to clients, all of its
mutual funds, money market funds and closed-end funds, whether or not such
funds are registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), and the rendering of distribution services to any such
entities.
(xiv) 1940 Act Registration. Each investment company or account
for which the Company or any of its subsidiaries acts as investment
adviser and which is required to be registered with the SEC as an
investment company under the 1940 Act is duly registered with the SEC as
an investment company under the 1940 Act.
(xv) Broker-Dealer Registration. Each subsidiary of the Company
required to be registered as a broker-dealer with the SEC under the 1934
Act is duly registered as a broker-dealer with the SEC under the 1934 Act,
and such subsidiary is not prohibited from acting as broker-dealer or
carrying on its business as now conducted or as contemplated in the
Registration Statements by any applicable laws, rules, regulations,
orders, by-laws or similar requirements.
7
<PAGE>
(xvi) Investment Company Status; Adviser and Broker-Dealer Status.
Neither the Company nor any of its subsidiaries is required to register
with the SEC as an investment company under the 1940 Act. The Company is
not required to register as an investment adviser with the SEC under the
Advisers Act and is not required to register as a broker-dealer with the
SEC under the 1934 Act.
(xvii) Commodity Exchange Act. The Notes, when issued,
authenticated and delivered pursuant to the provisions of this Agreement
and the Indenture, will be excluded or exempted under the provisions of
the Commodity Exchange Act.
(xviii) Business in Cuba. The Company is in compliance with all of
the provisions of Section 517.075 of the Florida statutes, and all rules
and regulations promulgated thereunder relating to issuers doing business
in Cuba.
(b) Additional Certifications. Any certificate signed by any director or
officer of the Company and delivered to the Agents or to counsel for the Agents
in connection with an offering of Notes through an Agent as agent or the sale of
Notes to an Agent as principal shall be deemed a representation and warranty by
the Company to such Agent as to the matters covered thereby on the date of such
certificate and at each Representation Date subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by an Agent and the
Company, Notes shall be purchased by such Agent as principal. Such purchases
shall be made in accordance with terms agreed upon by such Agent and the Company
(which terms shall be agreed upon orally, with written confirmation prepared by
such Agent and mailed to the Company). Each Agent's commitment to purchase Notes
as principal shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each purchase of Notes,
unless otherwise agreed, shall be at a discount from the principal amount of
each such Note equivalent to the applicable commission set forth in Schedule A
hereto. The Agents may engage the services of any other broker or dealer in
connection with the resale of the Notes purchased as principal and may allow any
portion of the discount received in connection with such purchases from the
Company to such brokers and dealers. At the time of each purchase of Notes by an
Agent as principal, such Agent shall specify the requirements for the stand-off
agreement, officer's certificate, opinion of counsel and comfort letter pursuant
to Sections 4(k), 7(b), 7(c) and 7(d) hereof.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers to purchase the Notes
upon the terms and conditions set forth herein and in the Prospectus. All Notes
sold through an Agent as agent will be sold at 100% of their principal amount
unless otherwise agreed to by the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing at
any time for any period of time or
8
<PAGE>
permanently. Upon receipt of instructions from the Company, the Agents will
forthwith suspend solicitation of purchases from the Company until such time as
the Company has advised the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as set
forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) specified in
Exhibit A hereto shall be agreed upon by the Company and the applicable Agent
and set forth in a pricing supplement to the Prospectus to be prepared in
connection with each sale of Notes. Except as may be otherwise provided in such
supplement to the Prospectus, the Notes will be issued in denominations of U.S.
$1,000 or any larger amount that is an integral multiple of U.S. $1,000.
Administrative procedures with respect to the sale of Notes shall be agreed upon
from time to time by the Agents, the Company and the Trustee (the "Procedures").
The Agents and the Company agree to perform the respective duties and
obligations specifically provided to be performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents promptly
(i) of the effectiveness of any amendment to any Registration Statement, (ii) of
the transmittal to the SEC for filing of any supplement to the Prospectus or any
document to be filed pursuant to the 1934 Act which will be incorporated by
reference in the Prospectus, (iii) of the receipt of any comments from the SEC
with respect to any Registration Statement or the Prospectus, (iv) of any
request by the SEC for any amendment to any Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and (v)
of the issuance by the SEC of any stop order suspending the effectiveness of any
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will give the Agents
advance notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment to
any Registration Statement or any amendment or supplement to the Prospectus
(other than an amendment or supplement providing solely for a change in the
interest rates of Notes), whether by the filing of documents pursuant to the
1934 Act, the 1933 Act or otherwise, and will furnish the Agents with copies of
any such amendment or supplement or other documents proposed to be filed or
prepared a reasonable time in advance of such proposed filing or preparation, as
the case may be; provided that if the Company files any such amendment or
supplement or other documents in a form to which the Agents or counsel for the
Agents shall reasonably object, the Company shall give the Agents and counsel
for the Agents advance notice of its intention to do so and the Agents shall
have the right to suspend
9
<PAGE>
immediately any obligation hereunder to solicit purchases of the Notes as agent
or to purchase any Notes as principal.
(c) Copies of the Registration Statements and the Prospectus. The Company
will deliver to each Agent as many signed and as many conformed copies of the
Registration Statements (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as the Agents may
reasonably request. The Company will furnish to each Agent as many copies of the
Prospectus (as amended or supplemented) as the Agents shall reasonably request
so long as the Agents are required to deliver a Prospectus in connection with
sales or solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold through or to the Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form previously
approved by the Agents and will file such Pricing Supplement pursuant to Rule
424(b)(3) under the 1933 Act not later than the close of business of the SEC on
the fifth business day after the date on which such Pricing Supplement is first
used.
(e) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (l) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, in the reasonable opinion of counsel for the Agents or counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of either such counsel, to amend or supplement any Registration
Statement or the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed
in writing, to the Agents to cease the solicitation of offers to purchase the
Notes in the Agents' capacity as agent and to cease sales of any Notes the
Agents may then own as principal, and the Company will promptly amend such
Registration Statement and/or the Prospectus, as the case may be, whether by
filing documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make each
Registration Statement and the Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (1) of this Section, on or prior to the date on
which there shall be released to the general public interim financial statement
information related to the Company with respect to each of the first three
quarters of any fiscal year or preliminary financial statement information with
respect to any fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall cause the Prospectus to be amended or
supplemented to include or incorporate by reference financial information with
respect thereto and corresponding information for the comparable period of the
preceding fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be required by the
1933 Act or the 1933 Act Regulations.
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(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (1) of this Section, on or prior to the date on
which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company for
the preceding fiscal year, the Company shall cause the Registration Statements
and the Prospectus to be amended, whether by the filing of documents pursuant to
the 1934 Act, the 1933 Act or otherwise, to include or incorporate by reference
such audited financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the independent
accountants with respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Earnings Statements. The Company will make generally available to its
security holders as soon as practicable, but not later than 90 days, after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 1933 Act) covering each twelve month
period (as contemplated in such Rule 158) beginning, in each case, not later
than the first day of the Company's fiscal quarter next following the "effective
date" (as defined in such Rule 158) of each Registration Statement with respect
to each sale of Notes.
(i) Blue Sky Qualifications. The Company will endeavor, in cooperation
with the Agents, to qualify the Notes for offering and sale under the applicable
Blue Sky laws of such states and other jurisdictions of the United States as the
Agents may designate, and will maintain such qualifications in effect for as
long as may be required for the distribution of the Notes; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Notes have been
qualified as above provided. The Company will promptly advise the Agents of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any such state or jurisdiction or the
initiating or threatening of any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the Prospectus
is required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the 1934 Act.
(k) Stand-Off Agreement. Unless otherwise specified by an Agent in
connection with a purchase by it of Notes as principal, between the date of the
agreement to purchase such Notes and the Settlement Date with respect to such
purchase, the Company will not, without such Agent's prior written consent,
offer or sell, or enter into any agreement to sell, any debt securities of the
Company (other than the Notes that are to be sold pursuant to such agreement and
commercial paper in the ordinary course of business).
(l) Suspension of Certain Obligations. The Company shall not be required
to comply with the provisions of subsections (e), (f) or (g) of this Section
during any period from the time (i) the Agents shall have suspended solicitation
of purchases of the Notes in its capacity as agent pursuant to a request from
the Company and (ii) the Agents shall not then hold any Notes
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purchased as principal pursuant hereto, until the time the Company shall
determine that solicitation of purchases of the Notes should be resumed or the
Agent shall subsequently purchase Notes from the Company as principal.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to purchase Notes as principal and to
solicit offers to purchase the Notes as agent of the Company, and the
obligations of any purchasers of the Notes sold through each Agent as agent,
will be subject to the accuracy of the representations and warranties on the
part of the Company herein and to the accuracy of the statements of the
Company's officers made in any certificate furnished pursuant to the provisions
hereof, to the performance and observance by the Company of all its covenants
and agreements herein contained and to the following additional conditions
precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have received the
following legal opinions, dated as of the date hereof and in form and substance
satisfactory to the Agents:
(1) Opinion of Company Counsel. The opinion of Weil, Gotshal &
Manges, special counsel to the Company or of Harmon E. Burns, Esq.,
Executive Vice President, Legal and Administrative, of the Company, to the
effect that:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware.
(ii) The Company has all requisite corporate power and
authority to own, lease and operate its properties and to carry on
its business as described in the Registration Statements.
(iii) The Company is duly qualified to transact business and
is in good standing as a foreign corporation in each jurisdiction in
which the character of its activities requires such qualification,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure of the Company to be
so qualified and be in good standing would not have a material
adverse effect on the financial condition or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(iv) Each Significant Subsidiary of the Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, and has all
requisite corporate power and authority to own, lease and operate
its properties and carry on its business as described in the
Registration Statements, and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which the character of its activities requires such
qualification, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure of
each such Significant Subsidiary to be so qualified and be in good
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standing would not have a material adverse effect on the financial
condition or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise; all
of the issued and outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable, and, except for directors' qualifying
shares, is owned by the Company, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity.
(v) The execution, delivery and performance of this
Agreement by the Company has been duly and validly authorized by all
necessary corporate action on the part of the Company, and this
Agreement has been duly and validly executed and delivered by the
Company.
(vi) The Company has all requisite corporate power and
authority to execute and delivery the Indenture. The execution,
delivery and performance of the Indenture by the Company has been
duly and validly authorized by all necessary corporate action on the
part of the Company. The Indenture has been duly and validly
executed and delivered by the Company and (assuming the Indenture
has been duly authorized, executed and delivered by the Trustee)
constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting enforcement of
creditors' rights and remedies, and subject as to enforceability to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and
except as enforcement thereof may be limited by (A) requirements
that a claim with respect to any Notes denominated other than in
U.S. dollars (or a foreign currency or foreign currency unit
judgment in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (B) governmental authority to limit,
delay or prohibit the making of payments in foreign currency or
currency units or payments outside the United States.
(vii) The Company has all requisite corporate power and
authority to execute and deliver the Notes; the Notes, in the
form(s) certified by the Company as of the date hereof, have been
duly and validly authorized by all necessary corporate action on the
part of the Company for issuance, offer and sale pursuant to this
Agreement and, when issued, authenticated and delivered pursuant to
the provisions of this Agreement and the Indenture against payment
of the consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable against the Company
in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting enforcement of creditors' rights and
remedies, and subject as to enforceability to general principles of
equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless
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of whether enforcement is sought in a proceeding at law in equity)
and except as enforcement thereof may be limited by (A) requirements
that a claim with respect to any Notes denominated other than in
U.S. dollars (or a foreign currency or foreign currency unit
judgment in respect of such claim) be converted into United States
dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (B) governmental authority to limit,
delay or prohibit the making of payments in foreign currency or
currency units or payments outside the United States, and each
holder of the Notes will be entitled to the benefits of the
Indenture.
(viii) The statements in the Prospectus under the captions
"Description of the Notes" and "Description of Debt Securities"
insofar as they purport to summarize certain provisions of documents
specifically referred to therein, are accurate summaries of such
provisions in all material respects.
(ix) The Indenture is qualified under the 1939 Act.
(x) The Registration Statements are effective under the
1933 Act and, to the best of such counsel's knowledge (which may be
based on telephonic confirmation from the Commission), no stop order
suspending the effectiveness of any Registration Statement has been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the SEC.
(xi) At the time each Registration Statement or any
post-effective amendment thereto became effective, such Registration
Statement complied as to form in all material respects with the
requirements of the 1933 Act, the 1939 Act and the regulations under
each of those Acts (except that no opinion is expressed with respect
to the financial statements and notes thereto, the financial
statement schedules and other statistical and accounting data
included or incorporated by reference therein).
(xii) The Notes, in the form(s) certified by the Company as
of the date hereof, when issued, authenticated and delivered
pursuant to the provisions of this Agreement and the Indenture, will
be excluded or exempted from the provisions of the Commodity
Exchange Act, assuming the accuracy of any certifications of factual
matters furnished by the Agents or the Company in connection with
the issuance thereof.
(xiii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or governmental proceedings
to which the Company or any subsidiary of the Company is a party or
of which any of their property is the subject which are not
described in the Registration Statements, including ordinary routine
litigation incidental to the business of the Company or any such
subsidiary, are, considered in the aggregate, not material.
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(xiv) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or, to the best of such
counsel's knowledge, in default in the performance or observance of
any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note or lease
to which it is a party or by which it or any of them or their
properties may be bound. The consummation by the Company of the
transactions contemplated herein and in the Indenture have been duly
authorized by all necessary corporate action on the part of the
Company, and the execution and delivery of this Agreement or of the
Indenture, or the consummation by the Company of the transactions
contemplated herein and therein, will not conflict with or
constitute a breach of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its Significant Subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument known to such counsel and to which
the Company or any such subsidiary is a party or by which it or any
of them may be bound or to which any of the property or assets of
the Company or any such subsidiary is subject, or any law,
administrative regulation or administrative or court decree known to
such counsel to be applicable to the Company of any court or
governmental agency, authority or body or any arbitrator having
jurisdiction over the Company; nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company.
(xv) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred
to in the Registration Statements or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct.
(xvi) No consent, approval, authorization, order or decree
of any court or governmental agency or body (including the SEC) is
required for the consummation by the Company of the transactions
contemplated by this Agreement or in connection with the sale of
Notes hereunder, except such as have been obtained or rendered, as
the case may be, or as may be required under Blue Sky laws.
(xvii) Each subsidiary of the Company required to be
registered under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), is duly registered as an investment adviser
with the SEC under the Advisers Act, and in each jurisdiction where
the conduct of its business requires such registration, and such
subsidiary is not prohibited from acting as an investment adviser or
carrying on its business as now conducted or as contemplated in the
Registration Statements by any applicable laws, rules, regulations,
orders, by-laws or similar requirements.
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(xviii) Each investment company or account for which the
Company or any of its subsidiaries acts as investment adviser and
which is required to be registered with the SEC as an investment
company under the 1940 Act is duly registered with the SEC as an
investment company under the 1940 Act.
(xix) Each subsidiary of the Company required to be
registered as a broker-dealer with the SEC under the 1934 Act is
duly registered as a broker-dealer with the SEC under the 1934 Act,
and such subsidiary is not prohibited from acting as broker-dealer
or carrying on its business as now conducted or as contemplated in
the Registration Statements by any applicable laws, rules,
regulations, orders, by-laws or similar requirements.
(xx) Neither the Company nor any of its subsidiaries is
required to register with the SEC as an investment company under the
1940 Act. The Company is not required to register as an investment
adviser with the SEC under the Advisers Act and is not required to
register as a broker-dealer with the SEC under the 1934 Act.
(xxi) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus complied when filed as
to form in all material respects with the 1934 Act and the 1934 Act
Regulations thereunder.
(xxii) The information contained in the Prospectus under the
caption "Certain United States Federal Income Tax Considerations" to
the extent that it constitutes matters of law or legal conclusions,
has been reviewed by such counsel and is correct in all material
respects.
(2) Opinion of Counsel to the Agents. The opinion of Brown & Wood,
counsel to the Agents, covering the matters referred to in subparagraph
(1) under the subheadings (i) and (v) to (xi), inclusive, above.
(3) In giving their opinions required by subsection (a)(1) and
(a)(2) of this Section, Weil, Gotshal & Manges and Brown & Wood shall each
additionally state that no facts have come to their attention that would
lead them to believe that any Registration Statement, at the time it
became effective or, if an amendment to a Registration Statement or an
Annual Report on Form 10-K has been filed by the Company with the SEC
subsequent to the effectiveness of such 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, or at the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary in order
to make the statements therein not misleading or that the Prospectus, as
amended or supplemented at the date hereof, or (if such opinion is being
delivered in connection with the purchase of Notes by an Agent as
principal pursuant to Section 7(c) hereof) at the date of any agreement by
such Agent to purchase Notes as principal and at the Settlement Date with
respect thereto, as the case may be, included or includes an untrue
statement of a
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material 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 belief need be
expressed as to the financial statements and notes thereto, the financial
statement schedules and other financial, statistical and accounting data
included or incorporated by reference in the Registration Statements or
the Prospectus.
(b) Officers' Certificate. At the date hereof, the Agents shall have
received a certificate of the President or any Vice President and the chief
financial or chief accounting officer of the Company, dated as of the date
hereof, to the effect that (i) since the respective dates as of which
information is given in each Registration Statement and the Prospectus or since
the date of any agreement by an Agent to purchase Notes as principal, there has
not been any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) the other representations and warranties of
the Company contained in Section 2 hereof are true and correct with the same
force and effect as though expressly made at and as of the date of such
certificate, (iii) the Company has performed or complied in all material
respects with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such certificate, and (iv)
that no stop order suspending the effectiveness of any Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the SEC.
(c) Comfort Letter. On the date hereof, the Agents shall have received a
letter from Coopers & Lybrand, dated as of the date hereof and in form and
substance satisfactory to the Agents to the effect that:
(i) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act and the
1933 Act Regulations.
(ii) In their opinion, the consolidated financial statements and
supporting schedule(s) of the Company and its subsidiaries examined by
them and included or incorporated by reference in the Registration
Statements comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations with
respect to registration statements on Form S-3 and the 1934 Act and the
1934 Act Regulations.
(iii) They have performed specified procedures, not constituting
an audit, including a reading of the latest available interim financial
statements of the Company and its indicated subsidiaries, a reading of the
minute books of the Company and such subsidiaries since the end of the
most recent fiscal year with respect to which an audit report has been
issued, inquiries of and discussions with certain officials of the Company
and such subsidiaries responsible for financial and accounting matters
with respect to the un-audited consolidated financial statements included
or incorporated by reference in the Registration Statements and the
Prospectus and the latest available interim unaudited financial statements
of the Company and its subsidiaries, and such other inquiries and
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procedures as may be specified in such letter, and on the basis of such
inquiries and procedures nothing came to their attention that caused them
to believe that: (A) the unaudited consolidated financial statements of
the Company and its subsidiaries included or incorporated by reference in
the Registration Statements and Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1934
Act and the 1934 Act Regulations or were not fairly presented in
conformity with generally accepted accounting principles in the United
States applied on a basis substantially consistent with that of the
audited financial statements included or incorporated by reference
therein, or (B) at a specified date not more than five days prior to the
date of such letter, there was any change in the consolidated capital
stock or any increase in consolidated long-term debt of the Company and
its subsidiaries or any decrease in the consolidated net assets of the
Company and its subsidiaries, in each case as compared with the amounts
shown on the most recent consolidated balance sheet of the Company and its
subsidiaries included or incorporated by reference in the Registration
Statements and Prospectus or, during the period from the date of such
balance sheet to a specified date not more than five days prior to the
date of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenues or
net income of the Company and its subsidiaries, except in each such case
as set forth in or contemplated by the Registration Statements and
Prospectus or except for such exceptions enumerated in such letter as
shall have been agreed to by the Agents and the Company.
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statements and
the Prospectus, and the limited procedures referred to in clause (iii)
above, they have carried out certain other specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by reference in
the Registration Statements and Prospectus and which are specified by the
Agents, and have found such amounts, percentages and financial information
to be in agreement with the relevant accounting, financial and other
records of the Company and its subsidiaries identified in such letter.
(d) Other Documents. On the date hereof and on each Settlement Date,
counsel to the Agents shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Notes as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment in all material respects of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of Notes as herein contemplated
shall be satisfactory in form and substance to the Agents and to counsel to the
Agents.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement (or, at the option of the
applicable Agent, any applicable agreement by such Agent to purchase Notes as
principal) may be terminated by the Agents by notice to the Company at any time
and any such termination shall be without liability of any party to any other
party, except that the covenant regarding provision of an earnings statement
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set forth in Section 4(h) hereof, the provisions concerning payment of expenses
under Section 10 hereof, the indemnity and contribution agreement set forth in
Sections 8 and 9 hereof, the provisions concerning the representations,
warranties and agreements to survive delivery of Section 11 hereof, the
provisions relating to governing law set forth in Section 14 and the provions
set forth under "Parties" of Section 15 hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through the Agents.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. If a purchaser shall fail either to
accept delivery of or to make payment for a Note on the date fixed for
settlement, the applicable Agent shall promptly notify the Company and deliver
the Note to the Company, and, if such Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to such Agent. If such
failure occurred for any reason other than default by an Agent in the
performance of its obligations hereunder, the Company will reimburse such Agent
on an equitable basis for its loss of the use of the funds for the period such
funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with each Agent that:
(a) Reaffirmation of Representations and Warranties. Each acceptance by it
of an offer for the purchase of Notes (whether to an Agent as principal or
through an Agent as agent), and each delivery of Notes to an Agent (whether to
an Agent as principal or through an Agent as agent), shall be deemed to be an
affirmation that the representations and warranties of the Company contained in
this Agreement and in any certificate theretofore delivered to the Agents
pursuant hereto are true and correct at the time of such acceptance or sale, as
the case may be, and an undertaking that such representations and warranties
will be true and correct at the time of delivery to the purchaser or its agent,
or to such Agent, of the Note or Notes relating to such acceptance or sale, as
the case may be, as though made at and as of each such time (and it is
understood that such representations and warranties shall relate to the
Registration Statements and the Prospectus as amended and supplemented to each
such time).
(b) Subsequent Delivery of Certificates. Each time that (i) any
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of Notes or similar changes, and, unless the Agents shall otherwise
specify, other than by an amendment or supplement which relates exclusively to
an offering of debt securities other than the Notes), (ii) there is filed with
the SEC any document incorporated by reference into the Prospectus (other than
any Current Report on Form 8-K relating exclusively to the issuance of debt
securities under either or both of the Registration Statements, unless the
Agents shall otherwise specify), (iii) (if required in connection with the
purchase of Notes by an Agent as principal) the Company sells Notes to an Agent
as principal or (iv) the Company issues and sells Notes in a form not previously
certified to the Agents by the Company, the Company shall furnish or cause to be
furnished to the Agents forthwith a certificate dated the date of filing with
the SEC of such supplement or document, the
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date of effectiveness of such amendment, or the date of such sale, as the case
may be, in form reasonably satisfactory to the Agents and of the same tenor as
the certificate referred to in said Section 5(b), modified as necessary to
relate to the Registration Statements and the Prospectus as amended and
supplemented to the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) any
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of the Notes or similar changes or solely for the inclusion of additional
financial information, and, unless the Agents shall otherwise specify, other
than by an amendment or supplement which relates exclusively to an offering of
debt securities other than the Notes), (ii) there is filed with the SEC any
document incorporated by reference into the Prospectus (other than any Current
Report on Form 8-K, unless the Agents shall otherwise specify), or (iii) (if
required in connection with the purchase of Notes by an Agent as principal) the
Company sells Notes to an Agent as principal, the Company shall furnish or cause
to be furnished forthwith to the Agents and to counsel to the Agents a written
opinion of Harmon E. Burns, Esq., Executive Vice President, Legal and
Administrative, of the Company, or other counsel satisfactory to the Agents
dated the date of filing with the SEC of such supplement or document, the date
of effectiveness of such amendment, or the date of such sale, as the case may
be, in form and substance reasonably satisfactory to the Agents, or, in lieu of
such opinion, counsel last furnishing such opinion to the Agents shall furnish
the Agents with a letter to the effect that the Agents may rely on such last
opinion to the same extent as though it was dated the date of such letter
authorizing reliance (except that statements in such last opinion shall be
deemed to relate to the Registration Statements and the Prospectus as amended
and supplemented to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) any
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus (other than any Current
Report on Form 8-K, unless the Agents shall otherwise specify) which contains
additional financial information, or (ii) (if required in connection with the
purchase of Notes by an Agent as principal) the Company sells Notes to an Agent
as principal, the Company shall cause Coopers & Lybrand forthwith to furnish
such Agent a letter, dated the date of effectiveness of such amendment,
supplement or document with the SEC, or the date of such sale, as the case may
be, in form reasonably satisfactory to such Agent, of the same tenor as the
letter referred to in Section 5(c) hereof but modified to relate to the
Registration Statements and Prospectus, as amended and supplemented to the date
of such letter, and with such changes as may be necessary to reflect changes in
the financial statements and other information derived from the accounting
records of the Company; provided, however, that if any Registration Statement or
the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Coopers & Lybrand may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement unless any other information included therein of an
accounting, financial or statistical nature is of such a nature that, in the
reasonable judgment of the Agents, such letter should cover such other
information.
20
<PAGE>
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls each Agent within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred,
(including the fees and disbursements of counsel chosen by the Agents)
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by either of the Agents expressly for use in such Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment
or supplement thereto).
(b) Indemnification of Company. Each Agent severally agrees to indemnify
and hold harmless the Company, its directors, each of its officers who signed
any Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in any
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agents
21
<PAGE>
expressly for use in such Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice in writing to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local counsel of record) for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 8 hereof is for any
reason held to be unenforceable by the indemnified parties although applicable
in accordance with its terms, the Company and the Agents shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and the Agents,
as incurred, in such proportions that each Agent is responsible for that portion
represented by the percentage that the total commissions and underwriting
discounts received by such Agent to the date of such liability bears to the
total sales price from the sale of Notes sold to or through such Agent to the
date of such liability, and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls each Agent within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of
the Company who signed any Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statements and all
amendments thereto and the Prospectus and any amendments or supplements thereto;
(b) The preparation, filing and reproduction of this Agreement;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the use of book-entry notes;
22
<PAGE>
(d) The fees and disbursements of the Company's accountants and counsel,
of the Trustee and its counsel, and of any Calculation Agent or Exchange Rate
Agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the program relating to the
Notes and incurred from time to time in connection with the transactions
contemplated hereby;
(f) The qualification of the Notes under the Blue Sky laws in accordance
with the provisions of Section 4(i) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Agents in connection
therewith and in connection with the preparation of any Blue Sky Survey;
(g) The printing and delivery to the Agents in quantities as hereinabove
stated of copies of the Registration Statements and any amendments thereto, and
of the Prospectus and any amendments or supplements thereto, and the delivery by
the Agents of the Prospectus and any amendments or supplements thereto in
connection with solicitations or confirmations of sales of the Notes;
(h) The preparation, printing, reproducing and delivery to the Agents of
copies of the Indenture and all supplements and amendments thereto;
(i) Any fees charged by rating agencies for the rating of the Notes;
(j) The fees and expenses incurred in connection with the listing of the
Notes on any securities exchange;
(k) The fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents
incurred with the prior written consent of the Company;
(m) The cost of providing any CUSIP or other identification numbers for
the Notes; and
(n) The fees and expenses of any Depositary (as defined in the Indenture)
and any nominees thereof in connection with the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company submitted pursuant hereto or
thereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Agents or any controlling person of
the Agents, or by or on behalf of the Company, and shall survive each delivery
of and payment for any of the Notes.
23
<PAGE>
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any agreement
hereunder by an Agent to purchase Notes as principal) may be terminated for any
reason, at any time by either the Company or an Agent (as to such Agent) upon
the giving of 30 days' written notice of such termination to the other party
hereto.
(b) Termination of Agreement to Purchase Notes as Principal. Each Agent
may terminate any agreement hereunder by such Agent to purchase Notes as
principal, immediately upon notice to the Company, at any time prior to the
Settlement Date relating thereto (i) if there has been, since the date of such
agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there shall have occurred
any material adverse change in the financial markets in the United States or any
outbreak or escalation of hostilities or other national or international
calamity or crisis the effect of which is such as to make it, in the judgment of
such Agent, impracticable to market the Notes or enforce contracts for the sale
of the Notes, or (iii) if trading in any securities of the Company has been
suspended by the SEC or a national securities exchange, or if trading generally
on either the American Stock Exchange or the New York Stock Exchange shall have
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the SEC or any other governmental authority, or if a
banking moratorium shall have been declared by either Federal, New York or
Delaware authorities or if a banking moratorium shall have been declared by the
relevant authorities in the country or countries of origin of any foreign
currency or currencies in which the Notes are denominated or payable, or (iv) if
the rating assigned by any nationally recognized securities rating agency to any
debt securities of the Company as of the date of any applicable principal
purchase shall have been lowered since that date or if any such rating agency
shall have publicly announced that it has placed any debt securities of the
Company on what is commonly termed a "watch list" for possible downgrading, or
(v) if there shall have come to such Agent's attention any facts that would
cause such Agent reasonably to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of Notes, included an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances existing at the time
of such delivery, not misleading, or (vi) if the Company shall have filed any
amendment or supplement or other documents in a form to which such Agent or
counsel to the Agents shall have reasonably objected in accordance with Section
4(b) hereof. As used in this Section 12(b), the term "Prospectus" means the
Prospectus in the form first used to confirm sales of the Notes.
(c) General. In the event of any such termination, neither party will have
any liability to the other party hereto, except that (i) the applicable Agent
shall be entitled to any commission earned in accordance with the third
paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) the
applicable Agent shall own any Notes purchased by it as principal with the
intention of reselling them or (b) an offer to purchase any of the Notes has
been accepted by the Company but the time of delivery to the purchaser or his
agent of the Note or Notes relating thereto has not occurred, the covenants set
forth in Sections 4 and 7 hereof shall remain in effect
24
<PAGE>
until such Notes are so resold or delivered, as the case may be, and (iii) the
covenant set forth in Section 4(h) hereof, the provisions of Section 10 hereof,
the indemnity and contribution agreements set forth in Sections 8 and 9 hereof,
and the provisions of Sections 11, 14 and 15 hereof shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms and
provisions hereof shall be in writing, either delivered by hand, by mail or by
telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404
Attention: Martin L. Flanagan
Fax: (415) 312-5707
With a copy to:
Harmon E. Burns
Fax: (415) 312-4937
If to [Name of Agent]:
[Address of Agent]
If to [Name of Agent]:
[Address of Agent]
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
25
<PAGE>
SECTION 14. Governing Law; Forum.
This Agreement and all the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in such State. Any suit,
action or proceeding brought by the Company against the Agents in connection
with or arising under this Agreement shall be brought solely in the state or
federal court of appropriate jurisdiction located in the Borough of Manhattan,
The City of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 8 and 9 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and respective successors and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Notes shall be deemed to be a
successor by reason merely of such purchase.
26
<PAGE>
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agents and the Company in accordance with its terms.
Very truly yours,
FRANKLIN RESOURCES, INC.
By:____________________________________
Name: Martin L. Flanagan
Title: Senior Vice President, Principal
Financial Officer and Principal
Accounting Officer
Accepted:
[Name of Agent]
By:________________________________
Name:
Title:
___________________________________
[Name of Agent]
27
<PAGE>
EXHIBIT A
The following terms, if applicable, shall be agreed to by the applicable
Agent and the Company in connection with each sale of Notes:
Principal Amount: $_______
(or principal amount of foreign currency)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Interest Reset Date(s):
Interest Payment Date(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
If Repayable:
Optional Repayment Date(s):
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Currency of Denomination:
Denominations (if currency is other than U.S. dollar):
Currency of Payment:
Additional Terms:
A-1
<PAGE>
Also, in connection with the purchase of Notes by an Agent as principal,
agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b) of the Distribution
Agreement. Legal Opinion pursuant to Section 7(c)of the Distribution
Agreement. Comfort Letter pursuant to Section 7(d) of the Distribution
Agreement. Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
A-2
<PAGE>
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay to the applicable Agent, on a discount basis, a commission for the
sale of each Note equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
From 9 months to less than 1 year............
From 1 year to less than 18 months...........
From 18 months to less than 2 years..........
From 2 years to less than 3 years............
From 3 years to less than 4 years............
From 4 years to less than 5 years............
From 5 years to less than 6 years............
From 6 years to less than 7 years............
From 7 years to less than 10 years...........
From 10 years to less than 15 years..........
From 15 years to less than 20 years..........
From 20 years to less than 30 years..........
From 30 years to 40 years....................
A-3
EXHIBIT 5
WEIL, GOTSHAL & MANGES LLP
A Limited Liability Partnership Including Professional Corporations
767 Fifth Avenue New York, NY 10153-0119
(212) 310-8000
Fax: (212) 310-8007
September 16, 1996
Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404
Gentlemen:
We have acted as counsel to Franklin Resources, Inc., a
Delaware corporation (the "Company"), in connection with the
preparation and filing by the Company with the Securities and Exchange
Commission of a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended, with respect
to debt securities (the "Debt Securities") having a proposed aggregate
initial public offering price of up to $500,000,000. The Debt
Securities will be issued by the Company under the Indenture (the
"Indenture") between the Company and The Chase Manhattan Bank
(formerly Chemical Bank), as trustee (the "Trustee"). The Debt
Securities will be sold by the Company either (i) directly on its own
behalf or (ii) pursuant to the Distribution Agreement incorporated by
reference in the Registration Statement (the "Distribution
Agreement").
In so acting, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the
Registration Statement, the Prospectus that is a part of the
Registration Statement (the "Prospectus"), the Indenture (in which is
set forth the proposed forms of the Debt Securities), the Distribution
Agreement and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of officers
and representatives of the Company, and have made such inquiries of
such officers and representatives, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of
all documents submitted to us as originals, the
<PAGE>
Franklin Resources, Inc.
September 16, 1996
Page 2
conformity to original documents of documents submitted to us as
certified or photostatic copies and the authenticity of the originals
of such latter documents. As to all questions of fact material to
this opinion that have not been independently established, we have
relied upon certificates of officers and representatives of the
Company.
Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that the Debt Securities, when
duly authorized and executed on behalf of the Company, authenticated
by the Trustee pursuant to the terms of the Indenture and sold and
delivered by the Company as contemplated by the Prospectus, as the
same may be updated from time to time, will be legally issued and will
constitute valid and binding obligations of the Company entitled to
the benefits of the Indenture in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
The opinion expressed herein is limited to the laws of the
State of New York, the corporate laws of the State of Delaware and the
federal laws of the United States, and we express no opinion as to the
effect on the matters covered by this letter of the laws of any other
jurisdiction.
We consent to the use of this letter as an exhibit to the
Registration Statement and to any and all references to our firm in
the Prospectus.
We further consent to the use of this letter as an exhibit
to applications to the securities commissioners of various states of
the United States for registration or qualification of the Debt
Securities under the securities laws of such states.
The opinion expressed herein is rendered solely for your
benefit in connection with the transactions described herein. The
opinion expressed herein may not be used or relied upon by any other
person, nor may this letter or any copies thereof be furnished to a
third party, filed with a governmental
<PAGE>
Franklin Resources, Inc.
September 16, 1996
Page 3
agency, quoted, cited or otherwise referred to without our prior
written consent.
Very truly yours,
WEIL, GOTSHAL & MANGES LLP
EXHIBIT 12
<TABLE>
<CAPTION>
FRANKLIN RESOURCES, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except for ratio)
Nine Months Ended Fiscal Year Ended
------------------------------- --------------------------------------------------------------------------------
June 30, 1996 June 30, 1995 Sept 30, 1995 Sept 30, 1994 Sept 30, 1993 Sept 30, 1992 Sept 30, 1991
------------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income before
Taxes $336,504 $286,141 $386,655 $362,521 $274,398 $204,748 $162,719
-------------- ------------- ------------- -------------- ------------- ------------- ------------
Add:
Interest 21,746 22,544 29,495 29,765 28,760 2,137 94
Rent Factor 6,022 5,316 7,271 5,026 4,555 2,735 2,475
------------- ------------- ------------- -------------- ------------- ------------- ------------
Total Fixed
Charges 27,768 27,860 36,766 34,791 33,315 4,872 2,569
------------- ------------- ------------- --------------- ------------- ------------- ------------
Income before
taxes and
fixed charges
$364,272 $314,001 $423,421 $397,312 $307,713 $209,620 $165,288
============= ============= ============= ============== ============= ============= ============
Ratio of
Earnings to
Fixed Charges 13.1 11.3 11.5 11.4 9.2 43.0 64.3
============= ============= ============= ============== ============= ============= ============
</TABLE>
EXHIBIT 23.1
Consent of Independent Accountants
----------------------------------
We consent to the inclusion in this registration statement on
Form S-3 of our report dated October 27, 1995, on our audits of the
financial statements of Franklin Resources, Inc. We also consent to
the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
San Francisco, California
September 16, 1996
EXHIBIT 23.2
GRABER & CO.
Certified Public Accountants
1100 Franklin Avenue
Garden City, N.Y. 11530
(516) 742-0100
Fax: (516) 742-0150
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this Registration
Statement of Franklin Resources, Inc. on Form S-3 for the issuance of
debt securities of our reports dated February 8, 1996 and January 31,
1995, on our audits of the financial statements of Heine Securities
Corporation for the years ended December 31, 1995 and December 31,
1994. We also consent to the reference to our firm under the caption
"Experts".
/s/ Graber & Co.
-------------------------
Graber & Co.
September 10, 1996
Garden City, New York
EXHIBIT 25
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
FRANKLIN RESOURCES, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-2670991
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
777 MARINER ISLAND BLVD.
SAN MATEO, CALIFORNIA 94404
(Address of principal executive offices) (Zip Code)
-------------------------------------------
DEBT SECURITIES
(Title of the indenture securities)
-----------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank.)
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank.)
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
(On July 14, 1996, in connection with the merger of Chemical Bank and The Chase
Manhattan Bank (National Association), Chemical Bank, the surviving corporation,
was renamed The Chase Manhattan Bank.)
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 5TH day of SEPTEMBER, 1996.
THE CHASE MANHATTAN BANK
By /s/Andrew M. Deck
---------------------------
Andrew M. Deck
Senior Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
CHEMICAL BANK
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................................................. $ 4,167
Interest-bearing balances ..................................................... 5,094
Securities:
Held to maturity securities ........................................................ 3,367
Available for sale securities....................................................... 27,786
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 IBF's:
Federal funds sold ............................................................ 7,204
Securities purchased under agreements to resell ............................... 136
Loans and lease financing receivables:
Loans and leases, net of unearned income ... $ 67,215
Less: Allowance for loan and lease losses .. 1,768
Less: Allocated transfer risk reserve ...... 75
--------
Loans and leases, net of unearned income,
allowance, and reserve ........................................................ 65,372
Trading Assets...................................................................... 28,610
Premises and fixed assets (including capitalized
leases)........................................................................ 1,326
Other real estate owned ............................................................ 26
Investments in unconsolidated subsidiaries and
associated companies .......................................................... 68
Customer's liability to this bank on acceptances
outstanding.................................................................... 995
Intangible assets................................................................... 309
Other assets ....................................................................... 6,993
-----
TOTAL ASSETS $151,453
========
- 4 -
<PAGE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ........................................................... $46,917
Noninterest-bearing .....................................$16,711
Interest-bearing ........................................ 30,206
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ..................................................................... 31,577
Noninterest-bearing ................................$ 2,197
Interest-bearing ........................................ 29,380
-------
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 IBF's
Federal funds purchased ....................................................... 12,155
Securities sold under agreements to repurchase ................................ 8,536
Demand notes issued to the U.S. Treasury ........................................... 1,000
Trading liabilities ................................................................ 20,914
Other Borrowed money:
With a remaining maturity of one year or less ................................. 10,018
With a remaining maturity of more than one year .................................... 192
Mortgage indebtedness and obligations under capitalized
leases ........................................................................ 12
Bank's liability on acceptances executed and outstanding ........................... 1,001
Subordinated notes and debentures .................................................. 3,411
Other liabilities .................................................................. 8,091
TOTAL LIABILITIES .................................................................. 143,824
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<CAPTION>
EQUITY CAPITAL
<S> <C>
Common stock ....................................................................... 620
Surplus............................................................................. 4,664
Undivided profits and capital reserves ............................................. 2,970
Net unrealized holding gains (Losses)
on available-for-sale securities ................................................... (633)
Cumulative foreign currency translation adjustments ................................ 8
TOTAL EQUITY CAPITAL ............................................................... 7,629
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ...................................................... $151,453
==========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
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